Thursday, 30 June 2022

Senator Leahy Statement on proposed PTAB Reform Act of 2022

Senator Patrick Leahy, who is chair of the Senate IP Subcommittee, has released a statement concerning the bipartisan proposed PTAB Reform Act of 2022.  The statement provides:

Patents drive our economy, allowing innovators to do what they do best while knowing they can reap the benefits of their hard work.  Good quality patents thus give small businesses and inventors certainty that they can defend their inventions from others who didn’t put in the work. Without the rights guaranteed by patents, the engine of our economy, American innovation, simply would not be as strong.  

Given the power that a patent conveys, though, a patent issued by the U.S. Patent and Trademark Office needs to actually represent innovation.  There are serious consequences for our entire economy when the system permits enforcement of a patent that never should have issued.  Vermonters and small businesses all across the country have suffered these consequences.  Several years ago, an out-of-state company asserted poor-quality patents against dozens of Vermont small businesses and non-profits, demanding payments for each and every time a business scanned a document and then emailed it. It was a scam. And it was an egregious abuse of our patent system.    

That is why I am proud of the work we did in 2011to pass the Leahy-Smith America Invents Act, which allowed the public to take their concerns about a questionable patent back to the Patent Office for a more in-depth review.  Through proceedings created by the Leahy-Smith Act, the scan-to-email patents were brought back to the Patent Office and invalidated, allowing Vermont companies and non-profits to continue their important work.  The Patent Trial and Appeal Board, or PTAB, created under the Act, resolved those disputes in a way that was faster, less expensive, and more accurate than a district court because the disputes were overseen by technically trained patent judges under a strict deadline.  In the past decade of the PTAB’s existence, the public has brought thousands of patents to the Patent Office’s attention, and the Patent Office has expertly addressed validity, reinforcing the strength of high-quality patents and cancelling ones that never should have issued. 

As with any big new undertaking, that success has also brought new questions. And all enacted laws—particularly those dealing with ever-evolving technologies and science—need to be revisited and updated from time to time. That is why I am thrilled that Ranking Member Tillis, Senator Cornyn, and I just last week introduced the PTAB Reform Act of 2022.  We gathered feedback from participants in the patent system, including the public broadly and businesses across the country covering a vast array sectors and technologies.  We looked at concerns from all corners and presented a series of different options for addressing them.  This bill, the product of months of hard work and compromise, addresses the biggest concerns of stakeholders from across the spectrum.  This bill will update the PTAB so it can continue its important work into the next decade and beyond.

This is important legislation for a number of reasons.  One big question it addresses:  If a petition to the Patent Office to review a patent is meritorious on its face, should the Patent Office decline review anyway?  Many believe that all meritorious petitions should result in a review.  Many others believe that it is harassing to patent owners to have the same members of the public able to request review of the same patent repeatedly over time, when the patent owner has already defended the patent.  We addressed these issues—as we often do in the Senate—through compromise.  While meritorious petitions to review a patent should generally be granted, serial petitions over time from the same or related parties will not be allowed.

Another big question:  Who has the authority to make a final validity decision, civil-servant PTAB judges or the politically appointed Director of the Patent Office?  While the Supreme Court last year resolved that the Director is the final decision-maker, it left open questions about how the Director may make decisions.  This bill ensures that the decision-making process must be open to the public.  The public has a right to know when independent PTAB judges are making a decision, and when a politically-appointed Director is making a decision. We should not have a patent system where any given PTO Director can influence and decree decisions non-transparently and behind the scenes.

Our bill also addresses a concern raised by small business patent owners:  They had to pay to apply for a patent and then may have to pay again to defend it at the PTAB.  This is expensive, and we want to help small businesses shoulder the expense.  Thus, if a small entity has not already decided to undertake the expense of litigation, the Patent Office will cover the expense of a PTAB proceeding for that small business under our bill. 

. . . 

I know that Ranking Member Tillis and Senator Cornyn share my belief that the patent system should work well for all Americans and all sectors of our economy.  I look forward to continuing the bipartisan work of our IP Subcommittee to help deliver real improvements to our patent system. I want to leave behind an even stronger patent system that further empowers America’s greatest natural resource: our ingenuity and innovation. 

A Great Idea to Raise Funding for Research: University of Pennsylvania and NFTs

The University of Pennsylvania appears to be one of the first universities to use NFTs to raise additional funding for research.  The university is offering for sale an NFT that commemorates the development of the mRNA technology used to develop vaccines for COVID-19.  Here is a description of the project:

The NFT features a stunning, one-minute 3D animation of the type of modified mRNA that protects the immune system from SARS-CoV-2 and the platform technology which holds promise for combatting other infectious diseases, as well as immunotherapeutics, cancer treatments, genetic diseases, and more. The video shows mRNA encapsulated inside of lipid nanoparticles, the fat droplets that are the delivery technique Weissman’s lab applied to ensure mRNA reaches the right part of the body to trigger an immune response. The NFT also includes images of Penn mRNA patent documents and a letter from Weissman, who directs the Penn Institute for RNA Innovation, about the ways in which he and colleagues are leveraging the mRNA technology platform to fight not only coronaviruses but also influenza, herpes, malaria, sickle cell anemia and cancer.

