Amicus Curiae Brief — Barr Laboratories, Inc. v. Burroughs Wellcome Co.

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Nos. 94-1527 and 94-15

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In the Supreme Court of the Anited States

OCTOBER TERM, 1995

BARR LABORATORIES, PETITIONER

wa

BURROUGHS WELLCOME Co.

NOVOPHARM, INC., AND NOVOPHARM, LTD.,

PETITIONERS

Vv.

BURROUGHS WELLCOME Co.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

DREW S. DAYS, III

Solicitor General

FRANK W. HUNGER

Assistant Attorney General

LAWRENCE G. WALLACE

Deputy Solicitor General

JEFFREY P. MINEAR

Assistant to the Solicitor

General

WILLIAM KANTER

ScoTT R. MCINTOSH

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 514-2217

QUESTIONS PRESENTED

The question presented in No. 94-1527 is whether an

inventor must have a reasonable expectation that an

invention will work in order to conceive the invention for

purposes of federal patent law.

The questions presented in No. 94-1531 are:

1. Whether the factual record before the district court

precluded the court from entering judgment as a matter of

law in favor of respondent under Rule 50(a) of the Federal

Rules of Civil Procedure.

2. Whether, after an invention has been conceived by an

inventor, someone who tests the invention with more than

ordinary skill thereby becomes a joint inventor.

(I)

TABLE OF CONTENTS

Page

Statement ........-cccccovccersscsscceccescereessescecerecsnrecenceseneasenceees 1

DisSCuSSiONn .........cscceeseeesccescsssseceeecsesereenessssserenessenensessrenees 9

Conclusion .......cccccsesccecesssscccersesseerenesssccessesedeneneesessenerenss 21

TABLE OF AUTHORITIES

Cases:

Alexander Milburn Co. v. Davis-Bournonville Co.,

270 U.S. 390 (1926) .....cccccceccccceccceeereesseereesereeserseeseees 18

Alpert v. Slatin, 305 F.2d 891 (C.C.P.A. 1962) ..... 13, 14

Applegate v. Scherer, 332 F.2d 571 (C.C.P.A.

1QBA) .occccccvcccccsccsecsesssevevccccccorsrsssssssvoncosonorscooses 11, 12, 14

Application of Tansel, 253 F.2d 241 (C.C.P.A. 1958) .. 6, 7

Biel v. Chessin, 347 F.2d 898 (C.C.P.A. 1965) .......-. 14

Brenner v. Manson, 383 U.S. 519 (1966) ......... 15, 16, 18

Coleman v. Dines, 754 F.2d 353 (Fed. Cir. 1985) ..... 7,18

Eli Lilly & Co. v. Medtronic, Inc., 496 US. 661

(1990) .....ccccccseccescrsccossscsceccereeesrescssenccserensessssecasoneees 5

Field v. Knowles, 182 F.2d 593 (C.C.P.A. 1950) ...... 18

Gunter v. Stream, 573 F.2d 77 (C.C.P.A. 1978) ....... 7

MacMillan v. Moffett, 482 F.2d 1237 (C.C.P.A.

1DTO) coccccceccecccsovesccsveccccccosccverssnsssvegevecsororserscees 12, 13, 14

Mergenthaler v. Scudder, 11 App. D.C. 264 (D.C.

Cir. 1897) .....cccccseccccccccscccssccssccsensersnsrrsanscerersesersssess 6, 10

Metropolitan Stevedore Co. v. Rambo, 115 S. Ct.

2144 (1995) .....ecscccercccecseceesrscessessscesseneesenensasernsasensess 14

Sewall v. Walters, 21 F.3d 411 (Fed. Cir. 1994) ...... 6

Smith v. Bousquet, 111 F.2d 157 (C.C.P.A. 1940) ... 13

The Telephone Cases, 126 U.S. 1 (1888) .......-++-++-++++ 10, 11

United States v. Johnson, 268 U.S. 220 (1925) ........ 20

Wisniewski v. United States, 353 U.S. 901 (1957) ... 14

(III)

IV

Constitution, statutes and rule: Page

US: Cate Bee. 5 Oe 6 io vcssicccstacecatiassvintecceboceusaas 15

Federal Technology Transfer Act of 1986, 15 U.S.C.

3710a (1988 & Supp. V 1998) ...........cccccssresssceseeeeereeee 17

21 U.S.C. 355(j) (1988 & Supp. V 1993)..........ccecceeeeeee 4-5

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SS WSC, BIR) -cikdiadcdckckiciinctichsttedsctseiion ; 5

Vad. Te. CAGE: BO) iceccccccccittitiiatanicn dun 8, 20

Miscellaneous:

AIDS Issues (Part 1): Hearings Before the Sub-

comm. on Health and the Environment of the

House Comm. on Energy and Commerce, 100th

Cong., lat Seas. (1987) .:......cccccorscccccccssccsecnesessoecesees 4

3 D. Chisum, Patents (1994) .............c00ccee00 6, 7, 12, 18, 14

S. Rep. No. 283, 99th Cong., 2d Sess. (1986) ............... 17

Steadman’s Medical Dictionary (25th ed. 1990) ......... 2

1 Walker on Patents (1984) .....cccccccccccccccsccsceccccscoscsees 6

In the Supreme Court of the Anited States

OCTOBER TERM, 1995

No. 94-1527

BARR LABORATORIES, PETITIONER

Vv.

