Posts Tagged: "patents"

Over the past few years, electronic devices have become a staple for Samsung’s main subsidiary, Samsung Electronics. That subsidiary is a major standard bearer for the mobile device industry, and even recently announced plans to release consumer electronics on the 5G network as early as 2020, according to Forbes. Patent applications published by the USPTO recently and assigned to Samsung show the wide scope of the electronic developer’s operations. Different applications protect more space-efficient surgical robotic arms, a component device for video playback of broadcasts from different global regions and more precise systems of infrared 3D location sensing.

n the case of Bowman v. Monsanto Co., Farmer Bowman may have believed that the “third time” would be “charm.” In two prior cases, Monsanto Co. v. Scruggs[1] and Monsanto Co. v. McFarling,[2] the Federal Circuit had ruled in favor of Monsanto, the owner of the patented Roundup Ready® soybeans, and against Farmer Scruggs and Farmer McFarling. Even so, Farmer Bowman, as probably did his legal counsel, may have believed that the Supreme Court’s 2008 decision in Quanta Computer, Inc. v. LG Electronics, Inc.[3] would undermine the Federal Circuit’s view that patent exhaustion didn’t apply to Monsanto’s patented Roundup Ready® soybeans. But in a unanimous decision, the Supreme Court affirmed the Federal Circuit’s 2011 ruling[4] that Farmer Bowman’s unlicensed planting of these patented Roundup Ready® soybeans (sold for commodity use only) was an infringing use that was not subject to the doctrine of patent exhaustion. Alas, Farmer Bowman found no solace in Quanta.

Some had hoped that the Court would use Bowman as an opportunity to address the extent of a patent owner’s monopoly over other self-replicating technologies in the areas of biotechnology and information technology, such as human cell lines or computer programs. Certainly, the Court hinted at the possibility of situations where the patented article’s self-replication is truly outside the purchaser’s control, or where the self-replication is an essential step in using the patented article for another authorized purpose. The Court, however, cautiously declined to extend its holding in Bowman to those situations. The decision in Monsanto is intended to be fact-specific and carry slight ramification. Indeed, the Court’s unanimous decision ended with a significant caveat that the holding is limited, “addressing the situation before [the Court], rather than every one involving a self-replicating product.”

I wrote something incorrect about SPE Len Tran and for that I apologize to him and to the USPTO and to readers who were lead astray. The fact is that if you do a simple Google patent search you will see that since the time he became a SPE in 2008 he has signed many hundreds of patents. SPE Len Tran is not an examiner or SPE that refuses to issue patents. To the contrary, he has issued many patents for a variety of different technologies and seems to be an example of a good supervisor.

Why have claims if the claims don’t matter. Essentially Judge Lourie, and the Canadian Patent Office too, are saying ignore the claims and read the specification to determine what the innovation is and then without regard to the language of the claims make your determination. Under this viewpoint claims are simply irrelevant. Yet we know that claims are not irrelevant, and such a view is directly contrary to the Patent Act itself. Ignoring claims is utterly ridiculous given inventions are not patentable. Patent claims are supposed to be evaluating NOT the entirety of the invention. The sine quo non of patents are the claims. It is black letter law that the claims define the exclusive right granted. Ignoring the claims shows reckless disregard for the well established law and is nothing short of judicial activism.

The first thing that any student of the Federal Circuit likely notices when reading CLS Bank is that Judge Lourie not only joined the dominant concurrence, but he also wrote the opinion. The same Judge Lourie who wrote the first opinion in Mayo, after which the Supreme Court asked the Federal Circuit to reconsider, and who then wrote the second opinion in Mayo. The same Judge Lourie who wrote the first opinion in Myriad, after which the Supreme Court asked the Federal Circuit to reconsider, and who then wrote the second opinion in Myriad[12]. All of those opinions interpret §101 broadly. What changed?

All the Judges rely on the same Supreme Court precedents in Gottschalk v Benson, Parker v. Flook, Diamond v. Diehr, Bilski v. Kappos, and Mayo v. Prometheus. All the Judges recognize the same judicial exception to statutory subject matter under §101 for laws of nature, natural phenomena, and abstract ideas. All the Judges recognize that a claim must include “meaningful limitations” that go beyond an abstract idea. Hollow field-of-use limitations and insignificant pre or post-solution activity don’t count. However, this is where their similarities end.

Oracle is also involved with efficiency upgrades to enterprise software, especially those that would benefit small businesses. Another patent application filed by Oracle would improve the reaction time for queries registered within a Model-View-Controller online database application. An official patent awarded to Oracle this month provides a better deployment model for small firms who manufacture and sell software applications.Oracle and published by the USPTO showcase the company’s focus on providing software business solutions. These patent applications seek protections for improvements to enterprise software, including voice control and more efficient upgrades for enterprise planning and management software.

