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Patent Infringement in the Context of Follow-On Biologics

By Janet Freilich

This Article fills a gap in the literature by conducting a comprehensive analysis of patent infringement in the context of follow-on biologics. Patent infringement is an important topic because, like small molecule generic drugs, follow-on biologics are likely to begin their life facing infringement suits. Because it is tremendously expensive to develop a follow-on biologic, it is vital that there be consistency in how they are treated in the courts once the inevitable patent infringement suits arrive. If follow-on biologics companies cannot predict how their product will be received in court, they may decide it is not worth the risk to develop the product. This Article looks at types of strategies industry is likely to use to avoid infringement and how courts are likely to respond to these strategies. This Article focuses predominantly on the doctrine of equivalents, both because it will be particularly important in suits concerning follow-on biologics (it is nearly impossible to make a follow-on biologic identical to the reference drug) and because it represents the outer limits of the scope of a patent, and thus the most difficult cases. The Article is important for courts that must create a coherent body of law where no precedent yet exists, for industry members trying to predict how their products will be received and for policy makers who seek to understand the nature of infringement suits and shape this body of law in a direction that makes sense for all parties involved.

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January 15, 2013 Cite: 16 Stan. Tech. L. Rev. 9 (2012)


Moore is Less

Why the Development of Induced Pluripotent Stem Cells Might Lead Us to Rethink Differential Property Interests in Excised Human Cells

By Osagie K. Obasogie & Helen Theung

Since Moore v. Regents of the University of California, there has been a wide-ranging debate regarding the holding of the case and its implications for property law. Moore stands for the notion that individuals do not have a property interest in ordinary cells taken from their bodies during medical procedures nor the commercial products that researchers might develop from them. At the same time, cases such as Davis v. Davis and Hecht v. Superior Court have asserted that individuals maintain a property interest in other types of cells—namely embryos and gametes (eggs and sperm)—once they are removed from the body. This, among other developments, has led to a fragmented regime in property law pertaining to excised biological materials that turns, in large part, on the type of cell in question: individuals have a diminished interest in regular somatic cells (skin, muscle, etc.) while courts have recognized that people retain a heightened property interest in reproductive cells such as sperm, eggs, and embryos. The articulated reason for the differential property interests in these two cell types is that embryos and gametes have the “potential for human life” while individuals are thought to have little use for ordinary body cells once they are excised.

This default rule has framed property law regarding excised human cells for over two decades. It exists to balance the need for scientists to have access to research materials with individuals’ reproductive autonomy. To the extent that the dividing line determining the property interest in excised cells turns largely upon their “potential for human life,” the recent development of induced pluripotent stem cells (iPSCs) suggests that this default rule is becoming increasingly untenable. Research has shown that iPSCs can create the ability to genetically reprogram somatic cells into a pluripotent state that may allow them to differentiate into other types of cells—including eggs and sperm—that can be used to create new organisms. While these developments have not yet been fully applied to human iPSCs, they nonetheless suggest that iPSCs may soon be able to give ordinary somatic body cells the same potential for human life as naturally produced embryos and gametes but without the corresponding property interest.

This Article argues that given this new technology, its relative success in animal models, and its impending application to human cells, the current default rules precluding individuals’ property interest in excised somatic cells needs substantial reconsideration. We propose a three-part approach to manage the challenges that iPSCs create for this aspect of property law. This includes (1) a self-imposed moratorium on human applications of iPSC research that can lead to human reproduction (2) Congressional action that vests property interests in the donors of somatic cells once their cells have been reprogrammed to a pluripotent state and differentiated into reproductive cells and (3) Judicial action that distinguishes Moore and related cases by acknowledging the reversion of property interest to donors once somatic materials are reprogrammed to a state of pluripotency and differentiated into reproductive cells. This proposal offers the best way to deal with the profound legal issues created by this new technology with the least disruption to existing rules and policy preferences.

