Litigation always factors into the pharmaceutical world, but the US Supreme Court commanded a special place in recent days. The high court figured in no fewer than four contentious issues that, not surprisingly, play a vital role in how drug makers can and will operate.

Let’s start with a case that is not yet before the court, but many predict will be headed there thanks to one of its earlier rulings. Earlier this month, a three-judge panel of the US Court of Appeals for the Second Circuit overturned the conviction of a former sales representative, who argued that prosecuting him for remarks made about off-label use violated his free speech rights.

In their decision, the 2-to-1 majority cited a US Supreme Court ruling early last year that struck down a highly controversial Vermont law, which restricted the sale of prescription drug data identifying prescribers and patients for commercial marketing purposes. Specifically, the court ruled that “speech in aid of pharmaceutical marketing… is a form of expression protected by… the First Amendment.”

Last week I published part 1 of my conversation with Manus Cooney, who is one of the preeminent intellectual property lobbyists in Washington, D.C. Cooney, a former Chief Counsel to the Senate Judiciary Committee, is currently a partner with American Continental Group and was intimately involved in lobbying Congress relative to the America Invents Act (AIA), primarily on behalf of his client Tessera Technologies, who aligned themselves with the Innovation Alliance.

In part 1 we discussed lobbying in general, shining some light on the process as a whole and explaining why it is unrealistic to expect you can enter the debate near the end and have any hope of affecting change. In part 2, which is reproduced below, we discuss the specifics of lobbying the AIA, as well as the fight against further erosion of patent rights. And you thought that patent reform was over. Sadly, the fight continues.

COONEY: Going back to the AIA, when it comes to passing legislation, it’s important to know how each of the Congressional bodies work. It may be an oversimplification but it is usually the case that whatever the House Majority Leadership wants to pass, it usually gets done. In the Senate, however, it’s different because of its rules. There, whatever the Majority wants to pass has a shot at getting done. In other words, if the House Leadership, the Republicans in this case today, and the Chairman of the Committee want to see a particular measure passed, more often than not, particularly on an issue as esoteric and complex as patent law, the party members of the majority party are going to adhere or defer to the wishes of Leadership, And as a result, you’re trying to either create a situation in advance of the House measure coming to the floor where you have the support of the Leadership or you have created an environment where it’s less certain to the House Leadership and the Chairman that they will in fact be able to prevail, and thereby create an environment where they have to negotiate. Oftentimes in the House, your laying the foundation for a fight in the Senate where there is less deference to the Leadership. The rules are such that, in theory, any Senator can offer an amendment to any bill at any time, and you have a better shot at winning on the merits, so to speak. That has a way of forcing consensus. So realizing that those tend to be the ground rules, the landscape you’re dealing with, you develop a strategy for your clients.

Manus Cooney is a formidable figure.  He stands 6’3”, is the consummate professional, highly intelligent and very personable.  He is the type of person you notice when he walks into a room.

Who is Manus Cooney?  Those in Washington, DC, know the name well, but many practitioners in the intellectual property space are probably not well acquainted with Cooney, but Manus Cooney is a name you should know if you are at all involved in the world of intellectual property.

Cooney is a prominent behind the scenes player in Washington, DC.  He is a partner in the American Continental Group, a D.C. based consulting and lobbying firm that boasts one of the most prominent IP practice groups in town.  His partners include Marla Grossman, who was an IP counsel for Senate Judiciary Committee Chairman Senator Patrick Leahy (D-VT), and Chris Israel, who was the nation’s first U.S. Coordinator for International IP Enforcement — the first IP Czar.  Philosophically, ACG tends toward the pro-IP side, so it is not surprising that many of the clients they represent are interested in securing and promoting a strong IP regime both in the U.S. and abroad.  In short, Cooney and others at ACG fight the good fight, helping content creators and innovators convey their message in the halls of Congress.

Washington, D.C. (May 24, 2012) – BIO commends the bipartisan Senate approval of FDASIA, which includes a reauthorization of the Prescription Drug User Fee Act (PDUFA).

In particular, we appreciate the leadership shown by Chairman Tom Harkin (D-IA) and Ranking Member Mike Enzi (R-WY) to craft a bipartisan measure which will continue to ensure patient safety, access to the newest cures and therapies, and job growth in America. FDASIA reflects the enhancements to PDUFA agreed upon by industry and the U.S. Food and Drug Administration (FDA). It will enhance the development and review of innovative new therapies through increased transparency and scientific dialogue, advancements in regulatory science and strengthened post-market review.

