Author: sewellnylaw


Angelina Jolie and The Supremes


Angelina Jolie and The Supremes

The LAW FIRM OF DAYREL SEWELL, PLLC is pleased to announce that Mr. Sewell’s article, entitled “Unanimous U.S. Supreme Court and Angelina Jolie: BRCA1 & BRCA2 Patentability”, is a featured cover story in this month’s issue of Intellectual Property Today™. Featured articles emphasize developments in cutting edge technology and their effect on intellectual property law practice.

 

On June 13, 2013, the Supreme Court of the United States issued its unanimous, landmark decision in the long-awaited and much anticipated case of Association For Molecular Pathology et al. v. Myriad Genetics, Inc., et al. That same day, the decision was prominently featured on several world news media outlets and firmly grasped the attention of more than just the intellectual property community.

Angelina Jolie and The Supremes Intellectual Property

BRCA1 protein

At issue before the Supreme Court, are nine of Myriad’s composition claims from three of its patents. The central issue presented to the Court is whether “a naturally occurring segment of deoxyribonucleic acid (DNA) is patent eligible under 35 U. S. C. §101 by virtue of its isolation from the rest of the human genome.” The Supreme Court makes clear that extensive discovery efforts will not result in otherwise ineligible law of nature claims transforming into a patent. The future implications surrounding other issues of gene patentability was addressed, in part, by the Court. Besides finding cDNA patent eligible, the Supreme Court carefully crafted its decision to state that its ruling does not implicate method claims or new applications of knowledge about the BRCA1 and BRCA2 genes. To this end, expect to see a marked increase in the number of patent applications claiming methods for genetic sequence isolation as well as new applications of knowledge. Additionally, Myriad—and those that enjoyed isolated DNA patent exclusivity—will likely have an advantage when applying for genetic sequencing method patents because a previous effect of the claims at issue was that said claims effectively precluded others from performing the method that yielded the isolated DNA. Since 1994, Intellectual Property Today™ continues to be a leading, national law publication that focuses on legal issues in patent, trademark, and copyright law. You are encouraged to comment on this article and to receive free updates by subscribing to the firm’s Blog and Press Release sections. Thank you.

Intellectual Property Today featured publication

 


HSBC Sued by NY A.G. Over Foreclosure Abuse


HSBC Sued by NY A.G. Over Foreclosure Abuse

Today, the New York State Attorney General’s Office (AGO) announced that it has filed suit against HSBC Bank USA and HSBC Mortgage Corporation (USA) in NY State Supreme Court in Erie County. See THE PEOPLE OF THE STATE OF NY vs. HSBC BANK USA. The lawsuit states that HSBC is failing to follow state law related to foreclosure actions, thereby putting homeowners at greater risk of losing their homes.

 

Background

 

In New York, loans for real property are secured through mortgages rather than through deeds of trust. New York, unlike trust states, is a judicial foreclosure state. In states like New York, mortgage foreclosure actions must proceed through the judiciary system.

 

Clearly, there are laws that govern the judicial foreclosure process and lenders are no exception to the requirement that these laws be followed. The New York State Unified Court System (UCS) issued a rule in October 2010 requiring that all foreclosure law firms attest to the accuracy of the legal papers they filed in court, in response to the widely reported robo-signing scandal in the mortgage industry. Since the implementation of the rule, after a foreclosure action is filed, the foreclosure firm must file an affirmation (the “Due Diligence Affirmation”) simultaneously with its filing of a Request for Judicial Intervention (RJI). The process mandates that the lender then attend a settlement conference within 60 days. Surprisingly, many foreclosure law firms almost immediately stopped filing RJIs after issuance of the court rule. Foreclosure law firms who refuse to file the RJIs not only run afoul of state law, but also significantly injure homeowners who want to save their homes.

