Congress Decides to Withhold Funds from USPTO

In a move that will effect the entire patent community, Congress has decided not to give the United States Patent and Trademark Office ("

USPTO") access to all of the funds it will collect this fiscal year. Specifically, Congress authorized Public Law 112-10, which calls for withholding approximately $85 million to $100 million from the agency. As a result, the USPTO will have to complete this fiscal year with less money than it anticipated.USPTO Director David J. Kappos broke the news to USPTO employees via email on April 21, 2011. According to the email, the USPTO will undergo major cutbacks, including freezing hiring, limiting training, and suspending overtime for USPTO employees. Additionally, the planned satellite office in Detroit and any consideration of additional satellite offices are postponed until further notice, which will set back the USPTO’s progress in reducing patent application backlog. Trademarks will be unaffected.


"I recognize that these measures will place additional burdens on your offices, your staff, and your ability to carry out the agency's mission," Kappos stated in his email, "[h]owever, I believe that they are absolutely necessary to ensuring that the agency can continue to operate through the remainder of this fiscal year and into FY 2012."

UpcomingTown Hall Discussion with CDRH - May 5, 2011

By way of follow-up to our earlier post regarding changes to the 510k process, we wanted to make sure that those who are following us are aware of an upcoming town hall style discussion being held by the Director of CDRH.  This public meeting will be held on May 5, 2011 from 8 AM to 12 PM at the Sheraton Orlando Downtown Hotel.  The registration deadline is April 22, 2011.

FDA Releases Statement on Enforcement Discretion Regarding Makena

In early February of this year, FDA approved a drug to help prevent premature birth in women who have had at least one preterm delivery.  Manufactured by KV Pharmaceutical, which developed the drug with substantial assistance from the federal government, approval of the drug was long in coming and was much anticipated because of the rising rate of premature births within the United States.  The license granted to KV provided KV with exclusive rights to the drug in the US for seven years.  While FDA's approval of Makena was much anticipated,  there was just one small wrinkle - the drug had already been compounded  by pharmacists for years and had been sold for a price of $10-$20.  KV's price?  $1,500 per dose.  As the drug is generally prescribed for 20 week periods, the total cost for a course of treatment would reach approximately $30,000.  Quite a difference from the $200 to $400 price it had been offered for in the past.

Following FDA's approval, KV issued warnings to specialty pharmacies informing them that continued production of the compounded hydroxyprogesterone caproate  would be unlawful and that FDA would no longer exercise enforcement discretion regarding the product.  On March 30, FDA issued a release permitting pharmacists to continue compounding and selling the mixture to expectant mothers.  FDA explicitly stated that, at this time, it does not intend to take enforcement action against pharmacists who make and sell the drug.  FDA stressed that it may revisit its decision in the future, but that the instant situation presented unique circumstances. 

Considering the current economic and political climate and, particularly, the reality that public money will soon be supporting these subscriptions at a higher level than they would have in the past, FDA made the right decision here.  KV is certainly entitled to make a profit on their product and, it goes without saying, to cover the higher costs of performing the R&D and manufacturing a high quality sterile injectible.  However, consumers should also have the right to choose whether the benefits of using that product are worth the 7,500% price differential , particularly when a safe, effective product has been on the market for years.


Follow-up on Senate Reform of Patent Laws

            The Senate is poised to have a final vote this Wednesday on the patent reform bill. As we discussed last week, this bill is designed to considerably revamp U.S. patent practice for the first time in almost 60 years.

            Senators began considering this bill on February 28, 2011, and have spent the last week debating a series of major and minor amendments. Specifically, some of the amendments made to the bill in the past week include:


·        correcting provisions related to the United States Patent and Trademark Office’s (“USPTO”) fee-setting authority;


·        ending diversion of patent fees;


·        creating a pilot program to examine business-method patents in the wake of the U.S. Supreme Court’s Bilski ruling;


·        amending the definition of a “microentity” and striking litigation-related provisions pertaining to damage calculations and venue selection;


·        authorizing the opening of three or more additional USPTO satellite offices around the country over the next year;


·        establishing a small-business ombudsman at the USPTO;


·        prioritizing the review of patent applications “important to the national economy's competitiveness”, such as applications for green energy inventions; and


·        requiring the USPTO to disclose the length of time between when it begins its post-grant review and when it completes the review.


