Keeping pace with the ever-changing life sciences industry, Morrison Foerster stays on top of the trends and political, legal, and economic drivers to support striking the balance between innovative discovery and purposeful business planning to assure our clients continued success. MoFo Life Sciences shares timely legal and business insights and in-depth analyses on trends and the complex technologies at the heart of the global pharmaceutical, biotechnology, diagnostics, medical devices, digital health, and AgTech fields.Learn more about our <a href="https://www.mofo.com/capabilities/life-sciences-healthcare" target="_self">Life Sciences practice</a>.<h2 dir="ltr">ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants. She represents clients ranging from large international pharmaceutical companies to midsized companies, startups, and universities.Meghan has filed numerous Patent Term Extension applications to secure additional term for her clients’ patents, which cover FDA-approved products. In addition, Meghan has extensive experience addressing complex obviousness-double patenting and subject matter eligibility issues impacting her clients’ patent portfolios. Meghan also represents clients in both investor-side and target-side due diligence, in deals from seed funding to initial public offerings.Prior to law school, Meghan attended graduate school at the University of California, Los Angeles, where she received a Ph.D. in biological chemistry based on her work on protein-protein and protein-DNA interactions at a molecular level. Meghan is the author of several scientific publications and has presented her research at international conferences.Meghan received her J.D. from the University of Southern California Law School and spent a year as a visiting student at Santa Clara University, where she focused on intellectual property.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants.

Meghan Poon

Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in life sciences, digital, and high-tech industries.His subjects of focus include research and development collaborations, complex licensing agreements, and other technology transactions, as well as know-how protection strategies, and employee invention law. He also has substantial experience in litigating patents, trademarks, and other intellectual property assets, often in a multijurisdictional context. In addition, Wolfgang and his team frequently clear trademarks and ad campaigns and prosecute trademark applications.Wolfgang is co-editor of our <a href="https://lifesciences.mofo.com/" dir="ltr" target="_blank">MoFo Life Sciences Blog</a>.Wolfgang is a partner of Morrison Foerster based in our German office in Berlin.<h4 dir="ltr">Representative Transactional Matters</h4><ul dir="ltr"><li>U.S.-based BioTech fund on various research collaborations and other transactions with German start-ups or research institutions.</li><li>Negotiate multimillion-euro strategic partnership between two AgTech leaders concerning the development and commercialization of pest-resistant transgenic traits.</li><li>Craft global multi-million collaboration regarding AI-powered robotic MaaS.</li><li>UK-based digital health company on product roll-out of RPM applications in Germany; coordinate international expansion.</li><li>Advise numerous German start-ups on their U.S. expansion.</li><li>Draft diverse global patent and know-how license agreements in the areas of AgTech and life sciences—including gene licensing and licensing of genome editing technologies (e.g., CRISPR)—and medical devices; draft correlating supply and distribution agreements.</li><li>Structure IP rights in connection with joint ventures and other M&A transactions, including the carve-out of a patent-heavy semiconductor business comprising nine jurisdictions into a German–U.S. joint venture.</li><li dir="ltr">Advise on government-funded, multi-partner R&D projects and/or R&D projects with academic institutions, as well as on employee invention law.</li></ul><h4 dir="ltr">Representative Contentious IP Matters</h4><ul dir="ltr"><li>Lead counsel in an international dispute between software companies on rights and obligations following termination of a multi-million licensing and distribution arrangement; coordinate local counsel.</li><li>Defend Japanese chip manufacturer in high-profile SEP-litigation; advise on global settlement arrangement.</li><li>Represent leading internet retailer in patent infringement and concurrent invalidity proceedings in the context of a multijurisdictional dispute concerning touch-screen technology.</li><li>Represent diverse pharmaceutical and life sciences companies in national and cross-border patent infringement proceedings and other technology-related disputes, including preliminary injunctions as well as pre‑trial discovery and inspection proceedings, concerning, inter alia, drug-coating technologies, toner cartridges, medicinal gases, transgenic plants, and vaccines.</li><li dir="ltr">Conduct trademark, copyright, and false advertising litigation, including, most notably, a high-profile trademark litigation for a German bank, and a nine-country cross-border trademark litigation involving a famous pharmaceutical brand.</li></ul>

