Time to Fix U.S. Innovation Policy to Ensure We’re Prepared for the Next Pandemic

“It is hardly a shock that research and development into medical diagnostics has stalled. The interesting thing about intellectual property and innovation policy is that it works. Much like the case with the tax code, society gets what society incentivizes.”

https://depositphotos.com/3989836/stock-illustration-global-viruses-3d.html“The COVID-19 crisis has once more highlighted the need for incentivizing investment and innovation—and thus, for patent laws that duly “promote” and protect such “progress,” precisely as our Founders envisioned,” writes Chief Judge Paul Michel, now retired from the Federal Circuit. As he so often is, Judge Michel is absolutely correct.

Many are asking why testing for the coronavirus that causes COVID-19 has been slow to roll out, and why tests in many countries are inaccurate. Those familiar with U.S. patent laws understand the problem. There has been a de-emphasis on medical diagnostics in America as the result of a series of Supreme Court and Federal Circuit rulings, coupled with Congressional inaction.

It is hardly a shock that research and development into medical diagnostics has stalled. The interesting thing about intellectual property and innovation policy is that it works. Much like the case with the tax code, society gets what society incentivizes. If it is impossible to protect medical diagnostics in the United States little research and development is done with respect to medical diagnostics, it is that simple.

A Perfect Storm

Because medical diagnostics are no longer patentable in the United States, investors are uninterested, which causes a series of unfortunate, but entirely predictable, cascading effects. Unable to receive funding— the true lifeblood of research and development— many leading research entities have simply abandoned medical diagnostics altogether. Witness the Cleveland Clinic and St. Jude electing to pursue other avenues of innovation.

When courts and Congress do not value medical diagnostics, and continue to view medical diagnostics as laws of nature or natural phenomena, is it any wonder that we don’t have more medical diagnostics? In addition to poorly considered patent policy disincentivizing diagnostic innovations, add the fact that payors of healthcare services refuse to compensate for diagnostics, and you have a perfect storm that explains why testing is lacking.

To put it simply, without diagnostics it is impossible to know who has what. With respect to the COVID-19 pandemic, this has led to a series of policy decisions by lawmakers that have effectively shut down the economy in hopes of preventing transmission of the coronavirus. While that strategy appears to be working, no one thinks that shuttering the economy on a long-term basis is desirable, or even feasible.

Even the prospect of keeping the economy shuttered for another few weeks, months or several months causes policymakers extraordinary anxiety. As we watch many of our friends and colleagues get sick and hear reports of mounting deaths, we are also seeing the very real economic pain and tragedy of workforce dislocation. And while policymakers who looked into the abyss of what could be can hardly be questioned for trying to save as many lives as possible, there has to be real compassion for the vast majority of the world that lives paycheck to paycheck. This pandemic has and will continue to affect many lives, directly and indirectly.


The Consequences of Shifting Focus

Of course, innovation policy that recognizes the importance of medical diagnostics and actually encourages appropriate levels of investment in research and development would not have stopped the coronavirus or COVID-19. We are, however, no doubt suffering the consequences of the best and brightest minds within the scientific community being incentivized to focus their mental energies elsewhere, which is precisely the problem.

To the extent there is a silver lining emerging it is that the innovation community is coming together to respond to this unprecedented crisis. Universities, big tech, biopharma are all working together, but working to address a problem that has already surfaced is backward looking. Innovation policy cannot be reactive, it must be proactive.

Innovation policy should not artificially pick winners and losers, which is precisely what the U.S. Supreme Court and the Federal Circuit have been doing with every patent eligibility ruling that prohibits the patenting of groundbreaking life sciences innovations. We have heard the most ridiculous excuses and explanations—”yes, this is a revolutionary innovation, but it simply isn’t the type of thing that can be patented in America.” Utterly ridiculous gobbledygook, particularly in light of what has transpired over the last several months.

Sometimes you will hear those who analyze the stock market say that when the American economy catches a cold the rest of the world economy catches the flu, as a testament to how resilient the U.S. economy is, generally speaking. With respect to life sciences research and development, the U.S. has been the global leader since the early 1980s, when the United States Supreme Court decided Diamond v. Chakrabarty. Since the Supreme Court fundamentally undercut its reasoning in Chakrabarty when it decided Mayo v. Prometheus, less and less has been protectible in the United States, which means less and less has been investible in the United States. And while there is great research happening all over the world, commercialization research and development simply does not happen if the U.S. marketplace does not allow for the exploitation of solutions to problems.

Stand Up, Save Lives

So, here we are. Congress has allowed the Supreme Court to fundamentally rewrite U.S. innovation policy and now the public wants answers. The question is whether Congress will stand up and prevent unelected judicial activists to continue to throttle U.S. innovation policy or will Congress stand up and say enough is enough. In our Constitutional form of government, the actions of the Supreme Court have been anything but Constitutional, and we are seeing firsthand just how unprepared the nation is to handle a pandemic.

The good news is that universities and biopharma companies are working at breakneck speed to develop accurate testing, identify drug cocktails that may save lives, and race to create vaccines. The bad news is this level of cooperation cannot be a long-term strategy for the poor policy decisions that have unilaterally dismantled America’s engine of innovation.