BURROUGHS WELLCOME Co.

No. 94-1531

NOVOPHARM, INC., AND NOVOPHARM, LTD.,

PETITIONERS

Vv.

BURROUGHS WELLCOME Co.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

This brief is filed in response to this Court’s order

inviting the Solicitor General to express the views of the

United States.

STATEMENT

Respondent Burroughs Wellcome Co. (Burroughs) holds

patents for the use of a pharmaceutical compound called

AZT (3’-azido-3’-deoxythymidine) to treat persons in-

fected with the human immuno-deficiency virus (HIV),

which causes a disease commoniy known as acquired im-

mune deficiency syndrome (AIDS). Burroughs brought

suit against petitioner Barr Laboratories, Inc. (Barr) and

(1)

2

petitioners Novopharm, Inc., and Novopharm Ltd. (jointly

Novopharm), alleging that those companies had infringed

Burroughs’ patents. The district court entered judgment

for Burroughs (94-1527 Pet. App. 25a-37a), and the court of

appeals largely affirmed the district court’s decision (id.

at la-23a).

1. In 1984, Burroughs commenced a research program

to identify compounds that might be active against HIV,

which was known to be a member of the Retroviridae or

“retrovirus” family. See Steadman’s Medical Dictionary

1720 (25th ed. 1990). Burroughs focused its research on a

group of compounds known as nucleoside analogs. In

October 1984, Burroughs began by screening the com-

pounds against a class of murine (mouse) retroviruses that

were thought to be analogous to HIV. Burroughs’ testing

revealed that administration of low concentrations of AZT

produced significant activity against those retroviruses.

94-1527 Pet. App. 3a-4a.

At the time that it was carrying out the murine

retrovirus screening program, Burroughs lacked the

technical capability to test the compounds using thé

human retrovirus. However, the National Institutes of

Health (NIH), which is a component of the Department of

Health and Human Services (HHS), had that capability.

Dr. Samuel Broder, a government scientist employed by

the NIH, had developed a technique for testing potential

AIDS drug treatments against clones of HIV-infected

human cells. At Burroughs’ request, Dr. Broder under-

took to screen compounds supplied by Burroughs against

his so-called ATH8 cell line. 94-1527 Pet. App. 4a.

On February 4, 1985, Burroughs supplied Dr. Broder

with a sample of AZT, which Burroughs identified only as

“Compound 8.” Two days later, before Dr. Broder had

tested the compound, Burroughs prepared a draft British

patent application for AZT. The draft patent application

3

described the use of AZT to treat patients infected with

HIV, and it set out various formulations of AZT and

associated dosages for administering the treatment. In

mid-February 1985, shortly after Burroughs had prepared

the draft patent application, one of Dr. Broder’s colleagues

tested “Compound S” on the ATHS8 cell line. He found that

the compound was extremely active against HIV. Dr.

Broder informed Burroughs of the positive test results on

February 20, 1985. 94-1527 Pet. App. 4a.

After receiving those positive results, Burroughs

sought approval from the Food and Drug Administration

(FDA) to market AZT as an AIDS treatment, and it

initiated clinical trials. Burroughs filed British appli-

cations for AZT patents in March 1985, and it filed

American applications for AZT patents in September 1985.

In 1987, Burroughs received FDA approval to market AZT

as an AIDS treatment drug. Burroughs eventually re-

ceived six United States patents for the use of AZT to

treat HIV-infected patients. 94-1527 Pet. App. 5a, 26a, 29a.

2. Under United States patent law, if two or more

persons jointly make an invention, the patent application

must name each of the joint inventors, and if a patent is

issued, each inventor (or his assignee) is entitled to

practice the invention. 35 U.S.C. 116, 262. See also 35

U.S.C. 256 (describing the procedure for adding omitted

inventors and the consequences of a “deceptive” omission).

In this case, Burroughs identified five of its own scientists

as joint inventors in its AZT patent applications, but it did

not name Dr. Broder or any other NIH scientist. See 94-

1527 Pet. 7-8.

At the time that Burroughs filed the patent appli-

cations, and for a considerable period thereafter, the NIH

scientists did not themselves assert a claim of inventor-

ship. See 94-1527 Pet. App. 36a. In 1987, a congressional

subcommittee held hearings that raised questions con-

cerning, among other things, the price that Burroughs

charged for the AZT treatment. See AJDS Issues (Part

1): Hearings Before the Subcomm. on Health and the

Environment of the House Comm. on Energy and Com-

merce, 100th Cong., Ist Sess. 1-52 (1987). Thereafter, the

NIH reexamined the role that its scientists had played in

testing AZT for Burroughs. Based on that review, the

NIH concluded that its scientists had been joint inventors

of the patented inventions and should have been named in

the Burroughs patent applications. See 94-1527 Pet. 8.

