1. Functional Claim Elements in the Unpredictable Arts 2015 AIPLA Spring Meeting Robert D. Titus – Sr. Director

2. ♦The use of functional language in a peripheral claiming paradigm is an efficient way to broaden claim scope. ♦Unpredictability is a recognized property of the chemical arts and there is a tension between claim scope and the written description requirement of 35 U.S.C. § 112 as the University of Rochester, Ariad, and AbbVie line of cases just discussed aptly demonstrates. ♦The AbbVie decision has important implications for the use of functional elements in claims encompassing inventions in the chemical arts. 01 MAY 2015 2 © 2015 Eli Lilly and Company Introduction

3. ♦The pharmaceutical industry’s business model relies heavily on robust patent exclusivity to sustain drug discovery and development. ♦Intellectual property rights to every product will be challenged internationally. ♦Experience with patent validity challenges and recent IPR proceedings demonstrate that not all patent claims can withstand post-grant review. ♦It is through this lens that the following views of the application of AbbVie are offered for your consideration. 01 MAY 2015 3 © 2015 Eli Lilly and Company Context

4. ♦The question reduces to what level of written description is required to support the desired claim scope breadth. “No bright-line rules govern the number of species that must be disclosed to describe a genus claim, as this number necessarily changes with each invention, and it changes with progress in the field.” “The level of detail required to satisfy the written description requirement varies depending on the nature and scope of the claims and on the complexity and predictability in the relevant technology. ♦The impact of AbbVie in the chemical arts depends upon: 1)the field of technology of the claimed invention; and 2)the relationship of the functional claim element to the theory of patentability of the claimed invention as a whole. 01 MAY 2015 4 © 2015 Eli Lilly and Company Problem Statement

5. ♦Functional elements are commonly used in patent claims encompassing this technology space: flavoring, colorant, coating, lubricant, dispersant, diluent. Each represents a well-defined class of structures and a standard understanding of function (USP; FDA; Remington, The Science and Practice of Pharmacy) ♦“A pharmaceutical formulation comprising Compound A, an antioxidant, and optionally an enteric coating.” Compound A is novel; Functional elements are “antioxidant” and “enteric coating” Patentability of this formulation flows from the patentability of Compound A ♦No specific formulation exemplification necessary to support claim scope. 01 MAY 2015 5 © 2015 Eli Lilly and Company Formulations

6. ♦A specific acid-labile coating is necessary to assure that Compound B, a prior art molecule, is released at low pH to avoid base catalyzed degradation. Patentability is no longer dependent upon the formulated molecule, rather is now dependent upon the constituent elements of the formulation itself. ♦What claim scope could be pursued? 01 MAY 2015 6 © 2015 Eli Lilly and Company Formulations CompoundCoatingFunctional Elements Compound BSpecific coatingNo Compound BAcid-labile coatingsYes Base-sensitive compoundsSpecific coatingYes Base-sensitive compoundsAcid-labile coatingsYes

7. ♦A claim limited to Compound B and the specific coating contains no functional elements, so exemplification is limited to that which demonstrates the claimed invention possesses the desired properties. ♦A claim encompassing the functional element “acid-labile coatings” would require sufficient exemplification to demonstrate that formulations with a variety of coatings possess the desired properties. Suitable coatings would be part of a closed set of pharmaceutically acceptable members, and so exemplification would not need to be extensive. ♦A claim encompassing the functional element “base-sensitive compound” would require sufficient exemplification to demonstrate that the breadth of coatings in the claim were generally applicable to compounds that have the base-sensitivity property regardless of structure. This would require extensive exemplification to meet the AbbVie standard. 01 MAY 2015 7 © 2015 Eli Lilly and Company Formulations

8. ♦Chemical process claims commonly employ functional elements: reducing agent, buffer, acid, base, solvent. These functional elements have standard meanings in the art and frequently the specification will include additional context to cabin the intended scope of each term. ♦Process claims directed to a method of preparing a novel molecule can derive patentability from the molecule itself. A specific synthetic example would likely be sufficient. ♦When the patentability of the process is no longer dependent upon the molecule prepared and depends on aspects of the process per se, however, the degree of specific exemplification must be expanded to support the breadth of the functional elements if they are central to the theory of patentability. 01 MAY 2015 8 © 2015 Eli Lilly and Company Process Claims

9. “A method of oxidizing glucose comprising contacting an aqueous solution of glucose with oxygen or an oxygen containing gas, and a cupric catalyst.” ♦Glucose and its oxidation product are well known in the art as are oxygen (oxidizing agent) and water (solvent). ♦Functional element is “cupric catalyst” In its broadest interpretation, “cupric catalyst” would be any copper (II) complex that catalyzes the oxidation of glucose by elemental oxygen 6 cupric catalysts are specifically named in the specification and 4 of these are demonstrated to be operative in the claimed process All named cupric catalysts are structurally similar chelates ♦AbbVie holding increases risk in relying on claim with “cupric catalyst” scope. 01 MAY 2015 9 © 2015 Eli Lilly and Company Process Claims

