Patent Law Practice Center

FTC Says Thermo Fischer Must Sell Assets to GE Healthcare

On January 31, 2014, the Federal Trade Commission announced that Thermo Fisher Scientific Inc., a global manufacturer and distributor of scientific products, laboratory equipment and consumables headquartered in Waltham, Massachusetts, agreed to sell assets to GE Healthcare. This asset sale settles FTC charges that Thermos’ proposed $13.6 billion acquisition of Life Technologies Corporation (Life), headquartered in Carlsbad, California, would likely substantially lessen competition.

The FTC complaint challenging the transaction alleges that the deal as originally proposed would have eliminated competition between Life and Thermo Fisher, which supplies siRNA reagents under its Dharmacon brand, and cell culture media and sera under its HyClone brand. The FTC specifically charged the acquisition would substantially increase concentration in the markets for short/small interfering ribonucleic acid (siRNA) reagents, cell culture media, and cell culture sera, enabling the combined firm to raise prices and reduce quality for consumers.

The proposed order settling the FTC’s charges requires Thermo Fisher to divest its gene modulation business, Dharmacon, which contains the siRNA reagents business, as well as its cell culture media and sera business including the HyClone brand to GE Healthcare, along with all intellectual property and know-how necessary to operate each of the divested businesses.

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SCOTUS Ending Term with Patent Decisions

Over the past several days, the United States Supreme Court has issued several important decisions that will impact the patent system.

First, on June 13, 2013, the Supreme Court issued a decision in Association of Molecular Pathology v. Myriad Genetics, which has sometimes been referred to as “ACLU v. Myriad” in recognition of the fact that it was the American Civil Liberties Union that was responsible for bringing the challenge in the district court and pursuing the matter through the judicial system.

In Myriad, Justice Thomas wrote for a nearly unanimous Court.  Only Justice Scalia wrote a brief separate opinion in which he concurred in part and concurred in the judgment.

The majority decision in Myriad is not long, and the first 10 pages are background. Despite not giving much detailed attention to the significant legal issues presented, the Supreme Court did manage to do real and serious harm to much of the biotechnology industry.

Justice Thomas summarized the Court’s decision by saying:

“[W]e hold that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.”

The decision has widely been reported as the Court recognizing that cDNA is patent eligible, but the ruling is far more nuanced. In fact, Justice Thomas specifically recognized that some cDNA is not patent eligible. He wrote:

“cDNA is not a ‘product of nature’ and is patent eligible under §101, except insofar as very short series of DNA may have no intervening introns to remove when creating cDNA. In that situation, a short strand of cDNA may be indistinguishable from natural DNA.”

I have spoken with a number of people who are in the biotech industry and they all seem to think this decision means that cDNA is patent eligible and I shouldn’t make too much out of Thomas specifically saying that at least some cDNA is not patent eligible. Personally, I think this is misplaced hope; we all know how the district courts will respond, and it won’t be to an expansive reading of patent eligibility. While the USPTO seems poised to say that cDNA is patent eligible, the fact that some has been determined not patent eligible will be used by challengers and likely successfully so. Further, it seems clear that Thomas is saying that if something is man-made but identical to what appears in nature, it is not patent eligible. This fundamentally undercuts the most important aspects of Chakrabarty and would effectively kill research into such important areas as artificially grown organs, which by their very nature must be identical to what is produced in nature to be transplanted into the human body, for example.

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Patent Reform Takes A Big Step Forward As The Senate Passes The America Invents Act

Jeanne Gills, Partner at Foley & Lardner and Practice Center Contributor, along with colleagues Courtenay C. Brinckerhoff and Liane M. Peterson, sent in this alert highlighting the key provisions of The America Invents Act.

On March 8, 2011, U.S. patent reform moved one step closer towards becoming a reality when the Senate passed the America Invents Act (S. 23) in a bipartisan, 95-5 vote. The bill includes some modification to the “first-to-file system” and removes the damages and venue provisions that were present in earlier versions of the bill.

Now the House of Representatives will have to craft its own version of patent reform, which is expected to have at least some differences vis-à-vis the Senate bill. If and when the House approves its patent reform bill, House and Senate leadership will have to reach a compromise. Although the House is expected to vote in support of a compromise bill, final passage could be blocked by a late-stage “hold” in the Senate. Thus, patent reform likely still has a long road ahead. (more…)

New FTC Report Suggests Improved Alignment of Patent System With Competition Policy

Earlier this week, the FTC published an extensive report recommending ways to improve patent law policies.  The report emphasizes that the patent system and competition policy share the goal of promoting innovation that benefits consumers and explores ways to achieve greater alignment between the two.  Our friends at Foley & Lardner sent in this alert highlighting the key points of the report.

On March 7, 2011, the FTC released a 300-page report, The Evolving IP Marketplace: Aligning Patent Notice And Remedies With Competition. The Report assesses the patent system’s benefits and challenges as more companies shift to “open innovation” and increasingly rely on technology transfers to adopt inventions created outside their own R&D efforts. The FTC continues its engagement regarding the patent system that began with its 2003 Report, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, and continued with its 2007 Report, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition. The 2011 Report aims to better align the patent laws with competition policy by recommending improvements to two areas of patent law policies, namely how well a patent gives notice to the public of what technology is protected, and the remedies available for patent infringement.

Improving The (more…)