Dr. Wolfgang Schönig berät Mandanten zum Schutz des geistigen Eigentums sowohl in streitigen als auch nichtstreitigen Angelegenheiten, mit einem besonderen Fokus auf die IP-rechtliche Beratung von Unternehmen aus den Bereichen Life Sciences, Digitalwirtschaft und High-Tech.Zu seinen Beratungsschwerpunkten gehören Forschungs- und Entwicklungskooperationen, komplexe Lizenzvertragsgestaltungen und andereTechnologie-Transaktionen, sowie Know-how-Schutz-Strategien und das Arbeitnehmererfinderrecht. Er verfügt zudem über umfangreiche Prozesserfahrung zur Durchsetzung von Patenten, Marken- und anderen IP-Rechten, häufig auch in einem grenzüberschreitenden Kontext. Darüber hinaus bewertet Dr. Wolfgang Schönig zusammen mit seinem Team regelmäßig die Rechtskonformität von Werbekampagnen, prüft die Verfügbarkeit von Marken und entwickelt entsprechende Anmeldestrategien.Dr. Wolfgang Schönig ist Co-Editor des Life Sciences Blogs von Morrison Foerster.Er hat seinen Doktortitel an der Heinrich-Heine-Universität Düsseldorf und seinen LL.M. an der Fordham School of Law in New York erworben, jeweils mit Schwerpunkt im gewerblichen Rechtsschutz. Seinen MBA-Abschluss erhielt er von der European University in Barcelona.Dr. Wolfgang Schönig ist Partner des deutschen Büros von Morrison Foerster in Berlin.<h4 dir="ltr">Repräsentative Transaktionen</h4><ul><li dir="ltr">BioTech-Fonds mit Sitz in den USA bei verschiedenen Forschungskooperationen und anderen Transaktionen mit deutschen Start-ups oder Forschungseinrichtungen</li><li dir="ltr">Verhandlung einer hochvolumigen strategischen Partnerschaft zwischen zwei Technologieführern im Bereich Crop Science betreffend der Entwicklung und Kommerzialisierung von bestimmten Resistenzen</li><li dir="ltr">Gestaltung einer globalen Multi-Millionen-Zusammenarbeit für KI-gestützte Roboter</li><li dir="ltr">Ein in Großbritannien ansässiges Unternehmen für digitale Gesundheit bei der Markteinführung von RPM-Anwendungen in Deutschland; Koordination der internationalen Expansion</li><li dir="ltr">Beratung zahlreicher deutscher Start-ups bei deren US-Expansion</li><li dir="ltr">Strukturierung und Verhandlung diverser Patent- und Know-How-Lizenzen in den Bereichen Ag Tech und Life Sciences – einschließlich Fragen zu genome editing wie CRISPR-Medizingeräte, sowie Gestaltung von Softwarelizenzverträgen und Erstellung korrespondierender Liefer- und Vertriebsvereinbarungen</li><li dir="ltr">Strukturierung von IP-Rechten im Zusammenhang mit Joint Ventures und anderen M&A-Transaktionen, darunter die Koordination eines neun Länder umfassenden IP Carve-Outs im Rahmen eines Halbleiter-JVs</li><li dir="ltr">Beratung zu staatlich geförderten Multi-Partner F&E-Projekten und/oder F&E-Projekten mit akademischen Einrichtungen sowie zum Arbeitnehmererfindungsrecht</li></ul><h4 dir="ltr">Repräsentative IP-Streitigkeiten</h4><ul><li dir="ltr">Lead Counsel in einem internationalen Rechtsstreit zwischen Softwareunternehmen über Rechte und Pflichten nach Beendigung einer millionenschweren Lizenz- und Vertriebsvereinbarung; Koordinierung der lokalen Anwälte</li><li dir="ltr">Verteidigung eines japanischen Chipherstellers in einem prominenten Streitfall bezüglich Standardessentieller Patente (SEP); Beratung zu einer globalen Vergleichsregelung</li><li dir="ltr">Verteidigung einer führenden Internetplattform gegen Ansprüche eines Patenttrolls wegen vermeintlicher Verletzung von Patent bezüglich Touchscreen-Technologie sowie korrespondierende US-Streitigkeiten</li><li dir="ltr">Vertretung von Pharma- und Life Science-Unternehmen in nationalen und grenzüberschreitenden Patentverletzungsverfahren und anderen technologiebezogenen Streitigkeiten, einschließlich einstweiliger Verfügungsverfahren und vorprozessualer Beweissicherungs- und Besichtigungsverfahren, unter anderem in Bezug auf Arzneimittelbeschichtungstechnologien, Tonerkartuschen, medizinische Gase, transgene Pflanzen und Impfstoffe</li></ul>

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Wolfgang Schönig is a partner of Morrison Foerster (International) LLP based in our German office in Berlin. His practice specialty is advising on IP aspects relative to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. Wolfgang is specialized in research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig focuses his practice on IP aspects relative to transactions in the digital, telecoms, high tech, life sciences, and pharmaceuticals industry, as well as legal representation in IP disputes.

