Month: June 2018

Categories
Legislation Patent Law Uncategorized

Rep. Massie Introduces New Legislation to Restore America’s Patent System

dictionary entry for the word "legislation"Yesterday, Representative Thomas Massie introduced the Restoring America’s Leadership in Innovation Act of 2018 (H.R. 6264). This legislation would reverse many of the harms that have been caused by recent changes to the patent laws from all three branches of government. Patents are an important part of our innovation economy, providing an incentive for inventors to invent and protecting those creations for commercialization and investment.

Unfortunately, the past decade has witnessed the gradual weakening of our patent system. The America Invents Act (AIA) created new post-issuance methods for reviewing patent validity on top of the review that already occurred in federal courts. The Supreme Court has handed down case after case weakening patents and excluding broad swaths of innovation from the patent system entirely. The USPTO, through the Patent Trial and Appeal Board (PTAB), has been systematically invalidating worthwhile patents based on flawed procedures that are easily abused. Together, these changes have done substantial damage to our innovation economy.,

This new bill will reverse many of these recent changes. Although some of the proposals are new, most are merely the codification of what had long been the law for the patent system. The following provides a breakdown of the most important sections of this legislation:

    • Section 3 (the first substantive section), returns the United States to a first to invent patent system. As noted by CPIP Founder Adam Mossoff, giving patents to the first inventor rewards the intellectual labor that results in the invention. This conception of patents as private property rights protecting the innovator’s creation is arguably required by the Patent Clause of the Constitution, and thus, this Act will bring patent laws back within constitutional limits. Conversely, a first to file system merely rewards those who can win a race to the Patent Office.
    • Section 4 abolishes Inter Partes Review (IPR) and Post-Grant Review (PGR). In addition to covered business method review, which was created with a sunset provision, these procedures allow the Patent Office to cancel at patent it has previously issued. Numerous scholars have identified the substantial harms caused by the PTAB. The problems have been so extensive that other legislation focused on trying to fix these procedures has been introduced. This bill goes the necessary next step. Because these procedures fundamentally undermine the status of patents as private property, the bill eliminates IPR and PGR entirely.
    • Section 5 abolishes the PTAB. The PTAB is a terrible example of regulatory overreach. In light of the elimination of IPR and PGR and the return to a first to file system, the creation of the PTAB by the AIA to administer these systems serves no purpose. The legislation instead recreates the Board of Patent Appeals and Interferences, which existed prior to the AIA and handled the administrative appeals and trials that occurred under the prior system. This change also overrules the holding of Oil States v. Greene’s Energy and accomplishes legislatively the outcome of a CPIP led amicus brief in that case.
    • Section 6 eliminates fee diversion and provides for full funding of the USPTO. Innovators and the public alike count on the USPTO to perform timely, quality examinations of patent applications in the first instance. Ensuring that adequate resources are available for this purpose is essential, particularly given that applicants pay fees to the USPTO for precisely this purpose.
    • Section 8 is mainly technical to assure that the restored § 102 retains the one-year grace period and that certain disclosures by the inventor do not become prior art.
    • Section 9 reestablishes the previously long-held status of patents as a property right. The Constitution secures a patent as a property right and many scholars have noted the important implications of treating patents as property. This section not only states that a patent is a property right, but confirms that a patent may only be revoked in a judicial proceeding, which has substantial benefits, unless the patent owner consents to another procedure. This reverses the broad reasoning in Oil States. The parts of this section returning to patent owners the right to control their property also largely overturn Impression Products v. Lexmark International, now allowing patent owners to exclude unlicensed users from their supply chains.
    • Section 10 ends the automatic publication of patent applications. This change will allow applicants to keep their inventions secret until they have the security that comes with an issued patent.
    • Section 11 codifies the details of the presumption of validity and available defenses to patent infringement. For the first time, this will enshrine in statute that the “clear and convincing standard” must be used to invalidate a patent. Additionally, this section provides for tolling of the patent term during litigation challenging the patent’s validity.
    • Section 12 confirms that injunctions are available to protect the patent property. Although not explicit, the new statutory presumption that infringement of patent causes irreparable harm largely abrogates the Supreme Court’s decision in eBay, which dramatically limited the availability of injunctions. Furthermore, having this rule placed into the statute will limit the inter-court variability that has led to inconsistent outcomes.
    • Section 13 restores the possibility of invalidating a patent for failure to comply with the best mode requirement.
Categories
Patent Law

The Value of Public Data: Update to “Turning Gold to Lead”

files labeled as "patents"By Kevin Madigan & Adam Mossoff

A key value in the empirical work done in the social sciences and in the STEM fields is that data is made public and available for review, testing, and confirmation. Humans are neither infallible nor omniscient, and thus this standard practice in empirical research has evolved as a way to ensure that mistakes are identified and corrected. All scholars should ensure that their data is accessible, their analysis is understandable, and the means by which they draw their conclusions in both content and method is independently verifiable. As scholars, we embrace these principles.