Funds raised by the sale of the NFT—the first digital asset Penn has offered—will further important research across the university.

Saturday, 18 June 2022

TRIPS Waiver Agreement Released

The following appears to be the “Draft Ministerial Decision on the TRIPS Agreement.”  Will COVID-19 vaccines become more available based on the waiver?  I am sure this will be carefully tracked. 

Ministerial Conference Twelfth Session Geneva, 12-15 June 2022 Original: English


. . . The Ministerial Conference, Having regard to paragraphs 1, 3 and 4 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization. Noting the exceptional circumstances of the COVID-19 pandemic; Decides as follows:

1. Notwithstanding the provision of patent rights under its domestic legislation, an eligible Member[Footnote 1] may limit the rights provided for under Article 28.1 of the TRIPS Agreement (hereinafter "the Agreement") by authorizing the use of the subject matter of a patent [Footnote 2] required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic, in accordance with the provisions of Article 31 of the Agreement, as clarified and waived in paragraphs 2 to 6 below.

2. For greater clarity, an eligible Member may authorize the use of the subject matter of a patent under Article 31 without the right holder's consent through any instrument available in the law of the Member such as executive orders, emergency decrees, government use authorizations, and judicial or administrative orders, whether or not a Member has a compulsory license regime in place. For the purpose of this Decision, the "law of a Member" referred to in Article 31 is not limited to legislative acts such as those laying down rules on compulsory licensing, but it also includes other acts, such as executive orders, emergency decrees, and judicial or administrative orders.

3. Members agree on the following clarifications and waiver for eligible Members to authorize the use of the subject matter of a patent in accordance with paragraphs 1 and 2:

(a) An eligible Member need not require the proposed user of the subject matter of a patent to make efforts to obtain an authorization from the right holder as set out in Article 31(b).

(b) An eligible Member may waive the requirement of Article 31(f) that authorized use under Article 31 be predominantly to supply its domestic market and may allow any proportion of the products manufactured under the authorization in accordance with this Decision to be exported to eligible Members, including through international or regional joint initiatives that aim to ensure the equitable access of eligible Members to the COVID-19 vaccine covered by the authorization.

(c) Eligible Members shall undertake all reasonable efforts to prevent the re-exportation of the products manufactured under the authorization in accordance with this Decision that have been imported into their territories under this Decision. [Footnote 3] Members shall ensure the availability of effective legal means to prevent the importation into, and sale in, their territories of products manufactured under the authorization in accordance with this Decision, and diverted to their markets inconsistently with its provisions, using the means already required to be available under the TRIPS Agreement.

(d) Determination of adequate remuneration under Article 31(h) may take account of the humanitarian and not-for-profit purpose of specific vaccine distribution programs aimed at providing equitable access to COVID-19 vaccines in order to support manufacturers in eligible Members to produce and supply these vaccines at affordable prices for eligible Members. In setting the adequate remuneration in these cases, eligible Members may take into consideration existing good practices in instances of national emergencies, pandemics, or similar circumstances. [Footnote 4]

4. Recognizing the importance of the timely availability of and access to COVID-19 vaccines, it is understood that Article 39.3 of the Agreement does not prevent an eligible Member from enabling the rapid approval for use of a COVID-19 vaccine produced under this Decision.

5. For purposes of transparency, as soon as possible after the adoption of the measure, an eligible Member shall communicate to the Council for TRIPS any measure related to the implementation of this Decision, including the granting of an authorization. [Footnote 5]

6. An eligible Member may apply the provisions of this Decision until 5 years from the date of this Decision. The General Council may extend such a period taking into consideration the exceptional circumstances of the COVID-19 pandemic. The General Council will review annually the operation of this Decision.

7. Members shall not challenge any measures taken in conformity with this Decision under subparagraphs 1(b) and 1(c) of Article XXIII of the GATT 1994.

8. No later than six months from the date of this Decision, Members will decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics.

9. This Decision is without prejudice to the flexibilities that Members have under the TRIPS Agreement, including flexibilities affirmed in the Doha Declaration on the TRIPS Agreement and Public Health, and without prejudice to their rights and obligations under the TRIPS Agreement, except as otherwise provided for in paragraph 3(b). For greater certainty, this Decision is without prejudice to the interpretation of the above-mentioned flexibilities, rights and obligations outside the scope of this Decision.

Footnote 1: For the purpose of this Decision, all developing country Members are eligible Members. Developing country Members with existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of this Decision. Such binding commitments include statements made by eligible Members to the General Council, such as those made at the General Council meeting on 10 May 2022, and will be recorded by the Council for TRIPS and will be compiled and published publicly on the WTO website.

Footnote 2: For the purpose of this Decision, it is understood that 'subject matter of a patent' includes ingredients and processes necessary for the manufacture of the COVID-19 vaccine.