While the Supreme Court has done away with the “useful, concrete and tangible result” test from State Street Bank v. Signature Financial, in Bilski v. Kappos, 8 out of 9 Justices (i.e., everyone except Justice Scalia) signed onto an opinion that recognized that the patent claims in State Street displayed patent eligible subject matter. Indeed, the dissenters in Bilski specifically acknowledged that the claims at issue in State Street did not deal with processes, but dealt with machines. See Footnote 40 of the Steven’s dissent. The import of this is that machines are specifically patent eligible subject matter, so if the claims of State Street are to machines then claims that are similarly configured would also be directed to machines and therefore patent eligible.

Watson? It is an artificially intelligent computer system that is capable of answering questions presented in natural language. It is, in essence, the modern day equivalent to the all knowing Star Trek computer. It is flat out ridiculous to be asking whether the Star Trek omnipotent computer could be patent eligible, that that is where we find ourselves because what makes the computer unique is the software that makes it possible for Watson to perform 80 trillion operations per second. But Federal Circuit Judges say that mere fact that software is fast doesn’t make it patent eligible unless there is some kind of uniqueness to the computer itself. Have we really reached the point where truly astonishing innovations, innovations once thought to be impossible, are not patent eligible? Talk about jumping the shark!

Perpetuating the myth that the computer is where the magic lies does nothing other than ignore reality. Software is what makes everything happen. or crying out loud, software drives a multitude of machines! Maybe the auto mechanic for Judges Judges Lourie, Dyk, Prost, Reyna and Wallach should remove the software from their cars. Perhaps as they are stranded and forced to walk to work they might have time to contemplate the world they seem to want to force upon the rest of us; a world hat clings to mechanical machines completely non-reliant on software. That will be great for the economy!

The only thing we know is this — the Federal Circuit issued an extraordinarily brief per curiam decision, which stated: “Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.” Thus, the asserted claims are not patent eligible.

