Reverse payment settlements are agreements between a generic and brand name drug manufacturer to settle ANDA litigation under the Hatch-Waxman Act whereby the generic manufacturer agrees not to bring its drug into the market for a specific amont of years in exchange for sometimes millions of dollars.  Here, the drug at issue was Androgel which was manufactured and patented by Solvay.  Actavis sought to make a generic equivalent, and claimed in Hatch-Waxman litigation that Solvay’s patent was invalid.  The two companies settled for a large sum of money, and the FTC sought to invalidate this agreement on the basis that it was anticompetitive.

The District Court dismissed the FTC’s complaint and the Eleventh Circuit affirmed, holding that as long as the agreement was within the scope of the patent, it was immune from antitrust scrutiny.  The FTC sought certiorari as different Circuit courts had come to different conclusions regarding the applicability of antitrust laws to such settlements (compare, In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (Fed. Cir. 2008) (reverse payment settlements are immune from antitrust law); and In re K-Dur Antitrust Litigation, 686 F.3d 197 (3d Cir. 2012) (reverse payment settlements are presumptively unlawful).)

The majority of the Supreme Court held that reverse payment settlements should not be measured solely against patent law policy, and must be considered with respect to antitrust laws.  The Court reasoned that this was comparable to situations where patent licensing deals have been struck down as being anticompetitive.  The Court rejected the FTC’s argument that these settlements should be considered under the Quick Look approach, and held that reverse payment settlements should be considered under the Rule of Reason test, as these agreements should not be deemed presumptively unlawful.  The Court, therefore, reversed the Eleventh Circuit and remanded the case down for further proceedings consistent with its opinion.

Chief Justice Roberts, delivering the dissenting opinion, found that patent law carves out an exception to antitrust claims in that patents are a legally accepted monopoly.  Settlements have long been upheld by courts within the realm of patent law, and as long as the patentee is acting within the scope of its patent, it is permitted to settled any litigation as it choses.  Chief Justice Roberts then continues to state that the majority is essentially announcing a completely new rule, that is unpersuasive, and not supported by precedent.  The dissent finds that the majority’s decision undermines patent law by weakening the protection afforded to patentees, and frustrates the public policy in favor of settling.

Section 101 of the Patent Act of 1952 has long been found to contain an implicit exception to patent eligibility in that “[l]aws of nature, natural phenomena, and abstract ideas are not patentable,” and this is fundamental to the patent system’s policy of promoting invention.  The Court held that Myriad’s efforts in locating the DNA sequence for both breast cancer related genes from the human genome and isolating it were simply efforts relating to what exists already in nature.  Myriad did not, in any way, create or alter the genes and simply isolating the sequences did not create a new and useful invention eligible for patent protection.  Gene isolation methods have long been known by scientists, and the isolated DNA sequence was not considered a new molecule.  Myriad’s claims were not in relation to the chemical composition of the isolated gene nor in relation to any new chemical properties that isolating the gene may create.  The Court also rejected the reliance argument made by Myriad, and found in Judge Moore’s concurrence in the Federal Circuit’s decision, that the USPTO has been granting isolated DNA patents for years now.

In contrast, the Court found that the creation of the cDNA sequence for BRCA1 and BRCA2 was patent eligible, because cDNA is completely chemically manufactured and therefore is not a naturally-occuring composition of matter.  The Court also noted that this decision did not pertain to any method or process claims relating to Myriad’s invention for testing for the BRCA1 and BRCA2 genes, as only the composition of matter claims relating to the DNA and cDNA sequences were before them.

The Court, therefore, affirmed in part and reversed in part the Federal Circuit’s decision in the case.  Justice Scalia, concurring in part and concurring in the judgment, made the point that he could not affirm the parts of the opinion discussing the details of molecular biology, regarding DNA and cDNA sequences and gene isolation practices, as he does not have the requisite knowledge.  He simply comes to the same judgment as the rest of the Court from reading the lower court opinions and expert reports in the case.

While this decision marks a huge change in previous practice of  upholding gene patents both at the USPTO and at the Federal Circuit , it does not come as a surprise in light of the Court’s decision last year in Mayo v. Prometheus.  It will be interesting to see how the USPTO’s practice will change and how the genetic industry will be affected by this variation in the status quo of patent-eligibility.

