• Jake Sherkow Guest Post: What the CRISPR Patent Appeal Teaches Us About Legal Scholarship

    Guest post by Professor Jake Sherkow of New York Law School, who is currently a Visiting Scholar at Stanford Law School.

    Yesterday, the Federal Circuit heard oral argument in the dispute between the University of California and the Broad Institute over a set of fundamental patents covering CRISPR-Cas9, the revolutionary gene-editing technology. Lisa has been kind enough to invite me to write a few words here about the dispute, and I thought I’d take that generous opportunity to discuss two aspects of yesterday’s argument: the basics of the appeal and, given that this blog is devoted to legal scholarship about patent law, what the argument can teach us, if anything, about IP scholarship in general. I think the short answer to the second question is, Quite a lot, although perhaps not for obvious reasons.

    CRISPR-Cas9, for you luddites out there, is a breakthrough technology in molecular biology that allows scientists to “edit” DNA, both in a test-tube and in cells, in a way that’s cheap, easy, flexible, and almost infinitely programmable. Like all breakthrough technologies, there were other substitute technologies before it, but they were, by contrast, expensive, difficult, clumsy, and ad-hoc. To give, perhaps, one good illustration about how CRISPR-Cas9 took the world by storm: since the technology was first elucidated in 2012, there have been over 2,000 papers describing experiments using the technology—an astonishing level of scientific acceptance around the world.

    The lure of the technology is its simplicity: it needs, essentially, only two ingredients—a DNA cutting enzyme, also called a nuclease (here, Cas9); and short piece of RNA, DNA’s molecular cousin, that can be programmed—crafting its As, Cs, Ts, and Gs—to bind to the gene of interest in the cell and activate the enzyme. Jennifer Doudna and Emmanuelle Charpentier—often referred to as the UC scientists, even though Charpentier was then at University of Umeå in Sweden—were among the first to figure all this out and get it to actually work in test tubes and bacteria. Virginius Šikšnys of Vilnius University in Lithuana also had a relatively contemporaneous paper showing, for the most part, the same thing. Both groups—the UC scientists and Šikšnys—separately filed for patents in 2012.

    Shortly after the UC and Šikšnys papers, a number of groups tried to work the technology in the cells of higher organisms, notably humans. If it worked, it had the potential to spell a breakthrough for therapeutics; it could be used to edit defective copies of genes in living patients. In late 2012, Feng Zhang of the Broad Institute successfully performed those experiments in human cells and filed for patents covering his iteration of the technology.

    Zhang’s filings—all of which matured into issued patents—ultimately triggered a patent interference between UC and the Broad Institute, with the UC’s patent application still-to-be issued. The interference saw the filing of thousands of pages of attorney argument, almost ten motions on dispositive issues, and expert testimony from a number of other molecular biologists in the field. The PTAB heard oral argument on the interference on December 6, 2016 and issued its decision on February 15, 2017.

    Interferences are famously arcane. But the predicate test to conducting an interference is simply to determine whether there really is an interference in the first place: whether each side’s patents or patent applications are obvious in light of one another. (Perhaps evocative of some exceedingly rare play in baseball, this is called the “two-way interference test.”) And in its February 2017 decision, the PTAB concluded that they did not—that Zhang’s patents disclosed an invention that was, itself, nonobvious in light of Doudna’s patent application. The PTAB’s decision was long, and is itself worth a read. But the basis for its decision rested on its interpretation of a mound of conflicting evidence. Yes, Doudna did not disclose how, precisely, to move the system to human cells. But she did provide a roadmap of sorts. Yes, there was no “guarantee of success” in getting the system to work in human cells. And prior efforts for other gene-editing systems—the ones that were clunky and expensive—had some major failures. But the solutions, here, were simple and predictable. Weighing this—and relying heavily on the notion that a person having ordinary skill in the art would not, at the time, have had a “reasonable expectation of success” that simple solutions would work—the PTAB concluded there was “no interference in fact” between Zhang’s patents and Doudna’s patent application.