Wolfgang Schönig advises clients on IP aspects relating to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. His additional focus areas include research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig

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The pharmaceutical market presents unique challenges to pharmaceutical companies seeking to launch new products. One such challenge involves the lengthy process of executing clinical trials as a prerequisite for obtaining market authorization.  In this context, the fact that trademark laws in most jurisdictions provide only a five-year grace period for non-use after registration can make a significant impact on retaining trademark rights, as early applicants for pharmaceutical trademarks risk revocation of their marks based on non-use if the marketing approval process outlasts this period. Therefore, the crucial considerations for trademark owners in the pharmaceutical sector are whether to seek registration of their trademarks before the grant of marketing authorization and whether clinical trials can be used to justify non-use of the trademarks after the five-year grace period.The Court of Justice of the European Union (“CJEU”) recently addressed these significant issues in its decision on July 3, 2019 and ruled that use of a European Union trademark (“EUTM”) in connection with pharmaceuticals can only constitute “genuine use” pursuant to Article 18(1) of the Regulation 2017/1001 (“EUTMR”) if the relevant drug has already been authorized for marketing to the public. Notwithstanding this requirement, clinical trials may constitute a “legitimate reason” for non-use of a trademark pursuant to Article 18(1) EUTMR, provided that the circumstances leading to the non-use exceeding the five-year term were beyond the trademark owner’s control.The factsOn September 23, 2003, Viridis Pharmaceutical Ltd (“Viridis”) filed an application for the word mark BOSWELAN with the European Union Intellectual Property Office (“EUIPO”), claiming protection for the goods described as “pharmaceutical and sanitary preparations.” The trademark was granted registration in 2007. On November 18, 2013 Hecht-Pharma GmbH successfully sought revocation of Viridis’ registration before the Cancellation Division of the EUIPO claiming that the mark was not put to genuine use within the five-year period after registration. Both, the EUIPO’s Board of Appeal and the General Court (“EGC”; formerly known as the Court of First Instance) upheld this decision.Viridis appealed to the CJEU, arguing that the BOSWELAN mark had already been put to use in publicly advertised clinical trials. Viridis put forth the view that since clinical trials are mandatory in order to obtain marketing authorization for pharmaceuticals, such use must be sufficient for “genuine use” of a trademark or at least constitute a “legitimate reason” for non-use.  The CJEU confirmed the EGC’s decision and dismissed Viridis’ appeal.Use of a mark within clinical trials as “genuine use” and “preparatory measurements”In its decision, the court ruled that Viridis’ clinical trials cannot be considered genuine use of the mark or preparatory measures that would be a substitute for actual genuine use. According to the CJEU’s established case law, genuine use of a mark requires that the public perceive such use as an indication of the commercial origin of the goods or services for which the mark was registered. This will be the case if the mark is used (i) outwardly on the market for the relevant goods or services and (ii) in order to obtain a market share, in contrast to purely internal processes of the trademark owner. Such requirements, in each instance, necessitate the distribution of goods or services to the relevant public.Clinical trials, however, constitute merely internal processes, because the trials are not directly for the purpose of distribution of the branded drug and are thus not directed to the public in order to obtain or secure a market position. Instead the CJEU notes that the main purpose of clinical trials is to obtain market authorization, and therefore take place outside of the relevant market, aimed only at a narrow circle of participants.The court takes the position that conducting clinical trials and the advertising related thereto cannot constitute genuine use of a trademark or preparatory measures of use because market authorization is a necessary prerequisite for selling or advertising a drug in the EU. Therefore, any use of a trademark on drugs or in advertising prior to authorization cannot be considered use in connection with entering the market or securing a market position.Clinical trials as legitimate reason for non-useThe CJEU further found that conducting clinical trials in the present case could not serve as a “legitimate reason” for non-use of Viridis’ mark, which would have a right-preserving effect in accordance with Article 18(1) EUTMR.The CJEU specifically confirms that clinical studies may in principle be a legitimate reason for non-use, but only if such trials (i) have a direct connection with the trademark, (ii) render use of the trademark impossible or impracticable, and (iii) are not under the control of the owner.Here, the court found that Viridis did not meet the third requirement, since several incidents hindering the completion of the clinical trials could be attributed to Viridis and were therefore under Viridis’ control. In this regard, the CJEU points out that Viridis, without being subject to any legal requirement, decided to register the mark at a very early stage, despite the considerable uncertainty as to both the timing and possibility of marketing of the designated drug. Furthermore, Viridis filed the clinical trial application three years after it filed the EUTM application and several events during the clinical trials indicated that Viridis lacked the financial resources necessary to swiftly execute the trials.Key Takeaways<ul><li>According to the CJEU, use of a pharmaceutical trademark cannot constitute “genuine use” of the trademark within the meaning of Article 18(1) EUTMR before marketing authorization for the designated drug has been obtained, since the trademark cannot be used in relation to delivery of the drug without such authorization.</li></ul><ul><li>Clinical trials may in principle be a “legitimate reason” for non-use of a trademark pursuant to Article 18(1) EUTMR, preserving the rights granted by the trademark. However, as the course and duration of a clinical trial is largely dependent on factors that are within the trademark owner’s responsibility, circumstances such as a very early trademark application combined with a delayed filing of the application for the clinical trial, as well as a lack of efforts to bring the clinical trial to a swift and successful conclusion, will hinder a company’s ability to cite such clinical trials as a “legitimate reason” for non-use.</li></ul><ul><li>When obtaining and maintaining trademark registrations for pharmaceuticals in the EU, particular attention should be paid to the five-year grace period when formulating a conclusive time and budget strategy for obtaining marketing authorization for the relevant drug. As “genuine use” of a trademark in this timeframe might not be possible due to the lack of marketing authorization, pharmaceutical companies should be sure to coordinate scheduling of trademark filings and the application for marketing authorization, and constantly pursue the mandatory clinical trials, in order to be able to claim it a “legitimate reason” for non-use of the mark in a potential revocation proceeding.</li></ul>

Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in the digital, high-tech, life sciences, and pharmaceutical industries.

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Robert advises companies from the technology and life sciences sectors on a wide range of commercial, intellectual property (IP) and regulatory matters. His clients range from multinational corporations to startups and scaleups.

Robert Grohmann

Robert Grohmann is counsel at Morrison Foerster’s German office in Berlin. As a member of the technology transactions group, he focuses on advising domestic and foreign companies and startups in all areas of technology and IP law, including patent and software licensing, employee inventions law, as well as know-how protection. Moreover, Mr. Grohmann’s expertise encompasses the judicial and extra-judicial representation in matters of trademark law, design law, and competition law.

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CJEU on Genuine-Use of Trademarks in Clinical Trials

The pharmaceutical market presents unique challenges to pharmaceutical companies seeking to launch new products. One such challenge involves the lengthy process

CJEU on Genuine-Use of Trademarks in Clinical Trials

The Administrative Regulations of the People’s Republic of China on Human Genetic Resources (the “Regulations”), promulgated by China’s State Council, went into effect on July 1, 2019, superseding prior regulations on China’s human genetic resources (“China HGR”), particularly the 1998 Interim Methods of Human Genetic Resources Administration.This article is not a comprehensive review of the Regulations, but rather focuses on those provisions in the Regulations that govern conducts related to “foreign organizations and individuals, as well as their established or actually controlled institutions” (collectively, the “Foreign Persons”). For a detailed analysis or an English translation of the Regulations, please contact the <a target="_blank" href="mailto:CCui@mofo.com?subject=MoFo%20Life%20Sciences%20blog%20post">author</a>.The Regulations prohibit Foreign Persons from collecting or preserving China HGR in China, or providing China HGR abroad. The Regulations do permit Foreign Persons’ limited use of China HGR “to carry out scientific research activities,” which must be conducted through collaboration with Chinese scientific research institutions, higher education institutions, medical institutions, or enterprises (collectively, the “Chinese Entities”). Such activities must be approved by China’s Ministry of Science and Technology (“MOST”), and the application for approval must be filed jointly by the Foreign Person and the relevant Chinese Entity. The only exception to the approval requirement is “international collaboration in clinical trials” that do not involve the outbound transfer of China HGR materials such as organs, tissues, or cells comprising the human genome, genes, or other genetic substances (collectively, “China HGR Materials”). Such clinical trial collaboration, however, must still be pre-registered with MOST.The Regulations require that the permitted international collaboration ensure that “the Chinese Entities can take part in the research substantially in the whole process for the duration of the collaboration” and have full access to and complete copies of “all records, data and other information in the research process.”The outbound transfer of China HGR Materials in permitted international collaborations must be on an as-needed basis and subject to MOST’s prior approval, which is required for the customs procedures.The Regulations dictate that any patent rights based on scientific research results obtained in the permitted international collaboration must be jointly owned by the participating Foreign Person and Chinese Entity. Ownership and use rights of other scientific and technological achievements arising from the collaboration may be contractually agreed upon by the parties. Notably, the Regulations do not dictate the ownership of HGR information, i.e., the data and other information materials generated from the utilization of China HGR Materials (collectively, “China HGR Information”), arising from the international collaboration, but simply provide, without further clarification, that it can be used by both collaborating parties.Penalties for violation of the Regulations by Foreign Persons include injunction; confiscation of any China HGR illegally collected or preserved and of any relevant illegal income; and  a fine of more than RMB 1 million but less than RMB 10 million. If the illegal income is more than RMB 1 million, the fine will be five to ten times that of the illegal income.The Regulations do permit the provision of or open access to China HGR Information to Foreign Persons, subject only to registration with MOST. In the event such provision or access could endanger China’s public health, national security or public interests, MOST’s security examination will be required. This may provide an easier route for Foreign Persons to gain access to China HGR Information (but not China HGR Materials), because apparently no international collaboration is required for such access.China’s next steps in regulating China HGR will likely focus on legislation related to the clinical application of new technologies in biomedicine, in part as a response to the gene-edited babies scandal that broke out in late 2018.