In July 1991, the NIH entered into an AZT licensing

agreement with Barr, which manufactures generic drugs.

C.A. App. A5368. The agreement stated that the NIH had

“inchoate intellectual property rights” in the Burroughs

AZT patents. Jd. at A5386 (§§1.02, 2.01). The NIH

granted Barr a nonexclusive license to market AZT in the

United States for any use approved by the FDA. Id. at

A5371, A5384, A5387 (§ 3.01, Apps. B & D). In return, Barr

agreed to pay the NIH royalties equal to a percentage of

Barr’s net sales, as well as certain additional sums. /d. at

A5372-A5373, A5385 (§§ 5.01-5.03 & App. C).

The licensing agreement required Barr to assume

responsibility for legal actions “to establish an inven-

torship/ownership interest on the part of the Government”

in the inventions covered by the Burroughs patents. C.A.

App. A5388 (§ 15.01). The agreement permitted Barr to

count 50% of its “reasonable legal expenses” as a credit

against any future royalty obligations to the NIH. Jd. at

A5385, A5388 (§ 15.01 & App. C). However, the agreement

did not obligate the federal government itself to partici-

pate in the litigation. Jd. at A5388 (§ 15.01).

3. While the NIH and Barr were negotiating the

licensing agreement, Barr took steps that precipitated

this patent dispute with Burroughs. In March 1991, Barr

applied to the FDA under 21 U.S.C. 355(j) (1988 & Supp. V

1993) for approval to manufacture and sell a generic

version of AZT. In June 1992, Novopharm, a generic drug

manufacturer that did not obtain a license from the NIH,

filed a similar application. The filings of those FDA

applications were themselves technical acts of patent

infringement under 35 U.S.C. 271(e)(2). See Eli Lilly &

Co. v. Medtronic, Inc., 496 U.S. 661, 675 (1990).

Burroughs responded by suing Barr and Novopharm for

patent infringement in federal district court. See 94-1527

Pet. App. 5a. Barr and Novopharm defended their actions

on the ground that the NIH scientists were joint

inventors and should have been named in the Burroughs

patent applications. Jbid. Novopharm additionally con-

tended that the omission of the NIH scientists was the

result of “deceptive intent” on the part of Burroughs,

rendering the patents invalid and unenforceable. Jd. at 6a.

See 35 U.S.C. 256. The dispute over joint inventorship

entailed, among other things, a disagreement over when

the inventions were made.

Burroughs contended that its scientists invented the

patented uses of AZT no later than February 6, 1985, the

date that Burroughs prepared its draft British patent

application (see pp. 2-3, supra). In contrast, Barr and

Novopharm contended that the inventive process was not

complete until at least two weeks later, on February 20,

1985, after Dr. Broder and his NIH colleague screened

“Compound S” against the ATH8 cell line and reported the

favorable test results to Burroughs. If the inventions

were made before the NIH scientists screened “Compound

S,” as Burroughs contended, then the NIH scientists by

definition could not be joint inventors. Conversely, if the

inventions were not made until after the NIH screening

took place, then the role of the NIH scientists might

qualify them for joint inventorship. See 94-1527 Pet. App.

7a.

The dispute over when the inventions were made rests

on an underlying disagreement over the governing test for

“invention” under federal patent law. See 35 U.S.C. 100(a).

Generally speaking, the act of invention involves two com-

ponents, conception and reduction to practice. See 35

U.S.C. 102(g). Conception is the inventor’s mental

formulation of a complete idea for the product or process.

Sewall v. Walters, 21 F.3d 411, 415 (Fed. Cir. 1994); 3 D.

Chisum, Patents § 10.04, at 10-48 (1994). Reduction to

practice is the process of putting the idea into effect,

either by building and testing the invention (“actual”

reduction to practice) or by filing an enabling patent

application (“constructive” reduction to practice). 3 D.

Chisum, supra, §§ 10.05-10.06. See also 1 Walker on

Patents §§ 3.11-3.12 (1984).

In this case, the dispute focused on the element of

conception. Although the federal patent statutes refer to

conception (see 35 U.S.C. 102(g)), Congress has left the

task of defining conception to the courts. The courts have

relied on the judicial definition set out in Mergenthaler.v.