    UC appealed. But this set up a tough task for UC. The “no interference in fact” determination is, itself, a factual one, and can only be overturned if it was made without the basis of “substantial evidence.” The standard should be familiar to those who litigate quasi-judicial fact-finding determinations from agencies, such as Social Security appeals. And, as one can guess, it’s a high bar: typically speaking, substantial evidence is satisfied so long as the evidence considered would have been enough to persuade a reasonable fact-finder of its outcome—even if that outcome is wrong. The standard does allow for reversals, but typically only if the lower tribunal committed reversible legal error.

    UC’s brief thus focused on two things: how far the “substantial evidence” standard really went and whether the PTAB’s description of the nonobviousness standard—important for the two-way interference test—was correct. Being neither an admin law nor appellate procedure expert, I was looking forward to getting educating on the meaning of “substantial evidence.” I expected a raft of cases and examples where appellate courts tossed out good, thoughtful agency determinations for nonetheless lacking substantial evidence. I was sorely disappointed. UC barely touched the standard in its briefing—perhaps for good reason.

    As for UC’s brief’s discussion of nonobviousness, I thought it was a closer call. Yes, the PTAB used some language in its opinion suggesting that a lack of a reasonable expectation of success meant that follow-on inventions were necessarily obvious. And that, would be a violation of some express language in KSR v. Teleflex that such considerations should be weighed flexibly in light of the Graham interpretation of prior art and other secondary factors. But I did think the UC took some of these statements out of context—perhaps, ironically, not unlike what the PTAB did concerning Doudna’s expectations of her technology working in human cells. I wasn’t persuaded; but I thought UC did the best with the hand they were dealt.

    The oral argument panel consisted of Chief Judge Prost and Judges Schall and Moore. Donald Verrilli, former Solicitor General and he of Obamacare fame, argued for UC. Raymond Nimrod of Quinn Emmanuel argued for the Broad Institute. The arguments opened with UC being immediately challenged by the Chief and Judge Moore on the substantial evidence hurdle. Verrilli, seeing only enemies down that road, then tacked his argument to the legal error in the PTAB’s obviousness determination. Verrilli relied, heavy, on the contemporaneous success of Doudna’s colleagues in getting CRISPR-Cas9 to work in human cells, and how the PTAB’s review of this did not comport with KSR. This also, argued Verrilli, improperly shifted the burden or proof to UC rather than the Broad Institute. During this, the Chief Judge seemed to express some skepticism of the PTAB’s recitation of the standard. But then, as Verrilli’s description of the science unfolded, Judge Moore began to take Verrilli to task for simply engaging in a reweighing of evidence. Verrilli’s complaints that contemporaneous success with “off the shelf” tools was not inventive science sparked a vocal disagreement from Judge Moore, who explained that such efforts were common—but they didn’t mean anyone necessarily thought they were going to work. Verrilli, trying to get his explanation heard, was shut down. “That’s how science works, Mr. Verrilli,” explained Judge Moore. “Don’t interrupt me.” After forty minutes of fun—if you’re me—the case was submitted.

    Given the standard, the briefs, and the tenor of the argument, I think it’s likely that the Broad Institute will win. Judge Moore seems to think—and I share her view, if so—that the substantial evidence controls the outcome in this case. Substantial evidence is a high, high bar. And we could disagree with the PTAB’s decision—but that doesn’t mean its view of evidence was unreasonable or that it utterly ignored crucial facts. I don’t necessarily share the Chief Judge’s skepticism about the PTAB’s recitation of KSR—I frankly don’t think the PTAB muddled the standard as much as UC said in its papers. But even if so, it’s hard for me to envision the slip opinion exclaiming that, substantial evidence be damned, this poor description of KSR makes it all reversible error. Judge Schall was silent, so I have no clue what he thinks. But if you buy into heuristics, à la Peter Lee’s Yale Law Journal article, it’s easier to rely on the PTAB and write a substantial evidence opinion than to commit to a gnarly reversal of a technically tough case. Either way, I think the Broad Institute has at least two votes in its favor. And because I don’t think the Supreme Court will touch this case with a ten-foot pole, I think this will ultimately be an ending chapter in the CRISPR patent saga.

