CASRIP Newsletter - Winter 1995, Volume 2, Issue 1
The GATT-TRIPS Legislation; Some Significant Court Decisions
The GATT-TRIPS Legislation The 1994 GATT-TRIPS legislation makes four changes in United States patent law: (1) it establishes a 20-year patent term measured from the earliest-referenced application filing date, in lieu of the existing 17-year from issue date term; (2) it authorizes low-cost, simplified "provisional applications" that establish a "domestic priority" right for up to one year; (3) it allows inventors to prove invention dates by reference to activity in other, "WTO member" countries; and (4) it adds offers to sell and importations as acts of infringement. The first two changes will take effect June 8, 1995; the latter two on January 1, 1996.
Because the legislation applies the 20-year term to all applications filed after June 7, 1995, including continuing applications and divisional applications referencing earlier-filed applications, patent rights owners should, if possible, file before June 8, 1995, applications for their inventions, including continuations and divisionals of pending applications, in order to retain the advantage of the existing minimum 17-years-from-issue patent term. Such filings will become unnecessary if bills now pending in Congress that would alter the 20-year term provision are enacted before June 8.
The Federal Circuit's Burroughs-Wellcome Decision The Court of Appeals for the Federal Circuit regularly renders decisions of interest on patent law. Lately, from about September, 1994 to January, 1995, the volume of Federal Circuit patent law decisions has been uncharacteristically low. Most likely, the judges are hard at work on three major pending "en banc" cases on the doctrine of equivalents, claim interpretation, and patent infringement damages.
Perhaps the most important decision in this time period is the long-awaited "AZT" decision on inventorship, Burroughs Wellcome Co. v. Barr Laboratories, Inc., -- F.3d ----, 32 USPQ2d 1915 (Nov. 22, 1994). The case involved Burroughs Wellcome's six patents on the use of 3'-azidothymidine (AZT) to treat persons infected with the human immunodeficiency virus (HIV), which causes acquired immunodeficiency syndrome (AIDS). The B-W scientists used mouse cell lines to screen compounds for their effectiveness on retroviruses. After discovering that AZT was effective, they sent the compound under a code name to government scientists, who used a unique human HIV cell line to verify that AZT worked against human HIV and AIDS. Before receiving the results from the government scientists, B-W prepared a complete draft patent application. After receiving the positive results, they filed a priority application in the United Kingdom and subsequently obtained the U.S. patents. Only the Burroughs-Wellcome scientists were named as inventors. Directly at issue was the ownership and enforceability of the patents. The defendants were two generic drug companies--one possessing a license from the government of any rights it derived from its employees (the scientists), another claiming that the patents were unenforceable because of Burroughs-Wellcome's failure to disclose facts on inventorship to the patent office. These issues turned on whether U.S. Government scientists should have been named as co-inventors.
The Federal Circuit held that, as to five of the patents, Burroughs Wellcome's draft patent application was, as a matter of law, a complete conception because the draft expressly disclosed: (1) "the intended use of AZT to treat AIDS"; (2) "the compound's structure, which, along with at least one method of preparation, was already well known"; and (3) details on "how to prepare a pharmaceutical formulation of AZT and how to use it to treat a patient infected with HIV." It rejected the defendants' contention that the conception was not complete because the mouse cell tests the inventors used to select the AZT compound had insufficient predictive value of operability in humans: an inventor's reasonable expectation that the invention would work is not an element of conception. Therefore, it affirmed the district court's summary judgment against the defendants' contention that NIH scientists were joint inventors because of their subsequent confirmation of AZT's operability by testing on human cells. As to a sixth patent, which claimed the use of AZT to increase a human patient's T-cell count, the court remanded for trial the issue of inventorship. The first express documentary evidence of a T-cell increase was by the government scientists during clinical trials of AZT. There was evidence supporting Burroughs-Wellcome's contention that a T-cell increase was the inherent and obvious result of using AZT and not a separate invention, but there was also evidence supporting the defendants' view that those skilled in the art would not have predicted a T-cell increase.
The Burroughs-Wellcome case turned on the definition of "conception", which is a critical component of the unique United States "first-to-invent" principle. But the case provides important lessons and possible solutions for problems that will arise in all patent systems. It should be emphasized that the case was an inventorship/ownership dispute, not a "first-to-invent" priority dispute. The case would have posed exactly the same issue even had the United States operated under a "first-to-file" priority principle.
More and more valuable technology results not from the work of a single person or persons working for a single company or institution but rather from corroboration between or among persons who work for different companies or for universities or government agencies or institutes. It is imperative that the patent system provide clear, uniform, and policy-justified principles for determining the ownership of intellectual property rights in such corroborative research when the parties have not expressly agreed in advance upon such ownership. It is not realistic to expect persons working to solve urgent problems always to negotiate and agree in advance on intellectual property questions.
Because the United States has operated so many years under a first-to-invent system, it has a rich case law history on when a given technology was invented. This case law can be useful in determining by whom technology was invented.
District Court Decision: Litton Systems, Inc. v. Honeywell Inc. The Litton-Honeywell patent litigation has attracted considerable attention, primarily because of the jury verdict awarding $1.2 billion in patent infringement damages against Honeywell. On January 6, 1995, the trial judge granted Honeywell's motion to overturn the jury verdict. The court found the patent invalid for obviousness under 35 U.S.C. Section 103. It also found that Litton had committed inequitable conduct in procuring the reissue of its patent, rendering it unenforceable.
An appeal of the judge's decision is highly likely, but the decision deserves careful analysis by all interested in the prosecution of patent applications and the litigation of infringement claims. In resolving both the invalidity and inequitable conduct issues, the court focused on an "expert opinion declaration" Litton submitted to overcome the patent examiner's rejection of Litton's claims. Based on the expert's testimony during the trial, the court found that he lacked a factual basis for his opinions and had merely signed a statement drafted by Litton's patent counsel.