As we turn the page to 2021, we expect at least two major cases to be resolved that could have long-lasting effects on where and how Hatch-Waxman and Biologics Price Competition and Innovation Act (BPCIA) cases are litigated. Specifically, the future of skinny labels is in doubt, and available venues for Plaintiffs could be significantly narrowed. The number of new drugs eligible for generic competition will also rebound in 2021, but only time will tell if the global pandemic affects the overall number of generic filings. While there are many more Hatch-Waxman and BPCIA developments to watch this year, these are a few that we will be following closely.
Advocates for “patent reform” have long argued that reducing patent protection will open up markets and accelerate innovation by lowering entry barriers and expanding access to existing technologies. Yet, over 15 years of patent reform since the landmark 2006 decision in eBay, Inc. v. MercExchange LLC, followed by enactment of the America Invents Act in 2011, we have witnessed the rise of a technology ecosystem led by a handful of dominant platforms. In my recently published book, Innovators, Firms and Markets: The Organizational Logic of Intellectual Property, I show that this outcome should not be surprising. Almost 120 years of U.S. patent and antitrust history (1890-2006) indicate that reducing patent protection can often shield incumbents against the entry threats posed by smaller firms that have strong capacities to innovate but insufficient resources to transform innovations into commercially viable products and services.
Last year brought unprecedented changes as to how the United States Patent and Trademark Office (USPTO) conducts business. Prior to the pandemic, the USPTO was already a trailblazer with employees teleworking. As of 2018, 8,824 patent positions, roughly 94% of the total positions eligible for telework, already worked from home. On March 15, 2020, however, the USPTO closed all of its offices to the public, and subsequently transitioned its entire workforce of roughly 13,000 people (which includes patent examiners, trademark examiners, and other staff), to full telework, practically overnight. Since the majority of these positions were already teleworking, the transition was almost seamless.
Examiners at the U.S. Patent and Trademark Office (USPTO) can be categorized into three different “types,” namely, green, yellow and red Examiners. Knowing the type of Examiner assigned to a particular U.S. patent application can help in strategizing on prosecution tactics, crafting responses, and anticipating costs and timing needed to obtain a U.S. patent. For each year from 2009 to 2019, data was gathered for Examiners in each of eight non-design Tech Centers at the USPTO from the LexisNexis PatentAdvisor® patent prosecution analytics database. Examiners are categorized into three different types (so-called green, yellow, and red Examiners), and the data show that certain types of Examiners allow and examine disproportionately more U.S. patents each year than other types of Examiners, resulting in few allowing many, and many allowing few.
Patent Filings Roundup: Fortress Gets Into the 5G SEP Game; Judge Gilstrap Stays Trial for Reexam After Board Denied Under Fintiv; Fintiv Case Transferred
All eyes this week were on the USPTO Director’s chair and the inauguration, and yesterday the USPTO posted a farewell blog and speech, confirming that Andrei Iancu will (and probably already has) resigned pursuant to the changeover in administrations. But patent filings wait for no one, and so we turn to the just 20 Patent Trial and Appeal Board (PTAB) petitions that were filed last week, with the district court on usual pace with 68 complaints. Notably, there were another 10 discretionary denials (and 12 substantive ones), a few highlighted below, and a few developments in district court relevant to Fintiv in general.
Anyone who is familiar with the fortunes of Waco, Texas over the past few years will recognize the remarkable transformation of the city in most every respect. This is often attributed to Chip and Joanna Gaines of HGTV’s “Fixer-Upper” fame. The legal world has its own version of a “fixer-upper” success story in Waco, and it has nothing to do with any renovation television series. With the arrival of Judge Alan D. Albright a little over two years ago, the Waco division of the Western District of Texas began its own transformation in every respect.
When Joe Biden became President-elect Biden, he asked us to imagine a new, more hopeful version of America. He urged us to work toward leaving a “grim era” behind – a COVID-19 outbreak, economic devastation, social unrest, and a contentious election. It won’t be easy to recover, and it will require that Americans do something recently seen as undoable – unite, cooperate, and innovate. President-elect Biden immediately took a step in the right direction, though, pledging to be a president who “does not see red or blue states, but United States.” His economic priorities are also clearly expressed in the first sentence of his Build Back Better economic plan, which states, “Joe Biden believes to his core that there’s no greater economic engine in the world than the hard work and ingenuity of the American people.” These are encouraging sentiments, but to make more substantial inroads his rhetoric will hopefully be supported by real policy. Improving the protection of America’s intellectual property (IP) is an economic opportunity that he needs to capitalize on.
While researching the U.S. Patent and Trademark Office’s (USPTO) treatment of final Office actions for previous articles (Part I, Part II, Part III and Part IV, we noted, all too often, applicants acquiesce to premature or improper final Office actions rather than engage in a petition process they consider uncertain. Anecdotally, patent practitioners are often reluctant to challenge an examiner on petition without a clear understanding of the likelihood of success. Here in Part V, we research successful after final petitions: ones properly processed by the USPTO and promptly granted. We found, in many instances, favorable petition decisions are followed by a Notice of Allowance. What characteristics do these successful outcomes have in common?
