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

“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.”

Senate JudiciaryIPWatchdog 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.

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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.

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Join the Discussion

11 comments so far. Add my comment.

  • [Avatar for Pro Say]
    Pro Say
    November 29, 2021 07:06 pm

    No patents = no more cures.

    No more cures = millions of unnecessary deaths.

    Worldwide.

    Simple. As. That.

  • [Avatar for Josh Malone]
    Josh Malone
    November 29, 2021 09:51 pm

    This is extremely high stakes. The USTPO Director has total control over ownership of more than a trillion dollars in IP assets. It is a terrible situation we are in. Rule of law is gone. It is 100% politics. Future innovation is not a factor. Hundreds of thousands of inventors have been effectively excluded.

    See https://www.amazon.com/Blood-Water-Americas-Assault-Innovation/dp/B09LGTTXL5

  • [Avatar for Pro Se]
    Pro Se
    November 29, 2021 10:40 pm

    I believe anyone who makes $4.8mln a year willing to accept a position that only pays $168,000 a year is doing it with a direct agenda: say goodbye to the Fintiv factors at the PTAB. Her client list is a who’s who of Silicon Valley and they’re the ones that’s ensured her lofty $4.8mln a year and when she’s done, they’ll continue her wages.

    No one makes millions a year (for years) then go to a government job that pays less than what he pays in wage taxes unless there’s an incentive.

    From APJs to the Director… how did the United States allow operatives from the Judicial Branch to infiltrate the Executive Branch?

    It’s like a TV actor that plays a doctor getting picked to be the Director of John Hopkins or the CDC…

    People who are trained to misconstrue facts (sorry, “persuade”) should not be in governance of the work of engineers and scientists.

    Lawyers should be confined to the Judicial Branch, Engineers, Scientist, Military and Business/Economic minds should be confined to the Executive Branch.

    Legal arguments won’t win a global innovation race.

  • [Avatar for Paul F Morgan]
    Paul F Morgan
    November 30, 2021 10:53 am

    Gene, I will also look forward to your report on whether or not Vidal in her PTO Director confirmation hearing gets asked about PTO PTAB Fintiv IPR denials based on unrealistic trial date projections in Waco TX, and her response.
    But that is NOT why some already highly financially successful patent litigation attorneys would take on being PTO Director public servants for a few years at large financial sacrifices. It is highly career prestigious and of obvious value in bringing in future new clients.
    Furthermore, the apparent conflict between some PTAB non-rule Fintiv practices and the Congressional intent for IPRs to avoid trials in the AIA may well get decided by the PTAB itself or by the Fed. Cir., rather than the Director.

  • [Avatar for Night Writer]
    Night Writer
    November 30, 2021 11:38 am

    My predication is that she will prove to be far worse for patents than Lee. I think she is qualified but what did Biden’s team get her to promise to do for the nomination?

    Let’s be real too. It is easy for a person like this to be the director and then collect $10 million from SV for their service while at the PTO. That is just facts and there are plenty of government watchdog groups that say exactly this.

    So–the big question is what did Biden’s socialist, SV controlled team get her agree to do for the nomination? My guess is this is going to be the ugliest three years in patent history.

  • [Avatar for Model 101]
    Model 101
    November 30, 2021 02:11 pm

    Just another crook.

  • [Avatar for Capt. Obvious]
    Capt. Obvious
    November 30, 2021 02:15 pm

    “I believe anyone who makes $4.8mln a year willing to accept a position that only pays $168,000 a year is doing it with a direct agenda”

    You mean….like Iancu?

  • [Avatar for Particularly Pointing Out]
    Particularly Pointing Out
    December 5, 2021 03:26 pm

    She will be far better for patents than Iancu. Trump was a weak-minded fool who did the bidding of anyone who told him what a genius he was, It’s not as if Trump even knew who Iancu was when he nominated Iancu.

  • [Avatar for Anon]
    Anon
    December 6, 2021 09:28 am

    PPO,

    Is there something in particular that you think Iancu was “bad for patents”…?

  • [Avatar for Particularly Pointing Out]
    Particularly Pointing Out
    December 10, 2021 05:42 pm

    Is there some reason why you don’t understand the plain meaning of “better”? It’s a telling look into your persecution complex that you believe someone being better than Iancu translates into Iancu being “bad”?

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