The COVID-19 pandemic needs to be viewed as a shot across the bow. It is time to get serious about correcting the unforced errors of the past decade and opening America up to innovation of all types and without any discrimination based on technological content.

We are lucky this pandemic is not worse, and with a higher mortality rate. We might not be so lucky the next time.

Image Source: Deposit Photos
Author: cteconsulting
Image ID: 3989836 


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Join the Discussion

14 comments so far.

  • [Avatar for Pro Say]
    Pro Say
    April 17, 2020 06:37 pm

    How many millions worldwide will suffer and die needlessly in the years to come . . . because there were no quick tests — including those needing computers, software, AI, machine learning . . . and yes, the Internet — to determine exactly what they had / have; and therefore how to treat and cure them?

    How many more graves will be dug and earns filled?

    Why are some in Congress more concerned with imaginary, comic-book “trolls” than they are with American lives?

    Why are they more concerned with what Big Tech thinks and wants . . . than with what their fellow Americans want and need?

    Blood for money, money for blood?

    While Congress dawdles, people are dying.

    COVID-19 will not be the last pathogen to ravage America and the World.

    Will we be better prepared next time around?

    Not if Congress doesn’t restore patent protection to all fields of innovation, we won’t.

  • [Avatar for stepback]
    April 17, 2020 11:29 am

    Pro Se @10

    Ha Ha.

    One does not have to “discover” a solution when in “fact” all one needs done (and by “one” we mean a Supreme one) is to have the right leaf plucked off the natural phenomenon tree.


  • [Avatar for Anon]
    April 17, 2020 07:48 am

    The personality of a corporation is inherently sociopathic

    Some have called this: a Rational Actor (given whatever constraints placed on that actor).

    Not the first time in the last week or so that MaxDrei has hewed close to my position vis a vis the juristic person of the corporation.

  • [Avatar for MaxDrei]
    April 17, 2020 04:02 am

    All this focus on eligibility of diagnostic methods is a red herring. Big pharma has abandoned research into new and better anti-biotics, not because there is no prospect of patent protection but because antibiotics are not drugs that people, once prescribed them, take every day for the rest of their lives. All being well, such new antibiotics will never be needed. So there’s no profit in them. So there’s no commercial research into them. The personality of a corporation is inherently sociopathic. It has no empathy with individual human beings. that’s the reality that we must all accept and manage. Most everybody supposed that the next corona variant would go the same way as ebola, SARs and MERS. That’s why we are in the stae we are now. we know better now. When the next corona variant mutates i hope it will meet a better prepared humanity.

    Absent that new antibiotic, which Big Pharma declines to find and develop, the next new virulent bacterium will wipe us all out. Issues of patent eligibility, and what the CAFC thinks, are irrelevant.

  • [Avatar for Pro Se]
    Pro Se
    April 16, 2020 04:33 pm

    The U.S. (and the world) is burning and we’re seeing now the SCOTUS and CAFC “natural phenomena” advice that everyone can do a “Rain Dance” to put out the unstoppable fire…

    No, this is showing that diagnostic claims are not the throwaway subject matter the courts have unfairly summed them up to be.

    Only universities are working around the clock to find diagnostic and cures.. no commercial Bio company are wasting their time and resources into creating a “product” knowing patents and rights are impossible under today’s patent laws..

    10 years ago, the USPTO and Congress were convinced Silicon Valley interests were so great to the profitability of the economy that the IP laws for which Pharma depended on for R&D and Investment insurances were swept away as expendable collateral damage… Before the AIA passed, Pharma begged, they warned, here you go, here’s an example from Hopkins:


    Covid-19 is a “natural phenomena” according to current CAFC and SCOTUS precedents… Scientists and private companies currently have 0% incentive to “discover” what’s needed to stop the fire…

    CAFC and SCOTUS says a “rain dance” can fix it…

    So now we’re forced to wait for the “natural phenomena” to correct itself.

  • [Avatar for Bill Alford]
    Bill Alford
    April 16, 2020 01:24 pm

    Isn’t funding for research into preventing viruses from reaching the US and finding a vaccine when they do, more important than patent policy.
    US Companies are more driven by sales revenue and profits on the bottom line to make the shares more valuable. The CEO is incentivized by his stock options.
    Trump’s budget cutting the CDC budget, and now his thread to defunding WHO is not helpful.

  • [Avatar for Model 101]
    Model 101
    April 16, 2020 12:32 pm

    The problem is Judges and Congress get so much cash stuffed into their ears by the patent killing Mafia…they can pretend they aren’t listening.

    Gene once again is spot on correct.

  • [Avatar for BP]
    April 16, 2020 11:27 am

    Thank you Gene for the Webinar Tuesday.

    Another area of concern is the Fed Circuit’s Amgen Inc. v. Sanofi decision as to the written description requirement of 35 U.S.C. § 112(a) for what is needed to claim new antibodies for a newly identified and characterized antigen.

