Are 3D Printed Tissues and Organs Patentable?

It has been long established, and recently codified in the Leahy-Smith America Invents Act (AIA), that no one is able to obtain a patent on any part of the human body. Examiners are taught to issue 35 U.S.C. 101 and AIA § 33(a) rejections even if claims are directed towards devices that are “attached to” parts of the human body and recommend applicants change the language to “configured to be attached” or something similar so that there is no doubt the human body part is not part of the claim. However, various medical and technological advances have hinted at the possibility of printing human organs in the future. Would those be patentable?

As the number of people on the waiting list for transplant organs grows steadily every year, donors and actual transplants that happen have remained relatively constant.  With this growing shortage, many doctors and scientists have turned to 3D printing as a potential solution. Unlike traditional manufacturing processes which are subtractive methods, in which excess portions of metal, wood, or plastic are removed to form the final product, 3D printing technology uses an additive process, in which objects are created by laying down successive layers of the material of choice until the object is created. This allows for the rapid creation of any object you have a digital model or scan of, and in any material supported by the printer.

While 3D printing has been popular in fields such as engineering, fashion and even food, recent advances have allowed for the 3D printing of biocompatible materials, or bioprinting. Scientists have already printed numerous blood vessels and organ tissues, and even a functional ear. These developments give rise to the question whether the scientists or the companies bioprinting these objects are able to obtain patents on them even though they exist in nature.

In one of the seminal cases related to the patentability of biological matter, Diamond v. Chakrabarty, the Supreme Court addressed whether a genetically engineered bacterium that was able to break down components of crude oil was patent-eligible subject matter. The Court interpreted the statutory language of section 101 to allow the patenting of “anything under the sun that is made by man.”[1] However, excluded from this are laws of nature, products of nature, physical or natural phenomenon, abstract ideas, and unapplied mathematical formula as they are “free to all men and reserved exclusively to none.”[2] As the genetically engineered bacteria in question were unlike any found in nature, the court determined that it was “a nonnaturally occurring manufacture or composition of matter – a product of human ingenuity.”[3]

Following the guidelines set out in Chakrabarty, the Court later held in Association for Molecular Pathology v. Myriad that an isolated DNA fragment coding for a gene was a naturally occurring composition of matter as the inventors “did not create or alter any of the genetic information encoded in… genes”[4] and that the “location and order of the nucleotides existed in nature”[5] before they were discovered by Myriad. However, the Court ruled that the complementary DNA sequences (cDNA), which were synthetically created, were not a product of nature and thus patent eligible.

From the Chakrabarty and Myriad rulings, it would seem that currently bioprinted tissues and organs would be patentable. While some of the base materials used in the printing may be naturally produced, just like how nucleotides in cDNA can be naturally produced, the final printed product is undoubtedly manmade and not a product of nature.  Furthermore, current bioprinting technology does not yet allow for the perfect reproduction of human organs; there are marked differences between real organs and bioprinted ones, making the question of patentability easier for now.

However, should the technology develop in the future to allow for the perfect replication of human organs, the line between patentable and unpatentable subject matter could blur significantly. Such perfectly replicated organs could be considered analogous to “very short series of DNA [that] have no intervening introns to remove when creating cDNA” which “may be indistinguishable from natural DNA” and thus not patent eligible under § 101. [6]

Nonetheless, as long as the bioprinted tissues or organs do not amount to an entire human person (including fetal and embryonic states) and are distinguishable in some way from their naturally occurring counterpart, they should remain patentable under current laws.

[1] Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).
[2] Id.
[3] Id.
[4] Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2116 (2013).
[5] Id.
[6] Id. at 2119

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STLR Link Round Up – October 2, 2015

New Rules Require Credit Cards to Use Security Chips

As of October 1, retailers may be liable for fraudulent transactions at their stores if they fail to use chip cards. Visa and MasterCard set the deadline for the new rules as part of their agreement with various retailers and banks, and American Express will be shifting liability to their retail partners on October 16. The new rules follow President Obama’s executive order last year mandating the use of chip-and-PIN technology in government issued credit and debit cards. The new chip cards contain microprocessors which create unique, encrypted information for each transaction.

This should make it more difficult for credit card thieves to duplicate the information from one transaction and reuse it for a fraudulent purchase. Although the new cards will likely improve the security of credit card transactions, they do not serve as complete protection. Online transactions are still vulnerable to fraud and the overall fraud rate is unlikely to decrease until a critical mass of consumers adopts the technology.

This could prove problematic given that many customers still have not received their chip enabled cards and many retailers will not be equipped to handle chip-enabled transactions for another year. Retailers have also complained that they are the ones bearing the more significant burden in switching to the new system and that the chip-and-signature system adopted by the major credit card companies is significantly less effective at preventing fraud than the chip-and-PIN system currently used in Europe and by the federal government. Credit card companies have defended the new rules, emphasizing that the new cards will prevent at least some fraudulent transactions.

