1. Supreme Court Decision: Product-by-Process Claims AIPLA Annual Meeting 2015 IP Practice in Japan Pre-Meeting Seminar Yoshiki KITANO Japan Patent Attorneys Association International Activities Center

2. Before Decision 2 BeforeAfter ExaminationProcessNon-limiting LitigationProcessMixed case-laws Product-by-Process Claim Construction

3. Facts Teva (Patentee) v. Kyowa Kirin Pat. 3,737,801: “Pravastatin sodium substantially free of pravastatin lactone and epi-pravastatin, and compositions containing same” Teva sued Kyowa for infringing the ‘801 patent. 3

4. Facts Claim 1 of the ‘801 patent: Pravastatin sodium, wherein the mixing amount of pravastatin lactone is less than 0.5 wt%, wherein the contamination of epiprava is less than 0.2 wt%, and wherein the pravastatin sodium is prepared by a process comprising the following steps a) forming an enriched organic solution of pravastatin; b) precipitating pravastatin as its ammonium salt; c) purifying the ammonium salt by recrystallization; d) transposing the ammonium salt to the pravastatin sodium; and e) isolating pravastatin sodium. 4

5. Facts Kyowa was selling pravastatin Na salt tablets called “KH.” The KH tablets contained pravastatin Na with less than 0.5 wt% of mixed pravastatin lactone and less than 0.2 wt% of mixed epiprava. by a process not involving step “a)The KH tablets were produced by a process not involving step “a) forming an enriched organic solution of pravastatin.” 5

6. IP High Court, En Banc Case No. 2010(ne)10043 should be limited to products manufactured according to the process, unless there exist circumstances where it was impossible or difficult to directly define the product by its structure or propertiesThe scope of a product claim, when a manufacturing process of the product is recited therein, should be limited to products manufactured according to the process, unless there exist circumstances where it was impossible or difficult to directly define the product by its structure or properties at the time of filing. 6

7. IP High Court, En Banc Since no such circumstances existed, the scope of Claim 1 should be limited to those produced by the production process. Kyowa’s process did not involve at least step a) of Claim 1. Kyowa did not infringe the ‘801 patent. 7

8. Supreme Court Case No. 2012(ju)1204 Decided on June 5, 2015 8

9. Supreme Court When a product claim recites a manufacturing process of the product, the scope of the claim covers products that have the same structures and properties, etc., as those of the product made according to the process. The process is not limiting!The process is not limiting! 9

10. Supreme Court For a product-by-process claim, it is generally unclear what structures or properties of the product the process represents. This is not appropriate. On the other hand, depending on the nature of the product, it can be technically impossible or require an outrageously large economic expenditure or amount of time to identify its structure or properties at the time of filing. 10

11. Supreme Court only if it is impossible or utterly impractical, such as when an outrageously large economic expenditure or amount of time is required, to directly identify the structures or properties of the product at the time of filingProduct-by-process claims satisfy the clarity requirement under Article 36 (6) (ii) only if circumstances exist where it is impossible or utterly impractical, such as when an outrageously large economic expenditure or amount of time is required, to directly identify the structures or properties of the product at the time of filing. Product-by-process claims only meet the clarity requirement under exceptional circumstances. 11

12. Supreme Court The en banc decision of the IP High Court was reversed. The IP High Court will determine whether the claim satisfies the clarity requirementThe IP High Court will determine whether the claim satisfies the clarity requirement, or whether circumstances existed where it was “impossible or utterly impractical” to identify the structure or properties of the product at the time of filing. 12

13. Concurrent Opinion, Judge Chiba technical point of view“Impossible” in the decision means being impossible to identify the structure or properties of the product mainly from a technical point of view. 13

14. Concurrent Opinion, Judge Chiba economically unrealistic time“Utterly impractical” means that identifying the structures or properties of a product would require an economically unrealistic, enormously large amount of time or expenditure, rather than the technical difficulty. Such a requirement would be a significant burden to the Applicant considering the rapid development of technology and the highly competitive global patent landscape. 14

15. Concurrent Opinion, Judge Chiba ones that distinguish the invention from prior artThe “structures and properties” are ones that distinguish the invention from prior art when examining novelty and inventive step. 15

16. Concurrent Opinion, Judge Chiba product-by-process claims will be rejected if the Applicant fails to demonstrate the presence of said “impossible or utterly impractical” circumstancesFrom now on, product-by-process claims will be rejected if the Applicant fails to demonstrate the presence of said “impossible or utterly impractical” circumstances during examination. If said circumstance exists (e.g., in the case of cells obtained by new genetic engineering), it will not be a large burden on the Applicant to demonstrate it. 16

17. Concurrent Opinion, Judge Chiba Since the Applicant is limited in demonstrating the “impossible or utterly impractical” circumstances, the requirement should not be applied strictly. product-by-process claims will be accepted unless there exists a reasonable doubtIt is likely that product-by-process claims will be accepted unless there exists a reasonable doubt as to the existence of said circumstances. 17

18. Concurrent Opinion, Judge Chiba Many registered patents with a product-by- process claim would be unavoidably invalidatedMany registered patents with a product-by- process claim would be unavoidably invalidated if the existence of said circumstances is not demonstrated. However, as such a situation is not attributable solely to the patent owner, this problem must be solved, possibly through the use of a correction trial or correction in an invalidation trial. 18

19. Concurrent Opinion, Judge Chiba In the US, the CAFC en banc decided in Abbott v. Sandoz that a product-by- process claim is limited to the process in litigation, while a product-by-process claim is not limited thusly during examination at the USPTO. Such a double standard in US practice is different from, and cannot harmonize with, Japanese and EP practice. 19

20. Next… Hopefully, the IP High Court will articulate the “impossible or utterly impractical circumstances.” 20

21. JPO The JPO revised its examination guidelines in view of the Supreme Court decision. 21

22. Before/After 22 BeforeAfter Examination ProcessNon-limiting ClarityCould be but not rejected Rejected unless impossible or utterly impractical circumstance exists Litigation ProcessMixed case-lawsNon-limiting ClarityN/ARejected unless impossible or utterly impractical circumstance exists Product-by-Process Claim Construction

23. Thank you for your kind attention! Any questions? Yoshiki KITANO Saegusa & Partners kitano@saegusa-pat.co.jp 23