What is Michelle Lee Hiding?

“I don’t want to be embarrassed” is not a grounds for privilege and improperly asserting privilege is not being transparent.

 

Michelle Lee is the head of the US patent office. She makes regular pronouncements and speeches on how important transparency is to her and the US patent system. Not long after taking over as Director in 2014, Michelle gave a speech on The Benefits of Transparency Across the Intellectual Property System at a major IP conference. She talked about her embrace and dedication to transparency for the US patent office – “As we all work together to build a better IP system, the light of transparency can guide us.” If you google “Michelle Lee transparency” you can find more quotes with similarly lofty and inspiring language. However, Ms. Lee doesn’t seem to practice what she preaches: read this story, and you be the judge as to whether Ms. Lee and the patent office truly support transparency.

In case you missed the story in the NYTimes, Kyle Bass and I have launched an initiative to invalidate incredibly specious pharmaceutical patents using the wonderful tools given to all under the America Invents Act. To be clear—just like the pharma companies we are up against, we are not an eleemosynary institution and have a profit motive. We are attacking a practice called “evergreening.” “Evergreening” is what branded pharmaceutical companies do when they seek additional patents, often of dubious validity or utility, to artificially extend the monopoly pricing they can charge under the shelter of patent protection. One notorious example involves patenting the use of a rubber stopper in a vial containing the drug. Another one patented sugar speckles on a pill and claimed this provided benefits to people who take a lot of pills. In another famous patent, a drug company got a patent for using a “centralized database” to track users of the drug. The patent office erroneously went ahead and granted these patents and hundreds of others, despite their being ineligible for patent protection for various reasons, including being “obvious.”

We’re not alone in criticizing evergreening. A recent NYTimes article written by an endocrinologist from Yale shares the shocking story of how the US patent office keeps granting new patents on insulin – a compound that’s been around for 100 years – that allows the three giant pharmaceutical companies making the compound to rake in billions of undeserved dollars from US patients and taxpayers. The patents have not only blocked generic manufacturers from coming in and lowering prices, they’ve allowed the big drug companies to hike prices by 168% to 325% over the last few years. People are endangering their health by cutting dosages because they can’t afford the vital medication. We can’t blame Ms. Lee for permitting these patents to issue and historical evergreening practices – they happened before her time. What we want to know is what she’s doing about it now. Is she permitting the abusive “evergreening” practice to continue by putting her thumb on the scale and interfering with Patent Trial and Appeal Board (PTAB) judges impartially calling “balls and strikes” when it comes to invalidating these bogus patents?

The US patent office is an obscure government agency that many people have never heard of, despite the fact that it promotes flagrant corporate welfare for large branded pharmaceutical companies that costs American consumers and taxpayers billions of dollars a year. We didn’t think that challenging this corporate welfare was going to make us popular with the management at the patent office. We didn’t know how unpopular until we saw the results of a Freedom of Information Act (FOIA) request that was filed with the patent office this past Summer that produced 611 heavily redacted pages.

The vast majority of pages—other than a publicly available copy of a House bill used to “bulk up” the number of pages—were completely or mostly blank, other than a statement “Withheld pursuant to exemption (b)(5) Atty Client Priv (b)(5) Delib Proc Priv of the Freedom of Information and Privacy Act”—known in FOIA circles as “Exemption 5.”  The Justice Department’s website says that the courts have interpreted “Exemption 5” to

exempt those documents, and only those documents that are normally privileged in the civil discovery context.

We find it incredibly hard to believe that all of this redacted material meets that standard.

Many other pages showed email headers with the to/from details, date, and subject fields – including tantalizing subject lines such as “Kyle Bass” — but no content other than “Exemption 5.”

Many of the emails went right to the top – to Michelle K. Lee.

You can see all 611 pages here.

 

Missing documents—this is not transparency

Here are a few examples of the problems we see in those 611 pages:

• Biotechnology Innovation Organization, known as BIO, is a lobbying organization representing the branded pharmaceutical industry. BIO had a meeting with Lee and her staff in February, 2015. Attendees included the CEO of BIO — who as a former member of Congress is a great lobbyist — and CEOs of pharma companies. This meeting between pharma, Michelle Lee, and her top lieutenants, was held less than a month after word of our initiative to stop evergreening was leaked to the press. It was extremely cordial of Ms. Lee and her team to have a meeting with top pharma executives and lobbyists on less than 30 days’ notice. Kyle and I requested a meeting the same month through numerous emails and phone calls—the emails are included in the production—and we are still waiting for a date when we can meet with Ms. Lee and her team. It’s an outrage that Ms. Lee is showing incredible bias by granting meetings to the people that are gouging American patients, consumers and taxpayers and denying the same access to the people who are attempting to end this abuse.
• At a recent TED conference, Ron Cohen, the CEO of Acorda Therapeutics (and the current Chairman of BIO) made the outrageous accusation that Kyle and I were destroying innovation. This is rich coming from the man that has reigned over massive near 1,000% price increases over the past few years for a drug that Acorda acquired, where the compound went off patent in 2003 and is now protected by patents where the “novelty” is improved walking speed. We have no objection to pharma getting patents for real innovation and new products and charging whatever they want. What we object to is the patent office cooperating with pharma to artificially extending monopoly pricing with bogus patents. (Ron—our invitation to debate you and anyone from BIO you want to bring along on GMA or any other forum you select, stands—since you appear to have significant influence with her, maybe you can get Ms. Lee to join us for this shindig.)
• On page 407 there’s an email to Michelle Lee with briefing materials for the BIO meeting that were prepared by BIO. Not only are the many pages of the BIO briefing materials themselves redacted, but in the email the list of what’s included is redacted. We don’t even know what’s missing. How can materials prepared by BIO and shared with Ms. Lee be privileged?

