Bipartisan Letter from U.S. Senators on Drug Patent Thickets

In June, U.S. Senators Leahy (Democrat) and Cornyn (Republican) (and others) sent a letter to the United States Patent and Trademark Office requesting that the USPTO review practices concerning granting “an excessive” amount of patents on pharmaceuticals, such as biologics, that may be driving up drug pricing costs. 

The press release concerning the letter states:

Senators Patrick Leahy (D-VT) and John Cornyn (R-TX) led a bipartisan letter Wednesday asking the U.S. Patent and Trademark Office to address an issue that is a significant cause of soaring drug prices.  Senators Richard Blumenthal (D-CT), Susan Collins (R-ME), Amy Klobuchar (D-MN), and Mike Braun (R-IN) also joined the letter.

The senators explained that drug companies and other large companies sometimes artificially extend the period in which they can charge high prices by filing many patents on nearly the same invention, creating a so-called patent thicket of dozens of patents on a single drug.  Those thickets make any challenge to the patents, or to the drug companies’ pricing of the covered drug, nearly impossible.  Because of the exorbitant cost of taking on each of the patents in these patent thickets, generic manufacturers are impeded from entering the market, hurting competition and raising prices for American consumers.  The secondary patents, which are similar to the originals, often receive less scrutiny from the Patent Office but have an outsized effect on everyday Americans who struggle to afford expensive medication.

Leahy believes the Patent Office has the ability to address this abusive practice, and he is asking the agency to take action to rein in this misuse of the patent system.  The letter requests that the Patent Office look into specific ideas for curbing the abuse and “take regulatory steps to improve patent quality and eliminate large collections of patents on a single invention.”  The Patent Act clearly states an inventor may obtain a single patent for a single invention, not dozens.  The senators believe the Patent Office can and should stop these large companies from undermining the patent system, obstructing appropriate competition, stifling innovation, and hurting Americans, who end up paying for all of this at the pharmacy.

The letter contains several ideas for the USPTO and the public to consider concerning future potential rule-making:

1. Terminal disclaimers, allowed under 37 C.F.R. 1.321(d), allow applicants to receive patents that are obvious variations of each other as long as the expiration dates match. How would eliminating terminal disclaimers, thus prohibiting patents that are obvious variations of each other, affect patent prosecution strategies and patent quality overall?

2. Currently, patents tied together with a terminal disclaimer after an obviousness-type double patent rejection must be separately challenged on validity grounds. However, if these patents are obvious variations of each other, should the filing of a terminal disclaimer be an admission of obviousness? And if so, would these patents, when their validity is challenged after issuance, stand and fall together?

3. Should the USPTO require a second look, by a team of patent quality specialists, before issuing a continuation patent on a first office action, with special emphasis on whether the claims satisfy the written description, enablement, and definiteness requirements of 35 U.S.C. § 112, and whether the claims do not cover the same invention as a related application?

4. Should there be heightened examination requirements for continuation patents, 2 to ensure that minor modifications do not receive second or subsequent patents?

5. The Patent Act requires the USPTO Director to set a “time during the pendency of the [original] application” in which continuation status may be filed. Currently there is no time limit relative to the original application. Can the USPTO implement a rule change that requires any continuation application to be filed within a set time frame of the ultimate parent application? What is the appropriate timeframe after the applicant files an application before the applicant should know what types of inventions the patent will actually cover? Would a benchmark (e.g., within six months of the first office action on the earliest application in a family) be preferable to a specific deadline (e.g., one year after the earliest application in a family)?

6. The USPTO has fee-setting authority and has set fees for filing, search, and examination of applications below the actual costs of carrying out these activities, while maintenance fees for issued patents are above the actual cost. If the up-front fees reflected the actual cost of obtaining a patent, would this increase patent quality by discouraging filing of patents unlikely to succeed? Similarly, if fees for continuation applications were increased above the initial filing fees, would examination be more thorough and would applicants be less likely to use continuations to cover, for example, inventions that are obvious variations of each other?

Senators Tillis and Leahy Propose to Improve U.S. Patent Quality

Senators Tillis, a Republican, and Leahy, a Democrat, have introduced legislation in Congress designed to improve patent quality at the USPTO.  The bipartisan nature of the legislation, hopefully, means it will be quickly adopted. [I am an optimist.] Senator Tillis’ press release states:

This legislation would evaluate prior and current initiatives and pilot programs relating to the quality of patents. It would evaluate the need for greater clarity in terms of what constitutes patent quality, the setting of patent quality metrics, and how the quality of work product performed by patent examiners is measured within the office. The bill would evaluate the need for recording examiner interviews via audio files or automated transcriptions, how the assignment of patent applications to examiners is undertaken, and the creation of a group that looks at real-world circumstances and uses that information to perform targeted review of certain patent applications. Furthermore, the bill would also study any evidence of fraud in the patent application process and suggest avenues to address such fraud.  

“If the United States is going to continue to be the world’s leading innovation economy, then we have to first make sure our patent system is strong and instills confidence,” said Senator Tillis. “We only have strong patents when those patents are of the highest quality and meet all the requirements of patentability. I’m proud to introduce this measure with my good friend Senator Leahy to improve the quality of patent examinations and ensure that the USPTO issues strong patents. This legislation is a step further in continuing our work to strengthen our intellectual property rights.” 

“I am proud to cosponsor this commonsense legislation with Ranking Member Tillis,” said Senator Leahy. “This bill follows up on our hearing last year on patent quality, which put a spotlight on the fact that many U.S. patents represent brilliant inventions and drive our economy.  Unfortunately though, some are issued by mistake and can cause great expense for unsuspecting Americans and small businesses.  I look forward to advancing legislative solutions that will help make sure that the patents that are issued are valid and to continuing my work supporting American creators and innovators.” 

Background:

For decades there has not been a major change to the time afforded to patent examiners for the examination of patent application, yet the nature of the technology from which these patent applications are derived and the complexity of this technology have only increased. In addition, the proliferation of prior art, which patent examiners must search for and review in order to make patentability determinations, has only increased and it has done so at a rapid pace. This complexity can and does lead to the necessity for patent examiners to raise more complex prior art rejections. And because of this patent examiners must be afforded the necessary amount of time so as to generate quality work products. 

This bill would require that not later than 1 year after the date of enactment of this Act the Comptroller General of the U.S. submit to the Senate Committee on the Judiciary and House the Committee on the Judiciary a report detailing this evaluation on patent examination improvement. Not later than 1 year after the date on which the Comptroller General of the U.S. submits their report the USPTO Director shall develop guidance for patent examiners focused on patent examination improvement. Finally, not later than 2 years after the date of enactment of this Act the USPTO Director, after soliciting public comment, shall submit to Congress a report that includes how the Office will improve the technical training of patent examiners with respect to emerging areas of technology, the status of office IT systems, a 5-year IT modernization plan, an accounting of the use by the office of advanced data science analytics and a 5-year modernization plan regarding advanced data science analytics, and finally how the result of the application of advanced data science analytics can be regularly shared with the public.