Scudder, 11 App. D.C. 264 (D.C. Cir. 1897), which states as

follows:

The conception of the invention consists in the

complete performance of the mental part of the

inventive act. All that remains to be accomplished in

order to perfect the act or instrument, belongs to the

department of construction, not invention. It is there-

fore the formation, in the mind of the inventor, of a

definite and permanent idea of the complete and

operative invention, as it is thereafter to be applied

in practice, that constitutes an available conception,

within the meaning of the patent law.

11 App. D.C. at 276. See, e.g., Application of Tansel, 253

F.2d 241, 243 (C.C.P.A. 1958) (“The Mergenthaler decision

has been repeatedly cited and approved by this court.”);

Gunter v. Stream, 573 F.2d 77, 80 (C.C.P.A. 1978)

(following Mergenthaler); Coleman v. Dines, 754 F.2d 353,

359 (Fed. Cir. 1985) (same).

Under the Mergenthaler standard, conception is deemed

complete when the inventor can describe the invention

with sufficient clarity and precision to make an “enabling”

disclosure—that is, “a disclosure which would enable a

person of ordinary skill in the art” to practice the

invention. Tansel, 253 F.2d at 243; see also Coleman, 754

F.2d at 359; 3 D. Chisum, supra, § 10.04[3], at 10-160. In

this case, Burroughs contended that the draft British

patent application was just such an enabling disclosure

and that the preparation of the draft application on

February 6, 1985, demonstrated that the Burroughs scien-

tists had conceived the inventions by that date. 94-1527

Pet. App. 7a.

Barr and Novopharm evidently did not dispute that the

draft patent application was enabling. See 94-1527 Pet.

App. 18a, 29a. However, they contended that in “uncer-

tain” or “experimental” fields, such as biology and

pharmacology, conception is not complete until the

inventor has a “reasonable expectation” that the invention

will work. Under that proposed standard, even if a person

has formed an otherwise definite and permanent idea of the

invention and has made an enabling disclosure, he cannot

be deemed to conceive the invention until he obtains

experimental data or other information that would make it

reasonable for him to expect the invention to work. In this

case, Barr and Novopharm contended that the results of

the murine retrovirus screening (see p. 2, supra) did not

provide a reasonable expectation that AZT would be active

against HIV in human cells and that the Burroughs scien-

tists did not have a reasonable expectation until Dr.

8

Broder informed them of the results of the ATH8 cell line

screening. See 95-1527 Pet. 9. ;

4. In June 1993, the district court commenced a jury

trial of the parties’ patent infringement and joint inventor-

ship claims. During that trial, Barr and Novopharm

sought to introduce evidence bearing on their “reasonable

expectation” theory of conception. The district court dis-

allowed the evidence on the ground that, as a matter of

patent law, conception does not require the inventor to

have a reasonable expectation that the invention will work.

After allowing Barr and Novopharm to submit offers of

proof on the reasonable expectation issue, the district

court entered judgment for Burroughs as a matter of law

pursuant to Rule 50(a) of the Federal Rules of Civil

Procedure. See 94-1527 Pet. App. 25a-37a.

The Federal Circuit affirmed the judgment with respect

to five of the six patents and remanded (for reasons that

are not relevant here) with respect to the remaining

patent. See 94-1527 Pet. App. la-19a. The court of appeals

agreed with the district court that the legal test for

conception does not include a “reasonable expectation”

requirement. Jd. at 9a-16a. The court held that, as long as

the inventor “had an idea that was definite and permanent

enough that one skilled in the art could understand the

invention,” his “belief that his invention will work or his

reasons for choosing a particular approach are irrelevant

to conception.” Jd. at 9a, 10a. |

The Federal Circuit concluded ‘hat Burroughs’ pre-

paration of the enabling draft British patent application

demonstrated that the Burroughs scientists “had formu-

lated a definite and permanent idea of the inventions”

before the NIH scientists confirmed that AZT was active

against HIV. Hence, the NIH scientists could not be joint

inventors. 94-1527 Pet. App. 13a-l4a, 15a. The court

agreed with Barr and Novopharm that the NIH scientists

9

had been more than “a pair of hands” in carrying out the

ATHB8 screening, but reasoned that the screening merely

“confirmed the operability of the inventions” and was

“part of the reduction to practice” rather than part of the

conception. Jd. at 14a-15a.

DISCUSSION

The legal questions presented in this patent case arise

in a dispute involving AZT, which is currently the most

widely used medicine for the treatment of AIDS. The

outcome of this dispute may affect the price, and

consequently the availability, of AZT to AIDS patients.

The AIDS epidemic is one of this country’s most pressing

health problems, and the United States has a strong public

health interest in facilitating the availability of AZT to

AIDS patients at an affordable price. Nevertheless, the

resolution of this case must ultimately turn on the proper

construction of federal patent law, which embodies long-

standing principles governing inventorship. Indeed, the

incentives of the patent system, including the opportuni-

ties that system provides for the recoupment of expensive

research costs, help to provide hope that more effective

means than AZT for treating or preventing AIDS will be

forthcoming.