    So: what does this all mean for scholars, if anything? Well, I think a lot—but not for the typical reasons that cases make good scholarly fodder. The CRISPR case, it seems, is not legally groundbreaking in any way. It’s unlikely we’ll get an opinion with a radical departure on the substantial evidence standard or even nonobviousness. I also doubt we’ll get a fractured opinion, and the case probably won’t go en banc. Like I said earlier, the Supreme Court would never touch it.

    But I think the dispute is important for patent scholars because it demonstrates that patents covering even revolutionary technology can be legally mundane and still have significant real-world impact. Who wins the CRISPR patent dispute is likely to decide a great many important things—the speed of technological development, its cost, and the extent of patent thickets in the real-world. If good scholarship strives, in part, to make sense of momentous legal events—say, the constitutional affirmance of same-sex marriage, the suspension of cost-sharing reduction payments, or the end of deferred immigration violation prosecutions—then the CRISPR patent dispute should be considered in that vein. I bring this up because there is a current of criticism of younger scholars who pick up bright, shiny developments elsewhere in the world and simply apply the law to them (guilty), especially where such developments have little to say about how the law will change in response. But oftentimes, the law simply does not change. Parties negotiate in the shadow of the law, not its flames. And as scholars who, I hope, are ultimately concerned with how things work in the real world, we should lace our enthusiasm of momentous events in the law with momentous events in the world.

    More practically, attending these oral arguments also showed me how important it is to see how the law gets applied—how the sausage gets made. This is something the bulk of us has from clerking or practice experience, or both. But making a regular habit of it demonstrates how important factual nuances are, even on appeal. This is all the more important for patent scholarship where factual predicates of the underlying technology can go a great deal in informing—or misinforming—your reader. This case showed me—and keeps showing me, as this blog post makes evident—that sometimes lengthy descriptions of technology are required to even understand what the underlying factual argument is. With exception of empirical legal scholarship, there’s enough patent scholarship out there that’s thin on the technical facts and devoid of instructive hypotheticals. Ultimately, I think that’s a disservice to the judiciary and the academy—just as a gross misinterpretation of the technology would have been to the judges in this case. Many scholars, in framing their work, love the So what? question. We also love the Who decides? question. We should put the How so? question in that pantheon—how would a piece of technology produce such a disagreement about the law?

    Lastly, the oral arguments yesterday provided some great fodder for future work. There were two cases argued prior to the CRISPR case that presented some fascinating questions: The first, Martin v. Wilkie (Case No. 17-1747), was a Court of Appeals for Veterans Claims case that asked whether an egregiously delayed decision by the Board of Veterans Appeals constituted a due process violation, and whether such a violation would continue after remand. That is, if the legal result of the appeal is a remand, but also an acknowledgment that the remand would increase an otherwise constitutionally violative delay in adjudication, how is a court supposed to weigh those? The second was a § 1498 patent case (Hitkansut LLC v. U.S., Case No. 17-1853) with a simple question: does § 1498 provide for prospective remedies like running royalties? Prospective remedies in private infringement cases don’t have the greatest statutory grounding. But this makes running royalties in § 1498 cases especially suspect because the statute is both jurisdictional in nature and written in the past tense. These are issues that I would never have dreamed of without hearing them live. And, given that they are predicated by real cases with fact patterns that seem to come up frequently, would make—in my estimation—good vehicles for future scholarship.

