Bizarre drug shortage story

Guest post by Andrew Moeser:

http://www.theglobeandmail.com/life/health/demise-of-a-death-drug-puts-patients-at-risk/article1885636/

Another story about availability problems for generic medicines, but the case of sodium thiopental is different from the general shortage of drugs.

It’s an interesting example of global linkages in drug markets – concerns of Italian officials (the site of manufacturing) that the drug will be used for executions in the US means that there’s a shortage for use in anesthesia in Canada (and elsewhere).

For patent geeks: are killer patents an urban legend?

Tell me if you've heard this - supposedly, one of the motivations behind disclosure and utility standards are patents from early in the century from the German chemical industry deliberately written so that, if the methods in the disclosure are followed, the hapless copier would blow herself up!  This sort of self-help/IP vigilante-ism is disapproved in polite company ;)  But is it true?   Christopher Wadlow investigates in the latest issue of the Journal of Intellectual Property Law and Practice.

RIM, Apple win a round against Kodak at ITC

The International Trade Commission, which can block the importation of items into the United States if they infringe patent rights, has issued a preliminary opinion that RIM and Apple devices do not infringe Kodak patents.  See
http://us.generation-nt.com/eastman-kodak-apple-rim-apn-patents-itc-request-news-2700921.html

http://www.therecord.com/news/business/article/477712--kodak-loses-ruling-in-case-to-collect-royalty-fees-from-rim-apple

A bit more CETA

From The Parliament .com

"The two sides concluded the latest FTA talks, the sixth round of discussions, in Brussels last week. The next round of negotiations are due to take place in Canada in April.

A Canadian official said that the main remaining obstacles to a deal appeared to be "government procurement, services and intellectual property rights"."

United States "a reclining world power"

according to Bank of Canada Governor Mark Carney.

Not sure what that means, but its a neat turn of phrase, isn't it?  ;)

Canada-EU exchange of offers delayed

From Embassy Magazine: the Canada-EU free trade talks are facing delays.  The negotiators are met last week, but the process is not meeting the benchmarks as fast as desired.  

Most importantly, the exchange of "offers" is being delayed.  Note that this won't necessarily delay the end-point of the process: if the extra time is used to better understand each side's position, resulting in more finely tuned offers, the delay in offers may not delay the date of actual agreement.

No specific mention of patents or pharmaceuticals or IP.  My understanding is that those issues might well be dealt with after the offers - as a political choice by the politicians. 

BTW, the Canada/EU trade negotiations were mentioned during the Intellectual Property Developments conference in London - "At present the EU is negotiating a FTA with Canada, which has attracted criticism in Canada on account of patent linkage." (see IPKat).

Wi-LAN settles with Broadcom

Ottawa-based “technology innovation and licensing company” Wi-LAN settles its ED Texas lawsuit against Broadcom.

http://www.wi-lan.com/company/news-and-events/News-Details/2011/broadcom-and-wilan-reach-agreement-to-end-litigations/default.aspx

Lawsuit continues against lots of companies who use Bluetooth (including Apple, Dell, HP, Intel. Motorola, Sony, Texas Instruments, etc.)

http://www.theglobeandmail.com/news/technology/business-technology/wi-lan-settles-broadcom-lawsuit-signs-licensing-deal/article1877320/

Financial terms not disclosed.

Canadians obtaining more patents

In 2010, Canadian companies were granted 5,223 U.S. patents - up 20% from 2009.  The Globe and Mail reports HERE, but also notes:

All but one of the five countries that rank ahead of Canada in U.S. patents are churning them out at a more rapid clip, including No. 1, the United States (up 24 per cent); No. 2, Japan (up 26 per cent); No. 3, Germany (up 25 per cent); No. 4, South Korea (up 26 per cent); and No. 5, Taiwan (up 16 per cent), according to the U.S. Patent and Trademark Office’s 2010 annual report. The list of companies winning the most patents includes International Business Machines, Samsung, Microsoft and Canon.

 More broadly, there is concern being voiced that the USPTO is just issuing more patents - 31% more in 2010 than in 2009 - in line with Director David Kappos' goal of reducing pendency (to be simplistic, the amount of time a  patent application sits in the USPTO before being issued).  But is this being accomplished at the cost of issuing lower quality patents?  Dennis Crouch calls for a "quality study" HERE and has further comments HERE.  Some commentators point to "a pick up in R&D after the recession" (but wouldn't that result in patents 2-3 years from now?) and "the increasing importance of patents as companies war with each other over intellectual property" (as a patent lawyer, one can only hope!).