Footnote 3: In exceptional circumstances, an eligible Member may re-export COVID-19 vaccines to another eligible Member for humanitarian and not-for-profit purposes, as long as the eligible Member communicates in accordance with paragraph 5.

Footnote 4: This includes the remuneration aspects of the WHO-WIPO-WTO Study on Promoting Access to Medical Technologies and Innovation (2020), and the Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical Technologies published by the WHO (WHO/TCM/2005.1).

Footnote 5: The information provided shall include the name and address of the authorized entity, the product(s) for which the authorization has been granted and the duration of the authorization. The quantity(ies) for which the authorization has been granted and the country(ies) to which the product(s) is(are) to be supplied shall be notified as soon as possible after the information is available

[Hat tip to Professor Justin Hughes]

Thursday, 9 June 2022

Retraction of 2019 Statement on Remedies and SEPs

The USPTO, DOJ and NIST have issued a statement retracting the 2019 policy statement on remedies for SEPs.  The Press Release states:

WASHINGTON—The Department of Justice, U.S. Patent and Trademark Office (USPTO) and the National Institute of Standards and Technology (NIST) (the Agencies) announced today the withdrawal of the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (2019 Statement). After considering public input on the 2019 Statement and possible revisions, the Agencies have concluded that withdrawal of the 2019 Statement is the best course of action for promoting both competition and innovation in the standards ecosystem.

On Jan. 8, 2013, the Antitrust Division of the Department of Justice and the USPTO issued a Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (2013 Statement). On Dec. 19, 2019 the Agencies withdrew the 2013 Statement and issued the 2019 Statement, which offered the views of the Agencies and expressly recognized that it had “no force or effect of law.” 

In July 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy noting that, “[a] fair, open, and competitive marketplace has long been a cornerstone of the American economy.” He encouraged the Agencies to review the 2019 Statement to ensure that it adequately promoted competition.

In response to the Executive Order, on Dec. 6, 2021, the Agencies issued a Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments and a request for public comments through a Dec. 6, 2021 news release, extending the deadline for comments in a Dec. 13, 2021 news release. The Agencies thank the wide range of individuals, organizations and other stakeholders who submitted comments, all of which have been considered.

After a review of those comments and a collaborative deliberation on how best to proceed, the Agencies are announcing the withdrawal of the 2019 Statement. As noted in the Withdrawal of the 2019 Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments, “[a]fter considering potential revisions to that statement, the Agencies have concluded that withdrawal best serves the interests of innovation and competition.” 

“The U.S. Patent and Trademark Office is focused on creating incentives to generate more innovation, especially in underserved communities and in key technology areas, and maximizing that innovation’s widespread impact,” said Under Secretary of Commerce for Intellectual Property and USPTO Director Kathi Vidal. “Forging our global leadership in new industries cannot happen without greater investment in research and development in technologies that may become international standards. We also need greater U.S. engagement in global standards-setting organizations from our large multinational companies, as well as from small- to medium-sized businesses and start-ups. I stand behind any measure that will enable innovation that will drive sustainable, long-term growth in the U.S. economy.”

“The withdrawal of the 2019 Statement will strengthen the ability of U.S. companies to engage and influence international standards that are essential to our nation’s technology leadership and that will enable the global technology markets of today and tomorrow,” said Under Secretary of Commerce for Standards and Technology and NIST Director Laurie E. Locascio. “A common thread in so many of the thoughtful stakeholder comments we received is a commitment to America’s industry-led, voluntary, consensus-based approach to standards development. This approach consistently delivers the best technical solutions, and I wholeheartedly support it.”

“The Antitrust Division will carefully scrutinize opportunistic conduct by any market player that threatens to stifle competition in violation of the law, with a particular focus on abusive practices that disproportionately affect small and medium sized businesses or highly concentrated markets,” said Assistant Attorney General Jonathan Kanter. “I am hopeful our case-by-case approach will encourage good-faith efforts to reach F/RAND licenses and create consistency for antitrust enforcement policy so that competition may flourish in this important sector of the U.S. economy.”

In exercising its law enforcement role, the Justice Department will review conduct by standards essential patent (SEP) holders or standards implementers on a case-by-case basis to determine if either party is engaging in practices that result in the anticompetitive use of market power or other abusive processes that harm competition. In addition, in accord with President Biden’s Executive Order, the Agencies plan to continue to cooperate as appropriate on matters that affect the intersection of competition, standards development, and intellectual property rights. 

Standards-developing organizations (SDOs) and the widespread and efficient licensing of SEPs on reasonable and non-discriminatory (RAND) or fair, reasonable and non-discriminatory (FRAND) terms (collectively F/RAND) help to promote technological innovation, further consumer choice, and enable industry competitiveness, including in emerging technologies and by new and small- to medium-sized market entrants. 

SDOs may require parties participating in the standards development process to voluntarily commit to making patents essential to the standard available on F/RAND terms. The specific F/RAND commitments are contractual obligations that vary by SDO. United States laws and regulations govern the interpretation of those contractual obligations and otherwise govern the conduct of parties participating in SDOs.