Thanks to our making the data publicly available, we recently discovered that we made a mistake in listing a patent application number in an essay we published on a dataset of patent applications. In Turning Gold to Lead: How Patent Eligibility Doctrine Is Undermining U.S. Leadership in Innovation, George Mason Law Review, vol. 24 (2017), pp. 939-960, we reported on a dataset compiled by David Kappos and Bob Sachs of 17,743 patent applications “that received a § 101 rejection in initial or final office actions and then were abandoned between August 1, 2014 and September 27, 2017” (p. 941, footnote 10). The Kappos-Sachs dataset, as we detail in our article, identifies 1,694 patent applications among these 17,743 applications that received initial or final rejections and were ultimately abandoned in the United States, but patents were granted on the same inventions by the European Patent Office, China, or both.

We used the Kappos-Sachs dataset in our essay to highlight a “disturbing trend” in the U.S. patent system today in comparison to other countries. Our essay does not draw statistical inferences about this dataset, but rather reports on it and contextualizes it within the changes in patent eligibility jurisprudence recently wrought by the U.S. Supreme Court. We compare the more restrictive approach in patent eligibility doctrine in the U.S. today with historically a more open and accessible patent system for cutting-edge innovation in the U.S. The earlier approach led commentators to refer to the U.S. patent system as the “gold standard” compared to the rest of the world. Thus the title of our essay, “Turning Gold to Lead.”

In our essay, we listed twelve patent applications that exemplified this new disturbing trend of the closing of the U.S. patent system to cutting-edge innovation, as compared to other countries (pp. 957-958). In accord with publicly accessible data standards, we identified these twelve applications in a table with their patent application numbers, the titles of the inventions in the applications, the publication dates of the applications, and the assignees of the now-abandoned U.S. applications.

We have since learned that we made a mistake in one of the patent application numbers listed in this table. The invention, “Method for Growing Plants,” is listed as application number US12/139,753. This was a “parent” application that was ultimately rejected on novelty (§ 102) and nonobviousness (§ 103) grounds, but it was not rejected for lack of § 101 patent eligibility. We should have instead listed patent application US12/968,726, which has the same title, “Method for Growing Plants,” and is the “child” application of the mistakenly listed “parent” application.

(For non-patent-law geeks, a “parent” is a patent application during which, while its examination is still pending, the applicant files another patent application on a related invention that is linked to the “parent” in order to receive the earlier invention/filing date of the parent. These patent applications are also linked in the database of applications in the USPTO. This related “child” application is a new application that may disclose new features of or adds new claims to the original “parent.” These additional, related applications are expressly permitted under § 120 and § 121 of the Patent Act.)

We would also like to make clear that our essay reports on the Kappos-Sachs dataset, which comprises patent applications that have been abandoned by the applicants after an initial or final rejection on § 101 patent eligibility grounds. A typo at the end of footnote 10 on p. 941 leaves out the “initial,” and this could be confusing given the earlier sentence in the footnote that refers to both “initial or final rejections.” An example of an initial rejection for lack of § 101 patent eligibility is a patent application in our table on pp. 957-958: patent application US13/746,180, titled “Methods For Diagnosing and Treating Prostate and Lung Cancer.” This patent application received an initial rejection based on § 101 for lack of patent eligibility, but the applicant continued to pursue the application at the USPTO, revising and resubmitting the application in the hope it would be granted. This patent application was ultimately abandoned, just like all the others in the dataset, and the very last rejection before this abandonment was one in which the examiner argued that it was not patentable given its obviousness (§ 103) and a lack of proper disclosure (§ 112).

Pursuant to the terms of the Kappos-Sachs dataset, there was an initial rejection under § 101 for patent application US13/746,180 and it was ultimately abandoned. In fact, given the extensive confusion now in the courts and at the USPTO between the legal standards of § 101 and § 103, as many scholars and others have widely recognized, it is completely unsurprising to find an initial rejection under § 101 morph into a rejection under § 103 after which the applicant then abandoned it (while the corresponding patent for the same invention was granted in other countries where it was not similarly rejected and abandoned).

We regret any confusion that may arise from the dynamic and evolving examination histories of the patent applications in the Kappos-Sachs dataset, and we especially regret listing the wrong “parent” application number instead of the “child” application number.

