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Life Sciences is an area ripe for trade secrets misappropriation litigation. In recent news, Merz Pharmaceuticals, LLC filed a lawsuit under the North Carolina Uniform Trade Secrets Act alleging that its former director of federal accounts, Andrew Thomas, stole trade secrets relating to Merz’s flagship botulinum toxin drug Xeomin®. Those secrets purportedly included drug pricing strategies, marketing plans, market share data, and potential customer lists, all of which were intended to grow Xeomin®’s presence in the government market sector — a key therapeutic sector for Merz’s drug, which is primarily known for its aesthetic effects.   

In three previous blog posts, we have discussed recent inventorship issues surrounding Artificial Intelligence (“AI”) and its implications for life sciences innovations – focusing specifically on scientist Stephen Thaler’s attempt to obtain a patent for an invention created by his AI system called DABUS (“Device for Autonomus Bootstrapping of Unified Sentence). Most recently, we considered Thaler’s appeal of the September 3, 2021 decision out of the Eastern District of Virginia, which ruled that under the Patent Act, an AI machine cannot qualify as an “inventor.” Continuing this series, we now consider the USPTO’s recently filed opposition to Thaler’s appeal.

In one of the first district court opinions applying the Federal Circuit’s recent GSK decision on induced infringement in the context of label carve-outs (the “GSK decision,” discussed here and here), Judge Richard Andrews in the District of Delaware held that plaintiff Amarin Pharma (“Amarin”) failed to plead facts sufficient to show that Hikma Pharmaceuticals’ (“Hikma”) carved-out product label and/or public marketing statements induced infringement of Amarin’s patents. The holding suggests that carved-out labels (so-called “skinny labels), despite the GSK decision, continue to provide some measure of protection from liability based on induced infringement.

Our previous blog posts, Artificial Intelligence as the Inventor of Life Sciences Patents? and Update on Artificial Intelligence: Court Rules that AI Cannot Qualify As “Inventor,” discuss recent inventorship issues surrounding AI and its implications for life sciences innovations. Continuing our series, we now look at the appeal recently filed by Stephen Thaler (“Thaler”) in his quest to obtain a patent for an invention created by AI in the absence of a traditional human inventor. 

How is orphan drug exclusivity affected when the FDA-approved use for an orphan drug is arguably narrower than the treatment of the rare disease it was designated for?

By way of background, a sponsor can obtain orphan drug exclusivity when the FDA approves an application for a drug that has first been designated under 21 U.S.C. § 360bb of the Orphan Drug Act (ODA) for a “rare disease or condition.”  Id. § 360cc(a).  Except in any of three statutorily prescribed circumstances (§§ 360cc(b), (c)), the FDA cannot approve another application for the “same drug” for “the same disease or condition” for seven years after the first approval.

Striking a blow to patent applicants seeking to assert inventorship by artificial intelligence (“AI”) systems, the U.S. District Court for the Eastern District of Virginia ruled on September 3, 2021 that an AI machine cannot qualify as an “inventor” under the Patent Act.  The fight is now expected to move to the Federal Circuit on appeal.

On August 5, 2021, the Federal Circuit withdrew its October 2020 opinion in GSK v. Teva, summarized in this post on induced infringement of method-of-treatment claims, and issued an opinion that reiterated the prior holding but sought to clarify its reasoning. GlaxoSmithKline v. Teva. Specifically, the majority stated that a generic manufacturer’s touting of AB equivalence to a brand drug is generally not evidence of intent to induce infringement—but in the specific facts of this case it did support inducement, because the Court found ample evidence tying claim limitations to statements in Teva’s label even though the patented method was omitted as a distinct indication. The Court also found that Teva’s advertising statements regarding treating “heart failure” evidenced intent to induce physicians to prescribe the drug to treat CHF.

The question whether an artificial intelligence (“AI”) system can be named as an inventor in a patent application has obvious implications for the life science community, where AI’s presence is now well established and growing. For example, AI is currently used to predict biological targets of prospective drug molecules, identify candidates for drug design, decode genetic material of viruses in the context of vaccine development, determine three-dimensional structures of proteins, including their folding form, and many more potential therapeutic applications.

Reference product sponsors often obtain patents claiming methods of using a known drug to treat a condition or disease. Because generic and biosimilar developers typically do not treat patients, and thus do not directly infringe the claims, plaintiffs must sue under a theory of induced infringement—i.e., that the generic or biosimilar developer recommended, encouraged, or promoted a patented use for the drug. Demonstrating induced infringement most often involves the label of the defendant’s product, but increasingly may involve non-label evidence such as the defendant’s press releases, brochures, product catalogs, advertisements, and statements to the FDA, doctors, and investors. This non-label evidence is likely to be especially significant in the biologic context.