 

A RJI is a very important instrument in the litigation process that transforms an indexed case wherein documents are filed to a case that now has a justice assigned to the matter. Without an RJI, New York courts do not schedule court-supervised foreclosure settlement conferences. Cases, in which complaints are filed but no RJI is filed—which would otherwise move the case forward by assigning a justice to the matter—often linger indefinitely on the “shadow docket”. The shadow docket in New York consists of thousands of foreclosure cases that linger for several months, and sometimes years, causing distressed homeowners and the overtaxed judicial system to suffer. A recent report indicates that a “re-review of the November 2010 and March 2011 residential foreclosure filings in Brooklyn and Queens reveals that 43% of cases remain in the shadow docket.”

 

While cases are on the shadow docket, delinquent interest, inspection fees, attorney’s fees, and other costs in addition to the mortgage, continue to accrue. In general, the larger a loan balance, the more difficult it is to attain an appropriate and affordable modification.

 

Discussion

 

An investigation conducted by Attorney General Schneiderman showed that lenders HSBC Bank USA and HSBC Mortgage Corporation (USA) repeatedly failed to timely file the RJI in hundreds of foreclosure cases against New York homeowners, increasing the risk that those homeowners would lose their homes. A sampling of HSBC foreclosure filings from four counties — Erie, Monroe, Suffolk and Bronx — identified close to 300 instances where HSBC failed to file the RJI with the proof of service. In some of those cases, homeowners waited for over two years for HSBC to file the RJI.

 

“Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can’t even get the legally required settlement conference that could help them keep their homes,” said Attorney General Schneiderman. “For homeowners facing foreclosure, time is their greatest enemy. Every day spent waiting for a settlement conference is a day that the lender piles on additional interest, fees and penalties and the homeowner falls further behind. I am committed to doing everything I can to stand up for New Yorkers who are trapped in the ‘shadow docket’ and denied their right to fight for their homes.”

 

As a result of these findings, Attorney General Schneiderman filed suit seeking to compel HSBC to file the RJI immediately in all cases in which it has filed a proof of service, and to file an RJI simultaneously with proof of service in all future cases. In cases where HSBC has already failed to file the RJI with proof of service on the homeowner, the suit also seeks to compel HSBC to take the following steps to protect New York homeowners:

 

  • Prepare an accounting of interest charges, penalties and fees (e.g. late fees, inspection fees, attorney’s fees, broker reports) that accrued beginning 60 days after the filing of proof of service on the homeowner;
  • Toll and waive all accrued interest charges, fees and penalties that accrued, or will accrue, beginning 60 days after the filing of proof of service on the homeowner;
  • Grant restitution for interest charges, fees and penalties paid by the homeowner that accrued beginning 60 days after the filing of proof of service on the homeowner; and
  • Grant damages to homeowners injured by HSBC’s illegal practices.

 

Case Details

 

The presiding justice is Justice John L. Michalski. The index number for the instant action is 001660/2013. The attorney representing the AGO is James Morrissey. The RJI was filed on May 31, 2013. The AGO’s motion seeking the aforementioned relief was filed on June 3, 2013 and has a motion hearing date of July 24, 2013.

 

Conclusion

 

New York is undoubtedly well-represented. Attorney General Schneiderman is committed to prosecuting HSBC and any other lenders that deny New York homeowners their legal rights to negotiate alternatives to foreclosure. Schneiderman asserts that he will not hesitate to bring similar actions against other mortgage lenders who hold borrowers in the shadow docket in defiance of state law.



“First-Sale” Resellers Rejoice


“First-Sale” Resellers Rejoice

SUPREME COURT OF THE UNITED STATES

KIRTSAENG, DBA BLUECHRISTINE99 (Petitioner) v. JOHN WILEY & SONS, INC. (Respondent)

No. 11–697. Argued October 29, 2012—Decided March 19, 2013

 

COMMENT

 

Recently, a seminal decision was issued by the Supreme Court of the United States that undoubtedly affects the scope of rights for copyright holders as well as the resellers of those copyrighted works.

 

Background

 

John Wiley & Sons, Inc., an academic textbook publisher, often assigns to its wholly owned foreign subsidiary (Wiley Asia) rights to publish, print, and sell foreign editions of Wiley’s English language textbooks abroad. Wiley Asia’s books state that the books are not to be taken (without permission) into the United States.