Policymakers Seek to Regulate Cell-Site Simulators

In early September, the Department of Justice announced a new policy governing its use of cell-site simulators designed to improve transparency through specific data-handling requirements and an auditing program. The simulators allow law enforcement to track individual’s phones by mimicking cell phone towers and thereby connecting to cell phones in the area. Stingray, the most widely known cell-site simulator, collects cell phones’ serial numbers, which authorities use to monitor phone locations or record phone calls made. The DoJ emphasized that simulators can only collect location information and call traffic, and that the new guidelines require officers to get warrants before using the simulators, except in exigent or exceptional circumstances. In total, over 20 states use Stingray as part of their law enforcement efforts, but only Utah, Virginia, and Washington have passed bills requiring law enforcement agents to receive a warrant prior to using cell-site simulators, with  similar legislation pending in the U.S. Senate.

Patent Battle Over Genetic Engineering Tool May Soon Be Over

In 2012, scientists announced a technique called CRISPR that enabled rapid editing of DNA. CRISPR has proven very successful in genetic and biomedical research, helping scientists develop treatment for diseases and create designer crops. Patent issues, however, have plagued the technology. Over a year ago, a patent was issued to researchers at MIT for a method using CRISPR-Cas9, which relies on a particular enzyme for genome editing. In April of this year, a number of parties challenged the original CRISPR patent, both in the United States and in Europe. One of the parties fighting the patent has even claimed Twitter handles based on the protein, such as @CRISPRCas9.

This patent battle may turn out to be moot though: a researcher at MITone of the parties in the ongoing disputehas announced the discovery of a new CRISPR enzyme: Cpf1. Cpf1 may turn out to be more popular and easier to use than Cas9, and may herald the development of a wide-range of enzymes that can all be used edit genes, making patents less valuable in this rapidly growing field. Not that the patent uncertainty has stopped numerous companiessuch as Caribou, Editas and CRISPR Technologiesfrom continuing to raise capital and invest in developing this gene editing tool. But perhaps the settling of some of these patent claims will allow these companies to focus on the other major legal hurdle limiting widespread use of CRISPR: rules regulating the use of genome editing in human embryos.

Google and Microsoft Settle Patent Claims

Continuing a series of high profile patent settlements between technology giants, including Apple/Samsung and Microsoft/Samsung, Google and Microsoft announced that they were settling a number of patent claims in both the United States and Germany. The 18 patent infringement claims covered a wide range of patents, including cell phones, wifi, and Microsoft’s Xbox platform. The settlement includes cases related to Motorola Mobility, which Google sold to Lenovo last year, but does not preclude future patent infringement suits.

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The Application of EU Competition Law in the Sports and Entertainment Sectors 2014/2015

Geo-blocking (geo-filtering) remains high on the agenda of the Commission, with the Commission raising questions on that practice in the e-commerce sector enquiry and sending a statement of objection to the major film studios as well as Sky UK for allegedly geo-blocking films provided from EU consumers established outside Ireland and the UK.

Following its decision in the Apple e-books case, the Commission has launched an investigation into Amazon’s e-books business and in particular its ‘Most Favoured Nation’ (MFN) clauses.

The European Commission cleared a number of concentrations in the pay-TV sector, most notably the concentration Liberty Global/Ziggo and a joint venture between music collecting societies in PRSfM/STIM/GEMA.

The European Court of Justice held that self-employed musicians may be considered as acting as an ‘association of undertakings’ even when their interests are represented by a trade union organisation, implying that such associations must integrate the idea that their behaviour could be subject to scrutiny under competition law.

Should Professionals in Employment Constitute ‘Undertakings’?: Identifying ‘False-Employed’

This article argues for the recognition of some professionals in employment as ‘undertakings’ on the grounds that they are ‘false employed’—a term inspired by Dutch Orchestra which regarded some self-employed musicians as ‘false self-employed’ who lost their status as ‘undertaking’.

It teases out the potential parameters of this category by drawing on labour law research and suggests that it extends beyond the liberal professionals to include professionals employed in, for example, financial services and IT.

Adopting this approach would secure the applicability of Art 101TFEU (and, presumably, equivalent provisions of national competition law in some Member States) to anti-competitive decisions of professional associations whose membership includes many employees.

Sharing Economy: What Challenges for Competition Law?

The concept of ‘sharing economy’ designates business activities involving exchanges between parties through one or several electronic platforms.

Such platforms can create antitrust concerns where their operator(s) are able to activate network effects.

Another concern may arise from with platforms capable of locking in parties located on one side of the transaction—thereby acquiring a dominant position vis-à-vis these parties.

