Clarify Appeals Court Decision: BIO
The Biotechnology Innovation Organization (BIO) is asking the Appeals Court for the Federal Circuit to reconsider and clarify its decision in The Medicines Company v. Hospira. In an amicus brief filed in support of The Medicines Company’s request for rehearing by the full court, BIO says that the court’s decision “needlessly expands the on-sale bar to discriminate against pharmaceutical manufacturers who choose to take advantage of the economic efficiencies of outsourcing clinical manufacturing or other aspects of the drug development process. Applying the on-sale bar to a contract between a patent holder and a contract manufacturer who confidentially provides manufacturing services conflicts with established precedent and congressional intent. The decision has wide-ranging economic implications for the pharmaceutical and biotechnology industry as a whole and risks chilling investment in research, development, and commercialization of new products that heal, feed, and fuel the world.”
The brief says that the purpose of the on-sale bar is to promote timely filing of patent applications and to prevent inventors from unduly extending the statutory monopoly of patent protection or removing knowledge the public already believes is in the public domain. The bar precludes patent protection for an invention that was “on sale in this country, more than one year prior to the date of application for patent in the United States.”
Many biotechnology companies are moving toward a model, BIO says, in which at least some research, development, and manufacturing work is performed by third-party providers to streamline resources and enhance efficiencies.
“The fundamental policies of the on-sale bar are not served by applying the bar in a way that preserves patent rights for companies that perform their own in-house manufacturing while invalidating patent rights for companies otherwise engaging in the very same economic activity, but who seek to operate in a nimble and efficient manner by engaging the services of third-party contract manufacturing organizations,” BIO says. “The decision, if it stands, would undermine, rather than advance, the policies behind the on-sale bar of uniformly encouraging all innovators to promptly file for patent protection. It would treat the very same conduct — ramp-up production, process validation, and pre-commercialization manufacturing — differently depending on how a patent-holder structures its business. The decision therefore discriminates against companies with specialized expertise or who choose to take advantage of the capital and resources of contract manufacturing organizations and instead encourages inefficiency and delay in bringing important pharmaceutical products to market.”
BIO asks the full court to clarify that contract manufacturing services provided to a patent holder, when an invention is not sold to the public more than one year before filing a patent application, does not constitute a commercial “sale” for purposes of the on-sale bar and should not fall within the scope of the Special Devices holding rejecting a “supplier exception” to the on-sale bar.