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China’s new administrative regulations on human genetic resources as applied to foreign persons

China’s new administrative regulations on human genetic resources as applied to foreign persons

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The Administrative Regulations of the People’s Republic of China on Human Genetic Resources (the “Regulations”), promulgated by China’s State Council, went into

In particular for commercial reasons, pharmaceutical companies have an interest in the confidentiality of documents submitted in connection with the marketing authorization for medicinal products vis-á-vis its competitors as well as vis-á-vis the public.The Court of Justice of the European Union (“CJEU”) ruled in its decision of June 28, 2019 (<a href="http://curia.europa.eu/juris/document/document.jsf?docid=215581&text=&doclang=EN&part=1&occ=first&mode=LST&pageIndex=0&cid=1772522">Case T-377/18</a>), that a pharmaceutical company cannot invoke the exceptions of <a target="_blank" href="http://www.europarl.europa.eu/RegData/PDF/r1049_en.pdf">Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents</a> (the “Regulation”) to prohibit public access to a periodic benefit-risk evaluation report submitted in the context of a marketing authorization of a medicinal product.  The exceptions to the Regulation for protection of court proceedings or commercial interests must be interpreted and applied strictly, as such exceptions derogate from the Regulation’s objective of ensuring the widest possible access to documents.Background to the DisputeIn the context of a communication of the Food and Drug Administration (FDA, United States) concerning the safety of a medicinal product and a drop in the share price followed by a lawsuit filed by shareholders in the U.S. against the pharmaceutical company manufacturing the medicinal product (the “DeSmet lawsuit,” a so-called stock drop lawsuit), a law firm requested access to several documents from the European Medicines Agency (“EMA”) relating to the marketing authorization of the medicinal product in question.  Despite the fact that the pharmaceutical company proposed redactions of specific sections of the report relating to the safety of the medicinal product with regard to the disclosure request, EMA decided to disclose the report without the proposed redactions.  The pharmaceutical company challenged EMA’s decision.Decision of the CJEUThe CJEU approved EMA’s decision to grant access to documents submitted in the context of a marketing authorization of the medicinal product, and found that the exceptions of the Regulation did not apply in this case. Exception to publication applies to documents relating to court proceedings (second indent of Art. 4(2) of the Regulation)The CJEU ruled that this exception only applies to documents drawn up in the context of specific pending court proceedings (e.g., pleadings in pending court proceedings) or, exceptionally, documents that contain legal positions that subsequently become the subject of such proceedings and whose disclosure would be likely to compromise the defense of the documents’ author in the context of such proceedings.  However, the contested report is a scientific document that was submitted to EMA in the context of an administrative procedure (in order to establish whether the risk-benefit balance remained unchanged), and not a document that met the conditions set forth by the CJEU. (N.B.: The term “court proceedings” also covers non-European court proceedings.)The exception to publication for protection of court proceedings is necessary to ensure observance of the principles of equality of arms.  Contrary to the claimant’s opinion, disclosure of the report would not lead to circumvention of the protections conferred by U.S. legislation in proceedings relating to preliminary investigation.  The main purpose of that legislation is characterized by the intention to limit abusive class actions, given that such actions have a negative impact on the U.S. capital markets.  Accordingly, that legislation is not concerned with the protection of court proceedings as interpreted by the EU courts and, consequently, does not affect the principle of equality of arms.Exception to publication applies to documents where disclosure undermines the protection of commercial interests (first indent of Art. 4(2) of the Regulation)The CJEU ruled that pharmaceutical companies have to show that the requested documents contain commercially sensitive information, e.g., with regard to commercial strategies of the undertakings involved or to their customer relations or where that document contains information particular to that undertaking that reveals its expertise.  Arguments such as a greater financial investment in the context of the court proceedings pending in the U.S. or the scientific nature of the complex, detailed, or specialized report are not sufficient to constitute a ground for non-disclosure.Key TakeawaysTo invoke the exception of “court proceedings,” the document must be drawn up in the context of specific court proceedings or contain internal positions of a legal nature. To invoke the exception of “commercial interest” successfully, pharmaceutical companies have to show that the requested documents contain sensitive commercial information.  The mere fact that a document concerns an interest protected by an exception is not sufficient to justify the application of that exception.  Furthermore, the risk of such interest being undermined by disclosure of the document must be reasonably foreseeable and must not be purely hypothetical. Otherwise, these exceptions do not apply and disclosure of the documents cannot be prohibited.Note that other EU Regulations, such as the Trade Secrets Directive, in particular its rules for preservation of confidentiality of trade secrets in the course of legal proceedings, do not affect the rules on public access to documents or on the transparency obligations set forth in the Regulation (<a target="_blank" href="https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016L0943&from=EN">recital 11 of the Trade Secrets Directive</a>).