In addition to what we discussed earlier, key components of the bill also include the following:


  • giving third parties the opportunity to submit information relating to a pending patent application to the examiner;
  • improving the current system for making administrative challenges to the validity of a patent throughout its life;
  • setting new fees for applicants who do not use electronic filing methods;
  • precluding individuals from filing lawsuits challenging the validity of patents on marked products; and
  • allowing the USPTO to offset costs by raising fees, resulting in a net increase in USPTO fee collections of about $1.7 billion between 2011 and 2016.

Now that the Senate is poised to pass its patent reform legislation, attention is shifting to the U.S. House of Representatives, which is in the process of developing its own version of the legislation.

Senate Considering Patent Reform

The Senate is taking up the Patent Reform Act, a bill sponsored by Judiciary Committee Chairman Senator Patrick Leahy, Senator Orrin Hatch, and Senator Chuck Grassley.  This legislation is designed to overhaul the U.S. patent system and bring the patent system in line with 21st century technology, such as biogenetics.

Among other things, the bill proposes to make the following controversial changes:

1.  Transition from a first-to-invent system to the first-to-file system used by the rest of the world;

2.  Create a nine-month, post-grant procedure that allows challenges to recently issued patents;

3.  Give the United States Patent Office the authority to set its fees at a level that will provide enough funds to reduce the backlog of its applications; and

4.  Create a “micro-entity” class which allows for a 75% reduction in fees for independent inventors who have not been named on five or more previously filed applications and have gross incomes less that 2.5 times the national average.

Senator Leahy’s office lists a growing number of supporters for the bill, including Pfizer and other major drug companies, IBM, and the Association of American Universities.  Opponents of the bill include the Coalition for Patent Fairness, a group of high-tech companies that would like to see more in the bill to “lessen the growing burden of abusive and unjustified patent infringement claims.”  Other opponents of the bill, including the American Innovators for Patent Reform and the U.S. Business and Industry Council, assert that the bill favors multinational and foreign firms over start-up companies entering the U.S. market for the first time.

Congress has been trying for over a decade to rewrite patent law, so only time will tell if this attempt will be successful.

FDA and Xavier University Team Up for MedCon 2011

On May 3, 2011, FDA and Xavier University in Cincinnati, Ohio will once again team up to hold MedCon.  The goal is to bring together as many members of the global medical device community together to openly dicuss pressing issues facing the industry.  Leading FDA officials and field investigators as well as a number of global industry experts will be in attendance.  MedCon is geared towards medical device companies of all sizes, with a particular eye towards regulatory affairs, quality assurance, research adn development and risk management.

Key speakers include:

  • Bill Maisel, Deputy Director for Science, CDRH
  • Kim Trautman, Medical Device GMP, CDRH
  • Michael Marcarelli (invited), Director of Bioresearch Monitoring, CDRH
  • Christy Foreman, Director oof the Office of Device Evaluation, CDRH
  • Thinh Nguyen, Director of the Office of Combination Products, FDA

Registration is available here.

Lorillard and Reynolds Sue to Halt Regulation Based on Upcoming Report on Menthol Cigarettes