10. ♦Purely functional elements are commonly employed in claims directed to a composition of matter, expanding the structural space encompassed by the claims without structural limitation. leaving group protecting group electron withdrawing group prodrug ♦The function these terms describes is typically well-accepted, but the structural space encompassing moieties that possess these functions is vast. The skilled person would appreciate that not every member performing the desired function generally works in all instances. ♦How could the AbbVie decision impact claims incorporating these functional elements? 01 MAY 2015 10 © 2015 Eli Lilly and Company Composition of matter

11. “A compound of Formula I or a prodrug thereof.” ♦A prodrug is a derivative or analog of a molecule that must undergo transformation to the active moiety prior to exhibiting the desired pharmacological activity. The complexity of in vivo conversion coupled with distribution and metabolism of the resulting compound renders the prodrug arts highly unpredictable. ♦The prodrug functional element applies to two sites: 01 MAY 2015 11 © 2015 Eli Lilly and Company Functional Elements

12. ♦The functional element “prodrug” encompasses a breathtaking scope. Approximately 40 potential prodrug moieties were listed in the specification 20 different prodrug moieties were specifically exemplified The specification reports data for only 1 prodrug derivative of the parent molecule that demonstrates the requisite properties. ♦What claim scope would meet written description after AbbVie? Claim with functional element “prodrug” would not. –Vast structural space –Highly unpredictable art –Exemplification sparse relative to scope of functional element Claim encompassing exemplified and/or listed species likely would. –Beware enablement challenge! 01 MAY 2015 12 © 2015 Eli Lilly and Company Functional elements

13. ♦“Quasi-functional” elements are used in composition of matter claims. derivative thereof analog thereof ♦These terms expand claim scope into structural space constrained only by a relationship to exemplified compounds and their utility. 01 MAY 2015 13 © 2015 Eli Lilly and Company “Quasi-functional” elements

14. “A conjugate of peptide A or analog thereof.” “Analog” defined to be “a derived protein with substitution, deletion or addition of one or several amino acids in the amino acid sequence defined by SEQ ID NO: 1, while maintaining activities of peptide A.” Only 1 specific example of an analog is provided in the specification and it is shown to possess the requisite activity. ♦What claim scope would meet written description after AbbVie? Claim containing functional element “analog thereof” would not. Claim encompassing peptide A and the exemplified analog would. No written description to anything of intermediate scope. 01 MAY 2015 14 © 2015 Eli Lilly and Company “Quasi-functional” elements

15. “A compound of formula (I): wherein A represents a heteroaryl group which is unsubstituted or mono-, di-, or tri-substituted, wherein the substituents are independently selected from the group consisting of halogen, C 1 -C 4 alkyl, C 3 -C 6 cycloalkyl, and phenyl.” ♦Is it possible for a generic structural term (heteroaryl) to be construed as a quasi-functional element to which AbbVie would apply? 01 MAY 2015 15 © 2015 Eli Lilly and Company “Quasi-functional” elements

16. ♦Taken alone, the term “heteroaryl” is expansive, particularly when multiple substitutions are contemplated. ♦The following definition is commonly used: “The term heteroaryl means a 5- to 10-membered monocyclic or bicyclic aromatic ring containing 1, 2, or 3 heteroatoms independently selected from oxygen, nitrogen, and sulfur.” ♦Used as a claim element, it is effectively expanding claim scope to include a molecule within formula 1 that bears a heteroaryl moiety within the definition that possesses the utility asserted for the genus as a whole. If AbbVie applies to this situation, the level of exemplification and definitions in the specification will need to be significantly expanded to for the written description to support the quasi-functional element “heteroaryl”. 01 MAY 2015 16 © 2015 Eli Lilly and Company “Quasi-functional” elements

17. ♦AbbVie increases the risk of relying on claims where functional elements are central to the theory of patentability for the invention as a whole. The increased risk will impact: Due diligence assessments FTO assessments Risk-sharing expectations in licensing arrangements ♦A mitigation strategy would be to: Avoid or minimize the use of functional elements altogether; Increase the degree of disclosure in the specification related to the functional element: –Add prophetic examples/substituent charts (prior art impact; effect OUS); –Add actual examples (increased costs; additional research required); –Add data demonstrating efficacy across greater structural space; Increase specific basis for variable claim scope for structural element. 01 MAY 2015 17 © 2015 Eli Lilly and Company Recommendations

18. An excellent review on PTAB treatment of functional claiming is: Tom Brody, Functional Elements in Patent Claims as Construed by the Patent Trial and Appeal Board (PTAB), 13 J. MARSHALL REV. INTELL. PROP. L. 251(2014). 01 MAY 2015 18 © 2015 Eli Lilly and Company Thank You!