    The USPTO’s memo on Amgen is being applied in an overly strict manner, beyond the language of Amgen and contrary to the language of the Fed Cir’s en banc opinion in Ariad. Some PTAB decisions too are applying Amgen too strictly. The result? Millions of dollars that have been invested to identify and characterize a new antigen result in a corresponding patent application that is worthless. And, where any subsequent application trying to “save” that investment is filed, it’s too late, being unpatentable over the “defective” earlier one.

    The USPTO appears to say, if only one example antibody is described for that newly identified and characterized antigen, that’s all the applicant can claim, i.e., a picture claim (generally worthless).

    The Fed Cir and the USPTO are requiring applicants to perform more time consuming and more costly research to make, show and describe a sufficient number example antibodies (game playing as to what number is sufficient) to get coverage for a “genus”; whatever “genus” means in the eyes of the USPTO (more game playing going on as to what is a “genus” where the USPTO applies a double standard, “genus” to them is not the same “genus” to applicant). Applicants need certainty, not the toxicity of game playing uncertainty.

    As discussed during the Webinar, the Fed Cir and USPTO have erected “strategic” anti-patent barriers on many fronts in the life sciences to de-incentivize the promotion of life saving technologies. Such Luddite “thinking” needs its day of reckoning.

  • [Avatar for MaxDrei]
    April 16, 2020 11:24 am

    Mr Quinn, I’m in Germany, and observing the progress of COVID-19 from country to country, and how each country manages it. The differences between Germany and the UK are jaw-dropping. The world-wide data available from the Johns-Hopkins dedicated web-site is revealing and shocking. One has only to reflect on how many people have yet to suffer any exposure to the virus to realise what lies ahead of us all, in the period until a vaccine is available in bulk. Until that time, availability of enough PPE to protect medical personnel is key. The Asian countries had enough, many Western countries were criminally negligent and did not.

    Who shall make the vaccine. GSK’s in partnership with Sanofi, I gather, pooling their respective areas of excellence. And still it will take at least 12-18 months more, before the vaccine is available in bulk, patentability regardless.

    All in all, it seems to me a bit one-eyed and opportunistic to conflate current COVID-19 mortality with the question whether current US jurisprudence on the patentability of diagnostics is or is not in compliance with the obligations on the USA imposed by its membership of the GATT-TRIPS Agreement.

  • [Avatar for Paul Cole]
    Paul Cole
    April 16, 2020 09:49 am

    Very best wishes to all concerned with this blog for avoidance of the virus or OK outcomes.

  • [Avatar for Eileen McDermott]
    Eileen McDermott
    April 16, 2020 08:56 am

    So sorry Kevin – I’m just getting over it myself. It wasn’t pleasant, but I was ok, and almost 100% again (Day18). Many thanks to your wife for her service.

  • [Avatar for Anon]
    April 16, 2020 07:26 am


    One of those patent minimalists is the frequent ‘contributor’ TFCFM.

    I have put to him directly several times now the point of “Discoveries is the very term used in the US Constitution,

    He has absolutely refused to engage.

    He deigns to label “true invention” according to his own precepts, and is often eager to chide those that do not ‘rise’ to his personal expectations, and yet, he is afraid to actually explore the foundations of the US innovation protection system. Leastwise, to the point that his views do not survive scrutiny.

  • [Avatar for Curious]
    April 15, 2020 11:51 pm

    The Courts and the patent minimalists are incredibly short-sighted. They thing that by making these discoveries unpatentable, they free up everybody else to use them at no cost. While this makes recent discoveries more accessible, it removes any incentive for organizations/companies/universities to spend money to make new discoveries.

    Discoveries is the very term used in the US Constitution, and these are the things that this country desperately needs now and in the future. Judges, in their haste to pick the right winner for today, fail to consider how their judgement will impact the future. This is why policy making should be reserved for Congress — it is their job to create laws that are in the best interest of the US for now and in the future.

    Diagnostics can be what revolutionizes medicine in the future. For example, people once thought of cancer as a monolithic disease. However, there are many different types of cancers, and even for a particular type of cancer (e.g., skin cancer) there are a multitude of different types that react differently to different treatments. As such, knowing EXACTLY WHAT kind of cancer can make all the difference in the world in able to provide a patient with the correct treatment the first time versus subjecting a patient to dozens of different treatments — hoping that one will work. The more information researchers can obtain about a particular disease, the better able they are in identifying a treatment.

    However, none of the discoveries that lead to this kind of information come easily or for free. If we want better lives through better medicine, we better make the investment now, and part of that investment requires allowing medical researchers to recoup their investment in making these discoveries.

    Patent law has always been a trade-off. But in this instance, I would rather pay a premium for a patented medical product/drug/diagnostic than have no medical product/drug/diagnostic for whatever ails me.

  • [Avatar for Kevin R.]
    Kevin R.
    April 15, 2020 08:50 pm

    100% correct, but the “price gouging” and “pandemic profiteering via patents” narratives have already reached the ears of the House. So much for a rally call to stop opportunism and political theater.

    My nurse wife tested positive for covid last week and is recovering. She got it—and now I have it—because there weren’t enough test kits for patients even if they had apparent respiratory issues.

    We need to start playing the long game. We need to invest in IP.