Earlier today, the House Committee on the Judiciary heard testimony from seven witnesses (and accepted written testimony from other interested parties) regarding the House patent reform bill (H.R. 1260). Although the hearing was not made available for online viewing, written testimony from the witnesses who testified at the hearing can be downloaded at the Committee's website. In Part I of our report on the House patent reform hearing, we examine the written testimony submitted by two of the witnesses as well as testimony submitted by the Biotechnology Industry Organization (BIO).
I was somewhat encouraged to learn that the Senate has reached a compromise on the damages provision which does not alter the standard for calculating damages, but provides some additional guidance to judges in these cases. In my view this may be a reasonable compromise, but anything that went beyond this to alter the standards for calculating damages could have serious consequences for our patent system and our economy.
As for post-grant review, he argues that "the expansion of post-grant reviews proposed by H.R. 1260 would add uncertainty to the value and validity of patents (in some instances many years after those patents were granted), create further disincentives for patent holders and investors, and may open the system up abuse by potential infringers."
Mr. Kamen also calls for a permanent end to fee diversion and a reconsideration of the change from a first-to-invent system to a first-inventor-to-file system, contending that such a change "would create a rush to the patent office that would result in an increase in the number of poorly thought-out, lower quality patent applications," that "could unfairly disadvantage individual inventors, small and start-up companies, and universities, who may have smaller budgets and less access to patent professionals," as well as overburden the Patent Office.
Another new voice to the debate (at least amongst witnesses called to testify at the two Congressional patent reform hearings held this year) was that of venture capitalists. Representing this group, and the 460 venture firms of the National Venture Capital Association (NVCA), was Jack Lasersohn, a Partner with the Vertical Group. Like Mr. Kamen, Mr. Lasersohn's written testimony "focuses on two critical elements of patent reform proposals: the calculation of damages in patent infringement cases and the structure of post-grant review procedures." With respect to the damages provision, Mr. Lasersohn notes that "the venture capital community believes that the current methodology for calculating damages is appropriate and working, and that patentees are not systematically overcompensated." As a result, Mr. Lasersohn's group supports the gatekeeper language that replaced the apportionment of damages provision in the original version of the Senate bill (S. 515), and which was largely responsible for permitting the Senate bill to be voted out of Committee on April 2.
[T]he NVCA has supported the creation of a well defined, limited post grant review process with strong estoppel, because we believe it will improve the quality of future patents, which is in the interest of all. However, we must recognize the imbalance of power intrinsic in this situation and take care that the system limits the potential for abuse by larger firms seeking to harass smaller competitors.
The venture capital community supports a limited, 12 month window after a patent is granted to allow time for challengers to file opposition. This single, finite post-grant window will serve to quickly weed out bad patents, but will not foster repeated challenges to patent validity nor introduce uncertainty into the patent system.
In addition, Mr. Lasersohn notes that the NVCA opposes expanding inter partes reexamination to include the use of "prior public use or sale," language that was removed from S. 515 but which remains in H.R. 1260, since "in this procedural setting patentees will be disadvantaged if such issues may be raised many years after a patent has granted."
[B]oth the legal and economic landscape relevant to patent reform has shifted dramatically. To the extent that proponents of patent reform argued two years ago that the judicial climate was overly protective of patents and patent owners (a view decidedly not embraced by BIO even back then), there can be no doubt that a series of landmark decisions by the U.S. Supreme Court and the United States Court of Appeals for the Federal Circuit has made it much harder to obtain and enforce valid patents, while making it easier to challenge patents. And to the extent that concerns were raised in 2007 about the negative impact that some of the proposed patent reforms could have on U.S. economic growth at home and competitiveness abroad (a concern that BIO shared), there can be no doubt that such concerns are even more pronounced in light of the current economic situation in the U.S. today.
Among the patent reforms that BIO supports (some of which have made it into H.R. 1260, and some of which have not) are full funding of the USPTO by permanently ending fee diversion, an expansion of opportunities for members of the public to submit prior art during examination, a transition to a first-inventor-to-file system that incorporates an "appropriate 'grace period,'" willful infringement reforms that require litigants to first resolve validity and infringement before turning to willfulness, venue reforms that discourage forum-shopping, repeal of the best mode requirement, and restoration of the rebuttable presumption of irreparable harm and inadequacy of remedies at law when evaluating a patentee's request for a permanent injunction. BIO also "believes that [the inequitable conduct] doctrine should be abolished," and that "[t]he regulation of applicant conduct should be committed to the expert agency, the PTO."
BIO wants to emphasize that, with respect to its opposition to these two key provisions in this bill -- damages and expanded reexamination -- it stands in good company. There is broad consensus, among a variety of industries, universities, unions, and other stakeholders across the spectrum of American society, against these proposed changes.
Patent Docs will examine written testimony provided by the other witnesses, as well as reaction in the patent community to today's hearing, in subsequent posts.
• Bernard Cassidy, Senior Vice President and General Counsel for Tessera Inc.
Interestingly, Mr. Johnson will be making his second appearance at a Congressional patent reform hearing this year, having appeared as a witness at the Senate Judiciary Committee's hearing in March. Like Mr. Johnson, Tessera will also be getting a second chance to address a Congressional hearing on patent reform, with Mr. Cassidy replacing Tessera Vice President Taraneh Maghamé, who appeared before the Senate Judiciary Committee. Despite her company's focus (micro-electronics and imaging/optics), Patent Docs readers may recall that Ms. Maghamé testified that a gatekeeper approach, in which the court determined the Georgia-Pacific factors to be considered by the jury, was the best method for calculating a reasonable royalty (see "Senate Judiciary Committee Holds Hearing on Patent Reform").
Unfortunately, the witness list for the House hearing appears to be nearly as imbalanced as the witness list for the Senate hearing. While Mr. Johnson -- the lone life sciences representative at the Senate hearing -- will be joined by Mr. Lasersohn of the Vertical Group, a venture capital firm focused on medical technology and biotechnology, the Coalition for Patent Fairness will once again be well-represented, with Mr. Simon and Mr. Chandler taking over for Mr. Appleton, the Chairman and CEO of Micron Technology, Inc. The witness list also includes Mr. Kamen, the inventor of the Segway, who is described on DEKA's website as an inventor, entrepreneur, and tireless advocate for science and technology and Professor Thomas from Georgetown University Law School.
Earlier today, California Healthcare Institute president and CEO Dr. David Gollaher provided Patent Docs with an update regarding the status of patent reform and follow-on biologics legislation in the 111th Congress. The California Healthcare Institute (CHI) is an independent organization comprising more than 250 biomedical companies and academic and research institutions involved in researching and advocating policy to forward the interests of California's biomedical community.
While in Washington, DC last week to host a workshop on comparative effectiveness research and participate in the CHI's quarterly board meeting, Dr. Gollaher and other representatives of CHI took the opportunity to meet with members of Congress to discuss pending patent reform and follow-on biologics legislation. Dr. Gollaher was particularly interested in recent developments concerning H.R. 1260, the companion bill to the Senate patent reform bill (S. 515) voted out of Committee earlier this month, and H.R. 1548, the follow-on biologics bill introduced by Rep. Anna Eshoo (D-CA) on March 17.
With respect to patent reform legislation, Dr. Gollaher (at left) noted that the CHI had played an important role in securing the April 2 compromise that permitted S. 515 to be voted out of Committee (see "Senate 'Patent Reform' Bill (S. 515) Voted out of Judiciary Committee"). The organization accomplished this by working closely with Senator Dianne Feinstein (D-CA) to improve the bill originally introduced in the Senate on March 3 (see "Senate and House Introduce New Patent Reform Legislation"). Dr. Gollaher noted that the CHI was able to convince Senator Feinstein that the original version of the Senate bill would cause more problems for California's life sciences companies and universities than it would resolve problems with the U.S. patent system. (Dr. Gollaher also noted that in making the argument for harm to California's universities, it probably did not hurt that Senator Feinstein's husband, Richard Blum, is the Chairman of the Board of Regents of the University of California.) The CHI's work ultimately paid off when Senator Feinstein expressed concerns about the bill during the Senate Judiciary Committee's March 10 hearing on patent reform, and declared that absent a reworked damages provision, she would not be voting for the bill (see "Senate Judiciary Committee Holds Hearing on Patent Reform").
Despite the successful outcome in the Senate, however, Dr. Gollaher was worried about what might happen to the House version of the bill in the coming weeks. Dr. Gollaher's fears had only been heightened by conversations he had last week with Rep. Zoe Lofgren (D-CA), who suggested that the pro-apportionment faction might be looking to torpedo the House bill altogether rather than allow it to pass with the same gatekeeper damages provision currently in S. 515. In view of the House's passage of H.R. 1908 in September of 2007 (see "Patent 'Reform' Bill Passes House of Representatives"), it is hardly surprising that a portion of the House -- probably a good number of the Democrats that voted 160-58 in favor of the bill -- might have problems with the compromise provisions in S. 515. Interestingly, Dr. Gollaher indicated that some House members had signed onto H.R. 1908 with the promise, subsequently broken, that more controversial provisions in the bill would be "fixed" before the legislation reached the floor for a vote. Because it was unlikely that these House members would be duped again, Dr. Gollaher suggested that the pro-apportionment faction might fail in its attempts to put an apportionment of damages provision back into play.