This is just the start of data collection on the nature and impact of the overly restrictive approach to patent eligibility in the U.S. in the past several years. We hope that scholars trained in rigorous statistical analysis will start to scrutinize the Kappos-Sachs dataset. As we state in the conclusion of our essay:

This Essay highlights empirical data about extensive invalidations of patents by the courts and by the PTO, and hundreds of patent applications rejected in the U.S. but granted for the same or similar inventions in Europe and China. This data reflects a very disturbing trend that portends darkly for the future of the U.S. innovation economy. The data deserves to be mined further with rigorous statistical analysis, investigating more closely issues like technology classes and other relevant variables, but this is beyond the scope of this conference Essay.

Our essay is short and so we invite any interested parties to consider it for themselves. Also, as we said, the dataset is on the Internet and available to all (unlike empirical claims made by others in the patent policy debates that are based in secret, proprietary data and infected with basic methodological problems in statistical analysis).

In conclusion, we wish to express (again) our profound appreciation to David Kappos and Bob Sachs for sharing their dataset with us. We were honored that they gave us permission to report on it. We apologize for any confusion caused by our “scrivener’s error” in listing the wrong patent application number and any confusion caused by an applicant’s ongoing attempts at trying to obtain a U.S. patent before abandoning it after receiving an initial § 101 patent eligibility rejection.

One final minor update is necessary. In our essay, we expressly state that if anyone has questions about the dataset, they should contact Robert Sachs, but the email address is at his old law firm and is now defunct. Bob can now be contacted at rsachs@patentevaluations.com.

Categories
Patent Law Pharma

New CPIP Policy Brief: An Unwise Move to Discriminate Against Pharmaceutical Patents

enlarged image of a moleculeCPIP has published a new policy brief entitled An Unwise Move to Discriminate Against Pharmaceutical Patents: Responding to the UN’s Guidelines for Pharmaceutical Patent Examination.

The brief, written by CPIP Senior Scholar and UMKC Professor of Law Chris Holman, analyzes the UN’s recent Guidelines for Pharmaceutical Patent Examination, which are influential in the policy debates regarding the role of patented pharmaceuticals in public health. Professor Holman critically examines the Guidelines, pointing out that they “put a thumb on the scale in favor of generic medications” while failing to adequately consider “the development and incremental improvement of innovative pharmaceutical products.”

The Executive Summary is copied below:

EXECUTIVE SUMMARY

Recently, United Nations agencies have encouraged countries to make it harder to get patents on pharmaceuticals. The primary vehicle for this policy has been the Guidelines for Pharmaceutical Patent Examination: Examining Pharmaceutical Patents from a Public Health Perspective (the “Guidelines”). The Guidelines advocate excluding entire categories of pharmaceutical inventions from patentability.

This new approach represents a departure from past patent policy. The patent system has long applied the same rules to everybody instead of discriminating against particular types of technologies or industries. Ordinarily, each invention is judged on its individual merits based on neutral and generally-applicable rules for patentability.

The aim of the Guidelines is to make medicines cheaper, which is a laudable goal, but the kind of goal that has long been kept out of patent examination for good reasons. If a government objects to the prices of a product or how a business behaves in the marketplace, it applies other laws after the patent is granted. But when governments interject politics and policy before a patent is granted, the patent system as a whole becomes unreliable and unpredictable. Businesses are reluctant to invest in unreliable property rights and in the markets that make them unreliable. They either stop investing in innovation or avoid the markets where their innovations are unprotected.

The Guidelines contend that many forms of pharmaceutical innovation are inherently routine and hence unpatentable by default. Consequently, they demand exceptional circumstances from pharmaceutical inventions not required in other fields. The Guidelines would also restrict patents on innovations that occur later during drug development, including after the initial launch of a product.

This Policy Brief provides an evidence-based review of the categories of pharmaceutical innovation addressed by the Guidelines and dismissed as undeserving of patents. These include “Markush claims,” selection patents, patents on different forms of the drug, prodrugs and metabolites, compositions, combinations, doses, and new medical uses. Many of these categories of inventions are rather technical, so the Policy Brief attempts to briefly illuminate what each is and why it matters to the process of discovering and bringing new drugs to patients.

Once each category is carefully explained and examined, one finds real innovations. As illustrated by the decisions surveyed in this Policy Brief, when courts delve deeply into the substance of these inventions, they are often struck by the unpredictability and difficulty inherent in pharmaceutical innovation. These innovations can provide new and beneficial ways to formulate, prepare, and deliver the drugs as well as different ways to use the drugs.

Considered in the abstract, it is easy to devalue the inventiveness of the categories of pharmaceutical innovation targeted by the Guidelines. However, it is hoped that this Policy Brief and the full-length version, In Defense of Secondary Pharmaceutical Patents: A Response to the UN’s Guidelines for Pharmaceutical Patent Examination, will provide some counterweight to balance some of the more radical, and in my view unwarranted, recommendations set forth in the Guidelines. The interested reader should consult the full-length article for an expanded explanation including examples and citations to primary sources.

To read the policy brief, please click here.