What we can see is a very biased attack against us, including a statement from BIO that “…Kyle Bass has opened a new door to abuse of the US patent system…” We agree someone is abusing the system, we simply disagree as to who’s doing the abusing.

Since when is it an “abuse” to challenge patents that never should have been issued in the first place? If the patents were actually valid, they’d easily survive our challenges and pharma would have nothing to worry about.

The minutes from this meeting are also missing.

What’s Michelle Lee hiding?

• You can see multiple emails from Kyle requesting a meeting with Michelle Lee and her team. Somehow she was never able to meet with us, despite our repeated attempts and offer to meet anytime, anyplace.

How come BIO could get a meeting in less than 30 days, but we can’t get one in over a year?

• The patent office’s Chief Economist sent a report to the “Patent Litigation Task Force” (redacted, of course) that included a look at “stock market reactions to the Kyle Bass petitions.” Since everything is redacted, we don’t even know why such a study was called for, or is relevant to the operations of the patent office, or how much taxpayer money was spent on it.Why is the patent office executive staff hearing from an economist about the stock market and our IPR filings? To help them “feel the pain” of the price-gouging pharma industry when its invalid patents get challenged? Patent office management doesn’t need a presentation on the stock market, they need a presentation on patent validity; it would be nice if they also took a hard look at evergreening. They could also use an explanation that the US Patent Office does not work for the pharmaceutical industry.Why doesn’t the PTO staff get the chance to hear about evergreening and how branded pharma and the US patent office are working together to artificially keep drug prices high? They are doling out welfare to the greediest corporations on the planet by improperly extending monopoly pricing with flimsy patents.
• There’s an email from a journalist (p. 428) quoting an interview with Kyle saying, “It appears to me, after the Biogen ruling, that Michelle Lee and the US Patent & Trademark Office are running a Kangaroo Court,” and “Michelle Lee should stick to calling balls and strikes as Congress legislated her to do through the America Invents Act. And she should stop forwarding her political agenda and ignoring the law.”Any emails commenting on this are redacted, so we don’t know what Michelle Lee’s response was. Did she agree or disagree?

 

What’s Michelle Lee Hiding?

What we want to know is, “what’s Michelle Lee hiding and why?”

Obviously you don’t have to hide compliments. So we assume the hidden information must be derogatory and likely embarrassing to the patent office and Ms. Lee.

Just so you know, Ms. Lee – we can take it. You don’t have to worry about hurting our feelings. Whatever you or your staff called us, we’ve been called worse.

So that leaves the likely motivation to hide the information as embarrassment– and “embarrassment” isn’t a statutory basis for claiming privilege and omitting or redacting documents under a FOIA request. As repulsive as this may seem to you, you actually work for the people and not branded pharma. BIO and huge branded pharmaceutical companies are not your clients or even your main constituency and they should be shown no more favor than any other stakeholder—even hedge fund managers, patent monetizers and those “annoying little people” that are patients, consumers and taxpayers.

 

What’s the agenda?

Not only is there a lack of transparency, but Michelle Lee seems to be continuing to push the same misguided agenda she pushed when she was at Google.

In a recent speech at the Consumer Electronics Show, she spouted the completely discredited figure of “patent trolls” “draining $80 billion from our economy every year.” *

That number’s a joke – and Michelle Lee is smart enough to know it.

She’s a government employee in charge of running the US patent office for the benefit of inventors, patent owners and society in general. So why’s she spreading this phony anti-patent-owner propaganda? Why is she protecting pharma and promoting improper practices that cost US patients and taxpayers billions of dollars a year?

 

Without Fear or Favor

All we’re asking is that the patent office does its job impartially – “without fear or favor.” When it comes to reviewing the validity of granted patents, we want it to “call balls and strikes” without worrying about whether the call will anger team owners, players or fans.

While the patent office serves a number of stakeholders, it should favor none of them to the detriment of others. Patents should be granted and invalidated based on their merits – not based on lobbying or the impact on the stock market.

If the patent office is subject to political or corporate pressure, that would be an embarrassment (or worse). Evidence of improper considerations might be something the office would want to redact.

So again we ask, “What’s Michelle Lee hiding?”

 

* [Editorial Note: Link to this speech has become broken and no longer available. 08/27/2022 — GQ.]