As for the effort to enact follow-on biologics legislation, Dr. Gollaher noted that Rep. Eshoo's bill continued to maintain a sizeable advantage over Rep. Henry Waxman's competing bill (H.R. 1427) in terms of the number of co-sponsors (currently, H.R. 1548 has 66 co-sponsors and H.R. 1427 has 10). Dr. Gollaher took this as a good indicator that Rep. Eshoo's bill, which the CHI supports, might prevail over Rep. Waxman's bill. However, Dr. Gollaher conceded that Rep. Waxman, who chairs the House Committee on Energy and Commerce, still wielded much power, and as a result, could eventually swing support back to his own bill. Dr. Gollaher also believed that the follow-on biologics debate could eventually be influenced by Senator Edward Kennedy (D-MA), who might introduce his own follow-on biologics bill in the Senate (as he did in the 110th Congress; see "Senate Committee Passes Biologics Legislation"). Dr. Gollaher concluded the discussion by noting that CHI member Deloitte recently released a study entitled "Avoiding No Man's Land: Potential Unintended Consequences of Follow-on Biologics," which examines the follow-on biologics bills introduced in Congress, and according to a CHI press release warns that "if responsible legislation is not carefully crafted specifically for today's industry, the industry may enter into a 'no man's land' which could significantly reduce our ability to continue to develop innovative treatments for the most dreaded diseases." Patent Docs will provide a more comprehensive analysis of the study in a subsequent post.
Last month, Amgen Inc. Vice President Stuart Watt asserted that any follow-on biologics regulatory pathway established by Congress would have to specify an exclusivity period of at least 12 years in order to provide incentives to innovator drug companies to continue developing new biologic drugs (see "Amgen VP Makes Case for Longer Exclusivity Period in Follow-on Biologics Legislation"). On the heels of Mr. Watt's statement, Johnson & Johnson executive director for biotechnology policy Audrey Philips recently indicated that Congress should provide for a 14-year exclusivity period -- such as in H.R. 1548, introduced by Rep. Anna Eshoo (D-CA) on March 17 (see "Second Follow-on Biologics Bill Is Introduced in House").
According to a Bloomberg.com report, Ms. Philips contended that a 5-year exclusivity period -- such as in H.R. 1427, introduced by Rep. Henry Waxman (D-CA) on March 11 -- would be bad for innovation and bad for patients' health. Ms. Phillips told reporters that follow-on biologics legislation should strike "the right balance between saving money and still having medicines to advance in the future," adding that a 5-year exclusivity period would "certainly have a chilling effect on [biotech] investment." The follow-on biologics stakes are high for Johnson & Johnson as its top-selling product (arthritis drug Remicade; $3.75 billion in sales last year) and third-best-selling product (anemia drug Procrit; $2.46 billion in sales last year) are biologics.
In contrast with a number of recent announcements from other drug manufacturers (see "Follow-on Biologics News Briefs - No. 2"), Ms. Phillips stated that Johnson & Johnson had "no current plans" to get into follow-on biologics itself.
Countering Johnson & Johnson's position was Katie Huffard, executive director of the Coalition for a Competitive Pharmaceutical Market, who told Bloomberg.com that "Johnson and Johnson has less than 14 years of exclusivity in Europe where prices are controlled without innovation dying."
Earlier this month, Lupin Ltd., one of India's top five pharmaceutical companies, announced plans to expand its drug research program into both biologics and follow-on biologics. According to a Business Standard report, the change in strategy was necessitated by a drying pipeline that currently includes only four drugs at the clinical trial stage. Lupin managing director Kamal Sharma stated that the company "had ambitious plans in New Chemical Entity (NCE) research but they did not translate into success," and as a result, Lupin needed to reorient its focus. With respect to its follow-on biologics program, the Business Standard noted that Lupin was developing nine drugs in the areas of oncology, auto-immune diseases, and diabetes, which were expected to be ready for launch in 2012.
On April 21st, the Jefferson School of Population Health hosted a forum on follow-on biologics at the National Press Club in Washington, DC. The policy forum, entitled: "Regulation of Follow-on Biologics: Ensuring Quality and Patient Safety," brought together clinicians, thought leaders, and policy makers to discuss and debate the clinical, economic, ethical, and patient safety issues surrounding the approval and regulation of follow-on biologics. The forum was moderated by Dr. David Nash (at right), Dean of the Jefferson School of Population at Thomas Jefferson University in Philadelphia, PA.
Patent Docs had an opportunity to briefly discuss the topic of follow-on biologics with Dr. Nash just prior to last week's forum. Before addressing the issue of patient safety, which was the focus of the forum, we asked Dr. Nash whether he had a position with regard to the exclusivity periods provided in the two competing follow-on biologics bills currently before the House. While noting that he had no preference, Dr. Nash stated that innovator drug companies should have some measure of economic protection for a period of time. Turning to patient safety, Dr. Nash argued that Congress could ensure patient safety by passing legislation comparable to that in Western Europe, where, he noted, follow-on biologics are evaluated for safety on a case-by-case basis. Dr. Nash asserted that a generic drug manufacturer's use of an innovator drug manufacturer's data may not be sufficient to ensure patient safety, and that further review of the follow-on biologic by the FDA may be necessary.
More information regarding the forum can be found on Dr. Nash's blog, Nash on Health Policy.
Two pronouncements, one from the Supreme Court and the other from the Federal Circuit, portend the parlous state that could await American innovation should judges come to believe that that their judgment is as sound as that of actual innovators.
Specifically, this court observed that an obviousness finding was appropriate where the prior art "contained detailed enabling methodology for practicing the claimed invention, a suggestion to modify the prior art to practice the claimed invention, and evidence suggesting that it would be successful." 853 F.2d at 902 (emphasis added). Responding to concerns about uncertainty in the prior art influencing the purported success of the claimed combination, this court stated: "[o]bviousness does not require absolute predictability of success . . . all that is required is a reasonable expectation of success." Id. at 903-04 (emphasis added). The Supreme Court in KSR reinvigorated this perceptive analysis.
When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under § 103.
The combination of these sentiments leave open the question: what isn't obvious? We know that the Supreme Court has never disclaimed the discredited "flash of genius" requirement from Cuno Engineering Corp. v. Automatic Devices Corp., despite Congressional abrogation in the last sentence of 35 U.S.C. § 103: "Patentability shall not be negatived by the manner in which the invention is made." Indeed, the Court opined in Graham v. John Deere Co. that Congress merely intended to codify the Court's own obviousness jurisprudence. Fortunately not, since even members of the Court had come to recognize, in the years just prior to the 1952 Act, that the Court's overt hostility to patents had become extreme: Justice Robert Jackson was moved to remark that the remedy for "bad patents" (sound familiar?) was not "an equally strong passion in this Court for striking them down so that the only patent that is valid is one which this Court has not been able to get its hands on." Jungersen v. Ostby & Barton Co., 335 U.S. 560, 572 (1949).
The design of the patent laws is to reward those who make some substantial discovery or invention, which adds to our knowledge and makes a step in advance in the useful arts. It was never their object to grant a monopoly for every trifling device, every shadow of a shade of an idea, which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of manufactures. Such an indiscriminate creation of exclusive privileges tends rather to obstruct that to stimulate invention. It creates a class of speculative schemers who make it their business to watch the advancing wave of improvement, and gather its foam in the form of patented monopolies, which enable them to lay a heavy tax upon the industry of the country, without contributing anything to the real advancement of the arts. It embarrasses the honest pursuit of business with fears and apprehensions of concealed liens and unknown liabilities to lawsuits and vexatious accountings for profits made in good faith.
(from Atlantic Works v. Brady, 107 U.S. 192, 200 (1882)) appeared in the KSR decision (or, for that matter, on the Coalition for Patent Fairness' website), would anyone have been surprised or thought it out of place?
The difference, of course, is that today we have the Court of Appeals for the Federal Circuit, capable (but lately seemingly unwilling) to provide legal analysis to assist the Court in its heretofore infrequent forays into waters it rarely, uncomfortably, and maladroitly treads. However, as the CAFC has shown in Kubin, and earlier in Pfizer, Inc. v. Apotex, Inc., Aventis Pharma Deutschland GmbH v. Lupin, Ltd., and Pharmastem Therapeutics, Inc. v. Viacell, Inc., the KSR influence is strong on the Court. All is not lost, of course: there have been plenty of decisions since KSR where the Federal Circuit upheld the non-obviousness of pharmaceutical patents, including Sanofi-Synthelabo v. Apotex, Inc., Eisai Co. v. Dr. Reddy's Laboratories, Inc., Ortho-McNeil Pharmaceutical, Inc. v. Mylan Laboratories, Inc., Forest Labs, Inc. v. Ivax Pharm., Inc., and Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd. However, in every case, the bases for so holding has been the application of traditional principles of chemical structural non-obviousness ("structure, structure, structure" according to Judge Rader) and none of these cases has focused on the more liberal "obvious to try" standard enunciated in In re Kubin.
The Federal Circuit's Kubin decision (and to a lesser extent, the Court's disregard of the Graham secondary indicia of non-obviousness in the Pharmastem decision) raises the legitimate issue of what won't be obvious by the application of the Kubin doctrine. For example, an analogy could be drawn between the way the court applied obviousness law to the facts in Kubin and the situation for most monoclonal antibody claims. Just like the p38/NAIL protein in Kubin, antigens (particularly antigens to pathogens) are frequently known in the art. Indeed, the existence in the art of such pathogen-derived antigens would presumably engender an even greater motivation for the skilled worker to make an antibody than the existence of p38 in the prior art motivated Kubin to isolate NAIL cDNA. As in Kubin, the methods for making monoclonal antibodies are just as established (perhaps even more so, having been judicially recognized as "extensive, but routine" in In re Wands and Noelle v. Lederman), and obtaining a monoclonal antibody just as "predictable" (perhaps more so) as obtaining a cDNA in Kubin. And the final similarity is that the structure of the antibody is equally as unknown in the prior art (and unrelated to the structure of the antigen) as is the protein structure to the nucleic acid comprising the gene encoding it. (It is probably a wash that the genetic code provides some means for determining "a" -- as opposed to "the" -- nucleotide sequence encoding a known amino acid sequence, versus the binding affinity between an antibody and its cognate antigenic epitope, since neither the identity of the epitope -- for antibodies -- nor the complete amino acid sequence -- for genes -- is typically known.) Thus, it can fairly be asked whether claims to a monoclonal antibody are now prima facie obvious under the Kubin doctrine.