1. The primary issue here is whether an inventor must

have a reasonable expectation that an invention will work

in order to conceive the invention within the meaning

of patent law. In our view, the Federal Circuit’s decision

is correct. The court’s rejection of the “reasonable

expectation” standard rests on a sound interpretation of

the controlling judicial precedents and does not conflict

with any decision of this Court or any other court. The

Federal Circuit's decision is also consistent with under-

lying principles of patent policy. Contrary to Barr’s

suggestions, it is not likely to impede the development of

10

future medical treatments for AIDS and other diseases.

Accordingly, we do not believe that further review by this

Court is warranted.

a. The Federal Circuit did not write its decision on a

blank slate. This Court recognized the basic require-

ments of conception in The Telephone Cases, 126 U.S. 1

(1888), which upheld Alexander Graham Bell’s right to a

patent for the telephone. The Court ruled that Bell had

established his conception of the invention when he applied

for a patent, even though at that time “he had never

actually transmitted telegraphically spoken words so that

they could be distinctly heard and understood at the

receiving end of his line.” Jd. at 535. The Court rejected

the argument that “Bell had not in fact completed his

discovery” (ibid.), explaining as follows:

The law does not require that a discoverer or

inventor, in order to get a patent for a process, must

have succeeded in bringing his art to the highest

degree of perfection. It is enough if he describes his

method with sufficient clearness and precision to

enable those skilled in the matter to understand what

the process is, and if he points out some practical way

of putting it into operation. This Bell did.

Id. at 536. The District of Columbia Circuit refined that

principle in Mergenthaler, and for nearly a century, the

Federal Circuit and its predecessor, the Court of Customs

and Patent Appeals (CCPA), have followed the definition of

conception set forth therein. See pp. 6-7, supra. That

definition does not ask whether the inventor knows, or has

reason to believe, that his invention works. Instead, it

simply asks whether the inventor has developed “a definite

and permanent idea of the complete and operative

invention, as it is thereafter to be applied in practice.”

Mergenthaler, 11 App. D.C. at 276 (emphasis omitted).

ONL

11

Under the Mergenthaler standard, the test of con-

ception is whether the inventor “is able to make a

disclosure which would enable a person of ordinary skill in

the art to practice the disclosure without extensive

research or experimentation.” Applegate v. Scherer, 332

F.2d 571, 572 (C.C.P.A. 1964). According to the Federal

Circuit, Barr and Novopharm conceded that Burroughs’

draft British patent application “would teach one skilled in

the art to practice the inventions.” 94-1527 Pet. App. 13a;

see id. at 29a. Consequently, Burroughs had satisfied the

prevailing test for conception by February 6, 1985, before

the NIH scientists screened “Compound S” against the

ATHS cell line.

Contrary to Barr’s suggestions (94-1527 Pet. 16-17),

neither the Federal Circuit nor the CCPA has ever held

that conception is incomplete until the inventor demon-

strates a “reasonable expectation” that the invention will

work. Indeed, the CCPA specifically rejected proposed

tests of conception that would have looked to the inven-

tor’s knowledge, or lack of knowledge, about the efficacy of

his invention. The CCPA’s decision in Applegate is

illustrative. In that case, a federal agency was conducting

a screening program to find compounds that could control

sea lampreys. A chemical company contacted the agency

to suggest that one of its compounds might be effective.

The company sent a sample to the agency, which tested it

and found that it was effective. The company and the

agency then filed rival patent applications, with each party

claiming sole inventorship. See 332 F.2d at 571-572.

The agency argued that the company did not conceive

the invention because, at the time that it sent the sample

for testing, it did not know whether the compound would

work. The CCPA squarely rejected that argument in

terms similar to those used by this Court in The Tele-

phone Cases, supra. The CCPA stated:

12

[The agency] seem[s] to propose that there cannot

be a conception of an invention of the type here

involved in the absence of knowledge that the

invention will work. Such knowledge, necessarily, can

rest only on an actual reduction to practice. To adopt

this proposition would mean, as a practical matter,

that one could never communicate an invention

thought up by him to another who is to try it out, for,

when the tester succeeds, the one who does no more

than exercise ordinary skill would be rewarded and the

innovator would not be. Such cannot be the law. A

contrary intent is implicit in the statutes and in a

multitude of precedents.

332 F.2d at 573-574.

The CCPA’s decision in MacMillan v. Moffett, 432 F.2d

1237 (C.C.P.A. 1970), makes the same point. In MacMillan,

one company selected antiperspirant compounds for test-

ing by another company. Moffett, a scientist employed by

the first company, selected 69 compounds for screening,

and the second company’s scientists found that one of

those compounds was highly effective. The CCPA held

that Moffett was the sole inventor, even though he had “no

knowledge that [the effective compound] would have new

and unexpected properties over the prior art and over the

other 68 compounds he selected.” Jd. at 1239. The court

held that Moffett’s “reasons or lack of reasons for includ-

ing [the compound] are not relevant to the question of

conception. The important thing is that he did think in

definite terms of the method claimed.” Jbid.; see 3 D.

