Posts Tagged: "Patent Reform"

This week in Other Barks & Bites: Chinese state media pushes back on the United States’ claims of intellectual property theft; a bipartisan coalition from both houses of Congress releases a draft proposal of Section 101 patent law reform; Senator Coons seeks more information on Amazon’s privacy practices for Alexa devices; the city of Baltimore files a lawsuit over a scheme to delay market entry of a generic to the Zytiga prostate cancer treatment; the USITC institutes a patent infringement investigation of Comcast after several complaints from Rovi; USPTO Deputy Director Peters files a petition brief in a Supreme Court case over USPTO personnel expenses incurred during litigation instigated by patent applicants; and Qualcomm plans to appeal adverse ruling in Northern California antitrust case brought by the FTC.

A group of Senators and Representatives has just released the draft text of a bipartisan, bicameral proposal to reform Section 101 of the Patent Act. Senators Thom Tillis (R-NC) and Chris Coons (D-DE), Chair and Ranking Member of the Senate Judiciary Subcommittee on Intellectual Property; Representative Doug Collins (R-GA-9), Ranking Member of the House Judiciary Committee; Hank Johnson (D-GA-4), Chairman of the House Judiciary Subcommittee on Intellectual Property and the Courts; and Steve Stivers (R-OH-15) sent the draft text via press release today. The stated goal of releasing the draft is to solicit feedback—there will be additional stakeholder feedback and Senate hearings, according to the press release.Senate hearings on the topic will be held on June 4, 5 and 11 featuring three panels of five witnesses each, for a total of 45 witnesses over three days. The draft text explicitly states that “the provisions of section 101 shall be construed in favor of eligibility.”

Pursuant to the 2018 SUCCESS Act, Congress directed the USPTO to submit to it a report on the results of a study that provides legislative recommendations for how to increase the number of women, minorities, and veterans who apply for and obtain patents. To help gather information as part of its study, the USPTO opened its doors for public comment on Wednesday, May 8, 2019, in one of three scheduled hearings. Five inventors spoke at this hearing. I was honored to be one of them. Patricia Duran spoke first, providing testimony in Spanish while I read the English translation. Duran expressed appreciation for the SUCCESS Act’s intent, but quickly set the tone with this question: “What good is a patent if one cannot feasibly defend it?” She added that “women, minorities, and veterans all reside in the same category with other independent inventors, and this class—the independent inventors—is the true underrepresented class.” She was not alone. Three other inventors who provided oral testimony stated that all independent inventors are underrepresented in today’s patent system, which I found interesting, given that they all belonged to the classes at issue: women, minorities, and/or veterans.

Most Congressional hearings are morality plays designed to reach a predetermined outcome. It wasn’t hard to predict how the second hearing on drug pricing by the House Committee on Oversight and Reform was supposed to go. If the title, “HIV Prevention Drug: Billions in Corporate Profits after Millions in Taxpayer Investments” wasn’t enough of a clue,  when Chairman  Elijah Cummings (D-MD) said it was because of the “phenomenal leadership” of freshman Rep. Alexandria Ocasio-Cortez (D-NY)  that the hearing was being held, any doubts evaporated. In an extraordinary gesture of deference for a new Member of Congress, Rep. Ocasio-Cortez was recognized for an opening statement before senior members of the committee. However, because of two differences in this hearing from its predecessor things didn’t quite go as planned. This time, the Committee invited both sides to appear, not just the critics; and one member dared to challenge its underlying premise, leading to an electrifying exchange with the Chairman. We’ll examine that shortly.

On Thursday, May 9, the Affordable Prescriptions for Patients (APP) Act was introduced into the U.S. Senate by Senators John Cornyn (R-TX) and Richard Blumenthal (D-CT). If passed by Congress and signed into law, the bill would modify the Federal Trade Commission (FTC) Act to give the FTC additional antitrust authority to challenge the anticompetitive nature of certain actions by pharmaceutical patent owners in the service of providing more consumer access to generic and biosimilar drugs.

On May 12, Frederick Reinhart published an article titled “Knowledge Ecology International Letter Misleads on March-In Rights.” Reinhart is a past president of the Association of University Technology Managers (AUTM), and his views echo those expressed by many in the university technology transfer field, including a frustration that not everyone acknowledges and appreciates the considerable investments and risks undertaken by the for-profit companies that license patents to inventions funded by the federal government. Knowledge Ecology International (KEI) recognizes the importance of the private sector in bringing therapies to the market, even when federal funding of R&D has played a role, and also that robust returns on those investments have a positive impact on innovation.