News broke several days ago that Senator Jon Kyl (R-AZ) has raised the issue of funding for the United States Patent and Trademark Office in his role as a member of the so-called Super Committee, which is charged with finding $1.2 trillion in budget cuts over the next 10 years. See Super Committee Considering an End to USPTO Fee Diversion.  This means the patent community has another chance to urge Congress to do the right thing and adequately fund the USPTO.  Everyone in the patent community can and should get involved and be heard — patent attorneys, patent agents, patent bar groups, patent bloggers, corporations, inventor groups, inventors and industry organizations such as the ABA IP Section, the AIPLA and IPO. It is time to get involved!

Many will recall that recently we came up to the doorstep of putting an end to fee diversion through the creation of a revolving fund for the USPTO.  The revolving fund proposed by Senator Tom Coburn (R-OK), would have tied a revolving fund together with taking the USPTO out of the appropriations process.  This would have meant that the USPTO would be guaranteed to keep 100% of the user fees collected without Congress being able to divert fees over and above what they specifically appropriated.  The revolving fund made it into the enacted America Invents Act, but not the part about taking the USPTO out of the regular appropriations process, which essentially just kept the status quo.

Today the U.S. patent community sits perilously in the path of an oncoming train. The Leahy-Smith America Invents Act (AIA) Act mandates – but fails to fund – a wholesale conversion of the USPTO from an expert examining agency to one that not only examines patents but also adjudicates patent disputes in ways that promise to be faster and cheaper than patent litigation in our courts.

Without predictable funding, the Congressionally mandated reforms of the AIA will likely turn out like the agency’s “fast track” and Detroit office initiatives: announced, planned, but then delayed by the lack of one essential element – money. Indeed, without predictable funding, the reforms mandated by the AIA will likely result in a greater patent backlog, significant additional delay in finalizing the value of disputed patents, and a confused and discouraged agency workforce, all of which will significantly delay the recovery of our national innovation-based economy.

The coming train wreck would have been avoided if the 95 Senators who voted for ending fee diversion (with the support of every significant stakeholder in the otherwise-divided patent community) had had their way. It can still be avoided at no cost to taxpayers. And it can be avoided quickly, before Thanksgiving’s leftovers are gone, via the Super Committee. Let me explain.

Once upon a time I used to not get worked up at all about proposals for patent reform, because after all they almost always didn’t seem to go through, or even if they did what was passed was hardly what was suggested.  Then, my good friend John White told me about six years ago that this time patent reform was going to happen, it was just a matter of time.  Since then I have written numerous articles on proposed patent legislation, followed the issue, reviewed transcripts from Congressional hearings and have watched multiple Congressional hearings streaming online, even while on vacation one year.  The end result is that not much has changed… at least not yet.

We have heard this all before, and to some extent it does sound a little like a “chicken little mentality” has captured the imagination of policy wonks and patent attorneys alike, but it is hard to deny the fact that there is growing momentum for real reform at the United States Patent Office.  Sadly, what the United States Senate will vote on Tuesday, September 6, 2011, does not represent that real reform that so many are hoping for.

At approximately 5:50pm the United States House of Representatives passed H.R. 1249, which is known as the America Invents Act, by a vote of 304-117.  This bill differs from the Senate version of patent reform, S. 23, so there will be no bill going to the desk of President Obama just yet.  There are important differences between the two bills, chief among them is funding for the United States Patent and Trademark Office.  The bill passed by the Senate put an end to the practice of fee diversion, which occurs when the Congress appropriates the USPTO less than they collect in fees.  The excess in the fees collected from users of the USPTO then go to the federal government as general revenues and are used for purposes other than the operation of the United States Patent and Trademark Office.

On March 8, 2011, the United States Senate passed S. 23, the Senate version of patent reform, by an overwhelming vote of 95 to 5.  Just about three weeks later the House Judiciary Committee unveiled the House version of patent reform.  While the framework of the House bill is largely the same as the framework of the bill that achieved overwhelming bipartisan support in the Senate, there are some non-trivial deviations that place the likelihood of achieving patent reform squarely in doubt.  The two big ticket items being kicked around as differences that threaten the entirety of patent reform are inter partes review and prior user rights.  These two issues could cause a splintering of stakeholders and place us back in the limbo we have been in for the past 6 years, which would be tragic because Congress is finally poised to adequately fund the United States Patent and Trademark Office.

On March 3, 2011, the amendment to remove the first to file provisions from the Senate patent reform bill — S. 23 — went down to a lopsided defeat by a vote of 87 – 13.  This was known as the Feinstein Amendment because it was Senator Diane Feinstein (D-CA) that was the primary opponent of first to file in the Senate.  A day earlier, on March 2, 2011, Senator Feinstein made the best argument anyone could make regarding why first to invent should be kept and first to file should be jettisoned from the bill.  The Patent Docs have her remarks for your review.

In one particular part of Senator Feinstein’s remarks on the floor of the Senate on March 2, 2011, she said:

Many first to file countries allow more extensive use of prior art to defeat a patent application, and provide for greater prior user rights than this bill would provide.