One of the central policy issues injected into the current case of AMP v. Myriad Genetics is whether the BRCA patents are good for innovation and ultimately for patients. Specifically, ACLU and PubPat allege that the patents have hindered research, blocked innovation, and harmed patient access to BRCA testing. No matter how many times these allegations are repeated, all available evidence shows concerns over research and innovation to be unfounded. More importantly, two natural experiments give us an opportunity to evaluate actual patient access to testing, the ultimate measure of whether the patents are doing their job of incentivizing delivery of new technology to the public. Both of these experiments show that exclusive licensing of strong “gene patents” not only does not harm patient access to quality testing, but is instead vital to it.
In the impassioned words of Linda Bruzzone, a Lynch syndrome mutation carrier and head of Lynch Syndrome International: “Many of us with Lynch Syndrome wish there had been a patent in place for us. It would have protected us and perhaps protected the lives of our loved ones.” L. Bruzzone, Oral Comments at USPTO Public Roundtable on Genetic Diagnostic Testing (January 10, 2013), available at http://www.uspto.gov/aia_implementation/uspto_genetic_testing_roundtable_transcript20130110.pdf.
If There Really Was a Problem, Shouldn’t We Have Seen Something by Now?
Commentators have expressed concern about so-called “gene patents” from the beginning. Perhaps the most popular theory underlying opposition to gene patents is the “tragedy of the anticommons” proposed by Michael Heller in 1998. The theory essentially goes as follows:
In an anticommons, by my definition, multiple owners are each endowed with the fight to exclude others from a scarce resource, and no one has an effective privilege of use. When there are too many owners holding rights of exclusion, the resource is prone to underuse — a tragedy of the anticommons.
Heller, The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, 111 HARVARD LAW REV. 621 (1998).
Heller and Rebecca Eisenberg attempted to apply this new theory of the anticommons to biomedical research, with particular emphasis on DNA patents. See Heller & Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCIENCE 698 (1998). This article caused quite a stir in the academic community, with numerous authors parroting the theory and, most problematic, presenting the “tragedy” as specifically applied to gene patents as a fact.
More recently, those studying biomedical innovation have begun to amass an impressive body of research showing there is no anticommons at all. For example, a 2005 study found that researchers rarely worried about patents and patents caused no project abandonments. Walsh et al., View from the Bench: Patents and Material Transfers, 309 SCIENCE 2002 (2005) (“[O]f 381 academic scientists, even including the 10% who claimed to be doing drug development or related downstream work, none were stopped by the existence of third-party patents, and even modifications or delays were rare, each affecting around 1% of our sample.”). A 2007 study found “[v]ery little evidence of an ‘anticommons problem.’” Am. Ass’n. for the Advancement of Sci., International Intellectual Property Experiences: A Report of Four Countries 23, at p.12 (2007). The list goes on and the evidence is mounting: “[T]here is at present no strong evidence that the ‘anti-commons’ concern has had a major impact on the research community.” Caulfield, Human Gene Patents: Proof of Problems, 84 CHICAGO-KENT L. R. 133, 136 (2009).
A careful review of the original Heller & Eisenberg article makes these findings unsurprising. While gene patent opponents co-opted the Heller & Eisenberg paper as the primary theoretical basis for their claims of harm, the paper explicitly contrasted patents directed to fully characterized genes (which would clearly include Myriad’s) against patents to uncharacterized gene fragments (i.e., expressed sequence tags or ESTs). In fact, Heller & Eisenberg appeared to accept as unproblematic “patents on genes generally correspond[ing] closely to foreseeable commercial products, such as therapeutic proteins or diagnostic tests for recognized genetic diseases.” Heller & Eisenberg at 699 (emphasis added). It was the NIH’s practice of patenting numerous ESTs, with no discernible function but which might incidentally cover an unforeseeable product, that for Heller & Eisenberg introduced the possibility of an anticommons. They were essentially worried about an EST thicket (which never materialized).
The recent findings of a lack of any anticommons effect have led some commentators to push back against the impassioned calls for, e.g., bans on gene patents. “Surely, if patents caused a problem warranting immediate policy action, there would be some clear, discernible effect.” Caulfield at 138. As noted by Christopher Holman:
The paucity of documented examples in which the fears surrounding gene patents have manifested themselves is striking, particularly when one considers the high level of public concern and the extraordinary nature of the proposed legislative fix.
Holman, The Impact of Human Gene Patents on Innovation and Access: A Survey of Human Gene Patent Litigation, 76 UKMC L.R. 295, 300 (2006). In other words, if there really was a pernicious problem as ACLU and others claim, shouldn’t we have seen something by now?
Patents Incentivize Investment in and Commitment to Translation From Basic Discovery to Commercial Availability
The absence of any evidence of a systemic problem should be enough to dismiss claims of harm caused by gene patents. But some simply cannot let go of the theory on which they built their ideological case against gene patents. Unfortunately for the misguided attack on gene patents, even the supposed epitome of what is wrong with gene patents turns out to instead be a brilliant example of what is right.
Many gene patent opponents focus on the initial discovery of the BRCA genes and invention of isolated BRCA-related DNA molecules, arguing it would have happened with or without Myriad. But for those who take the long-view and are genuinely concerned about actual patient access to life-saving technologies more than theories, the whole inquiry is irrelevant. The real question is whether, without the patents, the basic science discovery would have been successfully translated into a widely-available, quality product for patients.
First, a quick look at Myriad’s efforts and struggles to deliver the gold standard in genetic sequencing to as many patients as possible. Myriad has invested over $500M in developing and refining its BRACAnalysis® product and, more importantly, in raising physician, patient, medical society, and insurance company awareness of hereditary breast and ovarian cancer (HBOC) syndrome. A recent study found that such investment in public awareness for genetic tests that are non-exclusively licensed does not happen:
In the context of breast cancer testing, Myriad has a strong incentive to “get the word out” about genetic testing for inherited risk of breast cancer. This incentive is stronger for BRCA testing, for which Myriad is sole US provider, than for colon cancer testing, where there are alternative providers. […] The social benefit from this incentive is more public knowledge of test availability.
Cook-Deegan et al., Impact of gene patents and licensing practices on access to genetic testing for inherited susceptibility to cancer: Comparing breast and ovarian cancers with colon cancers, GENET. MED. (2010) 12:S15-38.
It took 17 years before Myriad finally broke even and became a profitable company. Myriad has spent years and millions of dollars collaborating with hundreds of researchers studying the BRCA genes and has performed tens of thousands of free tests to establish the clinical importance of BRCA testing. As result of this investment, numerous medical societies have clear, well-validated guidelines on who should get tested and virtually all major private and public payors reimburse BRACAnalysis® testing (such that the average out of pocket cost to patients is less than $100.). Further, Myriad has generous programs to help uninsured and underinsured patients get affordable access to BRCA testing.
It wasn’t just a monetary investment that the patents spurred; Myriad’s commitment goes much deeper than money. For example, many in the mid- to late-1990s actually opposed widespread clinical testing of the BRCA genes. As reported in a 1999 article in Reason Magazine,
[A] 53-member panel of ethicists and lawyers chaired by Stanford University law professor Henry Greely [declared] “The test for BRCA1 should be confined to the research setting.” […] The ethics panel advised women not to take the commercial test for BRCA1….
[…]
Francis Collins, the director of the Human Genome Project, agreed in U.S. Senate testimony in 1996 that the BRCA1 test should not be commercially available to women. According to Collins, the information that a woman might get from such a test is “toxic.”
Bailey, Warning: Bioethics May Be Hazardous to Your Health, available at www.reason.com/archives/1999/08/01/warning-bioethics-may-be-hazar/print. Bioethics and the wisdom of giving patients distressing genetic information are still controversial today. But the question of whether the concerns were well-founded is beside the point. It is difficult to imagine any company without a strong, exclusive patent position enduring years of losses to overcome this kind of opposition and deliver life-saving testing to patients.
Patent Exclusivity Increases Access to HBOC Compared to Lynch Testing
Delivering quality testing to as many appropriate patients as possible should be the ultimate goal of the patents and, thus, the ultimate measure of whether the BRCA patents are beneficial. Not how many providers offer the test. Not whether researchers subjectively feel unfettered to tinker with the genes. Not whether integrated or public health systems can maximize workflow efficiency by performing the test in public hospitals. Comparing testing levels of HBOC syndrome versus Lynch syndrome in the United States shows that the BRCA patents have led to wider patient access to higher quality testing.
Background. HBOC syndrome is a disorder caused by a mutation in, e.g., BRCA1 or BRCA2. Lynch syndrome is a disorder caused by a mutation in a mismatch repair genes, which predisposes a person to colorectal, endometrial, and other cancers. HBOC and Lynch share numerous similarities that make for an excellent comparison between exclusivity and non-exclusivity in genetic testing. For example:
• Similar prevalence in overall population …
– HBOC ~ 1/400
– Lynch ~ 1/440
• Similar prevalence in cancer population …
– HBOC ~ 7% of breast cancer
– Lynch ~ 3-5% of colorectal cancer
• Similar prevalence/mortality for breast cancer and colorectal cancer
– Breast cancer ? 2nd most commonly diagnosed cancer & 3rd highest in estimated yearly deaths
– Colorectal cancer ? 4th most commonly diagnosed cancer & 2nd highest in estimated yearly deaths
• Similarly drastic increases in cancer risk with each syndrome
– HBOC