While the CAFC conceded that Tzipori had established that Krivan did not disclose monoclonal or humanized antibodies to SLT-II, the Court noted that Queen disclosed a method of making humanized antibodies and Perara disclosed the manufacture of hybridomas that produce monoclonal antibodies.
Taken to its extreme, everything thus becomes obvious.
Courts, made up of laymen as they must be, are likely either to underrate, or to overrate, the difficulties in making new and profitable discoveries in fields with which they cannot be familiar; and so far as it is available, they had best appraise the originality involved by the circumstance which preceded, attended and succeeded the appearance of the invention. Safety Car Heat & Light Co. v. General Electric Co., 155 F.2d 937 (2d Cir. 1946).
Hat tip to Bob Harmon for the Learned Hand quotes.
Bone Care International LLC et al. v. Eagle Pharmaceuticals Inc.
Infringement of U.S. Patent No. 5,602,116 ("Method for Treating and Preventing Secondary Hyperparathyroidism," issued February 11, 1997) following a Paragraph IV certification as part of Eagle's filing of an ANDA to manufacture a generic version of plaintiffs' Hectorol® (doxercalciferol, used to treat secondary hyperparathyroidism in patients with chronic kidney disease). View the complaint here.
Pronova BioPharma Norge AS v. Teva Pharamceuticals USA, Inc. et al.
Infringement of U.S. Patent Nos. 5,502,077 ("Fatty Acid Composition," issued March 26, 1996) and 5,656,667 (same title, issued August 12, 1997) following a Paragraph IV certification as part of Eagle's filing of an ANDA to manufacture a generic version of Pronova's Lovaza® (omega-3-acid ethyl esters, used to reduce triglyceride levels in adult patients with very high triglyceride levels). View the complaint here.
Eli Lilly and Company et al. v. Barr Laboratories Inc.
Infringement of U.S. Patent No. 5,344,932 ("N-(pyrrolo(2,3-d)pyrimidin-3-ylacyl)-Glutamic Acid Derivatives," issued September 6, 1994), licensed to Eli Lilly, following a Paragraph IV certification as part of Barr's filing of an ANDA to manufacture a generic version of Lilly's Alimta® (pemetrexed for injection, used to treat malignant pleural mesothelioma and locally advanced or metastatic non-small cell lung cancer). View the complaint here.
Sepracor Inc. v. Alphapharm Pty. Ltd et al.
Infringement of U.S. Patent Nos. 6,864,257 ("Optically Active 5H-Pyrrolo[3,4-B] Pyrazine Derivative, Its Preparation and Pharmaceutical Compositions Containing It," issued March 8, 2005), 6,319,926 (same title, issued September 23, 2002), 6,444,673 (same title, issued November 20, 2001), and 7,381,724 (same title, issued June 3, 2008) following a Paragraph IV certification as part of Alphapharm's filing of an ANDA to manufacture a generic version of Sepracor's Lunesta® (eszopiclone, used to treat insomnia). View the complaint here.
Pfizer, Inc. et al. v. Teva Pharmaceuticals USA, Inc. et al.
Infringement of U.S. Patent No. 5,601,843 ("Pharmaceutical Tablet Composition," issued February 11, 1997) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Pfizer's Arthrotech® (diclofenac sodium/misoprostol, used for treatment of the signs and symptoms of osteoarthritis or rheumatoid arthritis in patients at high risk of developing NSAID-induced gastric and duodenal ulcers and their complications). View the complaint here.
Reckitt Benckiser Inc. v. Watson Laboratories, Inc. - Florida et al.
Infringement of U.S. Patent Nos. 6,372,252 ("Guaifenesin Sustained Release Formulation and Tablets," issued April 16, 2002) and 6,955,821 ("Sustained Release Formulations of Guaifenesin and Additional Drug Ingredients," issued October 18, 2005) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of plaintiff's Mucinex® and Mucinex® DM (guaifenesin, and guaifenesin/dextromethorphan, respectively, used to treat chest congestion). View the complaint here.
OptiGen, LLC v. Texas A&M University System et al.
Infringement of U.S. Patent Nos. 7,285,388 ("Methods for Identification of Alport Syndrome," issued October 23, 2007), 6,210,897 ("Identification of Canine Leukocyte Adhesion Deficiency In Dogs," issued April 3, 2001), 6,201,114 ("Identification of Congenital Stationary Night Blindness In Dogs," issued March 13, 2001), and 6,428,958 (same title, issued August 6, 2002), all licensed to OptiGen, based on defendants' sale of its Pawsitive I.D. kit to test for Progressive Rod-Cone Disease in dogs. View the complaint here.
• What happens next and where do we go from here?
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Late last week, PricewaterhouseCoopers and the National Venture Capital Association (NVCA), a trade association representing the U.S. venture capital industry, announced the release of their quarterly MoneyTree Report (based on data from Thomson Reuters), which showed that venture capitalists had invested $3.0 billion in 549 deals in the first quarter of 2009. The first quarter figures were down 47% in terms of dollars invested and down 37% in terms of the number of deals as compared with the fourth quarter of 2008 ($5.7 billion invested in 866 deals), dropping to levels last seen in 1997.
PricewaterhouseCoopers LLP, said the drop was no surprise given the economic turmoil of the past two quarters, adding that "it's not unexpected that [venture capitalists] would pause to assess the impact [of the recession] on their portfolio companies before again looking forward to their next investment." NVCA president Mark Heesen, however, stated that "those venture firms that have the ability to invest at this time are doing so as there remain entrepreneurs with game changing technologies waiting to be funded," and noted that the trade association was "not forecasting levels to continue to fall further." He predicted "a mild and steady increase in investment throughout the rest of the year."
According to the MoneyTree Report, first quarter declines were spread across almost every industry sector. The life sciences sector (biotechnology and medical devices) saw a 40% decline in dollars (to $989 million) and 31% drop in deals (to 133) as compared with fourth quarter numbers. However, the declines seen for the life sciences sector were not as bad as those seen for the software sector (dollars down 42% and deals down 34%) and clean technology sector (alternative energy, pollution and recycling, power supplies, and conservation; dollars down 84%), internet-specific sector. Investments in life sciences companies constituted 33% of all investment dollars and 24% of all deals, which the report noted was in line with historical norms. Surprisingly, the only sector that saw increases in both dollars (up 26%) and deals (up 21%) in the first quarter was the sector that many have blamed for the current economic crisis: the financial services sector.
Charts from PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, Data: Thomson Reuters.
For the past two years, much of the debate surrounding the various follow-on biologics bills that have been introduced in Congress has centered on the exclusivity periods provided by each bill. So far, three follow-on biologics bills have been introduced in the 111th Congress: H.R. 1427 and its companion bill, S. 726, which would provide up to 5.5 years of exclusivity, and H.R. 1548, which would provide up to 14.5 years of exclusivity.
At last month's Biotechnology Industry Organization (BIO) Intellectual Property Counsels' Committee (IPCC) conference, Stuart Watt, Vice President and Law & Intellectual Property Officer at Amgen Inc., made a strong case for an exclusivity period closer to that provided by H.R. 1548. In a presentation entitled: "Why Hatch-Waxman Is Not a Good Model for Biosmilars Legislation," Mr. Watt asserted that an exclusivity period of at least 12 years was needed to provide incentives to innovator drug companies to continue developing new biologic drugs.
Mr. Watt began by noting that H.R. 1427, introduced by Rep. Henry Waxman (D-CA), was not very favorable to innovator drug companies such as Amgen, contending that Rep. Waxman even "went beyond" the parameters set out in the Hatch-Waxman Act for small molecule therapeutics. In support of a longer exclusivity period, Mr. Watt pointed to three factors: the research and development costs for bringing a biologic drug to market ($1 billion), the average product development time (12-15 years), and the product development risk (1 out of 100 candidates). With respect to the second factor, Mr. Watt noted that product development times for proteins had almost doubled from five years in the mid 80's (three years in the clinic and two years securing regulatory approval) to nine years today. As a result of these factors, every product that gets to market must pay for the numerous candidates that never make it to market.
Looking at the impact of the Hatch-Waxman Act on small molecule drugs, Mr. Watt argued that if Rep. Waxman was successful in pushing his bill, and its shorter exclusivity period, through Congress, it would likely be the death knell for the industry. Under the Hatch-Waxman regime, Mr. Watt noted that 67% of prescriptions of small molecule drugs are filled with generic versions of the drug and innovators lose 85% the market within six months of a generic company's entry into the market. As a result, he argued that there has been a lack of sufficient innovation, which has resulted in pharma company consolidation, and that investment in innovation has shifted from pharma companies to biotech companies.
Mr. Watt told conference attendees that he was not trying to take on Hatch-Waxman, since Amgen had no choice but to deal with the 25-year-old regime, but that he was trying to make a case for ensuring that the same "mistake" was not made with follow-on biologics. As for supporters of the Waxman bill, who point out that its regulatory scheme would generate large healthcare cost savings (Mr. Watt mentioned that the Obama Administration has estimated such savings to be $9.2 billion over 10 years), Mr. Watt argued that one or two breakthrough products could achieve even greater cost savings.
Now that a representative from an innovator drug company has indicated that a 12-year exclusivity period would be agreeable, the question remains: will the generic industry support such an exclusivity period, or will it stick to the maximum 5.5 year period provided under Rep. Waxman's bill?
Last week, the U.S. District Court for the District of New Jersey barred Apotex from launching a generic version of PULMICORT® by granting AstraZeneca's requested temporary restraining order (see "Biotech/Pharma Docket," April 15, 2009). The TRO will remain in effect at least until April 27, 2009 when the Court is scheduled to hold a hearing to determine whether or not the injunction should continue.