Chisum, supra, § 10.04[4], at 10-68 to 10-69."

1 Strictly speaking, precedents such as Applegate and MacMillan

hold only that an inventor does not need to know that his invention

works. They do not hold that the inventor does not need a “reasonable

expectation” that the invention works. Their reasoning, however, is at

13

In the lower court proceedings, Barr attempted to

support its “reasonable expectation” test by reference to

cases in which an invention was simultaneously conceived

and reduced to practice. See Smith v. Bousquet, 111 F.2d

157 (C.C.P.A. 1940); Alpert v. Slatin, 305 F.2d 891, 894

(C.C.P.A. 1962); see generally 3 D. Chisum, supra,

§ 10.04[5]. According to Barr, those cases demonstrate

that conception in speculative fields cannot occur until the

inventor acquires a reasonable basis (through experi-

mentation or otherwise) for believing that his invention

will work. See 94-1527 Pet. App. 10a. The Federal Circuit

carefully reviewed the “simultaneous conception and

reduction to practice” cases and concluded that they do not

involve an exception to the Mergenthaler test, nor do they

require proof of “reasonable expectation” as an element of

conception in speculative fields of research. See 94-1527

Pet. App. 10a-12a.

As the Federal Circuit explained, the CCPA’s opinions

in Smith and Alpert deal with an evidentiary problem

under the Mergenthaler test—the difficulty of deter-

mining when an inventor who is proceeding by “trial and

error” (Alpert, 305 F.2d at 894) has formed a definite and

fixed idea of the ultimate invention. See 94-1527 Pet. App.

10a-lla. In that situation, “the reduction to practice can

be the most definitive corroboration of conception, for

where the idea is in constant flux, it is not definite and

permanent.” Jd. at lla. In this case, by contrast, the

enabling draft British patent application supplied the

necessary evidence that Burroughs had arrived at a

“definite and permanent” idea of the patented methods of

odds with a “reasonable expectation” test, for that test rests squarely

on the premise that conception is complete as soon as the inventor

“think[s] in definite terms of the method claimed.” MacMillan, 4382

F.2d at 1239.

14

using AZT to treat AIDS. Hence the evidentiary problem

involved in cases such as Smith was not presented. Id. at

16a. See 3 D. Chisum, supra, § 10.04[5], at 10-75.”

Barr also relied below on a statement in Biel v. Chessin,

347 F.2d 898 (C.C.P.A. 1965), that when someone invents “a

method of treating the human body” with a compound,

conception requires “some * * * reasonable under-

standing or appreciation of the fact that the compound

would work.” Jd. at 902-908. The Federal Circuit noted,

however, that the quoted language in Biel was dictum that

had not been treated as controlling in subsequent cases.

94-1527 Pet. App. 10a n.7. That court, which is the CCPA’s

successor, acted appropriately in declining to give force to

that prior dictum. See Metropolitan Stevedore Co. v.

Rambo, 1158. Ct. 2144, 2149 (1995).

The Federal Circuit’s reading of the “simultaneous

conception and reduction to practice” cases is consistent

with longstanding patent law principles, and its rejection

of Biel’s never-applied dictum is sound. Prior to the

Federal Circuit’s ruling in this case, its case law may

have created a legitimate question concerning the govern-

ing test for conception in “speculative fields,” but the

court has now dispelled whatever uncertainty existed

among its own precedents and has obviated the need for

further review. See Wisniewski v. United States, 353

U.S. 901, 902 (1957) (per curiam) (“It is primarily the task

2 The CCPA itself recognized that the concept of “simultaneous

conception and reduction to practice” is “rarely applied.” Alpert, 305

F.2d at 894. It confined that principle to priority disputes involving

independent inventors, and it declined to invoke the principle in

originality disputes involving collaborative research efforts. See

Applegate, 332 F.2d at 573; MacMillan, 432 F.2d at 1240 (“Applegate

* * * made it abundantly clear that such a doctrine does not apply in

cases where the issue is originality or derivation.”); 3 D. Chisum,

supra, § 10.04[5], at 10-72.

15

of a Court of Appeals to reconcile its internal diffi-

culties.”).

b. The Federal Circuit correctly recognized that

Barr’s proposed “reasonable expectation” standard is not

an established element of existing patent jurisprudence.

Barr disagrees with that conclusion, but its principal

arguments in this Court rest on policy considerations

relating to “patent monopolies.” See 94-1527 Pet. 13-14.

Barr’s policy arguments are not persuasive.

Barr argues that its “reasonable expectation” standard

would increase the incidence of joint inventorship and

thereby reduce the occurrence of “patent monopolization.”