Unsurprisingly, Lorillard, Inc. and Reynolds American, Inc.'s R.J. Reynolds Tobacco Company unit filed suit against FDA regarding an upcoming advisory panel board that will likely recommend a ban on menthol cigarettes.  Lorillard's top seller is the Newport brand and Reynolds sells, among other things, several mentholated versions of its Camel brand cigarettes.  FDA, of course, gained the power to regulate the tobacco industry in 2009 with the passage of the Family Smoking Prevention and Control Act.  Shortly thereafter, on September 22, 2009, FDA banned flavored cigarettes, with a particular eye towards vanilla, chocolate and clove cigarettes.  The ban of the latter raised some interesting WTO issues, but more importantly for our purposes, set the stage for the current controversy.
Although few know exactly what the upcoming Tobacco Products Scientific Advisory Committee (TPSAC) report on menthol cigarettes contains, many expect that the committee will call for an outright ban.  The report is due to be released on March 23, 2011, and in advance of its release, TPSAC will meet twice more in early to mid-March.  Following the report's release, FDA will consider the report and take whatever action it deems appropriate.  With a ban both legally allowable and likely imminent, manufacturers of menthol cigarettes have no choice but to take action to protect their business interests.
In their Complaint, filed in the United States District Court for the District of Columbia, Lorillard and Reynolds have requested the Court to enter declaratory and injunctive relief requiring the defendants to bring TPSAC and the membership of the constituents subcommittee of TPSAC into compliance with the law and to prevent FDA from taking any action based on or influenced by or from making any use of any report provided by TPSAC or the constituents subcommittee as currently constituted.  Specifically, the plaintiffs allege that three of the eight voting members of TPSAC have financial and appearance conflicts of interest and biases that are incompatible with TPSAC's roles as an impartial advisor to FDA.  Substantively, the plaintiffs allege that those three members of TPSAC cannot act objectively because they have all either appeared as paid expert witnesses in litigation against tobacco-product manufacturers or are or have been employed by members of the pharmaceutical industry engaged in the production of nicotine replacement therapy or other smoking cessation products.
While it remains to be seen whether this suit has any merit, at the least, it's sure to impede any further regulation of flavored cigarettes by FDA.  We'll keep our eye on this and do our best to keep you up to date.



Upcoming Meeting and Live Webcast on the Medical Device Innovation Initiative

FDA will hold a meeting on March 15, 2011 in Silver Spring, Maryland about its Medical Device Innovation Initiative.  The purpose of the Medical Device Innovation Initiative is to assure that American patients have timely access to new technologies and next-gen products, while insuring the patient's safety.  This Initiative proposes actions that the Center for Devices and Radiological Health ("CDRH") could take to accelerate and reduce the cost of regulatory evaluation of innovative medical devices.  You may attend, but must register by no later than 5 PM on March 4, 2011.  Alternatively, a live webcast will be available here.


FDA Greenlights Mobile Radiology App

The United States Food and Drug Administration (“FDA”) has recently approved a mobile radiology application for the iPhone, iPad, and iPod touch, all manufactured by Apple, Inc. This application is the first of its kind and is designed to allow physicians to view medical images and make diagnosis based upon the images viewed on the mobile device.

This new application allows iPhone, iPad, and iPod touch users to receive radiology images taken at a physician’s office or hospital that are compressed and sent using software called Mobile MIM, manufactured by MIM Software, Inc. The iPhone, iPad, or iPod touch user is then able to view the radiology images on his or her mobile device and measure distance on the image. The device user is also able to measure image intensity values, and display measurement lines, annotations, and regions of interest.


The FDA evaluated this application by reviewing performance test results, and reviewing results from demonstration studies with qualified radiologists under different lighting conditions. It concluded that although the display performance of mobile devices can vary significantly, a mobile device using this application is sufficient for diagnostic image interpretation under the recommended lighting conditions.


Mobile MIM should be available soon in the United States Apple Store. This application is already available in many countries, including Austria, Belgium, Bulgaria, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Romania, Spain, Sweden, Switzerland, United Kingdom, Australia, Hong Kong, Japan, Malaysia, New Zealand, Philippines, Singapore, India, Saudi Arabia, U.A.E, Costa Rica, Dominican Republic, El Salvador, Guatemala, and Paraguay.


USPTO to Open New Satellite Office

The United States Patent and Trademark Office (“USPTO”) is opening its first ever satellite office in Detroit, Michigan, in 2011. The new office is expected to create more than 100 new jobs in its first year and to provide a boost to the region’s economy.  

The satellite office represents the first phase of the USPTO’s Nationwide Workforce Program, an effort to hire more patent examiners and seek out additional resources and technical expertise in locations across the country. By opening satellite offices, the USPTO is working to reduce the patent backlog and create new jobs in geographically and economically diverse areas of the country.


The Detroit office enables the USPTO to draw upon Michigan’s workforce to help reduce the backlog of more than 700,000 patent applications. A year ago, the patent backlog stood at nearly 750,000 applications, but an agency push to get it below 700,000 has led to the first significant reduction in the patent backlog in a decade.