Senators and Representatives Coons, Tillis, Collins, Johnson, and Stivers recently announced in a press release a proposed framework to fix patent eligibility law in the United States. If written as proposed in the draft framework, section 101 may do harm to the patent system. The senators and representatives are now soliciting feedback on the draft framework. They are likely to take additional action on the framework as soon as early this week. Please send the following text with any of your edits to [email protected].

On Wednesday, the USPTO held the first of three scheduled hearings prompted by the Study of Underrepresented Classes Chasing Engineering and Science (SUCCESS) Act, which requires the USPTO Director to provide Congress with a report on publicly available patent data on women, minorities, and veterans, and to provide recommendations on how to promote their participation in the patent system. The hearing featured emotional testimony from five inventors, one of whom has recently joined Debtors Anonymous as a result of her patent being invalidated in the Southern District of New York. The SUCCESS Act was signed into law by President Trump on October 31, 2018 and gave the USPTO a one-year period to study representation of women, minorities, and veterans groups in patents. The Office released a report in February which showed that the number of women named as inventors had not been increasing at the same rate as the number of women who were now in STEM professions. Deputy USPTO Director Laura Peter said at the hearing on Wednesday that the Office is seeking input from industry, lawyers, and academics at the public forums, the next two of which are scheduled in Detroit on May 16 and San Jose on June 3. “We’re looking for concrete ideas and action plans to increase the numbers of these groups applying,” Peter said, before explaining that she would be unable to stay for the remainder of the hearing.

During a hearing of the Senate Committee on the Judiciary on Tuesday titled, “Intellectual Property and the Price of Prescription Drugs: Balancing Innovation and Competition,” senators heard from five witnesses about proposals to lower drug prices for Americans and what role the patent system plays in the high cost of prescription drugs. The witnesses included two professors, a patient advocate, the Director of South Carolina’s Department of Health and Human Services, and the Executive Vice President and General Counsel of the Pharmaceutical Research and Manufacturers of America (PhRMA). The hearing is one of several so far this term on the topic. Judiciary Committee Chair, Lindsey Graham (R-SC), opened the hearing by summing up the problem they faced in a question: essentially, how do we make sure that America continues to be the most innovative place on the planet and avoid killing the “goose that laid the golden egg,” without having a system that drives up cost for the consumer? Graham said he expects the committee will move on legislation related to patents and prescription drug pricing this year, and there seemed to be broad agreement on at least one bill currently under consideration—the CREATES Act of 2019, which has been floating around Congress since 2016.

On Monday, the International Intellectual Property Commercialization Council (IIPCC) gathered patent office and Federal Circuit experts, including current USPTO Director Andrei Iancu and former Federal Circuit Chief Judge Randall Rader, at the Capitol Building to discuss “The State of Innovation in the Union.” The panel was moderated armchair style and resulted in some poignant questions and answers from a few of the best-known players in the patent world. I attended the event, and at the end of the panel on which he participated I had the opportunity to ask Iancu what he thought about the current roundtables taking place in Congress and the efforts to reform Section 101. I reminded him that, at this time last year, he was giving speeches and testifying to Congress, saying to anyone who would listen that 101 should be something that we are all talking about and considering from a variety of angle. Then, as a newly minted Director, Iancu would tell Congress that if and when they were interested in engaging on 101 reform he and the Office would be ready to offer any assistance necessary. Congress seems to be working on the precursor to what will soon become legislative language. So, where does the Director stand on the issue today? His response was both correct, and something of a wake-up call. The final takeaway I think was that Iancu’s the only hope we’ve got, at least for the foreseeable future.“In the end, all three branches need to be rowing in the same direction on something like 101,” Iancu said. An obvious if seemingly cautious statement, but he did not stop there.

USPTO Director and Under Secretary of Commerce for Intellectual Property Andrei Iancu believes that “to a large extent … if they want to, the Federal Circuit can fix the problem” with patentable subject matter under Section 101. Speaking at the 27th Intellectual Property Law & Policy Conference at Fordham Law School on April 25, Mr. Iancu said the interpretation of Section 101 is “the most important issue of substantive patent law currently.” He added: “This issue must be addressed now in the United States.” The USPTO Director said there is consensus that the state of the law is unworkable: “Recent case law has created significant confusion in this regard.” But he added: “If you look at the Supreme Court cases by themselves, those cases are not the ones necessarily that have caused the problem. In the way those cases have been interpreted in the lower courts or at the USPTO itself, we have deviated from the core message of the Supreme Court to some extent.”