 

Supap Kirtsaeng moved to the United States from Thailand in 1997 to pursue an undergraduate degree in mathematics at Cornell University. After moving, Kirtsaeng asked friends and family to buy foreign edition English-language textbooks in Thai book shops, where the books were sold at low prices, and to mail the books to him in the United States. He then sold the books, reimbursed his family and friends, and kept the profit. Allegedly, in this manner, Kirtsaeng subsidized the cost of his education.

 

Issue

 

Whether the “first sale” doctrine should apply to copies of a copyrighted work lawfully made abroad.

 

“First-Sale” Resellers Rejoice

 

Procedural Posture

 

On September 8, 2008, Wiley brought suit against Kirtsaeng in the United States District Court for the Southern District of New York. Wiley filed suit, claiming—amongst other things—that Kirtsaeng’s unauthorized importation and resale of its books was a copyright infringement of Wiley’s 17 U.S.C. § 106(3) exclusive right to distribute and 17 U.S.C. §602’s import prohibition.

 

Kirtsaeng retorted that because his books were lawfully made and acquired legitimately, 17 U.S.C. §109(a)’s “first sale” doctrine permitted importation and resale without Wiley’s further permission.

 

The District Court jury ultimately found Kirtsaeng liable for willful copyright infringement of all eight works and imposed damages of $75,000 for each of the eight works. The District Court held that Kirtsaeng could not assert this defense because the doctrine does not apply to goods manufactured abroad. Kirtsaeng appealed.

 

On August 15, 2011, in a 2-1 split decision, the Second Circuit affirmed the District Court’s ruling, concluding that §109(a)’s “lawfully made under this title” language indicated that the first sale doctrine does not apply to copies manufactured outside of the United States.

 

On April 16, 2012, petition for writ of certiorari to the Second Circuit was granted by the Supreme Court.

 

Discussion

 

The first sale doctrine is codified at 17 U.S.C. § 109(a). Section 109(a) reads, in relevant part,:

 

Notwithstanding the provisions of section 106(3) [of the Copyright Act], the owner of a particular copy … lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy….

 

The crux of the argument between the litigants is the imposition, or lack thereof, of geographical limitations vis-à-vis the statutory language of “lawfully made under this title”. Should Wiley’s argument of geographical limitations apply to this statutory language, it would mean that the first-sale doctrine does not apply to Wiley Asia’s books. Contrastingly, should Kirtsaeng’s argument of non-geographical limitation made “in accordance with” or “in compliance with” the Copyright Act, then the first-sale doctrine would apply to copies manufactured abroad and could be re-sold without the copyright owner’s permission.

 

The Court first analyzed § 109(a)’s statutory language and held that § 109(a) says nothing about geography. A non-geographically based, simple reading “promotes the traditional copyright objective of combatting [sic] piracy and makes word-byword linguistic sense.”

 

Next, the Court grappled with the historical and contemporary statutory context of the language at issue. The Court held that the comparison of the language between §109(a)’s predecessor and the present provision supports the conclusion that Congress did not have geography in mind when writing the present version of §109(a). The Court also found support for its non-geographical interpretation of the first-sale doctrine predicated on Congress’ intent to retain the substance of common-law “first sale” doctrine.

 

Lastly, the Court relied on a constitutional law provision, which is a tenet of intellectual property law. The Court highlighted several ways that—by requiring geographical limitations—would fail to further basic constitutional copyright objectives, in particular “promot[ing] the Progress of Science and useful Arts,” U. S. Const., Art. I, §8, cl. 8.

 

For example: “Technology companies tell us that “automobiles, micro­waves, calculators, mobile phones, tablets, and personal computers” contain copyrightable software programs or packaging. Brief for Public Knowledge et al. as Amici Curiae 10. See also Brief for Association of Service and Computer Dealers International, Inc., et al. as Amici Curiae 2. Many of these items are made abroad with the American copyright holder’s permission and then sold and imported (with that permission) to the United States. Brief for Retail Litigation Center, Inc., et al. as Amici Curiae 4. A geographical interpretation would prevent the resale of, say, a car, without the permission of the holder of each copyright on each piece of copyrighted automobile software.”