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  • Measuring the Value of Patent Disclosure

    How valuable is patent disclosure? It’s a perennially asked question. There are studies, like Lisa’s, that attack the problem using surveys, and the conventional wisdom seems to be that there are niche areas that read patents, but for the most part patent disclosure holds little value because nobody reads them.

    Deepak Hegde (NYU Stern), Kyle Herkenhoff (Minn. Econ), and Chenqi Zhu (NYU Stern PhD candidate) have decided to attack the problem from a different angle: using the AIPA (which required patent disclosure at 18 months) as a natural experiment. The paper is on SSRN, and the abstract is here:

    How does the disclosure of technical knowledge through patents affect knowledge diffusion, follow-on invention, and patenting? We study this by analyzing the American Inventor’s Protection Act (AIPA), which required U.S. patent applications filed after November 28, 2000 to be published 18 months after filing, rather than at grant, and advanced the disclosure of most U.S. patents by about two years. We estimate AIPA’s causal effect by using a counterfactual sample of identical European “twins” (of U.S.patents) which were not affected by the U.S. policy change and find that AIPA (i) increased the rate and magnitude of knowledge diffusion associated with U.S. patents (ii) increased overlap between technologically distant patents and decreased overlap between similar patents. Patent abandonments and scope decreased, while patent clarity improved, after AIPA. The findings are consistent with the predictions of our theoretical framework which models AIPA as provisioning current information about related technologies to inventors. The information, in turn, reduces follow-on inventors’ R&D and patenting costs. Patent disclosure promotes knowledge diffusion and clearer property rights while reducing R&D duplication.

    This was a clever project. There have been AIPA studies before, but none that try to measure the value of the diffusion, so far as I know. What makes it go is the matching with European patents (which had always been published), which allows for their measurements to be independent of quality of invention.

    They find that the earlier disclosure made a difference in diffusion: faster citations, more citations in the same amount of time, changes in technological overlap that implies that patents are being read, fewer abandonments (due to overlap), fewer but longer claims. They did not find these changes in European patents centering on the passage of the AIPA. Furthermore, they do not find these effects for patents that opted out of the AIPA, which implies that it really is the AIPA that is driving these results.

    So, it is clear that somebody is reading these disclosures, but the question is who? The draft implies that one conclusion is decrease in duplicative R&D, which should be one of the primary benefits of the patent system and early licensing, as I argue in my essay Licensing Acquired Patents (among others). But there are some hurdles this article faces to get to that conclusion.

    First, the European patents were published pre-AIPA, so why wasn’t anyone reading and citing those? There are a couple of good responses to this. I believe that most citation study work has shown that citation is stronger more locally (another argument for diffusion effects). If so, then European patents may have been ignored (indeed, Cotropia, Lemley, and Sampat have a paper on this). In addition, the authors correct for this by examining whether European cites turned into US cites and for patent families.

    Second, one has to buy into the idea that these are the appropriate measures of diffusion. Are they cites added by examiners or by applicants (the paper has data on this). Are the claims narrowed by the examiner, by the patent attorney, or the inventor? Are there fewer abandoned applications because of less duplicated R&D, or because patent attorneys are not claiming as much? In other words, the diffusion may well be to patent attorneys at the point of filing, and not to inventors at the time of inventing. This, I think is a difficult hurdle. The authors attempt to justify this assumption based on the cost of secrecy and the risk of disclosure for important inventions, but they make clear that it is a key assumption for their definition of knowledge diffusion.

    Even if one does not buy into the strong version of their conclusions, however, this study has a really important real world payoff: publishing patents has an effect. They are seen, and they affect the body of prior art in a way that limits future claims (at the very least) and increases citations (which makes searching easier). This alone is an important function; as Lemley, Sichelman, Wagner, and I argued in prior work, one of the costs of not having software patents through the 1970s was that there was no prior art to knock out all the software patents of the 1990’s. This study confirms this for us.