Farmers, seed sellers, and agricultural groups who avoided using Monsanto seeds, but feared being pulled into litigation if Monsanto seed traits appeared in their crops, formulated the case as a preemptive measure. Monsanto has had a long history of filing patent infringement claims against farmers who plant their genetically modified seeds without paying royalties, more than 800 lawsuits to date.

However, the Court determined the collation was not allowed to bring the lawsuit against the company because “Monsanto has made binding assurances that it will not ‘take legal action against growers whose crops might inadvertently contain traces of Monsanto biotech genes (because, for example, some transgenic seed or pollen blew onto the grower’s land).’” Based on these assurances, the three-judge panel determined the Plaintiffs failed to allege a justiciable case or controversy, dismissing for a lack of jurisdiction.

Members of the collation feared being sued for trace amounts of genetically modified crop varieties showing up in their own crops due to animals or wind. After todays decision, farmers will have to depend on Monsanto’s assurances.  In a statement of their website, Monsanto backed up their assurances by saying it “ has never been nor will it be Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in farmer’s fields as a result of inadvertent means.” However, the question remains what will happen if more than ‘trace’ amounts are found; and with almost half of the “nation’s farmland sown with genetically modified crop varieties, it’s possible some growers have been contaminated by Monsanto’s technology”

The Public Patent Foundation said the decision was a partial victory, clearing the way for farmers to avoid having to implement costly measures to prevent crop “contamination”.  The Foundation points out that the decision also opens the door to farmers contaminated by Monsanto seeds to sue the company for the harm caused by the genetically altered product.

Others are claiming the decision makes no sense. “It is a very bizarre ruling that relies on a paragraph on a website. It is a very real threat to American farmers. This is definitely appealable,” said Andrew Kimbrell, a lawyer with the Center for Food Safety, another plaintiff in the case.

Monsanto, who is facing lawsuits over crop contamination by an experimental wheat variety, is likely breathing a sigh of relief, the farmers not so much. Yet, in the midst of the continuing dispute over genetically modified foods v. local and organic products, the effects of this decision will be interesting to follow.

I enjoy good writing and a good mystery, but I doubt that innovation is promoted when subjective and empty words like “contribution” or “inventiveness” are offered up by the courts to determine investment, resource allocation, and business decisions. Again, it is almost . . . well, “obvious” . . . to note that when all else fails, it makes sense to consult the simplicity, clarity, and directness of the statute.

As I start my next quarter century of judicial experience, I am sure that one day I will reflect on this moment as well. I can only hope it is a brighter reflection than I encounter today.

For the corporations who create these games, the battle is usually one about protecting their games from trademark infringement by competing game developers.  For example, Zynga, Inc., a San-Francisco based company famous for the hit social media game “FarmVille” previously sued Maryland-based Imagenesis Corp., for trademark infringement in connection with the latter’s new game called “MafiaVille.”  The lawsuit was filed with the United States District Court for the District of Maryland on February 19, 2013.

Boosted by the ever-growing popularity of social networking websites like Facebook and the ubiquity of modern-day smart phones and tablets, Zynga has become the leading developer of online social media games.  Its most iconic game, FarmVille, allows players to cultivate their own farm in the digital world.  Since its founding in 2007, Zynga has successfully developed, advertised and installed a number of different games, including FarmVille, CityVille, FishVille, FrontierVille, PetVille and YouVille (which the company has named collectively as the “Ville Family of Games”) as well as other similarly formatted games such as Mafia Wars.  The company claims that over 65 million people play its “Ville” games every month, all of which have been properly patented.

In December 2010, Zynga found out that competitor Imagenesis Corp. was intending to release “MafiaVille,” a game with a similar format and a name that sounded too much like a rip-off of two Zynga franchises – namely, FarmVille and Mafia Wars.  Zynga immediately contacted Imagenesis to assert that the continued use of the MafiaVille name would constitute an infringement of Zynga’s “Ville” trademarks.  Imagenesis refused to comply and instead filed suit with the Maryland federal court seeking a declaratory judgment providing that Imagenesis’ use of “MafiaVille” would not constitute a violation of Zynga’s trademark rights.  Although the case was ultimately dismissed and the sought-after declaration of non-infringement was never issued, Imagenesis nevertheless continued to use the controversial name and proceeded to file a trademark application for the MafiaVille name with the United States Patent and Trademark Office.