As we thankfully see 2020 fading into the rear-view mirror and all look forward to a hopefully much better 2021, we want to take a moment to reflect on what the past year brought us and how the stage is set for another very fluid and consequential year for intellectual property policy. In times like these, it is clear that leadership matters more than ever. During some of the most challenging times our country has faced, there were a number of places where we saw strong leadership result in tangible progress. This year has already shown us a dramatic first few days. Beyond the tragic events in the U.S. Capitol, we saw the somewhat unexpected shift of power in the Senate to Democratic control based on the election of both Rev. Raphael Warnock and John Ossoff in Georgia. It is clear that the new Congress and the new Biden Administration will face huge challenges before we approach anything close to “normal” in any sense. That said, when it comes to IP, what can we expect?
While the COVID-19 pandemic has changed every aspect of our lives, digital transformation in healthcare has accelerated above others. The pandemic has changed the healthcare delivery paradigm from human to digital platforms faster than Klaus Schwab could have imagined. In 2016, the World Economic Forum chairman coined the phrase “Fourth Industrial Revolution,” envisioning the combination of fourth industrial-era technologies in hardware, software, and biology, or cyber-physical systems. These new technologies, leveraging advances in communication, connectivity, and computing power, would usher in a more efficient way to live, work, and socialize. Who knew how the horrific circumstances triggered by a global pandemic could accelerate an evolution that might have taken 20 years and condensed into a single year. Healthcare has gone digital, and there is no going back now.
As a Patent Agent, the work product coming out of the U.S. Patent and Trademark Office (USPTO) seemed random to me. This article shares what I learned as a USPTO Patent Examiner that lifted the veil and shed light on that randomness. As a Patent Examiner I learned a powerful lesson: the approach that a Patent Examiner takes in interpreting claim language is learned by “on the job” training while working with USPTO trainers and other experienced USPTO examiners. The USPTO does not give new Patent Examiners detailed training on how to interpret claim language. Understanding the unique lens through which each examiner is viewing the application and prior art is critical to working effectively with Patent Examiners. Some Examiners interpret very broadly and allow fewer applications, while other examiners interpret more narrowly and allow more applications.
Patent Filings Roundup: Board Says ‘Nein’ to German Company’s IPR; A PTAB Footnote to the Fortress/Intel Fight
Per the usual slow January, it was a light week at both the Patent Trial and Appeal Board (PTAB) and in the district courts. At the PTAB, parties filed just 16 petitions—three post grant reviews (PGRs) (including a Regeneron filing) and 13 inter partes reviews (IPRs), which, if memory serves, is the lowest of the past 12 months. In district court, just 34 filings played out, with the noted absence (seemingly weekly at this point) of any new WSOU suits. And, as mentioned previously, there’s still no evidence that Uniloc is moving to correct their filings before the USPTO to include the necessary party, Fortress, as their exclusive licensee.
Since the Supreme Court’s Alice decision in 2014, inventors have faced extra hurdles trying to protect their software-related inventions with patents. A chief obstacle has been satisfying the two-part test for eligibility under Section 101 set forth in Alice and Mayo. To meet this test, claimed subject matter must not be directed to a judicial exception, such as an abstract idea, (Step One), and if it is, must add “significantly more” to provide an inventive concept (Step Two)…. Theodore Rand reported in IPWatchdog last week, a disturbing but not surprising trend. Rand found that, in 2020, 81% of software-related patents on appeal for subject matter eligibility in decided precedential cases (22 of 27) were found invalid. But in three cases, software-related patents were found drawn to eligible subject matter for patent purposes. Id. In each of the three cases, the appeals court pointed to aspects of the patent specifications themselves. Looking more closely at the representative claims and court’s comments with respect to the corresponding patent specification is illuminating. In particular, the court looked to the specifications for evidence of performance improvements over conventional systems, description of a technical problem/solution, and technological advantages.
Judge Kimberly Moore, in a comprehensive and insightful opinion dissenting from the denial of the petition for rehearing en banc in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., 927 F.3d 1333 (2019), emphasized that the lack of clarity in Section 101 jurisprudence is one of the most critical issues in patent law. Sensing no interest by her colleagues in crafting an opinion with sufficient common denominators to provide instructions to trial judges on how to navigate the cross-currents created by Federal Circuit decisions post-Mayo/Alice, Judge Moore advised litigants: “Your only hope lies with the Supreme Court or Congress.” Id. at 1363. Not now. Several months after Athena, the USPTO took the initiative to issue a guidance document “October 2019 Update: Subject Matter Eligibility,” in response to requests by numerous stakeholders for more clarity and predictability. Consequently, in light of well-established Supreme Court precedent in administrative law, there is every reason for the Federal Circuit to now adopt the analysis of these Guidelines in future Section 101 cases.
National Advertising Division Says Pre-Launch Investor Presentation Can Be Challenged Under Advertising Law
It has long been a fundamental tenet of advertising law that comments made to investors, and particularly those made before the commercial launch of a product or service, do not constitute the kind of “advertising” that is regulated by the Federal Trade Commission (FTC) or the National Advertising Division of the Better Business Bureau (NAD), and are outside the reach of the Lanham Act. That is because advertising law regulates communications that propose a commercial transaction; in contrast, the securities laws govern communications to investors that are designed to promote investments. A recent decision from the NAD has put a big crack in that jurisdictional wall, and threatens to breach the dam that has long shielded comments made in investor presentations from potential liability for false advertising.