 

Moreover, said the Court, “reliance upon the “first sale” doctrine is deeply embedded in the practices of those, such as book­sellers, libraries, museums, and retailers, who have long relied upon its protection. Museums, for example, are not in the habit of asking their foreign counterparts to check with the heirs of copyright owners before sending, e.g., a Picasso on tour. Brief for Association of Art Museum Directors 11–12.”

 

In summation, the Court held that Section 109(a)’s language, its context, and the “first sale” doctrine’s common-law history favored Kirtsaeng’s position.

 

Policy Implications

 

The Court, in siding with Kirtsaeng, noted “the ever­growing importance of foreign trade to America.” This 6-3 nod to being mindful of foreign trade is not to be overlooked. When the Court spoke of the activities of associations of libraries, used-book dealers, technology companies, consumer-goods retailers, and museums that would be hampered by geographical limitations, it took the important step of applying the law to the facts, and not doing so in a vacuum because of the real-world applications that Supreme Court decisions have. Will the market for reselling significantly change (i.e., supply and demand economics)? What effect will the Kirtsaeng decision have on domestic and international pricing of copyrighted works? Time will tell how the actions of copyright holders and resellers change because of the Kirtsaeng decision.

 

Read between the lines. It is clear that the Court weighed and balanced various factors in its decision that Wiley’s perceived benefits of the imposition of geographical limitations are far outweighed by the negative affects on foreign trade and the suppression of the progress of science and the useful arts that such geographical limitation would render.

 

Conclusion

 

The Supreme Court, in a 6-3 ruling authored by Justice Breyer, reversed the ruling of the Second Circuit Court of Appeals and remanded the case.

 

Held: The “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad.



After Patent Life, FDA says NO to Generic OxyContin


After Patent Life, FDA says NO to Generic OxyContin

Background

 

Under the Food, Drug, & Cosmetic (FD&C) Act and implementing regulations, the Food and Drug Administration (FDA) is responsible for ensuring that all new drugs are safe and effective. FDA also regulates the advertising and promotion of prescription drugs under the FD&C Act.

 

Purdue Pharma L.P., based in Stamford, CT, is a privately held pharmaceutical company founded by physicians. The FDA approved Purdue Pharma’s controlled-release pain reliever OxyContin in 1995. OxyContin (oxycodone hydrochloride controlled-release) is an opioid analgesic supplied in various dosages for oral administration. OxyContin is Purdue’s brand for time-release oral oxycodone. OxyContin followed Purdue’s older product, MS Contin, a morphine-based product that was approved in 1984 for a similar intensity and duration of pain and during its early years of marketing was promoted for the treatment of cancer pain.

 

OxyContin

 

OxyContin’s time-release formula could be used over 12 hours to maintain a steady level of the narcotic oxycodone in patients suffering from moderate-to-severe pain. By 2001, sales had exceeded $1 billion annually, and OxyContin had become the most prescribed brand name narcotic medication for treating moderate-to-severe pain. OxyContin has long been one of the nation’s top-selling prescription painkillers with sales of more than $2.8 billion last year, according to prescription tracker IMS Health.

 

However, in early 2000, reports began to surface about abuse and diversion for illicit use of OxyContin. Several factors thought to be early contributors to the abuse and diversion of OxyContin are: 1) the active ingredient in OxyContin is twice as potent as morphine, which may have made it an attractive target for misuse; 2) the original label’s safety warning advising patients not to crush the tablets because of the possible rapid release of a potentially toxic amount of oxycodone may have inadvertently alerted abusers to methods for abuse; and, 3) the significant increase in OxyContin’s availability in the marketplace may have increased opportunities to obtain the drug illicitly in some states.