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January 15, 2013 Cite: 16 Stan. Tech. L. Rev. 51 (2012)


Anticompetitive Tying and Bundling Arrangements in the Smartphone Industry

By Thomas H. Au

As smart technologies become more prevalent and mobile devices become the digital platform of choice, how will antitrust law adapt? While current tying law has been criticized for its reliance on dated physical product precedents, the principles of tying and bundling doctrines are well-suited to address the next technology-based product combinations and integrations. Smartphones are an ideal foil for emerging antitrust issues, as these devices stand at the crossroads of tying and bundling inquiries. Integration of a smartphone mobile operating system (“mOS”) with an application clearinghouse exemplifies the types of challenges that will test current tying and bundling doctrines. These dynamic high technology products exhibit a dual nature, as they are easily cognizable as separate products, yet they can also be characterized as a single product. This Note examines several permutations of tying tests to draw out the consequences of treating smartphone technologies as single or multiple products under the law.

To ensure the viability and increase the efficacy of current tying and bundling applications by courts, this Note recommends that (1) non-equilibrium-based assertions by either plaintiffs or defendants should be recognized as the exception, not the norm; (2) flexible rule of reason analyses should be utilized in high-technology industries; and (3) evidentiary tools, such as natural experiments and price-indexes, should be considered a permissible inference of anticompetitive arrangements. Although it is unorthodox to suggest that current tying and bundling law does not need to be significantly altered in order to address the issues raised by dynamic high technology industries, effective integration of evidentiary and econometric analyses rises to the challenge—while maintaining a modest role for antitrust in the economy.

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January 7, 2013 Cite: 16 Stan. Tech. L. Rev. 188 (2012)


Unchaining Richelieu’s Monster

A Tiered Revenue-Based Copyright Regime

By Martin Skladany

This Article proposes a tiered revenue-based copyright regime, which would require copyright holders to select one of two different copyright terms. The first tier would provide a fixed, nonrenewable copyright term of 10-14 years, while the second tier would offer a one-year copyright term that could be indefinitely renewed as long as the work is successful enough to meet or exceed a revenue threshold.

A tiered revenue-based copyright regime will break the gridlock between copyright proponents lobbying for longer copyright terms and public domain advocates insisting that terms are already remarkably excessive. It will entice Hollywood to set orphans free and to accept dramatically reduced copyright terms for most artwork in exchange for gaining longer protection for the most successful commercial works. It will require all artists seeking copyright protection to register each work and will immediately transfer all works that are not registered—most newly created noncommercial art and all existing orphans—to the public domain. It will increase the speed at which the overwhelming majority of commercial art moves into the public domain, because artists selecting the first tier would have only 10-14 years of copyright protection—a much shorter term than current law provides. Moreover, it will free much of the commercial art in the second tier within one or a few years of copyright registration, for the revenue-based annual renewal system will be a final filter to ensure that only the most profitable works continue to stand aloof from the commons.

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January 7, 2013 Cite: 16 Stan. Tech. L. Rev. 131 (2012)


Negotiating Cloud Contracts

Looking at Clouds from Both Sides Now

By W. Kuan Hon, Christopher Millard & Ian Walden

Contract terms for cloud computing services are evolving, driven by users’ attempts to negotiate providers’ standard terms to make them more suitable for their requirements, as well as market developments, particularly among cloud integrators. This Article, drawing on sources including interviews with cloud computing providers, users and other market actors, is the first in-depth research into how cloud contracts are negotiated. In particular, we have focused on instances where users have requested changes to providers’ standard terms, and the extent to which providers agreed to those changes. We have found that the terms that generated the most negotiation were provider liability, service level agreements, data protection and security, termination rights, unilateral amendments to service features, and intellectual property rights. Changes to providers’ standard terms are likely to filter down from large deals where users have negotiated amendments, and filter up from regulatory action affecting the consumer market. This Article suggests a multiplicity of approaches are emerging, rather than a de facto ‘cloud’ model, with market participants developing a range of cloud services with different contractual terms, priced at different levels, and embracing standards and certifications that aid legal certainty and compliance, particularly for small and medium-sized enterprise users.

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January 7, 2013 Cite: 16 Stan. Tech. L. Rev. 81 (2012)


Section 101 and Computer-Implemented Inventions

By Robert D. Swanson

The law surrounding the patentability of computer-implemented inventions is extraordinarily unclear. Thankfully, the Federal Circuit has granted rehearing en banc to CLS Bank v. Alice to determine the test for computer-implemented inventions under § 101. This Note identifies three current approaches in Federal Circuit doctrine, and finds each lacking. In their place, this Note proposes and defends the data manipulation test, which would hold that a claim is not directed to an abstract idea if it contains a computer element such that: (1) the computer manipulates data, rather than merely being present, (2) the data being manipulated is inherent to the computer, and (3) the data manipulation is directed to one or more particular applications. As this Note argues, the data manipulation test is an easily administrable compromise test that the Federal Circuit, or the Supreme Court upon review, can adopt in CLS Bank.