– Lynch

The patent landscapes for HBOC and Lynch are quite different, however. The patents first disclosing the BRCA genes are exclusively licensed to Myriad, while the patents for the Lynch genes are non-exclusively licensed. As such, NCBI’s Genetic Testing Registry lists only one provider of full-sequence BRCA analysis (Myriad) and 15 providers of Lynch testing.
Myriad itself offers Lynch syndrome testing. Using internal Myriad data based on market analysis and competitive intelligence, the following statistics show that this difference in patent landscape has driven a marked difference in test quality and utilization.
Pricing. One of the most common allegations by gene patent opponents is that gene patents lead to higher prices. This is clearly untrue as to HBOC v. Lynch. As noted by the Duke IGSP: “Prices for BRCA1 and 2 testing do not reflect an obvious price premium attributable to exclusive patent rights compared with [Lynch] testing, and indeed, Myriad’s per unit costs are somewhat lower for BRCA1/2 testing than testing for [Lynch].” Cook-Deegan at S15 (Abstract).
Quality. Some allege that patents lead to patent holder complacency and lower test quality. This is also untrue. One of the best examples is the issue of variants of uncertain significance (“VUS”). A VUS is a change in a patient’s gene where it is currently unclear whether the change leads to increased risk of disease. Myriad has invested $100Ms in reclassifying VUS. As a result, Myriad’s VUS rate is less than 3% for HBOC while the rate of VUS for non-Myriad Lynch providers ranges from 15% to 30% depending on the gene. Similarly, Myriad’s average turn-around time for BRCA testing is less than two weeks, while the average for non-Myriad Lynch providers is around double that.
Access. Finally, far more patients get tested for HBOC than for Lynch. From June 2010 to the present, Myriad tested nearly 340,000 patients for HBOC. Over the same period, just over 70,000 patients received Lynch testing. Thus, a single, incentivized provider performed almost 5X as many HBOC tests (of higher quality at a similar price) as 15 different Lynch providers. Again quoting Linda Bruzzone on the problem of a lack of “ownership” in genetic testing:
It is our belief, had there been a single patent for Lynch syndrome, public awareness would be far more enhanced. More physicians would have knowledge of the condition in order to diagnose affected persons. Tests would be improved and confusion over the testing process would alleviate with one central repository. Many more lives would have been saved. Many of our families wish there would have been one central company, with a patent and believe it could have saved the lives of our families.
L. Bruzzone, Written Comments on Genetic Diagnostic Testing Study, USPTO Public Roundtable on Genetic Diagnostic Testing (January 10, 2013), available at http://www.uspto.gov/aia_implementation/gen_e_lsi_20130207.pdf.
It Is the Same Story When BRCA Testing Is Compared Between US and Europe
Perhaps an even better comparison than HBOC versus Lynch is a comparison within HBOC: USA versus Europe. While nominal differences between HBOC and Lynch are very unlikely to account for the marked difference in quality and utilization, comparing US BRCA and European BRCA excludes even these differences as possible causes.
For this analysis, data was compiled from data that Myriad separately commissioned from a third-party consultant to analyze the HBOC testing market in five key European countries: Germany (DE), France (FR), Switzerland (CH), Italy (IT), and Spain (ESP). Considering these countries as a group, which I will call simply “Europe” for the purposes of this article, they are roughly comparable to the US in both population and per capita GDP (Europe is roughly 75% of US in both measures).
The patent landscapes for BRCA in the US and Europe are quite different. While Myriad has exclusive license to BRCA patents in Europe, the attitude in Europe toward the patents is very different from the US. N. Hawkins, The Impact of Human Gene Patents on Genetic Testing in the UK, 13 GENET. MED. 320 (2011) (“[G]ene patents are essentially ignored.”). As such, NCBI’s Genetic Testing Registry lists only one provider of full-sequence BRCA analysis in the US (Myriad) and 25 providers in Europe. This difference in provider exclusivity has driven a striking difference in test quality and utilization despite similar or better prices at Myriad.
• Pricing