Following an evaluation of the Detroit satellite office, the USPTO will consider opening additional offices, which would provide the patent community greater access to the USPTO and the services it offers.


A specific location and anticipated opening date for the new Detroit office will be announced in the coming months. The office will work closely with the Commerce Department’s CommerceConnect facility in Pontiac, Michigan.

DOJ Opines that Genes Should Not Be Eligible for Patent Protection

In a surprising opinion, the United States Department of Justice (“DOJ”) recently said that genes should not be eligible for patent protection because they are found in nature. This opinion could have a huge impact on the medical and biotechnology fields.

This opinion was declared in friend-of-the-court brief by the DOJ in a case involving two human genes linked to breast and ovarian cancer. The DOJ’s opinion is surprising because it is contrary to the long standing practices of the United States Patent and Trademark Office (“USPTO”), the National Institutes of Health (“NIH”), and other various government agencies.

Under U.S. patent law, anyone who invents any new and useful process, machine, manufacture, or composition of matter, may obtain a patent on that subject matter. In 1980, the Supreme Court found that this includes man-made products of genetic engineering. Using this rationale, the USPTO has issued numerous patents on a wide range of engineered DNA molecules. In 2010, the Supreme Court determined that the boundary between eligible and non-eligible subject matter is defined by the principle that patent laws do not embrace laws of nature, physical phenomena, or abstract ideas. 

With this in mind, the DOJ asserted in its brief that certain compositions of matter whose value is derived from the information-encoding capacity of DNA qualify as human-made inventions eligible for patent protection, such as cDNAs, vectors, recombinant plasmids, chimeric proteins, vaccines, and genetically modified crops. However, genomic DNA that is isolated from the human body, without further alteration or manipulation, is not considered patent-eligible. The unique chemical base pairs that induce a human cell to express a certain protein is not a human-made invention. According to the DOJ, the chemical structure of native genes is a product of nature, and is no less a product of nature when that structure is “isolated” from its natural environment than “cotton fibers that have been separated from cotton seeds or coal that has been extracted from the earth”.

It is not clear whether the USPTO will change its policies in the face of this brief. However, the potential impact on the medical and biotechnology fields is daunting. Isolated DNA can be used to induce a human cell to create certain proteins linked to certain diseases, such as the protein BRCA1, which is linked to certain cancers. Researchers can study the structure and function of these proteins to determine how these proteins contribute to the disease at issue, and to determine if there are any drug treatment therapies that can inhibit the function of the protein, thereby treating the disease. 

If isolated DNA is not considered patentable, investors may be hesitate to fund expensive and time consuming research that does not provide a chance for the commercial reward of exclusive patent rights in the product of the research. Without funding for research that isolates DNA, there is a danger that one of the more successful ways to treat certain diseases, creating drug treatment therapies that target specific proteins within the body, will be severely hindered, if not eliminated. 

FDA Update on Caffinated Alcoholic Beverages

In response to pressure from law makers and published peer-reviewed literature, on November 17, 2010, FDA issued Warning Letters to four companies known to produce caffienated malt alcoholic beverages.  FDA stated that it found no support for the claim that the addition of caffeinie to alcoholic beverages is 'generally recognized as safe' and that the combinations of caffeine and alcohol in the cited products may actually pose a public health concern.  The Warning Letters required the four named manufacturers to respond to FDA within 15 days to inform it of the specific steps that the companies intended to  take to remedy the violation or to provide evidence and supporting information to support its contention that the products are not unsafe.  Although that may seem like a short amount of time to respond, the companies were on notice of FDA's concern as early as this time last year.

FDA reports that within the last week, significant progress has been made.  All four manufacturers have reported that they have either ceased manufacturing, marketing and/or shipping the offending beverages or are having all product pulled from store shelves by December 13. 

While the available fact sheets certainly indicate that bans and limitations on caffeinated alcoholic beverages may make sense and while FDA is certainly acting within the power granted to it by regulating these drinks, one has to wonder how far FDA plans on taking this issue.  More than a few alcohol manufacturers promote the mixture of their alcoholic beverages with caffeinated drinks; there's nothing new or exciting about the combination of those two ingredients.  FDA certainly has the ability to regulate advertisement of food and other beverages - the quetion is whether it will use that power to adversely impact major players in the alcohol game, or whether it will limit itself to wrist slapping a few minor producers to quiet public discontent. 