 

After the problems with often-abused OxyContin began to surface, FDA and Purdue collaborated on a risk management plan to help detect and prevent abuse and diversion. Although risk management plans were not in use when OxyContin was approved, they are now an optional (or, at times, required) feature of new drug applications.

 

Recent Developments

 

Purdue stopped making its classic OxyContin pills — first released to the market in 1995 and easy to crush, snort and abuse — in 2010. In April 2010, the FDA approved a reformulated version of OxyContin, which was designed to be more difficult to manipulate for purposes of misuse or abuse. Purdue stopped shipping original OxyContin to pharmacies in August 2010. Various sources estimate that this new ‘tamper-proof’ pill’s patent term will expire about 2025.

 

Purdue Pharma’s patent on its original OxyContin formulation expired on April 16, 2013. That very same day, the FDA issued an immediate press release stating that it will not approve generic formulations to the original OxyContin. The FDA says that:

 

“because original OxyContin provides the same therapeutic benefits as reformulated OxyContin, but poses an increased potential for certain types of abuse, the FDA has determined that the benefits of original OxyContin no longer outweigh its risks and that original OxyContin was withdrawn from sale for reasons of safety or effectiveness. Accordingly, the agency will not accept or approve any abbreviated new drug applications (generics) that rely upon the approval of original OxyContin.”

 

The FDA also approved updated labeling for Purdue’s reformulated OxyContin tablets. The new labeling indicates that the product has physical and chemical properties that are expected to make abuse via injection difficult and to reduce abuse via the intranasal route (snorting).

 

The decision is the first time that the agency has allowed a manufacturer to state that a narcotic drug has tamper-resistant properties, said an agency official, Dr. Douglas C. Throckmorton. Dr. Throckmorton further stated that the F.D.A. had looked at data from several studies, some of it underwritten by Purdue, in arriving at its decision. He said that while the data was not perfect, the agency had concluded that it was enough to show that the new version of OxyContin was safer, in its abuse resistance, than the original version.

 

Discussion

 

The public health position is clear. Dr. Throckmorton says that “[t]he development of abuse-deterrent opioid analgesics is a public health priority for the FDA.” The public health aspect is self-evident, but what about the ramifications of the FDA’s decision?

 

Pharmaceutical companies invest vast sums of money into their Research & Development (R&D) programs, including safety and efficacy testing. The exclusive monopoly of a patent offers these companies means to recoup some of that investment while also promoting the progress of science and providing full disclosure of the invention (which in this case is a composition of matter). Typically, when a drug loses patent, revenues plunge quickly because such expirations open the door to a slew of cheaper versions from generic drug manufacturers that can rely on abbreviated new drug applications (ANDA) containing safety and efficacy data previously submitted to the FDA.

 

In general, generic drug companies are not built upon the model of conducting extensive R&D. It is this axiomatic principle that the FDA decision effectively protects Purdue from lower-price competition by requiring generic companies to develop their own abuse-deterrent designs. The ‘catch 22’ here is that generic drug companies, in part, are able to offer more competitive drug pricing because of the ANDA’s cost-saving reliance on the brand-name drug’s safety and efficacy data that was already submitted to—and relied on—by the FDA.

 

Economics teaches us that when supply is limited and demand outpaces supply (which it undoubtedly has for OxyContin), the price for goods generally increases. So, too, is the case with reformulated Oxycontin. When reformulated OxyContin was introduced to the market in late 2010, the price of the new version of OxyContin was about $6 per 40 milligram tablet, the same then as the price for the non-tamper resistant pill. Since then, the price of the new version has risen to about $6.80 for a tablet of that strength. Roughly a 13% increase in product price in less than three years of being on the market is not too shabby for Purdue’s profits.

 

Conclusion

 

Reformulated Oxycontin adds greater understanding of the affects and interplay between law and economics. The advertisement-like, ‘all-new’ OxyContin is a strikingly, interesting demonstration of the interconnection of patent law, food & drug law, public health, pharmaceuticals, and marketplace economics. Metaphorically-stepping back from the trees to see the entire forest is an invaluable lesson.