Posted by: Paul A. Forsyth | May 21, 2013

Monsanto, Generic Drugs, and What Not to Write to a Patent Office Examiner

1. Ronald Mann at SCOTUSblog has a recap of the opinion in Bowman v. Monsanto, the patent case decided May 13, which affirmed the Federal Circuit decision and held that a farmer who purchased patented “Roundup Ready” seed from Monsanto in one year could not in subsequent years plant seeds from the harvest of the crops from the first batch of seed.

Says Mann: “The question in the case is whether a farmer who buys the seed can plant only the seed that he buys from Monsanto, or instead can also plant the produce of seeds purchased by Monsanto. If the farmer is right, he can produce many generations of Roundup-resistant soybean plants simply by buying one season’s worth of seeds. The Court agreed with Monsanto: the farmer can plant the first seeds, those he purchased. But he can’t plant newly grown seeds again and again for years to go into the future.”

And here’s a key portion from the Court’s opinion: “Were the matter otherwise, Monsanto’s patent would provide scant benefit. After inventing the Roundup Ready trait, Monsanto would, to be sure, receive its reward for the first seeds it sells. But in short order, other seed companies could reproduce the product and market it to growers, thus depriving Monsanto of its monopoly.”

2. “Indian generic giant Ranbaxy has been selling generic ‘drugs’ that didn’t actually work”: A large manufacturer of generic drugs has been behaving very, very badly. Megan McArdle links to a story by Katherine Eban (“Dirty medicine”) for Fortune and CNN Money:

On May 13, Ranbaxy pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, failing to report that its drugs didn’t meet specifications, and making intentionally false statements to the government. Ranbaxy agreed to pay $500 million in fines, forfeitures, and penalties — the most ever levied against a generic-drug company. (No current or former Ranbaxy executives were charged with crimes.)

McArdle offers comment:

Ranbaxy learned how to game this system, according to former employees. To hasten the pace of its applications, Ranbaxy sometimes skipped a crucial intermediate step. Instead of making three medium-size exhibit batches and testing those for bioequivalence and stability, as required, Ranbaxy tested earlier and much smaller research-and-development batches that were easier to control and less costly to make. In some FDA applications, it represented these as much larger exhibit batches and presented the data as proof. And then there was the ultimate shortcut: using brand-name drugs as stand-ins for its own in bioequivalence studies.

These deceptions greatly accelerated the pace of the company’s FDA applications. They were also a grave public-health breach. Once Ranbaxy got FDA approval, it leaped straight into making commercial-size batches without any meaningful dry runs. The test results on file with the FDA were meaningless, and the drugs Ranbaxy was actually selling on the U.S. market were an unknown quantity, having never been comprehensively tested before.

The worst abuses, however, were in emerging markets, where regulatory supervision was weak. But the article raises questions about how good our regulatory supervision is of these companies. It’s simply not possible to provide the kind of oversight that the FDA does to companies in the US.

3. Clark D. Asay, “Kirtsaeng and the First-Sale Doctrine’s Digital Problem”: “This Essay argues that the history and purpose of the first-sale doctrine provide good reasons to abandon the licensee/owner dichotomy as well as the formalistic approach to interpreting the doctrine’s applicability to digital transfers. Doing so, furthermore, is unlikely to undermine markets for copyrighted works, but instead will help preserve the appropriate balance between the rights of copyright holders and consumers that first-sale rights have historically helped maintain.”

4. What Not to Write to a Patent Office Examiner in a Response: Patently-O quotes from an Office Action Response from a clearly frustrated patent attorney. A taste: “Are you drunk? No, seriously…are you drinking scotch and whiskey with a side of crack cocaine while you ‘examine’ patent applications? (Heavy emphasis on the quotes.) Do you just mail merge rejection letters from your home? Is that what taxpayers are getting in exchange for your services? Have you even read the patent application? I’m curious. Because you either haven’t read the patent application or are… (I don’t want to say the ‘R’ word) ‘Special.'” It goes on from there.

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