Graphic Images On Cigarette Packages? Help FDA Select Them

 You, the public, are being asked to help select the images, and/or you may post comments on the FDA’s proposal, from now until January 11, 2011. On November 10, 2010, the FDA posted on the Internet a set of 36 graphic color images showing the dangers of smoking grouped in nine categories, which are to be placed on the packages with appropriate text warnings. The public is being asked to help select from the 36 images a set of nine of them, one from each of nine categories.

Congress enacted the Family Smoking Prevention and Tobacco Control Act in 2009, requiring pointed health warnings with color graphics on all cigarette packages and advertisement after September 12, 2012.  Representing each of the nine categories, the text warnings, each to be coupled with a related image or photo, are:

v     WARNING: Cigarettes are addictive

v     WARNING: Tobacco smoke can harm your children

v     WARNING: Cigarettes cause fatal lung disease

v     WARNING: Cigarettes cause cancer

v     WARNING: Cigarettes cause strokes and heart disease

v     WARNING: Smoking during pregnancy can harm your baby

v     WARNING: Smoking can kill you

v     WARNING: Tobacco smoke causes fatal lung disease in nonsmokers

v     WARNING: Quitting smoking now greatly reduces serious risks to your health

Each of these congressionally mandated warnings will accompany a related color image, together to cover 50% of the both the front and back panels of each package, and to cover at least 20% of each advertisement. The various warnings will rotate on each package and advertisement periodically.

Some of the scenes depicted are:

o       smoke being exhaled from a tracheotomy opening of the smoker;

o       a baby and mother, with second-hand smoke from the mother engulfing the baby’s face;

o       side-by-side photographs of a healthy lung and a diseased lung;

o       an illustration of a cigarette package with an arrow pointing to a gravestone; and

o       second-hand smoke wafting from a smoker toward a non-smoker’s face during conversation.

When the public comment period ends on January 11, 2011, the FDA will use the comments and scientific research and results to pare the list of 36 images to nine. Secretary Kathleen Sebelius of U.S. Department of Health and Human Services says that she is hopeful that the tragic images will stop young people from picking up their first cigarette and also give smokers the incentive to quit. “Every day,” Secretary Sebelius says, “almost 4,000 youths try a cigarette for the first time, and 1,000 youths become regular, daily smokers.” Over 2,600 adults also try smoking for the first time every year.

The Centers for Disease Control and Prevention says tobacco use is the single biggest cause of preventable death in the United States, killing more than 443,000 users and victims of second-hand smoke every year, and causing serious illness in 8.6 million Americans. Most of smokers dying began smoking when they were under the age of eighteen.

The proposed rules were published in Federal Register, Vol. 75, No. 218, Friday, November 12, 2010.

To see the graphic color images with their text warnings, go to:

To submit comments on the warning labels and the proposed rule, through Tuesday, January 11, 2011:

a) go to: and insert docket number FDA-2010-N-0568-0001 into the “Search” box. (The proposed regs should be at the top of the list of Titles, and follow the prompts, clicking on the docket number in the fourth column to view the regs; to comment on the proposed regs and the color images, click on “Submit a Comment” in the right-hand column.)

b) send a fax*, with your comments, to:   301-827-6870

c) for paper submissions*, or disk* or CD-ROM* submissions, send by mail, or courier or hand delivery to :

            Division of Dockets Management (HFA-305)

            Food and Drug Administration

            5630 Fishers Lane, Room 1061

            Rockville, MD 20852


*NOTE: All comments should be identified by Docket ID No. FDA-2010-N-0568, and only one copy is necessary.