See 94-1527 Pet. 16. Barr suggests that when a single

inventor or firm holds a patent, it encourages an

undesirable “patent monopoly” in which the patentholder

is free to charge whatever the market will bear, without

having to face competition from other firms selling the

same invention. Barr theorizes that when two or more

inventors hold a patent, greater competition and lower

prices will result, because each inventor has an

independent right under 35 U.S.C. 261-262 to market the

invention. 94-1527 Pet. 16.

Barr’s “patent monopolization” argument has several

shortcomings. First, it is in significant tension with the

fundamental policies of the patent laws. See U.S. Const.,

Art. I, § 8, Cl. 8 (“i'o promote the Progress of Science and

useful Arts.”). Congress has crafted a patent system that

provides a right to exclude, which amounts to a limited

legal monopoly as an incentive for the development of

socially useful inventions. Brenner v. Manson, 383 U.S.

519, 584 (1966). Congress has determined the confines of

that right, imposing prerequisites (such as utility,

novelty, and non-obviousness, 35 U.S.C. 101-103) and re-

strictions (such as durational limitations, 35 U.S.C. 154).

But Barr has pointed to nothing in the patent laws

16

expressing Congress’s intent to promote joint

inventorship as a means of limiting that right. At bottom,

Barr’s argument is an invitation to this Court to assume a

legislative role. Barr asks this Court to modify the

longstanding test for conception to alter the balance that

Congress has struck to spur socially beneficial inventive

efforts.*

Second, Barr’s surmise that a “reasonable expectaticn’

standard would encourage joint inventorship is open to

serious question. Barr’s argument assumes that a firm

that does not yet have a “reasonable expectation” about its

invention’s efficacy will nonetheless turn the invention

over to another firm for testing without first taking steps

to protect itself against the potential loss of exclusive

patent rights. That assumption is highly dubious. The

first firm can generally ask the second firm to yield by

contract whatever patent rights the second firm might

otherwise acquire through the testing process. If the

second firm is unwilling to conduct the testing under

those terms, the first firm may be able to find someone

else who is willing and able to perform the tests on the

same terms. Alternatively, the first firm may be able to

develop the necessary testing capabilities “in house,” and

presumably will do so if the potential economic payout

from the invention makes it worthwhile.

Third, even when a “reasonable expectation” require-

ment would lead to jointly held patent rights in a particu-

’

8 The judicial resolution of patent disputes may affect the

economic power of market participants, and courts may take into

account the “basic quid pro quo contemplated by the Constitution and

the Congress for granting a patent monopoly” when they decide patent

law issues. Brenner, 383 U.S. at 534. But the courts evaluate that

factor based on congressional intent and not merely on the basis of

sentiments regarding the desirability of the durationally limited rights

authorized by the patent law. See, e.g., id. at 529, 532-535.

17

lar case, there is little reason to think that the result will

be greater competition and lower prices for the patented

invention. Joint inventors ordinarily will have a common

interest in maximizing any profits made possible by the

patent. As a result, joint inventors will have a strong

mutual incentive not to engage in price competition.‘

In addition to the patent “monopolization” argument,

Barr suggests that the Federal Circuit’s decision is un-

sound because it grants patent rights too freely, or at

least prematurely, to companies that rely on unsupported

speculation rather than research. Barr raises the specter

that a firm can “become an inventor by claiming that any

number of identified compounds will cure any number of

identified diseases” (94-1527 Pet. 15), without believing (or

having any basis for believing) that the compounds

4 In this case, a federal agency performed the testing at issue.

Barr perhaps believes that its “reasonable expectation” standard would

broaden the government’s joint inventorship rights when it tests

products and thereby reduce the prospect of monopoly pricing in those

fields where the government conducts research. Such a belief, however,

would be very speculative. It is true that government does not share

the profit-maximization objectives of a private firm; indeed, federal

agencies are prohibited from granting exclusive licenses that would

substantially lessen competition or result in undue concentration of

economic power. See 35 U.S.C. 20%c)(2). But to the extent that Barr’s

“reasonable expectation” test would tend to make the government a

joint inventor, the government’s unwillingness to take part in

monopoly pricing would correspondingly increase the incentive for

private firms to avoid the joint inventorship “problem” in the first

place. The firm might do so either by using non-government testing

resources or by entering into pre-testing contractual-arrangements that

limit the government’s patent rights. See Federal Technology Transfer

Act of 1986, 15 U.S.C. 3710a (1988 & Supp. V 1993) (authorizing federal

laboratories to enter into “cooperative research and development

agreements” with private companies and other “collaborating parties”

that determine patent and licensing issues at the outset of government

involvement); see also S. Rep. No. 283, 99th Cong., 2d Sess. 11 (1986).

18

actually cure the diseases. Barr implies that firms will be

able to acquire new patent rights simply by drawing up

lists of compounds and diseases. Jd. at 18-19.