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December 28, 2012 Cite: 16 Stan. Tech. L. Rev. 161 (2012)


Why the “Scope of the Patent” Test Cannot Solve the Drug Settlement Problem

By Michael A. Carrier

One of the most difficult legal issues today involves settlements by which brand-name drug companies pay generic firms to delay entering the market. Such conduct requires courts to consider not only patent and antitrust law, but also the Hatch-Waxman Act, the complex regime governing behavior in the pharmaceutical industry.

Courts have analyzed these agreements by relying on a test that asks if the settlement falls within the “scope of the patent.” They have found, in nearly all of these cases, that it does. And, as a result, they have concluded that the agreements do not violate the antitrust laws.

This Article shows why the scope test is not appropriate in determining the antitrust treatment of drug patent settlements. It recounts the history of the test, showing its increasing deference over time. And it demonstrates the three primary problems with the test: (1) it involves a transformation that has left the test toothless, (2) it assumes that the patent at issue is valid, and (3) it neglects the issue of infringement.

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September 11, 2012 Cite: 16 Stan. Tech. L. Rev. 1 (2012)


Luck/Unluck of the Draw

An Empirical Study of Examiner Allowance Rates

By Sean Tu

The United States Patent and Trademark Office is tasked with reading and reviewing patent applications to determine those applications which qualify for patent protection. Each application is reviewed by a specific patent examiner who should apply the standards of patentability in an even, fair, unbiased and consistent manner. This task requires the examiner not only to be internally consistent with the applications she reviews, but consistent with the behavior of other examiners within the same art unit. I find this may not be the case. I find two distinct populations of examiners that may be harming the patent system. The first population may be acting as a “rubber stamp” by allowing patents with little to no review and/or amendments to the claims. In contrast, the second population may be rejecting too many “good” applications that meet the patentability standards. In this article, I argue that the incentive system may play a role in creating these two distinct populations of examiners. Additionally, I propose a holistic pre-grant prosecution history review of both low and high allowance rate examiners to ensure a more consistent application of patentability rules.

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August 29, 2012 Cite: 2012 Stan. Tech. L. Rev. 10


Blinded by (a Lack of) Science

Limitations in Determining Therapeutic Equivalence of Follow-On Biologics and Barriers to Their Approval and Commercialization

By Trevor Woodage

Over the past twenty years, an increasing number of disease therapies based on recombinant DNA technology have been developed and commercialized. These treatments, commonly known as biologics, can be very effective. They can also be extraordinarily expensive. In an effort to ensure the availability and affordability of biologics, Congress enacted the Biologics Price Competition and Innovation Act (BPCIA) in 2010. The BPCIA was designed to strike a balance between facilitating the approval of generic biologics with a new regulatory pathway and protecting innovation of new biologics by offering a period of regulatory exclusivity much as the Hatch-Waxman Act (HWA) had done for small-molecule drugs.
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July 16, 2012 Cite: 2012 Stan. Tech. L. Rev. 9


The ITU and the Internet’s Titanic Moment

By Patrick S. Ryan

Try this: Mention the International Telecommunication Union (ITU) to a few casual Internet users, Netizens, or even the most senior-level computer programmers and technology experts and gauge their reaction. Few are likely to know what you’re talking about. Most will likely think you’re referring to either a telecommunications labor union or some kind of international working group. Only the most informed will know that the ITU is one of the most influential (and in fact the oldest) technology-based standard-setting and treaty-making institutions in the world. While it’s now a subsidiary of the United Nations (UN), the ITU predated the UN by more than 75 years, having been founded in 1865 to help coordinate the international standardization of telegraph signals. One of the most memorable forays that the ITU made into the international legal system happened 100 years ago when the seeds were planted for the ITU to take on the role of intergovernmental coordination on spectrum matters in the wake of the Titanic disaster. Today, the ITU’s primary mandate is for all intents and purposes limited to telecommunications; however, the ITU is currently working to gain relevancy in the areas of Internet security, privacy, and it is setting up a shop to compete with the open standardization bodies that built the Internet.
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July 16, 2012 Cite: 2012 Stan. Tech. L. Rev. 8