The grant of the TRO is the latest round in litigation initiated by AstraZeneca in defense of its PULMICORT®-related intellectual property. The original suit stemmed from the FDA’s March 30, 2009 approval of Apotex’s ANDA application for the marketing and manufacturing of a generic version of PULMICORT®. AstraZeneca filed suit upon Apotex's indication of intent to market its generic version prior to the expiration of AstraZeneca's patents (scheduled to expire in 2018 with pediatric exclusivity following in 2019).
Last week, Medicis Pharmaceutical Corp., the owner of patents covering the dermatitis steroid skin cream Vanos®, announced the settlement of its patent dispute with Perrigo Corp. Medicis filed the suit in the U.S. District Court for the Western District of Michigan in June 2008 (see "Court Report," June 15, 2008), following Perrigo’s ANDA filing seeking to market a generic version of Vanos®. As part of the ANDA, Perrigo asserted that the Vanos® patents were invalid and unenforceable. The Medicis suit addressed patent infringement for two patents-in-suit, U.S. Patent Nos. 6,765,001 and 7,220,424. Medicis claimed that were Perrigo allowed to market a generic version of Vanos®, both patents would be infringed.
Under the terms of the agreement, Perrigo can commence marketing its generic version of Vanos® on December 13, 2013 and will, in return, pay royalties to Medicis based on sales. Medicis also agreed to make an initial $3 million payment, to be followed by a payment of up to $5 million, at certain achievement milestones as the drug progresses through the hurdles of regulatory approval, commercialization, and development. Medicis has also agreed to pay royalties to Perrigo based on sales of the drug. This agreement also terminates the lawsuit.
The U.S. District Court for the District of New Jersey has ruled that the patents underlying Pfizer Inc.'s bladder control drug, Detrol®, are valid and enforceable. Ivax Pharmaceuticals, a Teva subsidiary currently embroiled in a patent dispute with Pfizer over Detrol®, had filed a motion for reconsideration regarding its efforts to have Pfizer's U.S. Patent No. 5,382,600 ruled unenforceable due to Pfizer's alleged inequitable conduct before the U.S. Patent and Trademark Office during prosecution of the patent. Pfizer originally filed this case in January 2007 (see "Court Report," February 25, 2007) after Ivax filed an ANDA with the FDA seeking approval to market a generic version of Detrol® prior to the 2012 expiration of the '600 patent.
In its complaint, Ivax claimed that Pfizer had knowledge of errors in statements made by one of the co-inventors during prosecution, and in spite of this knowledge, failed to correct these errors. Ivax alleged that Pfizer's knowledge of the errors and failure to cure them constituted inequitable conduct.
The District Court, however, disagreed with Ivax's assertion. The Court stated that while errors in the declaration could be considered relevant, the errors in this case were not so serious as to undermine the validity of the inventor's declaration. Though the USPTO originally rejected all claims on obviousness grounds and only reversed based in part on the information from the disputed declaration, the Court concluded that the declaration, as a whole, could not be considered a misstatement or invalid.
The Federal Circuit had the opportunity to make another "bright line" determination in Takeda Pharmaceutical Co. v. Doll, where the issue was whether after-developed technology could be considered when assessing obviousness-type double patenting. The patents at issue involved cepham antibiotics, having an original U.S. filing date of December 19, 1975 (for the product patent, U.S. Patent No. 4,098,888) and a later filing date of January 8, 1990 (for the process patent, U.S. Patent No. 5,583,216). The issue was raised in a re-examination proceeding initiated in 1998 by two anonymous requests. The Examiner asserted a rejection on obviousness-type double patenting grounds, which rejection was affirmed by the Board. Takeda appealed to the District Court of the District of Columbia under 35 U.S.C. § 145, and introduced additional evidence with regard to alternative synthetic methods first disclosed in 2002 and 2005. The parties stipulated that at least one of these methods was in fact a "materially-distinct" method, the District Court granted summary judgment that Takeda was entitled to a reexamination certificate, and the government appealed.
The Federal Circuit reversed and remanded, in part because there were genuine issues of material fact unresolved below. This was due to the parties wanting the Federal Circuit to address the fundamental point of difference: whether it was proper for courts and the Patent Office to consider after-developed technology (i.e., alternative, patentably-distinct processes for producing the cepham compounds claimed in the '888 patent) when deciding whether process claims are unpatentable under the judicially-created doctrine of obviousness-type double patenting. In an opinion by Judge Rader, joined by Judge Moore and joined, in part, by Judge Schall, the Court started the analysis by noting that it had long been the law that the obviousness-type double patenting "doctrine bars an applicant from obtaining separate patents with separate terms for both a product and process for making that product, unless the product and process are 'patentably distinct,'" citing In re Taylor, 360 F.2d 232, 234 (C.C.P.A. 1966) and In re Cady, 77 F.2d 106, 109 (C.C.P.A. 1935). The question of whether a product and a process for making that product were patentably-distinct was whether "the product as claimed can be made by another materially different process," citing M.P.E.P. § 806.05. Returning to the Cady decision, the majority noted that "product and process claims are patentably distinct if multiple processes for creating a product exist at the time of the invention," Cady at 109.
But this begs the question: that is "the time of the invention?" The Patent Office argued that this was the priority date, or in the alternative no later than the date that the first patent issues; the Office provided no support for these propositions, except by analogy to other requirements for patentability (including §§ 102, 103, and 112). Takeda, of course, believed that later-developed technology could be used to show that a process was patentably-distinct from the product produced thereby. Takeda cited several cases in support of this proposition, but according to the Federal Circuit the main case (U.S. Steel Corp. v. Phillips Petroleum Co.) does not address the issue.
The Court decided that the Patent Office rule was too indeterminate, due to difficulties in deciding the "date of invention" (which could include the priority date, the filing date, the date of conception or reduction to practice, etc.); as noted in the dissent, these concerns seem unrealistic, since they are issues the Office and courts address and resolve every day. The Court also rejected Takeda's position, as giving applicants "the best of both worlds: the applicant can use the filing date as a shield, enjoying the earlier priority date in order to avoid prior art, and rely on later-developed alternative processes as a sword to defeat double patenting challenges."
Instead, the Court considered the purpose of the obviousness-type double patenting doctrine: preventing the "unjustified extension of the patent term." From this perspective, the filing date of the second application is what "triggers" obviousness-type double patenting concerns, because, of course, without this filing there would be no "unjustified extension of the patent term." The Court also considered the filing of the second application (without filing a terminal disclaimer) as constituting an assertion by the applicant that the claims are patentably distinct from the earlier-granted claims.
While seeming Solomonic, prudence suggests that the logic and effects of this decision should be assessed before hailing its wisdom. When an application with product claims is filed, the application must disclose a method for making the claimed compounds (to satisfy § 112, first paragraph). These methods can either be patentable (and thus be the only method known for making the product) or known in the art (and thus irrelevant to the double-patenting analysis). If the product claims are patentable on the original filing date, this should also be true on the date the later-filed process patent is filed. In the absence of alternative, patentably-distinct (and presumably non-infringing) methods, granting a separate patent under these circumstances would permit the patentee to effectively extend patent term, since there would be no alternative, non-infringing method for making the product even after the product patent expired. Thus, determining whether there are alternative, patentably-distinct (and presumably non-infringing) methods on the filing date of the second, process claim containing application as decided by the majority opinion is consistent with the policy goals of the obviousness-type double patenting doctrine.
On the other hand, if the patentee was limited to her filing date, then the only way a process would be independently patentable would be if there were known methods for making a patented compound. This would be limited to instances where a known method of making was used to make a novel compound, or where known methods of making were modified to make a novel compound. Otherwise, using the original filing date as espoused by the PTO would prevent independent patenting of compounds and methods per se.
The Court's decision also prevents later "validation" of patentability by alternative methods developed after the filing date of the process patent application. In addition to the uncertainty of when such methods are evaluated (During prosecution? In an infringement action? During a reexamination or interference proceeding?), it would also perhaps encourage development of those methods by patentee, disclosed or not. But in any event, permitting a patentee to use after-developed technology after the process patent filing date would introduce further uncertainty to the analysis. This result is inconsistent with the Court's preoccupation with business certainty.
I am also concerned that the majority's approach could, in certain cases, result in the upsetting of reasonable expectations as to what is in the public domain. . . . Takeda is granted a product patent in year one. At that time, only one process exists (Process A). That process is disclosed, but not claimed, in the patent. In year eighteen, the product patent expires, putting Process A fully into the public domain. In addition, during the seventeen-year patent term, no other process has been developed, and thus Process A remains unpatentable separately because it is coextensive with the product patent . . . Then, in year nineteen, a second process, called Process B, is invented for making the patented product. The initial inventor then files a patent application on Process A (assume proper co-pendency with the product patent), triggering double-patenting concerns. According to the majority's approach, this second process would cause Process A to become patentable, despite the fact that Process A and the resulting product were in the public domain for one year. It seems to me such a result runs counter to public expectation and patent law's public notice function.
While Judge Rader characterized these concerns as "a stretch" (footnote 1 in the majority opinion), the real limitation on the effects of this decision is the change in U.S. law, pursuant to adoption of the GATT provisions in 1995, in the length of patent term for a U.S. patent to be 20 years from the earliest priority date instead of 17 years from grant date. The decision thus can be seen as merely once again illustrating how the Federal Circuit continues to approach these policy decisions from its own unique perspective, something only occasionally in evidence recently.
Par Pharmaceutical, Inc. v. Novartis Pharmaceuticals Corp. et al.
Declaratory judgment of invalidity and non-infringement of U.S. Patent Nos. 5,463,116 ("Crystals of N- (trans-4-isopropylcyclohexlycarbonyl)-D-phenylalanine and Methods for Preparing Them," issued October 31, 1995), 5,488,150 (same title, issued January 30, 1996), 6,559,188 ("Method of Treating Metabolic Disorders Especially Diabetes, or a Disease or Condition Associated with Diabetes," issued May 6, 2003), 6,641,841 ("Tablet Composition," issued November 4, 2003), 6,844,008 (same title, issued January 18, 2005), and 6,878,749 ("Method of Treating Metabolic Disorders, Especially Diabetes, or a Disease or Condition Associated with Diabetes," issued April 12, 2005) based on Par's filing of an ANDA to manufacture a generic version of Novartis' Starlix® (nateglinide, used to treat type 2 diabetes mellitus). View the complaint here.