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  • Defendant is Prevailing Party for Awarding Attorney’s Fees if Case Dismissed with Prejudice

    If an action is dismissed with prejudice for lack of standing, the defendant will be considered the prevailing party and attorney’s fees can be awarded under 35 U.S.C. § 285. The Federal Circuit also affirmed that the case was exceptional under § 285 because the court properly examined the totality of the circumstances in making its determination that Raniere litigated the case in an unreasonable manner.

    The post Defendant is Prevailing Party for Awarding Attorney’s Fees if Case Dismissed with…

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  • Unwitnessed E-mails and Drawings Cannot Corroborate Testimony of Conception

    Appellee Kamstrup A/S (“Kamstrup”) filed an IPR, and the Board instituted review of the challenged patent. Apator attempted to swear behind a cited prior art reference and submitted an inventor declaration and three emails with attachments to support the earlier conception date. The Board noted that there were no indicia in the body or header of the emails indicating what files were attached or what the attachments disclosed. The Board also noted that the only evidence that a file was attached…

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  • How The Fanapt Product Label Established Infringement Of Personalized Treatment Claims

    Our first article on Vanda Pharmaceuticals, Inc. v. Aventisub, LLC focused on the Federal Circuit’s decision upholding the subject matter eligibility of the personalized method of treatment claims under 35 USC § 101. Here, we consider how the Fanapt label was sufficient to establish infringement of personalized treatment claims in the ANDA context. The Personalized…… Continue reading this entry

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  • IPLAC Offers § 101 Revision That Attempts to Harmonize IPO and AIPLA Proposals

    By Donald Zuhn — In a letter sent to U.S. Patent and Trademark Office Director Andrei Iancu earlier this month, the Intellectual Property Law Association of Chicago (IPLAC) presented its proposal for a revised version of 35 U.S.C. § 101. IPLAC described its proposal as a harmonized version of revisions to § 101 proposed by the Intellectual Property Owners Association (IPO) and American Intellectual Property Law Association (AIPLA), which IPLAC indicated “represent the most straightforward and comprehensive revisions to Section 101.” In crafting a harmonized version of § 101, IPLAC sought “to combine the recommendations from IPO and AIPLA into…

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  • 記載

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    記載

    (DESCRIBE)
    $$ Similarly, the adhesive on the strengthening strip is preferably one described in European Patent No. 51935. / 同様に、補強ストライプ上の接着剤は、欧州特許第51935号に記載のものが望ましい。(USP5968000)

    $$ The substrate film was subjected to the test procedures described herein and exhibited the following properties. / 基材フィルムはここに記載された試験手順を受け、そして次の特性を示した。(USP5935903)

    (DEFINE)
    $$ Percolation of the cannabis herb was continued to exhaustion as described in Example 1 and evaporated to a soft extract (as defined in the British Pharmacopoeia). / 大麻ハーブの浸出(濾過)は、実施例1で説明したように、使い果されるまで続けられ、蒸発されて軟性抽出物となる(英国薬局方に記載されている)。(USP7622140)

    $$ It will be appreciated that variations in and modifications of the present invention may be made within the scope of this application as defined by the appended claims. / 本発明の変形と変更は、請求項に記載された本出願の範囲内であると理解される。(USP6560176)

    (MENTION)
    $$ As mentioned above, the second port 44 of the collection system 28 is connected to the vacuum pump 30 by a vacuum line 36. / 上に記載されているように、収集システム28の第2のポート44は、真空ライン36によって真空ポンプ30に接続されている。(USP8323264)

    $$ The above mentioned variable flow resistance in the bypass path could be achieved in a number of ways. / 以上に記載したバイパス通路内の可変流れ抵抗は複数の方法で実現されうる。(USP8261739)

    $$ Further details of this circuitry is contained in our aforementioned International application no WO98/49528. / この回路の他の詳細は、本発明者等のPCT98/49528号に記載されている。(USP7213467)

    $$ All publications mentioned in the text are incorporated herein by reference. / 本明細書に記載されるすべての刊行物は、引用により本明細書に組み入れる。(USP6242175)