And right she was, at least until the House of Representatives got into the act.  The House patent reform bill, which was leaked to virtually everyone who wanted a copy, began circulating late in the afternoon on Thursday, March 24, 2011.  The Senate and House bills are largely identical with the exception of prior user rights.  The House bill would make us much like those many other first to file countries Senator Feinstein talked about on the floor of the Senate.  Is she clairvoyant or did she know a game was afoot?

On Wednesday, March 30, 2011, the House of Representatives Subcommittee on Intellectual Property, Competition and the Internet will hold a hearing on H.R. ____, the “America Invents Act,” which will take place at 1:30 p.m. in the Rayburn House Office Building. Much to the disappointment of many who have been challenging patent reform, we are now closer than we have been at any time over the last 5 or 6 years to amending U.S. patent laws. The House patent reform bill is exceptionally close to the Senate bill S. 23, with only one major difference that is sure to spur great debate, but the remaining thorny issue — the change from “first to invent” to “first to file” remains intact in the House version of patent reform.

The one major difference between the Senate and House bills is that the House would like to embrace an across the board prior user right defense, which is not in the Senate bill.  That is something to keep an eye out for and which I will write about in the near future.  But those advocating that the U.S. continue to keep first to invent went down to an overwhelming defeat in the Senate — 87 to 13 on the Feinstein Amendment.  They are, nevertheless, expected to come back and fight hard to undue the first to file provisions

Late in the afternoon on Thursday, March 24, 2011, the purported patent reform bill from the House of Representatives began circulating.  The House patent reform bill is largely identical to the Senate version – S. 23.  There are some differences, one rather major difference, but the Senate first to file provisions remain intact.  The House bill would still grant the Patent Office the right to use all of the funds collected, as did S. 23.  The House bill also would grant the United States Patent and Trademark Office fee setting authority, as did S. 23, but then curiously goes on to set the fees that the USPTO charges.  It seems unclear why on one hand you would set the fees and in another section of the bill say that the USPTO can vary any fees defined.

Aside from the minor differences in language that are largely differences without a distinction, the one big thing that the House bill would do is extend the prior user rights defense under 35 U.S.C. 273 to patent infringement to all patents and not just business method patents.  Look for a big fight on that one.  The other differences of consequence seem to be that the House of Representatives really likes the thought of adding language authorizing automatic stays of pending litigation, which the Senate does not include.  Additionally, the House bill does not adopt the Senate’s language altering the residency requirement for Federal Circuit Judges.

Yesterday from the floor of the Senate, while debating whether the Senate should pass patent reform bill S. 23, Senator Amy Klobuchar (D-MN) cited a letter from Louis Foreman in support of patent reform, which was entered into the record without objection.  The name Louis Foreman is well known to those in the inventor community.  Foreman is the publisher of Inventors Digest, the Executive Producer of Everyday Edisons, an inventor himself and a serial entrepreneur.

Foreman, who supports patent reform efforts generally and S. 23 specifically, started his first business as a sophomore in college twenty years ago.  He has successfully started 8 business in that twenty year period and has been an integral part of twenty additional ventures.  Foreman has ten U.S. patents and his firm, enventys, has helped develop and file for another 400 patents.  This experience easily has shown Foreman, in his own words, that “the USPTO is hampered by a system that is in dire need of reform.”

Beginning at about 12:30pm Eastern Time today the United States Senate closed debate on the amendment offered by Senator Diane Feinstein (D-CA) relating to the removal of first-to-file provisions from the patent reform bill S. 23.

The Senate Roll was called and a vote taken on whether to table the Feinstein Amendment.  The votes were 87 in favor and 13 against, thereby killing the Feinstein Amendment and keeping the first-to-file provisions within S. 23.

Late yesterday afternoon it came to my attention that an article I recently wrote was referenced by Senator Jon Kyl (R-AZ) on the floor of the United States Senate. The article is titled Senate to Vote on Patent Reform, First to File Fight Looms and addresses the potential change from a first to invent system (which we have currently) to a first to file system (as proposed by S. 23). Needless to say, I was flattered by the attention given to this article by Senator Kyl.

As flattering as it was to be inserted into the patent reform debate in some peripheral way, the real news from yesterday was the Manager’s Amendment was passed by a vote of 97-2.  The Manager’s Amendment, cosponsored by Senator Patrick Leahy, Senator Charles Grassley (R-IA) and Senator Kyl, included language that would allow the United States Patent and Trademark Office to keep the fees it collects.  The Manager’s Amendment reportedly also included insertions favored by Congressman Lamar Smith (R-TX), who is chair of the House Judiciary Committee.   See Momentum build for patent bill.  Thus, it seems quite likely that patent reform will soon become a reality.