Meda Pharmaceuticals Inc. v. Sun Pharmaceutical Industries Ltd.
Infringement of U.S. Patent No. 5,164,194 ("Azelastine Containing Medicaments," issued November 17, 1992) following a Paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Meda's Optivar® (azelastine hydrochloride ophthalmic solution, used to treat seasonal allergic rhinitis). View the complaint here.
Hoffmann-La Roche Inc. v. Mylan Inc. et al.
Deoxy-5-Fluorocytidine Compounds, Compositions and Methods of Using Same," issued December 5, 1995) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Roche's Xeloda® (capecitabine, used to treat breast and colorectal cancer and Dukes' C Stage III colon cancer). View the complaint here.
AsymmetRx, Inc. et al. v. Dako Denmark A/S et al.
Infringement of U.S. Patent Nos. 6,946,256 ("Cell Regulatory Genes, Encoded Products, and Uses Related Thereto," issued September 20, 2005) and 7,030,227 (same title, issued April 18, 2006) by selling products utilizing p63 antibodies in the U.S. View the complaint here.


text:
In this article we analyse specifics of functioning of the so-called verbative synlexes (steady combinative neutral nominative units of language which arise and are used in texts of different functional styles; analytical analogs of the verbs) in publicistic texts placed in the National case of Russian. The object of the statistical analysis is the following units: “brat’ (vzyat’) v arendu chto-libo”, “brat’ (vzyat’) za obrazets chto-libo”, “brat’ (vzyat’) za pravilo, chto-libo, chto delat’”; “brat’ (vzyat’) pod kontrol’ kogo-libo/chto-libo”. Also we consider some general features of the use of the verbative synlexes and illustrate them with the examples from the publicistic texts: the verbative synlex as the only unit of nomination, synonymy of the verbative synlexes and the verbs, the adjective as an element of structure of the verbative synlex.
1. Klimovskaya G. I. Delo o sinleksakh (k voprosu o funktsional’nom podkhode k nominativnomu materialu yazyka) [The Case of the synlexes (to the problem of functional approach to the nominative language material)]. Vestnik Tomskogo gosudarstvennogo universiteta – TSPU Bulletin, 2008, vol. 3 (4), pp. 44–54 (in Russian).
2. Vyanicheva T. V. Substantiv-substantivnaya sinleksika sovremennogo russkogo yazyka. Diss. kand. fi lol. nauk [The substantive and substantive synlexes of modern Russian. Diss. cand. philol. sci.]. Tomsk, 2000. 344 p. (in Russian).
3. Klimovskaya G. I. Substantiv-atributivnaya sinleksika sovremennogo russkogo yazyka [The substantive and attributive synlexes of modern Russian]. Tomsk, 1978. 201 p. (in Russian).
4. Nikienko I. V. Ad’ektivnye konversivy v sovremennom russkom yazyke (na materiale otymennykh obrazovaniy). Diss. kand. fi lol. nauk [The adjective conversives in modern Russian (on material of the substantive collocations). Diss. cand. philol. sci.]. Tomsk, 2003. 310 p. (in Russian).
5. Tsoy E. V. Adverbial’nye konversivy sovremennogo russkogo yazyka (na materiale otymennykh obrazovaniy). Diss. kand. fi lol. nauk [Adverbial conversives of modern Russian (on material of the substantive collocations). Diss. cand. philol. sci.]. Tomsk, 2009. 224 p. (in Russian).
6. Lobanova S. V. Verbal’naya sinleksika sovremennogo russkogo yazyka: funktsional’no-semanticheskiy aspect. Diss. kand. fi lol. nauk [The verbal synlexes of modern Russian: functional and semantic aspects. Diss. cand. phil. sci.]. Tomsk, 2012. 224 p. (in Russian).
7. Krupennikova V. A. Kategoriya sostoyaniya kak analiticheskaya chast’ rechi [The category of state as the analytic part of speech]. Materialy XI Vserossiyskoy konferentsii studentov, aspirantov i molodykh uchenykh “Nauka i obrazovanie” [Materials of XI conf. “Science and education”]. Tomsk, 2008. Pp. 86–92 (in Russian).
8. Lobanova S. V. Klassifi katsiya ustoychivykh glagol’no-imennykh sochetaniy v sovremennom russkom yazyke: podkhody i problemy [Classifi cation of the steady verbal and substantive combinations in modern Russian: approaches and problems]. Vestnik Tomskogo gosudarstvennogo pedagogicheskogo universiteta – TSPU Bulletin, 2013, vol. 10 (138), pp. 163–167 (in Russian).
9. Kozhina M.N. Stilistika russkogo yazyka: uchebnik [Stylistics of Russian: textbook]. Moscow, Flinta Publ., Nauka Publ., 2008. 464 p.
10. Solganik G. Ya. Publitsisticheskiy stil’ [Publicistic style]. Stilisticheskiy entsiklopedicheskiy slovar’ russkogo yazyka – Stylistic encyclopedic dictionary of Russian. Ed. of M. N. Kozhina. Moscow, Flinta Publ., Nauka Publ., 2006. Pp. 312–315 (in Russian).
11. Solganik G. Ya. Tolkovyy slovar’: yazyk gazety, radio, televideniya [Explanatory dictionary: language of newspaper, radio, television]. Moscow, ACT, Astrel Publ., 2004. 749 p. (in Russian).
12. Sichinava D. V. Natsional’nyy korpus russkogo yazyka: ocherk predystorii [National Corpus of Russian: essay of prehistory]. URL: http://ruscorpora.ru/sbornik2005/03sitch.pdf (accessed 23 December 2014) (in Russian).
13. Natsional’nyy korpus russkogo yazyka [National Corpus of Russian]. URL: http://www.ruscorpora.ru (accessed 2 January 2015) (in Russian).
14. Lobanova S.V. Tipy otnosheniy mezhdu verbal’nymi sinleksami i glagolami [The types of correlations between the verbal synlexes and the verbs]. Vestnik Tomskogo gosudarstvennogo pedagogicheskogo universiteta – TSPU Bulletin, 2013, vol. 3, pp. 134–139 (in Russian).
16. LB.ua. URL: http://lb.ua/news/2014/03/11/258913_krimskiy_parlament_dal_tataram_ryad.html (accessed 4 January 2015) (in Russian).
17. Pravda.ru. URL: http://www.pravda.ru/news/accidents/24-05-2010/1032961-kizlyar-0/ (accessed 4 January 2015) (in Russian).

matches: V. V. V. V. V. V. V.


In Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., Appeal Nos. 2017-2173, -2175, -2176, -2178, -2179, -2180, -2182, -2183, -2184, the Federal Circuit held that a post-URAA patent that issues after but expires before a related pre-URAA patent is not a double-patenting reference against the pre-URAA patent.
This case relates to two patents and an intervening change in the law affecting patent term. A patent filed before June 8, 1995—the effective date of the Uruguay Round Agreements Act (URAA)—expires 17 years after the patent’s issuance date. A patent filed after the URAA’s effective date expires 20 years after the patent’s earliest effective filing date.
Here, Novartis owned an earlier-filed pre-URAA patent (“Patent A”) and a later-filed post-URAA patent (“Patent B”). By virtue of the URAA’s effect on patent term, earlier-filed Patent A expired after later-filed Patent B. The district court held that Patent B was a double-patenting reference against Patent A in view of the Federal Circuit’s decision in Gilead, which held that a later filed but earlier-expiring post-URAA patent was a double-patenting reference against an earlier-filed and later-expiring post-URAApatent, and that the expiration date was the benchmark of obviousness-type double-patenting. Gilead Sciences, Inc. v. Natco Pharma Ltd., 753 F.3d 1208, 1212 (Fed. Cir. 2014).
On appeal, the Federal Circuit reversed the district court’s decision. The Federal Circuit distinguished the present case fromGilead, since both patents at issue in that case were post‑URAA patents. Here, where one patent was filed pre-URAA and the other patent was filed post-URAA, the Federal Circuit held that the issuance dates of the patents control whether one patent is a double-patenting reference over the other. The Federal Circuit reasoned that its holding in this case was consistent with the URAA transition statute, which gives pre-URAA patents the longest term possible under either the pre- or post-URAA rules. It also reasoned that its holding was consistent with the purposes of the double-patenting doctrine, which is to limit a patent owner to one full term of patent rights. As a result of the Federal Circuit’s ruling, Novartis will enjoy one 17-year term of exclusive rights arising from Patent A.
In Novartis AG v. Ezra Ventures LLC, Appeal No. 2017-2284, the Federal Circuit held that obviousness-type double patenting did not invalidate an otherwise validly obtained patent term extension under 35 U.S.C. § 156.
Novartis owned multiple patents covering the multiple sclerosis drug Gilenya®, including the ’229 patent and the ’565 patent. The ’229 patent, a pre-URAA patent, is set to expire on February 18, 2019, due to five years of patent term extension (“PTE”) granted pursuant to 35 U.S.C. § 156, which allows forextension of the term of one patent of a product that has been subject to regulatory review. The ’565 patent, a post-URAA patent, expired on September 23, 2017.
Ezra filed an Abbreviated New Drug Application (“ANDA”) relating to a generic version of Gilenya®. Novartis filed an infringement suit, asserting claims of the ‘229 patent.