    (SET FORTH)
    $$ Preferable and/or optional features of the invention are set forth in claims 2 to 19, inclusive. / 本発明の好ましい特徴および/またはオプションの特徴は、請求項2~19(請求項2および請求項19を含む)に記載される。(USP8984844)

    $$ Advantageous features are set forth in the appendant claims. / 有利な特長は、特許請求の範囲に記載されている。(USP8160423)

    $$ Although the present invention has been described with reference to preferred embodiments, it will be understood by those skilled in the art that various changes in form and detail may be made without departing from the scope of the invention as set forth in the accompanying claims. / 本発明を好ましい実施形態を参照して説明してきたが、添付の特許請求の範囲に記載の本発明の範囲を逸脱せずに形態および詳細において種々の変更がなされ得ることが当業者には理解される。(USP7622711)

    (従属クレーム中)
    $$ A system according to claim 2, wherein the aperture is defined by four movable blades. / 絞りが4枚の可動ブレードによって規定されるような、請求項第2項記載の装置。(USP5946131): according to

    $$ A chiller in accordance with claim 13, wherein said resilient sheet within the vessel is substantially in the form of the letter "S". / 請求項13に記載の冷却機にして、前記容器内の前記弾性シートが略々「S」字形である冷却機。(USP5931005): in accordance with

    $$ The sensor arrangement as claimed in claim 1, wherein the hydrophilic polymer comprises polyethylene oxide. / 親水性ポリマーがポリエチレン酸化物である請求項1記載の装置。(USP5903685): as claimed in

    $$ A process for manufacturing a switchable polymer as defined in claim 1, comprising reacting… /(以下を)反応させることを特徴とする請求項1に記載の転換可能なポリマーの製造方法。(USP6610762): as defined in

    $$ A hand held tool as in claim 2, wherein: the output member includes air injection needle means for directing pressurised air to the interior of said end portion of the tubular pathway. / 出口部材が加圧された空気を管状通路の端部の内部に送るための空気注入針手段を備えることを特徴とする請求項2に記載の工具。(USP5749565): as in

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  • Cert Denied in Oil States Follow-On Cases

    Cert Denied in Oil States Follow-On Cases

    Until today, a host of patent cases have been pending before the Supreme Court — hanging onto the coattails of Oil States. Following full affirmance of the IPR regime, the Supreme Court has now denied certiorari in those cases.  The one additional case that was ripe-for-certiorari in the most recent Conference is PNC Bank National Association  v. Secure Axcess, LLC, No. 17-350.  The court issued no order in that case — suggesting that it may be up for further consideration.  In PNC, the substantive question is “whether . . . CBM review requires that the claims of the patent expressly include a ‘financial activity element?’”

    CBM Review Keeps its Narrow Scope: Narrowly Surviving En Banc Challenge

    As far as I know, all of the Oil States follow-on cases denied today involved a patent whose claims had been cancelled by the PTAB.  In those cases, all appeals have now seemingly been exhausted.

    Cases where Certiorari was Denied:  

    • Affinity Labs of Texas, LLC v. Andrei Iancu, No. 17-117, 17-232, and 17-233
    • Affinity Labs of Texas, LLC v.

    Continue reading Cert Denied in Oil States Follow-On Cases at Patently-O.

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  • IP rights are essential ingredients to our innovation system

    “Let’s talk a bit about intellectual property rights,” Undersecretary of Commerce and Director of NIST Walter Copan said at the LES Silicon Valley conference on Wednesday, April 25, 2018. “IP rights are American property rights.” This simple, declarative statement by Director Copan was as important as it was direct. These words were spoken on the morning after the United States Supreme Court issued its decision in Oil States v. Greene’s Energy, which rather than saying patents are a property…

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