The Framework rolled out by Congress last week to fix Section 101 law in the United States will not improve the current 101 disaster. It codifies current exceptions and even adds an entirely new exception specifically intended to protect big tech monopolies. Congress is pitifully unserious about restoring our innovation engine. For more than 200 years, the U.S. patent system was the primary engine propelling the United States to lead the world in virtually every new technology. But over the last 15 years, activists in Congress, the courts and the administration pulverized this engine to benefit a few huge multinationals in exchange for political donations and favors. Today, the patent system is a complete failure causing technologies critical to our economy, job creation, global technological lead, and national security to flee the U.S. and go to China. In a brutal political irony, the Communist Chinese have a better property rights system than we do here in the U.S.

Yesterday, members of congress announced in a press release a proposed framework to fix patent eligibility law in the United States.Reactions to the framework were mixed. While many are delighted that the issue seems to be getting real attention on Capitol Hill, others are skeptical of some of the proposals. For example, Russ Slifer, former Deputy Director of the United States Patent and Trademark Office (USPTO), described the framework as “a big swing and a miss.” Having attended the meeting on the Hill yesterday in which the framework was released and discussed prior to being circulated to the public, Todd Dickinson of Polsinelli, and the former USPTO Director, said that he can understand how those seeing the proposal without having taken part in the dialogue might be alarmed. “There are still some big questions to answer, but I left the meeting encouraged by the momentum,” Dickinson told IPWatchdog. The discussion, which he described as decidedly “more lawyerly” than previous meetings on the topic, included staffers for both the House and Senate, and from both political parties, which “is a good sign that there is a continued intention to do something,” he said.

In a promising indication that there is real momentum on The Hill to fix Section 101 law, several Senators and Representatives today proposed a framework for addressing 101-related patent reform.Senators Thom Tillis (R-NC) and Chris Coons (D-DE)—respectively, Chair and Ranking Member of the Senate Judiciary Subcommittee on Intellectual Property—and Representatives Doug Collins (R-GA-9), Ranking Member of the House Judiciary Committee; Hank Johnson (D-GA-4), Chair of the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet; and Steve Stivers (R-OH-15) announced earlier today indicating that “months of hard work by the Senators and Representatives has led to this bipartisan, bicameral framework.” IPWatchdog has been reporting for some time that closed-door meetings have been held with stakeholders and members of congress to gather information on the problems with patent eligibility law. IPWatchdog also has been told that the relevant members of congress intend to hold regular public hearings on the topic beginning soon. “I think it’s wise for congress to hit the reset button and reassert its authority with respect to the statutory requirements, and getting rid of the non-statutory judicial exceptions is an absolute must,” said Gene Quinn, patent attorney and President and CEO of IPWatchdog, Inc. “I just hope that whatever the ultimate statutory language is, it is very carefully limited and narrowly tailored; and I must confess that it worries me a little that the framework says that reciting generic language won’t be enough to save an otherwise ineligible claim.”

In each of the recent Federal Circuit decisions on medical diagnostics inventions, Athena Diagnostics v. Mayo Collaborative Services, 2017-2508, (Fed. Cir. Feb. 6, 2019) (“Athena”) and Cleveland Clinic Found. v. True Health Diagnostics LLC, 2018-1218 (Fed. Cir. April 1, 2019; non-precedential) (“Cleveland Clinic II”), the court affirmed a district court ruling that found a medical diagnostic or a related patent invalid for being directed to ineligible subject matter. Athena and Cleveland Clinic II follow the hard stance taken by the Federal Circuit against medical diagnostics inventions, first in Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1376 (Fed. Cir. 2015) (“Ariosa”) and next in Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352, 1361 (Fed. Cir. 2017) (“Cleveland Clinic I”). In Athena, the patent covered a method for diagnosing a disease in a subpopulation of affected individuals based on the discovery of a correlation between the disease and certain autoantibodies found only in that subpopulation. In Cleveland Clinic I, the patent claims were directed to diagnosing the risk of atherosclerotic cardiovascular disease (CVD) based on the correlation between elevated levels of a protein found in the blood and occurrence of atherosclerotic CVD. In Cleveland Clinic II, the claims were directed to methods of identifying elevated levels of the protein but did not include any recitation of the correlation…. The requirement for an improvement to the technology involved in carrying out the claimed method is a steep hurdle for the eligibility of most medical diagnosis inventions, since the essence of such inventions is applying a newly discovered correlation to deliver a practical benefit—not improving the technology used to provide the diagnosis. In this regard, medical diagnostic inventions are unique. This point was highlighted by the Athena dissent through reference to the amici curiae Five Life Sciences Patent Practitioners’ brief, which stated, “[medical] diagnostic methods . . . are so tightly bound to underlying natural laws and phenomen[a], they are especially susceptible to undue expansion of the eligibility standards…” Athena Dissenting opinion at 13.