For the FDA’s notice, click here or go to this link


More information below:

As provided in the “Background” section of the proposed regulations, in 1964 the U.S. Surgeon General of the Public Health Service issued the landmark report titled “Smoking and Health,” which concluded that cigarette smoking is a health hazard of sufficient importance in the U.S. to warrant appropriate remedial action. Shortly thereafter, Congress passed the Federal Cigarette Labeling and Advertising Act of 1965, which required a printed warning to appear on cigarette packaging. Although the current text warnings on packages have been in use for twenty-five years, there is considerable evidence that the current warnings are given little consideration by viewers, and the warnings are said to have become “invisible” and fail to convey relevant information in an effective way. 

The FDA says that there is evidence of a strong worldwide consensus that effective tobacco health warnings should be large and should include a graphic image component. The World Health Organization’s (WHO) Framework Convention on Tobacco Control (FTCT) has called for such a program of graphic images, and over 30 nations or jurisdictions have implemented such a program, including Canada, India, Mexico and the United Kingdom, with efforts pending in several others. (As of August 2010, there are 168 signatories to the Convention, including the United States, although the U.S. has not ratified this Treaty.)

Results from the 2009 National Health Interview Survey (NHIS) indicate that approximately 46.6 million U.S. adults are cigarette smokers (20.6% of the adult population). During the period of 1998 to 2009, adult smokersdeclined from 24.1% to 20.6%, although from 2005 to 2009 rates showed virtually no change.


Social Media - Still No Guidance, but FDA Is Getting Interested

The bad news?  Despite claims made earlier this year that it was on track to issue guidance regarding the use of the internet and social media by the industry, the FDA has remained mum.  At this point, release of guidelines before the end of the year is doubtful, but we remain hopeful for the beginning of next year.  Even then, due to the scope of the issues being addressed by FDA, we do not expect the first round of guidance to be very instructive. 

The good news?  If you've been paying close attention, it looks like someone at FDA is starting to understand the importance of social media and other online marketing and communication tools.  In the last year, FDA has moved into Facebook, Flickr, and even Twitter to communicate to the public regarding everything from salmonella outbreaks caused by peanuts to salmonella outbreaks caused by eggs.  FDA's Twitter feed is particularly active, with over 1,200 notifications of drug, device, biologic and food recalls since the account has been opened. 

Most, if not all, companies involved in the manufacturing and production of regulated devices and drugs should be paying close attention to social media issues and start preparing for the guidance that FDA will likely issue in the next three to six months.  For those who want to get started early, there is at least one conference being held in Washington D.C. this January.

USPTO and EPO Partner to Create Joint Classification System

The United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO) have agreed to work together to form a joint patent classification system.  One of the goals of the partnership is to align the U.S. and the EPO classification systems with the International Patent Classification (IPC) system used by the World Intellectual Property Organization (WIPO), a specialized agency of the United Nations.  The jointly developed classification system will be more detailed and designed to improve patent searching.  As a result, the two offices will move closer to eliminating the unnecessary duplication of work between the two offices, thus promoting more efficient examinations, while also enhancing patent examination quality. 

Currently, the USPTO classification system is a system for organizing all U.S. patent documents and many other technical documents based on common subject matter. Each subject matter division includes a major component called a class and a minor component called a subclass. A class generally delineates one technology from another. Subclasses delineate processes, structural features, and functional features of the subject matter encompassed within the scope of a class. Unlike other major patent document classification systems, the U.S. patent classification system is not based on the IPC system because it predates the IPC. 

The forming of this joint classification system is seen as a milestone achievement for the Five IP Offices (IP5). The IP5 is a forum of the five largest intellectual property offices in the world that is being set up to improve the efficiency of the examination process for patents worldwide. The members of the IP5 are:

  • the European Patent Office (EPO),
  • the Japan Patent Office (JPO),
  • the Korean Intellectual Property Office (KIPO),
  • the State Intellectual Property Office of the People's Republic of China (SIPO),  
  • and the United States Patent and Trademark Office (USPTO).

The IP5 Offices account for 90% of all patent applications filed worldwide and for 93% of all work carried out under the Patent Cooperation Treaty (PCT). 

With the USPTO and EPO collaborating on this joint classification project, the IP5 offices can continue to move toward a Common Hybrid Classification. This Common Hybrid Classification is one of the ten Foundation Projects of the IP5, which were devised to harmonize the search and examination of patent applications in each office and to standardize the information-sharing process between patent offices.