In a motion for judgment on the pleadings, Ezra argued that the ‘229 patent should be ruled invalid, or otherwise terminally disclaimed for the portion of the patent term past the expiration date of the unasserted ‘565 patent. Ezra argued that the granted extension of the ‘229 patent’s term beyond the life of the ‘565 is impermissible because it violates 35 U.S.C. § 156(c)(4)’s requirement that only “one patent be extended.” Further, Ezra argued that the ‘229 patent is invalid for statutory- and obviousness-type double patenting because Novartis’s ‘229 patent claims are not patentably distinct from the ‘565 patent. The district court denied Ezra’s motion, concluding that Ezra’s argument required reading “effectively” as a modifier of “extended” into 35 U.S.C. § 156(c)(4), which states, “in no event shall more than one patent be extended … for the same regulatory review period for any product.” After the district court denied Ezra’s motion for judgment on the pleadings that the ’229 patent is invalid or be terminally disclaimed, Ezra did not present any further evidence on the issue of double-patenting and stipulated to infringement if the asserted claims are not invalid, expired, or unenforceable. The district court entered judgment that Ezra infringed the ‘229 patent, and Ezra appealed.
The Federal Circuit also addressed the issue of whether the ’229 patent was invalid due to obviousness-type double patenting because the ’229 patent expired after the indistinct ’564 patent as result of the term extension. The Federal Circuit held, as an extension of its holding in Merck & Co. v. Hi-Tech Pharmacal Co., that obviousness-type double patenting does not invalidate a validly obtained PTE. In Merck, the Court concluded that a terminally disclaimed patent could still have its term extended with a PTE. The Federal Circuit noted that “if a patent is terminally disclaimed to another patent to overcome an obviousness-type double patenting rejection and then term-extended under § 156, it necessarily will expire after the patent to which it had been subject to an obviousness-type double patenting rejection.” This situation, which was already found acceptable by the Federal Circuit in Merck, was similar to the present case in which the extension of the ‘229 patent’s term effectively extends the life of the related ‘565 patent.
Plano Encryption Technologies ("PET"), registered to do business in the Eastern District of Texas, sent letters alleging patent infringement, inviting a license, and otherwise threatening litigation to eleven banks located in the Northern District of Texas. Jack Henry, who provides software systems for the banks' mobile applications and had agreed to indemnify the banks, along with the banks, filed an action for declaratory judgment against PET in the Northern District of Texas. PET moved to dismiss on the grounds that its contacts with the Northern District of Texas did not subject it to personal jurisdiction and thus venue was improper. The district court agreed with PET and dismissed the case. Jack Henry and the banks appealed.
Under 28 U.S.C. § 1391(d), a corporation who is a resident of a multi-district state "shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State . . . ." The district court interpreted the Federal Circuit decision in Avocent Huntsville Corp v. Aten Int'l, 552 F.3d 1324, 1444 (Fed. Cir. 2008) as establishing a "unique" rule for patent cases that letters threatening patent infringement suits by themselves do not create personal jurisdiction.
The Federal Circuit reverseddismissal and disagreed with the district court's interpretation of Avocent as creating such a generalized rule. In doing so, the Federal Circuit looked to Texas’ long-arm statute. The Federal Circuit concluded that Texas’s long-arm statute extends to the limits of federal constitutional due process, and thus, a due process inquiry was required.
In analyzing due process, the Federal Circuit reviewed the following three factors: (1) whether the defendant "purposefully directed" its activities at residents of forum; (2) whether the claim "arises out of or relates to" defendant's activities in the forum; and (3) whether the exercise of personal jurisdiction is reasonable and fair. On appeal, PET agreed that under New World International, a case in which the Federal Circuit held that sending a letter that forms the basis for the claim may be sufficient to establish minimum contacts, the first two minimum contacts factors were met. New World International, Inc. v. Ford Global Technologies, LLC, 859 F.3d 1032, 1037-38 (Fed. Cir. 2017). As for the “reasonable and fair” factor, the Federal Circuit found compelling that PET had undertaken a licensing program withthreat of litigation directed to banks conducting business in the Northern District of Texas, and that the forum had an obligation to resolve disputes involving its residents and businesses. Since PET had minimum contacts with the Northern District of Texas, the burden fell on PET to make a "compelling case" that the exercise of jurisdiction would be unreasonable and unfair. PET merely cited Red Wing Shoe Co. v. Hockerson-Hablerstadt, Inc., 148 F.3d 1355, 1361 (Fed. Cir. 1998) and Avocent, and argued that these cases created a rule that patent enforcement letters can never provide the basis for jurisdiction in declaratory judgment actions. The Federal Circuit found that these cases did not create such a rule and doing so would contradict the Supreme Court’s requirement that courts “consider a variety of interests” in assessing whether jurisdiction is fair. Judge Stoll, joined by Judge Wallach, included an additional view that the Court needs to revisit the statement in Red Wing that “principles of fair play and substantial justice afford a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum” and the interpretation of this statement that “sending of infringement letters would satisfy the minimum contacts requirement of due process except for policy considerations unique to the patent context.” Judge Stoll stated that Red Wing and its progeny need to be reconsidered as directly contrary to established Supreme Court precedent. The Federal Circuit reversed the finding that venue was improper.
In In Re: Marco Guldenaar Holdings B.V., Appeal No. 2017-2465, the Federal Circuit held that claims directed to the abstract idea of rules for playing a dice game were not transformed into patent eligible subject matter by the addition of printed matter.
The patent examiner rejected the application at issue under 35 U.S.C. § 101, because the claims were directed to the abstract idea of rules for playing a dice game. The PTAB and then the Federal Circuit affirmed. The Federal Circuit previously held, in In re Smith, 815 F.3d 816 (Fed. Cir. 2016), that a “method of conducting a wagering game” using a deck of playing cards was an abstract idea. Similarly, the claims here were directed towards the abstract idea of a wagering game, but with dice. The Applicant argued that the claimed dice markings were novel and not abstract. The Federal Circuit rejected that argument because the dice markings constituted “printed matter,” which is not patent eligible subject matter and is outside the scope of § 101. Without an “inventive concept” the claimed subject matter was not patent eligible.
Judge Mayer concurred in the judgment but wrote separately to state that: (1) the § 101 analysis is a pure question of law; and (2) claims directed to dice, card, and board games are not patent eligible because they endeavor to influence human behavior rather than effect technological change.


The citations included in the preamble to the Machinery Directive indicate the legal basis of the Directive, the opinions expressed by the relevant consultative Committee and the procedure according to which the Directive was adopted.
OJ C 154 E, 29.5.2001, p. 164.
OJ C 311, 7.11.2001, p. 1.
Opinion of the European Parliament of 4 July 2002 (OJ C 271 E, 12.11.2003, p. 491), Council Common Position of 18 July 2005 (OJ C 251 E, 11.10.2005, p. 1) and Position of the European Parliament of 15 December 2005 (not yet published in the Official Journal). Council Decision of 25 April 2006.
(now replaced by Article 114 of the Treaty on the Functioning of the European Union - TFEU) that enables the EU to adopt measures to harmonise the legislation of the Member States in order to ensure the establishment and functioning of the internal market. Such measures must take as a base a high level of protection of the health and safety of people and of the environment.
The Machinery Directive thus has a dual objective: to permit the free movement of machinery within the internal market whilst ensuring a high level of protection of health and safety.
Following the proposal by the Commission, the Machinery Directive was adopted by the European Parliament and the Council, after consulting the Economic and Social Committee, according to the co-decision procedure set out in Article 251 of the EC Treaty (now referred to as the ordinary legislative procedure in Article 294 of the TFEU).
The footnotes to the citation give the references and dates of the successive steps of the procedure. (The Position of the European Parliament of 15 December 2005 was not published in the OJEU).
The recitals introduce the main provisions of the Directive and present the reasons for their adoption. Several of the recitals explain the changes that have been made in the new Machinery Directive compared with Directive 98/37/EC.
The recitals do not have legal force as such and do not usually figure in the national legislation implementing the Directive. However, they help to understand the Directive, in particular, by clarifying the meaning of certain provisions. When interpreting the text of the Directive, the Courts may take the recitals into consideration in order to ascertain the intention of the legislators.
In the following comments, reference is made to the Articles and Annexes of the Directive introduced by each of the recitals. For further explanations, please refer to the comments on the Articles and Annexes concerned.
(1) Directive 98/37/EC of the European Parliament and of the Council of 22 June 1998 on the approximation of the laws of the Member States relating to machinery (4) codified Directive 89/392/EEC (5). Now that new substantial amendments are being made to Directive 98/ 37/EC, it is desirable, in order to clarify matters, that that Directive should be recast.
(4) OJ L 207, 23.7.1998, p. 1. Directive as amended by Directive 98/79/EC (OJ L 331, 7.12.1998, p. 1).
Directive 91/368/EEC extended the scope of the Machinery Directive to interchangeable equipment, mobile machinery and machinery for lifting goods. Parts 3, 4 and 5 were added to Annex I.
Directive 93/44/EEC extended the scope of the Machinery Directive to safety components and machinery for lifting and moving persons. Part 6 was added to Annex I.
Directive 93/68/EEC introduced harmonised provisions relating to the CEmarking.
Directive 98/37/EC was subject to a minor amendment by Directive 98/79/EC relating to the exclusion of medical devices.
Directive 98/37/EC remains in force until 29 December 2009.
Directive 2006/42/EC is termed a recast of the Machinery Directive since the modifications are presented in the form of a new Directive.
Directive 2009/127/EC modified the scope of Directive 2006/42/EC by adding environmental protection risks for “machinery for pesticide application”. It introduced a new section in Annex I part 2 to deal with this aspect. Note that it did not extend the scope of the Directive, with respect to the environment, to other types of machinery.
The machinery sector is an important part of the engineering industry and is one of the industrial mainstays of the Community economy. The social cost of the large number of accidents caused directly by the use of machinery can be reduced by inherently safe design and construction of machinery and by proper installation and maintenance.