A last challenge is when a platform acquires the power to reference rivals—thereby creating a situation that may give rise to collusion or, on the other end of the spectrum, to discriminatory behaviour.

The Spar Cases in Austria: Shaping the Legal Framework for Digital Evidence Gathering During Competition Dawn Raids

As appears from developing case law in Austria, the right of a company to be heard is not necessarily impaired where a search warrant originally addressed to another company of the same group is extended to it and merely refers to the original court order in its legal appraisal.

A search warrant that covers the saving of electronic documents extends to any data that are accessible from the business premises being searched, even if located on a server situated elsewhere

The use of forensic software in the course of an authorised dawn raid is legal.

The Legislative Response to Patent Trolls

Patent litigation could reach an all-time high in 2015. Sixty-eight percent of patent lawsuits filed this year were filed by patent trolls, defined by one law professor as “patent owners who do not provide end products or services themselves, but who do demand royalties as a price for authorizing the work of others.”[1] Recently, legislation has been introduced in Congress to stop the trolls—also known as non-practicing entities (NPEs), patent assertion entities (PAEs), or patent monetization entities (PMEs)[2]—from abusing U.S. patent law and harming legitimate businesses.

Patent trolls have particularly affected the tech industry. According to statistics compiled by Unified Patents, a patent reform watchdog, 90% of all patent suits filed against tech companies in the first half of the year were filed by trolls. Giants Apple and Amazon were among those hit the hardest, facing 25 and 21 patent suits respectively. Accordingly, petitions filed at the Patent Trial and Appeal Board (PTAB) to invalidate patents are up by 31% since the the first half of last year. Apple, Samsung, and Google are the three top filers of PTAB petitions.

The Supreme Court first handled the issue of patent trolls in Ebay v. MercExchange, 547 U.S. 388 (2006) where the Court found that permanent injunctive relief is not the appropriate remedy for every patent infringement suit. The decision benefitted corporations defending the suits because they can more easily pay damages than cease using patented technology. After MercExchange, lower courts responded by denying permanent injunctions in most cases where the plaintiff and defendant were not competitors.[3] This past May, the Court acknowledged the problem explicitly when Justice Antonin Scalia, writing in dissent, used the term “patent troll” for the first time in the Court’s history.

Congress has also weighed in on the patent reform debate, generating a number of patent reform efforts in the past few years. Six such bills have been introduced in Congress so far this year; thirteen such bills were introduced from 2013 to 2014. One of the most comprehensive House bills is the bipartisan-backed Innovation Act, (H.R. 9), a package of reforms including heightened pleading requirements, a fee-shifting provision, and a consumer protection provision that would allow manufacturers to intervene when NPEs sue customers for using products that allegedly infringe a patent. The Senate’s answer to the Innovation Act is the Protecting American Talent and Entrepreneurship Act (PATENT Act). The bills are similar, though the Senate bill contains both an added provision that would postpone the majority of discovery until after the resolution of pretrial motions and a different fee-shifting provision.

One of the most significant differences between the Innovation Act and the PATENT Act is their varied approach to fee-shifting. Both chambers’ bills hold the losing party responsible for the prevailing party’s attorneys’ fees under certain circumstances in order to disincentivize patent trolls from filing frivolous lawsuits; however, they differ on what those circumstances ought to be. The Senate bill would require the prevailing party to show that the losing party’s position in the legislation was not “objectively reasonable.” The House bill, on the other hand, would put the burden on the losing party to show that its position was objectively reasonable.

The House bill’s strong fee-shifting provision is one of the most powerful tools against patent trolls and the Senate would be wise to adopt it as well. The high cost of litigation—especially attorneys’ fees—encourages settlement before trial, meaning that patent trolling has low risk and high reward when filing non-meritorious claims. Fee shifting would encourage defendants with strong claims to go to trial. More importantly, it would make trolling a less lucrative venture for the NPEs that regularly file such suits.

In a statement before the Senate Judiciary committee on May 7, 2015, Senator Patrick Leahy (D-Vt.), one of the sponsors of the PATENT Act, stated that the bill’s relaxed fee-shifting provision was an improvement on the House bill because “[i]t promotes judicial discretion and ensures the burden is on the party seeking fees to show that fees should be awarded.” He argued that the Senate bill “allows the court to refrain from awarding fees if such an award would be unjust,” such as when it might “caus[e] undue financial harm to an individual inventor or a public institution of higher education.” However, the House’s Innovation Act does not remove judicial discretion from deciding who will pay; it only shifts the burden of proof. While the Senate bill should be sufficient to protect the interests of large tech companies like Apple and Amazon, the extra burden of showing that a plaintiff’s position was not objectively reasonable after successfully defending a case would be a heavy burden for small businesses like start-ups or the “individual inventors” Leahy mentions. Senator Leahy names protecting small businesses as one goal of patent reform efforts, and the Innovation Act’s default “loser-pays” provision gives that bill the teeth to do so.

