Vidal Confirmation Hearing Should Provide a Hint at What’s Ahead for Patent Owners

IPWatchdog has been told that Kathi Vidal, who is President Biden’s nominee for Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO), will have her confirmation hearing on Wednesday, December 1. As of the time of publication, the Senate Judiciary Committee, to which the Vidal nomination has been referred, lists a confirmation hearing for the full Committee at 10am on December 1, but provides no additional information. It is believed Vidal will share the hearing with several nominees for federal judicial positions.

Focus on Fintiv

While it is unclear how much time or focus Vidal will receive during her confirmation hearing, she is expected to receive questions relating to the Patent Trial and Appeal Board (PTAB) and the legacy of former Director Andrei Iancu. In fact, during the Vidal confirmation hearing, the most controversial issue will almost certainly relate to what is known as discretionary denials, an issue that has raised the ire of Senator Patrick Leahy (D-VT). During Director Iancu’s term the PTAB became more judicious with respect to exercising its authority, with the decision in Apple, Inc. v. Fintiv, Inc. setting a series of six factors for determining whether the USPTO should exercise authority to refuse an inter partes review (IPR), as a matter of discretion; a discretionary power recognized to exist by the U.S. Supreme Court.

According to Fintiv, the PTAB is to consider a variety of factors when determining whether to exercise the discretion of the Director to institute an IPR challenge. These factors are considered controversial in the view of IPR petitioners, who claim they should have the ability to have their patentability challenges reviewed by the Patent Office as envisioned by the America Invents Act (AIA), something Senator Leahy supports. Patent owners, on the other hand, argue that IPR petitioners who are defendants in ongoing federal district court litigation are merely attempting to frustrate the purpose of the AIA by increasing the costs associated with reaching a resolution to disputes.

The Drug Pricing Distraction

This type of inside patent litigation baseball is not the type of thing that ordinarily produces fireworks at a confirmation hearing, but a vocal minority who erroneously believe patents are to blame for high drug prices point to Fintiv and the exercise of discretionary denials by the USPTO to explain rising drug prices. These critics practically accuse the USPTO of being co-conspirators with brand name pharmaceutical companies. “If only the USPTO would allow challenges to pharmaceutical patents and stop denying petitions based on discretion,” the specious argument goes.

A recent study to determine the extent to which the USPTO has invoked the Fintiv doctrine to deny institution of post-grant challenges in pharmaceutical cases found that of the 604 “Fintiv rulings” made by the Office, only four were pharmaceutical petitions denied based on discretion, twice relating to IPR petitions and twice relating to post grant review (PGR) petitions. A total of four pharmaceutical petitions denied based on discretion since Fintiv became precedential on May 5, 2020, is hardly worrisome. Of course, imaginary problems are a mainstay when politics is involved and those blaming patents for drug prices simply ignore the costs associated with inventing and the decade-long Food and Drug Administration (FDA) process.

Setting the Tone

Only four discretionary denials of pharmaceutical petitions in 18-months seems like a bridge too far even for the “ends justify the means” crowd, but it is guaranteed that Vidal will be asked these questions during her confirmation hearing. Hopefully Vidal will point out that all of this Fintiv talk is complete nonsense. Sotera Wireless, Inc. v. Masimo Corporation, Paper 12, IPR2020-01019 (December 1, 2020), gives petitioners the ability to completely neuter the Fintiv decision of their own accord if they file a stipulation that they will not pursue in district court litigation any ground raised or that could have been raised in the IPR.

Vidal’s response to the inevitable discretionary denial and drug price questions will set the tone for patent policy during the Biden Administration. We will know more soon.