The 2010 USPTO Performance and Accountability Report may be found HERE.

The Globe also has an article about an inventor obtaining CA and US patents for a hockey stick modified to train stick handling.   Note his patent agent doing his job:   "The agent also helped him to ensure the patent applied to other kinds of sticks – such as goalie sticks, lacrosse sticks or field hockey sticks."

Target v. Target

Big recent news was Target (US) 's aquisition of Zellers, a Canadian chain of discount stores, for $1.8 billion from HBC.

HBC sold the bulk of its weakest chain, Zellers Inc., to the U.S. retail giant. Target will assume control of up to 220 Zellers stores and said it will spend more than $1-billion to convert 100 to 150 of them to its own banner within the next two to three years.

Interesting trademark aspect: Another store company in Canada, Fairweather, already owns a registered Canadian trademark for TARGET APPAREL for men's clothing, which dates back to 1981.  According to this article, Fairweather acquired the trademark from Dylex, a failed Canadian retailer, in 2001, and opened its first Target Apparel store in 2005.  Interestingly, there was a s.45 challenge to expunge the mark for non-use around 2005.  Litigation has begun.

Target (US) is hardly unknown in Canada.  It claims that

Target’s research suggests it will have a following when its launches in Canada. It found that 10 per cent of Canadians shop at Target and 70 per cent are familiar with its brand.

This will be an interesting case to watch, assuming its doesn't settle before judgment.

Article re: Drug Shortages

A note from colleague Victor So, who is both a pharmacist and a lawyer: "FYI - this shortage is real.  Every time I step in the pharmacy I see more and more drugs that are out of stock."

Globe & Mail article here.

Intel, NVIDIA settle with a $1.5 billion license

Intel and NVIDIA have settled their patent-plus litigation, with Intel agreeing to license NVIDIA's patents for $1.5 billion (US).  The Intel press release is HERE, and the Globe and Mail's less-than-helpful article is HERE  (hey Globe - might you at least tell us what sort of lawsuit they are settling, or the basis for the suit?). 

Technically, the settlement is a cross-license - Intel can use a set of NVIDIA patents, and NVIDIA can use a set of Intel patents.  Scuttlebutt is that Intel is going to (continue to? ;) ) use technology covered by the NVIDIA patents in their products, but NVIDIA has no plans to get back into computer chipsets - which probably explains the $1.5 billion payment from Intel to NVIDIA.  This also might be bad news for AMD, which is a competitor ot both NVIDIA and Intel but in different markets.    

Patents in the Oil & Gas Sector

There was an interesting article in the Globe and Mail on Saturday about patents in the petroleum sector.  The lead:

Deep beneath the muskeg and forest of northern Alberta lies an untapped treasure. Call it the impossible oil sands, a vast pool of crude that lies beyond the reach of current technology.

Of the 1.7 trillion barrels of crude buried in the oil sands, the industry currently believes it can produce just 170 billion, or one out of 10 barrels.

But the Alberta government believes nearly double that number could some day be liberated if there are enough breakthroughs to figure out how to do it profitably.

Now, the battle to reach those impossible oil sands has opened a new front: the patent office.

The general upshot:

As Canada’s oil and gas companies pour billions into ever more challenging oil and gas reserves, they find themselves in a growing technological arms race that has produced a surge in patent applications from an industry that has historically paid little attention to protection of intellectual property.

 An interesting article to read.  My impression is that oil and gas has always had some small companies who specialize in new technologies to access difficult sources - the article suggests that they are getting more focused on patents as a strategy.  Also of interest to Canadian patent lawyers: the petroleum industry (i.e. reserves and extraction) are based in Canada out-of-proportion to our population, providing a fertile ground for Canadian (and Canadian-focused) litigation.  Of course, that is not new - there has always been a stream of oil & gas patent cases around (Gilbert's recently represented Halliburton), but this article implies an upsurge in activity.

I had no idea I was a criminal lawyer...