A vote on the PATENT Act is likely happening this fall. While the package of reforms could have some positive effect on the tech sector, the bill’s weak fee-shifting provision will significantly limit its impact.

[1] John M. Golden, “Patent Trolls” and Patent Remedies, 85 Tex. L. Rev. 2111, 2112 (2007).

[2] Thomas H. Kramer, Proposed Legislative Solutions to the Non-Practicing Entity Patent Assertion Problem: The Risks for Biotechnology and Pharmaceuticals, 39 Del. J. Corp. L. 467, 472-73 (2014).

[3] Golden, supra at 2113.

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Resale Price Maintenance for On-line Businesses: The Hard Position of the Federal Cartel Office (Germany)

Recently, the Federal Cartel Office (FCO) imposed multi-million euro fines on manufacturers setting resale prices to avoid the increasing pressure of on-line sales on prices charged by traditional retailers.

These decisions confirm the jurisprudence developed by the FCO on that issue and demonstrate that that authority has not been sensitive, thus far, to the changes occurred in the United States after the adoption of the Leegin ruling by the Supreme Court.

Individual justifications remain possible but have not gained practical relevance, and companies should carefully consider pricing strategies that could trigger RPM concerns.

Indirect Effect: Fine Calculation, Territorial Jurisdiction, and Double Jeopardy

Recently, there have been developments in the calculation of cartel fines by the Commission and the ECJ dealt with specific aspects of the Commission’s fine calculation.

This article summarises the latest developments and provides an analysis including the related issues of territorial jurisdiction and the risk of double jeopardy, which is particularly relevant as more and more jurisdictions are imposing fines on international cartels.

The latest related developments in United States and Japan concerning the question what types of sales can be included in the calculation of fines are taken into account.

STLR Link Round – September 25, 2015

Xi Jinping Seeks to Reassure American Business and Tech Community

As part of a busy week-long U.S. Tour, President Xi Jinping of China has reached an agreement with President Barack Obama of the U.S. that neither country’s government will conduct or support cyber-theft of intellectual property or trade secrets for commercial advantage. The deal establishes a law-enforcement dialogue between specific senior officials in both countries, who will be responsible for analyzing incoming requests for legal cooperation. This will remove the ability of either side to stall upon being presented with evidence of commercial hacking. Many observers are hailing the accord as a victory for the U.S., which has been pushing China for years to acknowledge the difference between traditional cyber espionage and theft of trade secrets, and has recently threatened China with sanctions for past commercial hacking. However, other observers have noted that the deal is unlikely to result in a slowdown in theft of commercial intellectual property, given the massive monetary incentives for Chinese companies. Earlier in the week, Xi delivered the keynote address at a conference of over 650 business executives on Microsoft’s campus outside Seattle, during which he sought to allay their fears over the chilling business climate in China for American companies. The list of attendees included Bill Gates and Satya Nadella of Microsoft, Tim Cook of Apple, and Mark Zuckerburg of Facebook, which is banned in China.

Volkswagen Threatened with Massive Global Deluge of Legal Action

Following the revelation by the U.S. Environmental Protection Agency last Friday that Volkswagen cheated on emissions tests for its diesel cars in the U.S., consumers and government agencies around the world have launched a plethora of lawsuits and inquiries into the company’s practices in their own markets. U.S. and California regulators discovered that almost 500,000 VWs sold in the U.S. since 2009 were outfitted with the company’s 2.0-liter turbodiesel and incorporated software that allowed the cars to emit over 40 times the legally allowed level of nitrogen oxide during ordinary driving, while staying within the limit during emissions tests. Several lawsuits have already been filed in the U.S. and Canada, while government agencies are considering enforcement action in several other countries. The company already faces fines of up to $18 billion in the U.S. alone and has lost tens of billions of dollars of market capitalization in the last week.

Turing Pharmaceuticals Reverses Course on Daraprim Price Hike

On Sunday, The New York Times broke a story that Turing Pharmaceuticals planned to increase the price of Daraprim, a 62-year-old drug used to treat a parasitic infection in those with compromised immune systems—such as patients with AIDS and some forms of cancer—from $13.50 per tablet to $750 per tablet. The story thrust the issue of drug prices into the political spotlight. Presidential hopeful Hillary Clinton was quick to condemn the company and promised to cap prescription drug costs for patients with chronic or serious medical conditions at $250 per month, if elected. Turing has since backed down from the price hike, but the incident highlights the inability of generic copies of costly off-patent orphan drugs to emerge in situations where distribution channels are tightly controlled, and patient populations are relatively small.


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