Confidentiality of Documents: Only if Related to Court Proceedings or Commercial Interests

Fourth Circuit’s Decision Revitalizes First Amendment Challenge to the TCPA

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In particular for commercial reasons, pharmaceutical companies have an interest in the confidentiality of documents submitted in connection with the marketing a

Confidentiality of Documents: Only if Related to Court Proceedings or Commercial Interests

On July 3, 2019, in a 7-5 en banc decision, the Federal Circuit declined to reconsider its decision in Athena Diagnostics v. Mayo Collaborative Services,[1] finding that claims to a diagnostic method were patent ineligible for being directed to a law of nature. The claims on review recited a method of diagnosing disorders related to muscle specific tyrosine kinase (MuSK) by detecting autoantibodies to an epitope of MuSK. The majority of the panel generally felt confined by the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories setting forth a two-step framework for determining whether claims are patent eligible. [Summarized here [<a target="_blank" href="https://lifesciences.mofo.com/topics/securing-and-protecting-diagnostic-based-claims.html">5/30 Blog Post</a>]] Although the Federal Circuit will not re-hear the matter, the en banc decision uniquely lays out eight separate opinions acknowledging the problems of the current patent eligibility jurisprudence, and requests that the Supreme Court or Congress take action. The separate opinions include the following notable dicta:Judge Lourie (concurring, joined by Judge Reyna and Judge Chen)“If I could write on a clean slate, I would write as an exception to patent eligibility, as respects natural laws, only claims directed to the natural law itself, e.g., E=mc2, F=ma, Boyle’s Law, Maxwell’s Equations, etc. I would not exclude uses or detection of natural laws. The laws of anticipation, obviousness, indefiniteness, and written description provide other filters to determine what is patentable.”Judge Hughes (concurring, joined by Judge Prost and Judge Taranto)“I, for one, would welcome further explication of eligibility standards in the area of diagnostics patents. Such standards could permit patenting of essential life saving inventions based on natural laws while providing a reasonable and measured way to differentiate between overly broad patents claiming natural laws and truly worthy specific applications.”Judge Dyk (concurring, joined by Judge Hughes and Judge Chen)“Thus, it would be desirable for the Supreme Court to refine the Mayo framework to allow for sufficiently specific diagnostic patent claims with proven utility. In the life sciences, development of new diagnostic methods is often based on researching complex biological systems. The inventive concepts in this area may lie primarily in the application of a natural law.”Judge Chen (concurring)“New methods for diagnosing medical conditions, as a general matter, intuitively seem to be the kind of subject matter the patent system is designed for: to encourage the risky, expensive, unpredictable technical research and development that people would not otherwise pursue in the hope that if they discover something of great medical value, then they will be protected and rewarded for that successful effort with a patent.”Judge Moore (dissenting, joined by Judge O’Malley, Judge Wallach, and Judge Stoll)“This is not a case in which the judges of this court disagree over whether diagnostic claims, like those at issue in Athena, should be eligible for patent protection. They should. None of my colleagues defend the conclusion that claims to diagnostic kits and diagnostic techniques, like those at issue, should be ineligible.”Judge Newman (dissenting, joined by Wallach)“Athena’s diagnostic method is not a law of nature; it is a novel man-made method of diagnosis of a neurological disorder. The Athena diagnostic method, a multi-step method performed by a combination of specific chemical and biological steps, was unknown in the prior art. The Court in Mayo did not exclude such methods from eligibility for patenting.”Judge Stoll (dissenting, joined by Wallach)“Interpreting Mayo, our prior opinions seem to take for granted that the Supreme Court has foreclosed all avenues of patent protection for diagnostic claims…Our inflexible following of Mayo has created flawed decisions that are inconsistent with the precepts of Mayo and our patent system as a whole.”Judge O’Malley (dissenting)“I believe that confusion and disagreements over patent eligibility have been engendered by the fact that the Supreme Court has ignored Congress’s direction to the courts to apply 35 U.S.C. sections 101, et seq. (“Patent Act”) as written. Specifically, the Supreme Court has instructed federal courts to read into Section 101 an “inventive concept” requirement—a baffling standard that Congress removed when it amended the Patent Act in 1952.”This dicta is promising and may signify the real possibility of change (and certainty) to patent eligibility standards in the diagnostics field.  Although it remains to be seen if Athena will file a petition for certiorari review with the Supreme Court, either the Supreme Court or Congress has been given a call to action.The en banc decision can be viewed <a target="_blank" href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-2508.Order.7-3-2019.1.pdf">here</a>. [1] Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743 (Fed. Cir. 2019).

