Proving Utility, Demonstrating Value: How to Align the Moving Parts in Personalized Medicine Reimbursement

Of the many business, operational, legal, regulatory and clinical obstacles standing in the way of widespread delivery of personalized medicine, the single greatest challenge may lie in solving the reimbursement puzzle. Advocates of personalized medicine contend that it results in better care for the patient, as therapy is targeted specific to an individual, and that it should result in cost savings as treatment that is unlikely to work for that patient is avoided.

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Forget Bigger Data – Personalized Medicine Needs Smarter Data to Reach its Full Potential

The advent of big data has helped enable the growth of personalized medicine. But if machine learning and analytics are to truly help transform health care, it won’t be through bigger data, but through harmonized, smarter data.

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Seven Key Questions in Understanding the Current Regulatory State of HCT/Ps

Despite regulations, litigation, and significant draft guidance, the future of regulation of HCT/Ps remains up in the air.  Learn what you need to know quickly with these seven questions and answers.

What do I Need to Know?

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HHS and Medicare Asked to Expand Coverage for Genetic Tests

Fifteen members of Congress have asked the Department of Health and Human Services (HHS) and the Medicare Payment Advisory Commission (Medicare) to examine how the federal government can help improve patient access to genetic testing. In a March 7, 2017 letter to Secretary Price of HHS and Dr. Crosson, Chairman of Medicare, the congressmen seek a resolution to an important issue challenging precision medicine – who will pay for genetic tests that are necessary to develop and deliver personalized health care? Continue reading this entry

One is Not Enough – Infringement Liability under § 271(f)(1)

In Life Technologies Corp. v. Promega Corp., Slip Op. 14-1538 (Feb. 22, 2017), the U.S. Supreme Court held that the supply of a single component of a multicomponent invention for manufacture abroad does not give rise to liability under 35 U.S.C. § 271(f)(1). The Court’s decision is important for manufacturers of kit components and those that license and aggregate those components into a single commercial kit.

The Licensed Technology

Respondent Promega Corp. (Promega) was the exclusive licensee of U.S. Re. No. 37,984 titled “Process for analyzing length polymorphisms in DNA regions” and referred to by the Court as the “Tautz patent.” The reissued patent covers kits and methods, one element of which is the Taq polymerase enzyme. For the purpose of the litigation, the parties agreed “that the kit covered by the Tautz patent contains five components: (1) a mixture of primers that mark the part of the DNA strand to be copied; (2) nucleotides for forming replicated strands of DNA; (3) an enzyme known as Taq polymerase; (4) a buffer solution for the amplification; and (5) control DNA.” Slip op. at page 2.

Petitioner Life Technologies Corp. (Life Technologies) manufactured genetic tests. The Tautz patent was licensed for the manufacture and sale of kits for use in certain licensed fields worldwide. All but one component – the Taq polymerase  – was manufactured by Life Technologies in the United Kingdom, where Promega combined the Taq polymerase with the remaining four components into a kit.

At one point, Promega sued Life Technologies asserting that Life Technologies infringed the patent by selling the kits to clinical and research markets outside the licensed fields of use. Promega alleged that Life Technologies’ supply of the Taq polymerase from the United States to its United Kingdom facility triggered liability under § 271(f)(1). Slip op. at page 3.

Infringement Liability

The relevant portions of the statute considered by the Court are reproduced below:

 35 U.S.C. § 271    Infringement of Patent

“(f) (1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.”

Emphasis added.

The Court’s Analysis

The U.S. Supreme Court framed the key issue for consideration as “whether the supply of a single component of a multicomponent invention is an infringing act under 35 U.S.C. § 271(f)(1).” Slip op. at page 4.

The Court focused its analysis on the Section 271(f)(1) language “substantial portion” and whether “substantial” infers a quantitative or qualitative amount. Relying on dictionary definitions, the Federal Circuit had previously determined that “substantial” as used in the statute infers “important” or “essential” and therefore, a single component can be a substantial portion of the patented invention. Slip op. at page 4. Because the evidence at trial showed that the polymerase component of the kit was a main or major component of the kit, the Federal Circuit held that Life Technologies infringed the patent.

The Supreme Court disagreed, and reversed the Federal Circuit. The Court noted that the context in which the term appears in the statute “points to a quantitative meaning….” Slip op. at 5. Having determined that the term “substantial portion” referred to a quantitative measurement, the Court then asked whether, as a matter of law, a single component can ever constitute a “substantial portion” to trigger infringement liability under § 271(f)(1).

The Court again turned to the language of the statute, focusing on the term “components” in the plural, noting that the text “specifying a substantial portion of ‘components,’ plural, indicates that multiple components constitute the substantial portion.” Slip op. at 8. The Court stated that this interpretation allowed for consistent interpretation of sections (f)(1) and (f)(2); (f)(2) applying to situations where a single especially made or adapted for use in a patented invention results in infringement liability.

One of Five is Not Enough

The Court’s decision was clear that a quantitative analysis is warranted by § 271(f)(1) and that a single component of a patented invention is insufficient for infringement liability. The Court was equally clear that the case holdings are applicable only to the similar facts situations:

“We do not define how close to ‘all’ of the components ‘a substantial portion’ must be. We hold only that one component doe not constitute ‘all or a substantial portion’ of a multicomponent invention under 35 U.S.C § 271(f)(1). This is all that is required to resolve the question presented.”

Slip op. at page 10.

Thus, while the Court resolved the ambiguous language of § 271(f)(1), the Court’s holding left many questions open. While more than one component must be supplied to draw § 271(f)(1) liability, would 3 of 5 constitute a “substantial” portion? Would 2 of 4 constitute a “substantial” portion?

The Court’s holding also discredits what is appreciated by patentees and those of skill in the art, i.e., that certain components of multicomponent kits are essential to achieve the object of the invention and that there are no suitable substitutions for that element, even if the one component is not specifically made or adapted for use in the invention.