Anyone know any good criminal law associations to join?  I've apparently been practicing criminal law for the past few years without knowing it ;)

OK, putting jokes aside,  before Christmas the Federal Court of Appeal in Apotex v. Eli Lilly found that the Data Protection Regulations are valid federal legislation.  What raised a lot of eyebrows is that the regulations were found to be valid federal legislation under the criminal law power.  The trial judge, in contrast, found it was valid under the trade and commerce clause. 

The FCA decision in a nutshell

[117]      I therefore conclude that the pith and substance of the [Data Protection Regulations] is to implement article 1711 of NAFTA and paragraph 3 of article 39 of TRIPS so as to encourage the development of new drugs, a valid public health and safety purpose.

[118]      I now turn to the question of whether the pith and substance of the [Data Protection Regulations] falls within federal legislative authority under the Constitution Act. In my view, the [Data Protection Regulations] constitutes a valid exercise of the federal criminal law power under subsection 91(27) of the Constitution Act.

 In short, and not doing the analysis real justice, the regulations as a whole are about allowing and encouraging safe and effective drugs to be placed on the market on pain of criminal sanctions.  (Background - if you sell a medicine in Canada without a Notice of Compliance from Health Canada, it is a criminal act) 

The FCA quoted the Supreme Court in RJR-MacDonald:

The scope of the federal power to create criminal legislation with respect to health matters is broad, and is circumscribed only by the requirements that the legislation must contain a prohibition accompanied by a penal sanction and must be directed at a legitimate public health evil.

The counterargument is that the Data Protection Regulations themselves are about protecting expensive-to-gather data to encourage its generation.  In the words of the trial judge:

[79]      I conclude that the pith and substance of the Data Protection Regulation is the balancing of commercial considerations between the protection of an innovator drug manufacturer’s investments in preparing the NDS information in order to obtain an NOC for a new drug and the eventual NOC approval of generic drug manufacturer’s ANDS for a lower cost generic version of the new drug.

 One can then argue about whether that pith and substance falls under a head of federal power.  


Anyway, I am not a constitutional lawyer (although if someone paid me, I could probably figure it out pretty quick ;)  ).  However, as Andrew Moeser pointed out, the Supreme Court of Canada about two weeks later released Reference re Assisted Human Reproduction Act, which held that the Act was not a valid exercise of the criminal law power and intruded on provincial jurisdiction - albeit the court badly fractured on the issue.  As Andrew pointed out (not having read the case in detail) the AHR Act deals with human reproductive material and engaging in human/non-human transgenic engineering without a license - and that is not a valid exercise of the criminal law power, but data exclusivity is? 

   
 

 

CAFC rejects 25% Rule for calculating reasonable royalities

Yesterday, the Court of Appeals of the Federal Circuit (the CAFC if you're casual, Fed. Cir. if you're formal ;) ) released a big decision if you're interested in monetary remedies for patent infringement.  Uniloc USA v. Microsoft.

The CAFC (Linn J., writing for a panel that included Justices Rader and Moore) ruled that evidence regarding the "25% Rule" is inadmissible under Daubert "because it fails to tie a reasonable royalty base to the facts of the case at issue."

To quote myself, 

The 25 percent royalty rule recognizes as a benchmark that the licensor should be entitled to 25 percent of the predicted "profits".  However, this 25 percent rule is only a starting point: the profit split should then be adjusted up or down to reflect the exact circumstances of the license, and it is not unreasonable for the ratio to be reversed.

Questions have been raised in the past about whether Courts and/or Juries are biased towards the "benchmark" 25%/75% split, regardless of the evidence presented that the split should be amended in a specific case.  
 
Trial courts in the US often have admitted such evidence, as the CAFC states, "largely in reliance on its widespread acceptance or because its admissibility was uncontested."

The CAFC states that in the past it has "passively tolerated" its use; apparently it will no longer be tolerated ;) .

Notably, the CAFC rules that since the 25%/75% split is "unreliable and irrelevant", the approach cannot be saved by adjusting the split up or down to reflect the exact circumstances of the case, say by applying the Georgia Pacific factors.  Basically, the Court says you cannot start from an unfounded basis and then try to correct yourself.
 
In the Canadian context, the US Court that specializes in patents has rejected the reasoning applied in AlliedSignal, a leading Canadian case on patent damages.  It will be interesting to see if Canadian courts follow the US lead, and if so whether they do so explicitly or implicitly.