The second recital underlines the economic and social importance of the dual objectives of the Machinery Directive. The establishment of a harmonised regulatory framework for the design and construction of machinery is of vital economic importance to the European engineering industry. At the same time, safer machinery makes an important contribution to the reduction of the social cost of accidents and damage to health, both in the workplace and in the home.
Member States are responsible for ensuring the health and safety on their territory of persons, in particular of workers and consumers and, where appropriate, of domestic animals and goods, notably in relation to the risks arising out of the use of machinery.
The protection of health and safety is both a fundamental duty and a prerogative of the Member States. Since the Machinery Directive harmonises the health and safety requirements for the design and construction of machinery at EU level, the responsibility of Member States to protect health and safety of people with regard to the risks associated with machinery implies ensuring that the requirements of the Machinery Directive are correctly applied.
In order to ensure legal certainty for users, the scope of this Directive and the concepts relating to its application should be defined as precisely as possible.
The fourth recital underlines the fact that the new Machinery Directive provides a clearer presentation of the scope and includes definitions of the key terms and concepts used in the text. Definitions of terms used in the Directive are given in Article 2 and additional definitions of concepts relating to the essential health and safety requirements are given in sections 1.1.1, 3.1.1 and 4.1.1 of Annex I.
(5) The Member States' mandatory provisions governing construction site hoists intended for lifting persons or persons and goods, which are often supplemented by de facto compulsory technical specifications and/or by voluntary standards, do not necessarily lead to different levels of health and safety but, because of their disparities, do nevertheless constitute barriers to trade within the Community. Moreover, the national systems for the conformity assessment and certification of these machines diverge considerably. It is therefore desirable not to exclude from the scope of this Directive construction site hoists intended for lifting persons or persons and goods.
Construction site hoists, that were previously excluded from the scope of the Machinery Directive 98/37/EC and the Lifts Directive 95/16/EC, are lifting appliances intended to be temporarily installed for transporting persons or persons and materials to the different levels of a building during construction or repair. The fifth recital explains that such construction site hoists are no longer excluded from the scope of the Machinery Directive. Certain new essential health and safety requirements relating to machinery serving fixed landings have been added to Annex I to deal with specific risks associated with this type of machinery.
With respect to the conformity assessment procedure applicable to construction site hoists, it should also be noted that construction site hoists involving a hazard of falling from a vertical height of more than three metres are included among the devices for the lifting of persons or of persons and goods listed in Annex IV, item 17.
(6) It is appropriate to exclude from the scope of this Directive weapons, including firearms, that are subject to Council Directive 91/477/EEC of 18 June 1991 on control of the acquisition and possession of weapons(6); the exclusion of firearms should not apply to portable cartridge-operated fixing and other impact machinery designed for industrial or technical purposes only. It is necessary to provide for transitional arrangements enabling Member States to authorise the placing on the market and putting into service of such machinery manufactured in accordance with national provisions in force upon adoption of this Directive, including those implementing the Convention of 1 July 1969 on the Reciprocal Recognition of Proofmarks on Small Arms. Such transitional arrangements will also enable the European standardisation organisations to draft standards ensuring the safety level based on the state of the art.
OJ L 256, 13.9.1991, p. 51.
Weapons, including firearms, are excluded from the scope of the Machinery Directive – see §51: comments on Article 1 (2) (d). The sixth recital explains that this exclusion is to be understood in light of the scope of the EU legislation on the control of weapons, which does not apply to equipment designed for industrial or technical purposes only.
Cartridge-operated fixing and other cartridge-operated impact machinery designed for industrial or technical purposes that was excluded from the original Machinery Directive by amending Directive 91/368/EEC, is thus reintroduced into the scope of the new Machinery Directive. In addition, certain essential health and safety requirements relating to specific risks associated with portable fixing and other impact machinery have been added to Annex I. It should be noted that these requirements apply both to cartridge-operated fixing and impact machinery and fixing and impact machinery using other sources of energy – see §280: comments on section 2.2.2 of Annex I. With respect to the conformity assessment of such machinery, it should also be noted that portable cartridge-operated fixing and other cartridge-operated impact machinery is listed in Annex IV, item 18 – see §388: comments on Annex IV, item 18.
For the transitional arrangements mentioned in the last sentence of the sixth recital – see §154: comments on Article 27.
(7) This Directive does not apply to the lifting of persons by means of machines not designed for the lifting of persons. However, this does not affect the right of Member States to take national measures, in accordance with the Treaty, with respect to such machines, with a view to implementing Council Directive 89/655/EEC of 30 November 1989 concerning the minimum safety and health requirements for the use of work equipment by workers at work (second individual Directive within the meaning of Article 16(1) of Directive 89/391/EEC)(7).
(7) OJ L 393, 30.12.1989, p. 13. Directive as last amended by Directive 2001/45/EC of the European Parliament and of the Council (OJ L 195, 19.7.2001, p. 46).
Exceptional use of machinery designed for lifting goods for the purpose of lifting persons may be subject to national regulations in the framework of provisions implementing Directive 2009/104/EC – see §140: comments on Article 15. Recital 7 implies that equipment placed on the market for such exceptional use with machinery designed for lifting goods is not in the scope of the Machinery Directive. Placing on the market of such equipment may therefore be subject to national regulations.
Equipment for such exceptional use should be distinguished from interchangeable equipment designed to be assembled with lifting machinery in order to confer a new function for lifting persons. Such interchangeable equipment is subject to the machinery Directive – see §388: comments on Annex IV, item 17.
(8) In relation to agricultural and forestry tractors, the provisions of this Directive concerning the risks currently not covered by Directive 2003/37/EC of the European Parliament and of the Council of 26 May 2003 on type approval of agricultural or forestry tractors, their trailers and interchangeable towed machinery, together with their systems, components and separate technical units (1) should no longer apply when such risks are covered by Directive 2003/37/EC.
(1) OJ L 171, 9.7.2003, p. 1. Directive as last amended by Commission Directive 2005/67/EC (OJ L 273, 19.10.2005, p. 17).
The eighth recital refers to the exclusion of agricultural and forestry tractors from the scope of the Machinery Directive for the risks covered by Directive 2003/37/EC. This Directive was replaced by Regulation (EU) No 167/2013 which modified the Machinery Directive to exclude completely Agricultural and Forestry Tractors – see §53: comments on the first indent of Article 1 (2) (e).
Market surveillance is an essential instrument inasmuch as it ensures the proper and uniform application of Directives. It is therefore appropriate to put in place the legal framework within which market surveillance can proceed harmoniously.
Member States are responsible for ensuring that this Directive is effectively enforced on their territory and that the safety of the machinery concerned is, as far as possible, improved in accordance with its provisions. Member States should ensure their capacity to carry out effective market surveillance, taking account of guidelines developed by the Commission, in order to achieve the proper and uniform application of this Directive.
The term “market surveillance” designates the activity of the authorities of the Member States checking the conformity of products subject to the Directive after they have been placed on the market or put into service and taking the necessary action to deal with non-compliant products. The ninth and tenth recitals introduce several provisions in the new Machinery Directive which establish a stronger legal basis for market surveillance and enforcement action and also provide for the necessary cooperation between the Members States and the Commission in this area – see §93 to §102: comments on Articles 4, §118: comments on Article 9, §122 to §126: comments on Article 11 and §144: comments on Article 19.
In the context of market surveillance, a clear distinction should be established between the disputing of a harmonised standard conferring a presumption of conformity on machinery and the safeguard clause relating to machinery.
The eleventh recital indicates that the procedure for disputing a harmonised standard (known as a formal objection) and the safeguard procedure for dealing with noncompliant and dangerous products are different procedures that are set out in distinct Articles of the Directive – see §119 to §121: comments on Articles 10, and §122 to §126: comments on Article 11.
The putting into service of machinery within the meaning of this Directive can relate only to the use of the machinery itself for its intended purpose or for a purpose which can reasonably be foreseen. This does not preclude the laying down of conditions of use external to the machinery, provided that it is not thereby modified in a way not specified in this Directive.
The twelfth recital clarifies the notion of putting into service of machinery that is regulated by the Machinery Directive – see §86: comments on Article 2 (k). Putting into service is to be distinguished from use of machinery that can be regulated by the Member States, in particular, within the framework of the EU legislation on the use of work equipment provided that such national regulations do not conflict with the provisions of this Directive – see §139 and §140: comments on Article 15.
It is also necessary to provide for an adequate mechanism allowing for the adoption of specific measures at Community level requiring Member States to prohibit or restrict the placing on the market of certain types of machinery presenting the same risks to the health and safety of persons either due to shortcomings in the relevant harmonised standard(s) or by virtue of their technical characteristics, or to make such machinery subject to special conditions. In order to ensure the appropriate assessment of the need for such measures, they should be taken by the Commission, assisted by a committee, in the light of consultations with the Member States and other interested parties. Since such measures are not directly applicable to economic operators, Member States should take all necessary measures for their implementation.
The safeguard procedure set out in Article 11 requires Member States to take the necessary measures to deal with particular models of machinery that fail to comply with the requirements of the Directive and threaten the health and safety of persons. The thirteenth recital introduces a provision which enables measures to be taken at EU level if it becomes clear that an entire group of similar models of machinery give rise to the same risk – see §118: comments on Article 9.
The measures concerned must be submitted to the Machinery Committee according to the regulatory procedure with scrutiny – see §147: comments on Article 22.
The essential health and safety requirements should be satisfied in order to ensure that machinery is safe; these requirements should be applied with discernment to take account of the state of the art at the time of construction and of technical and economic requirements.
Recital (14) introduces the concept of ‘the state of the art’ which shall be taken into account when applying the essential health and safety requirements (EHSRs) set out in Annex I. This concept is very important as it means that the EHSRs are not absolute requirements irrespective of economic cost and technical possibilities available on the market for manufacturers – see §161 and §162: comments on General Principle 3, Annex I.
