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Supreme Court Asked to Step in Amid Patent Claims Losing Streak

Jan. 15, 2021, 10:56 AM

The Supreme Court could decide as soon as Friday whether to jump into a dispute over how broad a swath of chemicals a patent can claim, an issue some drug companies say could influence investments in the search for groundbreaking cures.

Just over four years ago, Merck & Co.’s Idenix won a record-setting $2.5 billion jury verdict over its patent on a hepatitis C treatment. The win was short lived: Gilead Sciences Inc. convinced a district court and the U.S. Court of Appeals for the Federal Circuit the patent was invalid.

The appeals court ruling highlighted a trend of pharmaceutical and biotechnology companies losing when they sue competitors on patent claims that cover a broad group of related chemicals, legal scholars say.

These patent claims, known as genus claims, have long been viewed by drug companies as an important part of their strategy to protect groundbreaking medicines. Some now question how many of these claims are even viable.

“It is pretty dramatic how broad the claims were that the patent office used to issue and where the courts are going now, and how some litigants are using those court decisions to push even further,” said Steven Lendaris, chair of Baker Botts LLP’s life sciences IP practice group.

A series of cases making their way through courts likely will clarify where the boundaries will be drawn and could have a significant impact on pharmaceutical companies’ ability to protect therapies for treating cancer, diabetes, and other diseases, attorneys say.

Record of Failure

Genus patent claims are typically sought by companies early in research into new drugs. Securing genus claims from the patent office can have value, including attracting investors. Other, more narrow, patent claims can be filed as development continues.

But when companies sue on genus claims, they face an uphill battle. In a recent study, a group of intellectual property law professors looked at Federal Circuit decisions over the past 30 years and found an “unmistakable” trend: “biotech, chemical, and pharmaceutical genus claims lose in court.”

The study found the court routinely invalidates these claims because they fail to enable or describe the full scope of the invention.

“Once they get to the Federal Circuit and strong arguments are made, in the cases we’ve looked at there is a consistent record of their failure,” said Dmitry Karshtedt, a George Washington University law professor and one of the study’s authors.

In Idenix’s case, the court said the patent encompassed “at least many, many thousands” of potential compounds, each of which would need to be screened to know whether they are effective against hepatitis C.

Appealing to the Supreme Court, Idenix warned that Federal Circuit rules “spell the end of genus claims as we know them.” The Supreme Court will consider whether to hear the case at the justices’ private conference on Friday.

Karshtedt and more than a dozen other law professors have urged the Supreme Court to take the case. They said the Federal Circuit has turned the law of genus claims on its head, putting in place requirements that are impossible to meet for large genus claims.

“The arc of this law wasn’t fully appreciated until Idenix came out,” said Karshtedt, adding that “we’re starting to see more and more cases” where arguments are made against genus claims.

Balancing Act

Courts will have to balance between concerns about rewarding companies for inventions and not allowing overbroad patents that block a field of research. Lines could be drawn in several cases that Lendaris said turn on questions of scope and support of patent claims.

“You need to have that balance of being able to understand the species that would fall within the scope of your genus without having to do the testing of every single member of the genus,” he said. “Where we are now is, ‘How do we figure that out?’”

In one case at the Federal Circuit, Gilead’s Kite Pharma unit is trying to escape a $1.2 billion patent judgment in a fight with Bristol-Myers Squibb unit Juno Therapeutics over Kite’s blood cancer treatment Yescarata. Kite argues the patent “preempts an entire field of inquiry” and should be struck down.

“Affirming this judgment would invite all patentees to follow Juno’s example—and stifle innovation,” Kite wrote in court filings.

Amgen Inc. in a separate case is trying to revive patents it lost in the district court on the cholesterol drug Repatha after it sued Sanofi and Regeneron Pharmaceuticals Inc. During oral arguments last month, one judge told Amgen it faced an “uphill battle.”

The cases are being closely watched for guidance from the Federal Circuit, although some attorneys are wary about the potential for sweeping rules.

“There’s risk that there could be broad pronouncements that people will overinterpret,” Bruce Wexler, the global co-chair of the IP practice at Paul Hastings LLP, said.

Competitors

Genus patent claims typically impact a subset of cases over drug products.

Generic drugs work the same way as a brand name version, and companies usually can rely on more narrow patent claims when attempting to block generic products. Genus patent claims are more often a focus when companies have competing products.

GlaxoSmithKline, which has supported Idenix’s bid for Supreme Court review, said without the protection of genus claims, companies may delay filing patent applications until a drug is far along in development.

More broadly, courts’ treatment of genus claims could reverberate into areas outside drug patents. In one example, Karshtedt noted the Federal Circuit found a semiconductor device patent didn’t teach the full scope of the invention.

That “might continue with Idenix as these things translate from one area of technology to another,” Karshtedt said.

To contact the reporter on this story: Matthew Bultman in New York at mbultman@correspondent.bloomberglaw.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Keith Perine at kperine@bloomberglaw.com

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