In filing its infringement claim, Zynga accused Imagenesis of “seek[ing] to use names that will confuse consumers, trade off of Zynga’s popularity, and exploit the goodwill Zynga has developed in the ‘VILLE Family of Marks.’”  The company claims that Imagenesis intentionally picked the name “MafiaVille” being fully aware of Zynga’s iconic game titles and their respective successes with online gamers.   In fact, Zynga alleged that Imagenesis actually played several of Zynga’s “Ville” games and Mafia Wars before filing its trademark application for the name “MafiaVille.”

Before the unveiling of the Inactive Account Manager, next of kin of deceased users did have some form of recourse for obtaining access to the deceased accounts.  Google’s general policy for account access for next of kin mirrors the current terms of service of Microsoft’s online e-mail service providers.   These policies allow for a next of kin to access the account after an extensive authentication process.  The applicant must provide an official death certificate, a document showing the relationship to the deceased (next of kin and/or executor or benefactor of their estate, or that you have power of attorney) and a photocopy of their government issued identification.  If a user has not enabled the Inactive Account Manager, the next of kin will have to go through these authentication steps to gain access to the account.

For the proponents of Google’s Inactive Account Manager, the biggest advantage the service provides is not just the possibility of account inheritance, but a simple, integrated system that a user can implement in a matter of clicks.  For example, under the former policy, the next of kin would have to assemble the documents required for authentication of the relationship, Google would process the request and notify the next of kin with a decision on the request of data.  There also remains the privacy concern of a deceased user who never wished any next of kin to gain access to their account.  The Inactive Account Manager seems entirely automated, and clearly shows the intent of the user.  The user-friendly nature of the feature is something Google’s extensive network of account holders are very excited about.

However, the entirely automated nature of the Inactive Account Manager may give rise to some concerns.  For instance, in a worst-case scenario, a user may designate a three-month period for deletion of his account.  If the forgets to check the account and does not receive the alert, all of his data will be automatically deleted.  Google has however added some safeguard to determine account activity in addition to usage of the Gmail account, including last sign-ins, a review of web history associated with the account and Android check-ins. Additionally, the same security and hacking concerns that plague all account users face accounts in the hands of trusted users.

Another concern that users have raised is the inability to use the Inactive Account Manager for Google Apps accounts.  The current feature only supports personal Gmail accounts.  It is likely the feature is not available for Google Apps accounts because third party companies, and not just Google, are responsible for the account data and information.  Google is probably hesitant to promise account transfer to those accounts that they do not maintain complete control over.

Natural occurrences cannot be patented, and therein lies the question of whether a human gene may be patented.  Mark Capone, president of Myriad Genetics Laboratories, was quoted by NPR as stating that the 20,000 genes in the human body are part of a six-foot-long molecule that’s “coiled and compacted and stuffed into each cell.” Additionally, “What Myriad was able to do is sort through all those 20,000 genes and find the two that were highly linked to hereditary breast and ovarian cancer.”

In a release the day before oral arguments, Peter Meldrum, President and CEO of Myriad Genetics, wrote in USA Today.  “We think it is right for a company to be able to own its findings, just as pharmaceutical and other companies do all the time.  The Supreme Court case could have broad implications for biotech, agriculture and animal health industries and the development of cutting-edge services of enormous benefit to society.”

During oral argument, the attorney for Myriad Genetics, Gregory Castanias stated that, “What Myriad inventors created in this circumstance was a new molecule that had never before been known to the world.”

The opposing parties are adamant that this process is not patentable since this human gene is something that occurs naturally.  NPR quoted Christopher Hansen of the American Civil Liberties Union, the attorney for the challengers, as stating, “All Myriad does is take a part of the body out of the body. . . It is no different than taking a kidney out of the body. Just because you are the [first] person who takes the kidney out of the body doesn’t entitle you to a patent on kidneys.”

If the Supreme Court eventually rules in favor of Myriad Genetics, it will be granting the company the exclusive right to use and research the genes for diagnoses and treatments.  This, in effect, will not allow diagnostic and therapeutic companies to compete over the quality and price of their tests.  Despite these concerns, it appears that after oral arguments that the Supreme Court may not rule in favor of Myriad Genetics.  According to a NBC report, “It would be one thing, several of the justices said during Monday’s oral arguments, for a company to seek a patent on a test for breast cancer that was developed by analyzing a human gene, but it would be going too far to be awarded a patent on the gene itself.”