Where the machinery may be used by a consumer, that is to say, a non-professional operator, the manufacturer should take account of this in the design and construction. The same applies where a machine is normally used to provide a service to a consumer.
The Machinery Directive applies both to machinery for use by workers at work and to machinery for use by consumers or providing a service to consumers, i.e. where the consumer either uses the item or would be directly affected by any defect. In general, the design and construction of machinery must take account of the intended use. Recital 15 stresses that the machinery manufacturer must consider whether the machinery is intended to be used by a professional or a non-professional operator or is intended to provide a service to consumers. The Directive includes a specific requirement relating to the drafting of the instructions for machinery intended for use by non-professional operators – see §259: comments on section 1.7.4.1 (d) of Annex I.
Although the requirements of this Directive do not apply to partly completed machinery in their entirety, it is nevertheless important that the free movement of such machinery be guaranteed by means of a specific procedure.
Recital 16 introduces the concept of partly completed machinery – see §46: comments on Articles 1 (1) (g) and 2 (g). The placing on the market of partly completed machinery is subject to a specific procedure – see §131: comments on Article 13. Partly completed machinery cannot comply fully with the essential health and safety requirements set out in Annex I, since certain of the risks may result from the fact that the machinery is not complete or from the interface between the partly completed machinery and the machinery or assembly of machinery into which it is to be incorporated. However, the manufacturer of partly completed machinery must state, in a Declaration of Incorporation, which of the essential health and safety requirements he has fulfilled – see §385: comments on Annex II 1 B, and §394: comments on Annex VII, B.
For trade fairs, exhibitions and such like, it should be possible to exhibit machinery which does not satisfy the requirements of this Directive. However, interested parties should be properly informed that the machinery does not conform and cannot be purchased in that condition.
This Directive defines only the essential health and safety requirements of general application, supplemented by a number of more specific requirements for certain categories of machinery. In order to help manufacturers to prove conformity to these essential requirements, and to allow inspection of conformity to the essential requirements, it is desirable to have standards that are harmonised at Community level for the prevention of risks arising out of the design and construction of machinery. These standards are drawn up by private-law bodies and should retain their nonbinding status.
Recital 18 recalls that the Machinery Directive relies on the regulatory method known as the “New Approach to technical harmonization and standards”. The legislation itself sets out the mandatory essential health and safety requirements that products placed on the EU market must fulfil and the procedures for assessing their conformity – see §103: comments on Articles 5 (1) (a), and §163: comments on General Principle 4 of Annex I.
Detailed technical solutions for meeting these essential health and safety requirements are given in European harmonised standards. Application of harmonised standards remains voluntary, but confers a presumption of conformity with the essential health and safety requirements they cover – see §87: comments on Articles 2 (l), and §110: comments on Article 7 (2).
The "New Approach" has been improved and updated by the "New Legislative Framework", through a set of legislative acts such as Regulation (EC) No 765/2008 and Decision 768/2008/EC.
(19) In view of the nature of the risks involved in the use of machinery covered by this Directive, procedures for assessing conformity to the essential health and safety requirements should be established. These procedures should be devised in the light of the extent of the danger inherent in such machinery. Consequently, each category of machinery should have its appropriate procedure in conformity with Council Decision 93/465/EEC of 22 July 1993 concerning the modules for the various phases of the conformity assessment procedures and the rules for the affixing and use of the CE conformity marking, which are intended to be used in the technical harmonisation directives (2), taking account of the nature of the verification required for such machinery.
(2) OJ L 220, 30.8.1993, p. 23.
Recital 19 refers to the procedures for the person responsible for the CE marking, assessing the conformity of machinery with the essential health and safety requirements – see §127 to §130: comments on Article 12 – and the rules for the CE marking – see §141: comments on Article 16.
Manufacturers should retain full responsibility for certifying the conformity of their machinery to the provisions of this Directive. Nevertheless, for certain types of machinery having a higher risk factor, a stricter certification procedure is desirable.
The conformity assessment procedure applicable to a given product depends on whether or not it belongs to one of the categories listed in Annex IV which are considered to have a high risk factor or which serve a critical protective function. The different conformity assessment procedures are set out in Annexes VIII, IX and X and the rules for their selection are given in Article 12.
The CE marking should be fully recognised as being the only marking which guarantees that machinery conforms to the requirements of this Directive. All other markings which are likely to mislead third parties as to the meaning or the form of the CE marking, or both, should be prohibited.
In order to ensure the same quality for the CE marking and the manufacturer's mark, it is important that they be affixed according to the same techniques. In order to avoid confusion between any CE markings which might appear on certain components and the CE marking corresponding to the machinery, it is important that the latter marking be affixed alongside the name of the person who has taken responsibility for it, namely the manufacturer or his authorised representative.
Recitals 21 and 22 introduce the provisions relating to the CE-marking – see §141: comments on Article 16, §250: comments on section 1.7.3 of Annex I, and §387: comments on Annex III.
The manufacturer or his authorised representative should also ensure that a risk assessment is carried out for the machinery which he wishes to place on the market. For this purpose, he should determine which are the essential health and safety requirements applicable to his machinery and in respect of which he must take measures.
Recital 23 refers to the requirement in Annex I on the risk assessment for the machinery which determines the application of the essential health and safety requirements – see §158 and §159: comments on General Principle 1 of Annex I.
It is essential that, before drawing up the EC declaration of conformity, the manufacturer or his authorised representative established in the Community should prepare a technical construction file. However, it is not essential that all documentation should be permanently available in material form, but it must be possible to make it available on request. It need not include detailed plans of subassemblies used for the manufacture of machinery, unless knowledge of such plans is essential in order to ascertain conformity with the essential health and safety requirements.
The manufacturer’s technical construction file referred to in Recital 24 is both a means to enable the market surveillance authorities to check the conformity of machinery after it has been placed on the market and a means for the manufacturer to demonstrate the conformity of his product – see §103: comments on Article 5 (1) (b), §383: comments on Annex II 1 A (2), and §391 to §393: comments on Annex VII A.
The addressees of any decision taken under this Directive should be informed of the reasons for such a decision and of the legal remedies open to them.
Recital 25 introduces the provisions relating to the rights of manufacturers or other stakeholders subject to decisions taken under the Machinery Directive – see §135: comments on Articles 14 (6), and §145: comments on Article 20.
Member States should provide for penalties applicable to infringements of the provisions of this Directive. Those penalties should be effective, proportionate and dissuasive.
Recital 26 is a reminder that the national authorities in charge of enforcement of the provisions of the Machinery Directive (the market surveillance authorities) must be able to impose appropriate penalties if those provisions are not correctly applied. The penalties must be foreseen by the national laws and regulations transposing the provisions of the Directive into national law – see §153: comments on Article 26.
(27) The application of this Directive to a number of machines intended for lifting persons requires a better delimitation of the products covered by this Directive with respect to those covered by Directive 95/16/EC of the European Parliament and of the Council of 29 June 1995 on the approximation of the laws of the Member States relating to lifts.(1) A redefinition of the scope of the latter Directive is thus deemed necessary. Directive 95/16/EC should therefore be amended accordingly.
(1) OJ L 213, 7.9.1995, p. 1. Directive as amended by Regulation (EC) No 1882/2003 (OJ L 284, 31.10.2003, p. 1).
Recital 27 explains that the new Machinery Directive 2006/42/EC includes an amendment of the Lifts Directive 95/16/EC (replaced by Directive 2014/33/EC as of 20 April 2016) in order to clarify the borderline between the scopes of the two Directives – see §151: comments on Article 24.
(28) Since the objective of this Directive, namely, to lay down the essential health and safety requirements in relation to design and manufacture in order to improve the safety of machinery placed on the market, cannot be sufficiently achieved by the Member States and can be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.
Recital 28 is a justification of the Machinery Directive with respect to the principles of subsidiarity and proportionality set out in Article 5 of the EC Treaty (now Article 5 of the Treaty on European Union – TEU). According to these principles, the EU shall take action only if the same objectives cannot be better achieved by the action of the Member States. It is clear that without the Machinery Directive, manufacturers of machinery would have to apply different rules and procedures for machinery safety in each Member State, which would both constitute a serious obstacle to the internal market and be a less effective means of improving machinery safety.
(29) In accordance with point 34 of the Interinstitutional Agreement on better lawmaking,(2) Member States are encouraged to draw up, for themselves and in the interests of the Community, their own tables illustrating, as far as possible, the correlation between this Directive and the transposition measures, and to make them public.
(2) OJ C 321, 31.12.2003, p. 1.
Recital 29 refers to an agreement between the European Parliament, the Council and the Commission on improving the quality and transparency of EU law-making. Under the heading of better transposition and application, Member States are encouraged to publish correlation tables showing the relationship between the provisions of the Directive and the measures transposing them into national law. This is important since, while it is the national transposition measures that have force of law, in the dialogue between economic actors, the text of the Machinery Directive itself naturally provides a common reference. A correlation table must also be communicated by the Member States to the Commission together with the text of the measures transposing the Directive into national law – see §153: comments on Article 26.
Recital 30 refers to certain measures that can be taken by the Commission after consulting the Machinery Committee – see §116: comments on Articles 8, and §147: comments on Article 22.
 OJ L 183, 29.6.1989, p. 9.
 Directive 98/37/EC of the European Parliament and of the Council of 22 June 1998 on the approximation of the laws of the Member States relating to machinery. OJ L 207, 27.7.1998, p.1.
 OJ L 198, 22.7.1991, p. 16.
 OJ L 175, 19.7.1993, p. 12.
 OJ L 220, 31.8.1993, p. 1.
 See guidance on Interchangeable equipment for lifting persons and equipment used with machinery designed for lifting goods for the purpose of lifting persons.
 See http://ec.europa.eu/growth/single-market/goods/new-legislative-framework/ and "The 'Blue Guide' on the implementation of EU product rules" http://ec.europa.eu/DocsRoom/documents/12661.