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Karen Potter is a partner in Morrison & Foerster’s Life Sciences Patent group. Her practice focuses on patent preparation, prosecution, and strategic counseling for start‑up, emerging, and established

Karen G Potter Ph.D.

Karen Potter

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Federal Circuit Diagnoses the Patent Eligibility Problem – But Denies a Remedy

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On July 3, 2019, in a 7-5 en banc decision, the Federal Circuit declined to reconsider its decision in Athena Diagnostics v. Mayo Collaborative Services,[1] fin

Federal Circuit Diagnoses the Patent Eligibility Problem – But Denies a Remedy

On May 9, the United States Patent and Trademark Office (“PTO”) published a <a target="_blank" href="https://federalregister.gov/d/2019-09600">notice</a> in the Federal Register that it is modifying its patent term adjustment (“PTA”) procedures in view of the Federal Circuit’s decision in Supernus Pharmaceuticals v. Iancu.[1] Under the PTO Duty of Disclosure requirements, patent applicants are required to disclose any information that may be material to the patentability of an application, which can include documents cited by a foreign patent authority in a counterpart application. A failure to disclose such information in a timely manner can result in a reduction of PTA, which is a mechanism to add patent term for delays caused by the PTO, subject to reduction if the patentee fails to engage in reasonable efforts to conclude prosecution. The PTO currently uses a system designated Patent Application Locating and Monitoring (“PALM”) to track information relevant to PTA calculations. However, PALM is only equipped to register internal PTO events. Thus, the provision of information received from a foreign patent authority may not be recognized by PALM as a relevant prosecution event and can result in inaccurate PTA calculations, as demonstrated by the Supernus case. There, the PTO incorrectly reduced the PTA of a patent by 546 days, during which time the patentee had not yet received notice of the information from the foreign patent authority and was therefore incapable of disclosing the information to the PTO.  Responding to the Supernus decision, the Federal Register Notice asserts that the PTO will continue to use PALM to calculate PTA based solely on internal events, but announces a procedure to allow a patentee to request reconsideration of PTA calculation under 37 CFR 1.705(b) if “there was no identifiable effort the patentee could have under taken to conclude prosecution.” The request must include the relevant information not recorded in the PALM system and the required fee, and must be filed within two months of patent grant. An extension of up to five months may be obtained by paying additional fees. Patentees are encouraged to work with counsel to review PTA of a granted patent to ensure all PTA to which a patent is entitled has been awarded. [1] Supernus Pharm., Inc. v. Iancu, 913 F.3d 1351 (Fed. Cir. 2019).

Patent Term Adjustment: A Post-Supernus Update from the Patent and Trademark Office

On May 9, the United States Patent and Trademark Office (“PTO”) published a notice in the Federal Register that it is modifying its patent term adjustment (“PTA

Patent Term Adjustment: A Post-Supernus Update from the Patent and Trademark Office