– BRCA testing in CH reimbursed at 5,500€ until Myriad entered Europe (dropped in response to Myriad’s lower test price)

• VUS Rates

– The five European countries have VUS rates ranging between >7X and >11X that of Myriad.

• Average Turn-Around Time (in weeks)

In Switzerland, for example, the average patient would wait five months and have more than a 30% chance of getting an inconclusive result. That same patient tested by Myriad would get a result within two weeks and have less than a 3% chance of an inconclusive result, all for a price that is 25% lower.
Access. What about actual patient testing, our “ultimate measure” of the value of the patents? Far more patients get tested for HBOC in the US than in Europe. Adjusting for population differences, none of the countries in this sample reaches even 40% of the proportional utilization of HBOC testing in the US:

In other words, a single, incentivized provider performs between 2.5X and 6.5X as many HBOC tests (of higher quality with faster turn-around time) as 25+ different HBOC testing providers.
What Can We Learn From This?
Many gene patent opponents attack the patents on innovation grounds (“They stifle innovation”). All available evidence shows this to be false. Some attempt to link gene patents to harms in patient welfare (“The patents lead to more expensive, lower quality tests”). Myriad’s experience shows there to be no link.
An endpoint analysis of how many patients get what quality of testing at what price under the exclusive provider and non-exclusive provider models shows that the incentives found only in an exclusive provider model result in better, faster, reasonably-priced tests delivered to vastly more patients. The data presented here suggest a significant positive effect of gene patents on patient access and explain the yearning amongst many patients for an incentivized standard-bearer in genetic testing. When coupled with the complete lack of data suggesting any negative effect, these data strongly warn against the drastic “solutions” to a non-existent problem offered by gene patent opponents (e.g., invalidating in the Myriad case 30+ years of patents on which the biotech industry is built).

Within the past month, many IBM patent applications published by the USPTO show a desire to improve multimedia experiences on many computer devices. Patent applications filed by IBM include systems for improving secure access of licensed content and another providing a more viewer-responsive experience for watching live events. IBM is still heavily involved with the development of business applications for computer systems. To that end, the company has filed patent applications for a system of capturing the workflow process of an employee accessing project software. Another application creates a visualization of temporal event data to aid in medical diagnostic processes. One official patent awarded to IBM protects a system of providing feedback to publishers from their subscribers.

As always, many patent applications show Microsoft’s focus on improving their software for business applications. Different Microsoft patent applications this week provide for systems of sharing meeting notes within office software, mapping identities to keep important business documents secure as well as using serious games to identify talent within an organization. Other USPTO documents of note show that the computer developer is also trying to reach beyond this market. Another patent application would protect a system of creating digital memorabilia for events. Also, one patent awarded to Microsoft protects a system of identifying different users on a touchscreen.