That scenario is not, in our view, a realistic one. First,

even under the Mergenthaler standard, conception is not

deemed to be complete until the invention has been

embodied in an enabling disclosure. See 94-1527 Pet. App.

8a-9a, 18a; Coleman, 754 F.2d at 359 (“Conception must be

proved by corroborating evidence which shows that the

inventor disclosed to others his ‘completed thought ex-

pressed in such clear terms as to enable those skilled in

the art’ to make the invention.”) (quoting Field v.

Knowles, 183 F.2d 593, 601 (C.C.P.A. 1950)). Second, mere-

ly conceiving an invention, without more, does not confer

any patent rights whatsoever. The inventor must reduce

the invention to practice, either actually or constructively

(see p. 6, supra), and must do so promptly or risk losing

whatever patent rights he might otherwise be entitled to.

See 35 U.S.C. 102(g); accord Alexander Milburn Co. v.

Davis-Bournonville Co., 270 U.S. 390, 400 (1926). Even

after conception and reduction to practice are complete,

moreover, the inventor must be able to show that his in-

vention satisfies the patent law’s substantive require-

ments for patentability, such as novelty, utility, and non-

obviousness. See 35 U.S.C. 101-103; accord Brenner, 383

U.S. at 528-536. The traditional test for conception

employed by the Federal Circuit in this case does not

eliminate those additional legal requirements for

obtaining patents, and there is accordingly no reason for

companies to respond to this decision, as Barr predicts (94-

1527 Pet. Reply Br. 1-2), by spending their time fruitlessly

drawing up arbitrary lists of compounds and diseases and

putting them into draft patent applications.

On the other side of the coin, adoption of a “reasonable

expectation” test would impose a potentially significant

19

burden on the patent process by complicating the task of

proving conception. Under current law, the Patent and

Trademark Office and the courts resolve conception

disputes by requiring the inventor to present evidence

that he had a definite and permanent idea comprising the

invention. The inventor can be expected to create

documentary evidence on that matter, such as Burroughs’

draft patent application or an inventor’s work diary, in the

ordinary course of developing the invention. There is no

reason to believe, however, that inventors routinely

develop documentary evidence of their expectations con-

cerning their inventions’ effectiveness. As a result, if the

approach urged by Barr were to be adopted, the parties and

courts would be faced with the task of retrospectively

constructing and evaluating a record of the inventor's

subjective knowledge and beliefs. That task would

encumber administrative proceedings and patent litigation

with additional and, in our view, unnecessary uncertainty

and expense.

In sum, we see no significant basis for believing that

adoption of a “reasonable expectation” test would be

desirable as a matter of patent policy. The test would be

an administrative encumbrance but would not appear

likely to change either the incentives for collaborative

development of inventions or the allocation of patent

rights among collaborators. There is no reason to believe

that the substantial public interest in encouraging

development of beneficial products, such as new medicines,

would be furthered if the test were to become law.

2. Novopharm’s petition (No. 94-1531) presents two

additional objections to the decision below. Neither of

them warrants review by this Court.

First, Novopharm argues that there was “sufficient

evidence in the record” (94-1531 Pet. 8) to foreclose the

district court from entering judgment as a matter of law

20

under Federal Rule of Civil Procedure Rule 50(a). Novo-

pharm does not contest the legal standard for conception

employed by the court of appeals, but argues only that “the

totality of the evidence” (94-1531 Pet. 12) created an issue

of fact for the jury to decide under that standard. Jd. at 8.

The question whether Novopharm’s offer of proof (94-1531

Pet. App. 46a-58a) was sufficient to create a jury question

under the Federal Circuit’s legal standard is a factbound

matter that does not warrant further review. See, e¢.g.,

United States v. Johnston, 268 U.S. 220, 227 (1925) (“We do

not grant a certiorari to review evidence and discuss

specific facts.”).

Second, Novopharm argues (94-1531 Pet. 13-14) that

once the court of appeals determined that the NIH

scientists acted as more than a mere “pair of hands” in

screening “Compound S” (94-1531 Pet. App. 18a), the court

should have deemed the NIH scientists to be joint

inventors as a matter of law. That argument rests on a

non sequitur. The degree of skill and expertise employed

by the NIH scientists might have been relevant to the

issue of joint inventorship if the Burroughs scientists had

not already conceived the patented inventions when the

NIH scientists performed their tests. But once it is

recognized that under the findings in this case conception

was complete by February 6, 1985, it follows that the skill

employed by the NIH scientists thereafter is irrelevant.

21

CONCLUSION

For the foregoing reasons, the petitions for a writ of

certiorari should be denied.

Respectfully submitted.

DREw S. DAYS, III

Solicitor General

FRANK W. HUNGER

Assistant Attorney General

LAWRENCE G. WALLACE

Deputy Solicitor General

JEFFREY P. MINEAR

Assistant to the Solicitor

General

WILLIAM KANTER

SCOTT R. MCINTOSH

Attorneys

DECEMBER 1995