The United States Supreme Court finally clarified its 11-year-old “clear evidence” standard for pharmaceutical preemption.  In its much-anticipated opinion delivered by Justice Breyer, the Court unanimously reversed the Third Circuit’s holding that questions of pharmaceutical preemption should be decided by juries.  Merck Sharp & Dohme Corp. v. Albrecht et al., No. 17-290, slip op. (U.S. May 20, 2019) (“Albrecht”).  However, those who had criticized the Third Circuit’s opinion were left wanting more—the limited holding does not reach the issue of whether plaintiffs’ claims against the manufacturer were preempted.BackgroundOver 500 patients sued Merck alleging they suffered atypical femoral fractures, a rare type of stress fracture affecting the thigh bone, after using Merck’s Fosamax drug.  They claimed that Merck failed to disclose these risks on the drug label.  Merck countered that FDA had rejected or would have rejected its proposed addition to the drug label.  As a result, Merck said it could not comply with both federal drug labeling requirements and its duty to warn under state law.  In these circumstances, Merck argued, the federal law and regulations preempt the patients’ state‑law claims such that Merck should not be held liable for failing to disclose the stress fracture risks to consumers.Merck based its argument on years of back-and-forth discussions with FDA about whether Fosamax could cause these types of stress fractures.  In 1995, when FDA first approved Fosamax, the label did not include the fracture warning because—at that time—the risk was still theoretical.  After more than a decade of post-market surveillance, Merck sought preapproval to add these risks to its Fosamax label in 2008.  FDA rejected Merck’s proposed change.  Not until 2011 did FDA agree to add language to the Fosamax label disclosing the risks of atypical femoral fractures.Beginning in 2010, hundreds of patients filed lawsuits that were eventually consolidated in a multidistrict litigation in the District of New Jersey.  The district court granted Merck’s summary judgment motion on the ground that the patients’ state-law failure to warn claims were preempted by federal law.  The Third Circuit reversed, finding that the preemption question involved factual disputes the jury should have resolved and that Merck needed more evidence to meet the “clear evidence” standard set forth in Wyeth v. Levine to establish its preemption defense.Defining Wyeth’s “Clear Evidence” StandardIn 2009, the Supreme Court issued the first of several important pharmaceutical preemption decisions in Wyeth v. Levine, 555 U.S. 555 (2009).  There, a Vermont jury found that Wyeth failed to provide an adequate warning that direct injection of its Phenergan drug created a significant risk of harm to patients.  The Vermont Supreme Court agreed, finding no preemption.The U.S. Supreme Court affirmed.  In doing so, the Court explained that unless a drug manufacturer can show “clear evidence” that FDA would not have approved a change to its drug label, a court cannot conclude that it was impossible for the drug manufacturer to comply with both federal drug labeling requirements and state-law duty to warn requirements.  In other words, to succeed on this type of impossibility preemption defense, a drug manufacturer has to provide clear evidence that FDA considered the risk and made an affirmative decision to either (a) not change the label or (b) prohibit the manufacturer from strengthening its warning.However, what constituted “clear evidence” under Wyeth remained unclear until now.  Post-Wyeth, courts have struggled to apply the undefined clear evidence standard to determine if the FDA would have rejected a proposed warning change that was never submitted.In Albrecht, Merck had sought preapproval from FDA to strengthen Fosamax’s warnings, but that proposal was rejected.  When Fosamax users brought state-law failure-to-warn claims, Merck argued that the claims were preempted by federal law because the FDA had rejected Merck’s proposed changes to the Fosamax label.The Court clarified that “clear evidence” means “evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug’s label to include that warning.”  This definition dispels the notion that the “clear evidence” standard is an evidentiary standard, as some district courts had interpreted it to be.But whether the FDA’s action in Albrecht satisfies the standard is left open.  The Court did not actually reach the preemption question.Preemption Questions Must Be Decided by the JudgeNext, the Court held that judges, not juries, must decide the question of whether state-law failure-to-warn claims are preempted by the Federal Food, Drug, and Cosmetic Act and related labeling regulations.  This includes whether there is clear evidence that FDA would not have approved the warning that state law requires.  The Court reasoned that resolving questions of agency disapproval often requires legal skills to understand an agency decision within the applicable regulatory framework.  The Court acknowledged that the preemption issue typically involves factual disputes but that these factual questions are “subsumed within an already tightly circumscribed legal analysis.”Key Takeaways<ul><li>Justice Thomas joined the opinion but wrote separately to say that Merck’s preemption defense failed. Why?  Because Merck relied on FDA response letters as evidence that Merck could not have strengthened its warning.  According to Justice Thomas, an FDA response letter cannot have preemptive effect because it is “not a final agency action with the force of law.”  His concurrence is surprising given that he wrote the majority opinion in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), holding that certain generic pharmaceutical failure-to-warn claims are preempted.</li><li>Justice Alito, joined by Justices Roberts and Kavanaugh, also wrote separately. He would have found preemption here and suggested that the Third Circuit should find “clear evidence” that the FDA would not have approved Merck’s label.  Justice Alito cited the record showing that FDA was deeply involved in the stress fracture issue for years, and that the agency has a statutory duty to require label changes upon learning new evidence warranting a change.  Under these circumstances, Justices Alito, Roberts, and Kavanaugh would have found preemption.</li><li>Defendants should welcome this clarity on the “clear evidence” standard, which relieves them of the confusing pseudo-evidentiary burden that some lower courts had applied.</li><li>Although the opinion may disappoint by not reaching the preemption question, Justice Alito’s concurrence provides drug manufacturers a roadmap for satisfying the “clear evidence” standard.</li><li>Given the favorable—albeit limited—holding, defendants should feel emboldened to assert a federal preemption defense in other areas beyond pharmaceuticals.</li></ul>

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Co-Chair, Litigation Department

Erin Bosman is the global co-chair of Morrison Foerster’s litigation department. Erin is also the founder and co-head of the Artificial Intelligence group and former chair of the Complex Litigation + Advisement practice group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.