U.S. Agencies Release Policy Statement Concerning Remedies and SEPs

The United States Patent and Trademark Office, the U.S. National Institute of Standards and Technology, and the U.S. Department of Justice, Antitrust Division, (collectively, the agencies) have issued a policy statement concerning remedies and standard essential patents.  Importantly, the agencies have rejected the prior 2013 policy statement in favor of a policy statement that expressly recognizes that all remedies, including injunctive relief and exclusion orders at the International Trade Commission, are available for infringement of a standard essential patent.  Notably, the agencies primarily rely on U.S. case law to support its decision and OMB Circular A-119.  The policy statement provides, in part: 

Of course, the particular F/RAND commitment made by a patent owner, the SDO’s intellectual property policies, and the individual circumstances of licensing negotiations between patent owners and implementers all may be relevant in determining remedies for infringing a standards-essential patent, depending on the circumstances of each case.  Further, individual parties may voluntarily contract for or agree to specific dispute resolution mechanisms. 

In the Agencies’ view, courts, the U.S. International Trade Commission, and other decision makers in their discretion should continue to consider all relevant facts, including the conduct of the parties, when evaluating the general principles of law applicable to their remedy determinations involving standards-essential patents, such as the factors enumerated in eBay or 19 U.S.C. § 1337, as appropriate. The courts are “more than capable of considering these factual issues” when deciding whether to award remedies for infringement.20 In the Agencies’ view, courts—and other relevant neutral decision makers—should continue to determine remedies for infringement of standards-essential patents subject to F/RAND licensing commitments pursuant

to the general laws. A balanced, fact-based analysis, taking into account all available remedies, will facilitate, and help to preserve competition and incentives for innovation and for continued participation in voluntary, consensus-based, standards-setting activity.

The policy statement is available, here. 

Patent Eligible Subject Matter: Bait and Switch Works Well?

The United States Patent and Trademark Office (USPTO) has released guidelines on patent eligible subject matter as well as section 112 issues concerning computer implemented inventions.  Once again, some believe there’s arguably a shift on the treatment of patent eligible subject matter at the USPTO.  It’s hard to imagine that patents may draw investment if there is a lack of certainty and stability with respect to patent rights.  On the other hand, the biotechnology industry arguably developed around many patents that were eventually invalidated—it doesn’t get much more uncertain than arguably changing the rules of the game later.  Does that mean we should look toward broader subject matter or narrow subject matter—both of which could be more certain and stable?  On the broad side, I suppose we can always dump patents later—the U.S. Supreme Court has nicely rejected reliance arguments.  If we experience problems with patents and innovation in the future, then we invalidate the patents.  As long as the capital is drawn forth for productive use based in part from the original patents, then from society’s perspective maybe all is good and the problem is avoided—as long as the industry develops and some investors receive some return (at least enough to keep playing).  Who knows what is lost from broad subject matter--particularly with new, developing technology.  Here is an excerpt from the press release:  

“These guidance documents aim to improve the clarity, consistency, and predictability of actions across the USPTO,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO Andrei Iancu. “The USPTO will provide training to examiners and administrative patent judges on both documents to ensure that guidance is being properly administered.”

The “2019 Revised Patent Subject Matter Eligibility Guidance” makes two primary changes to how patent examiners apply the first step of the U.S. Supreme Court’s Alice/Mayo test, which determines whether a claim is “directed to” a judicial exception.

• First, in accordance with judicial precedent and in an effort to improve certainty and reliability, the revised guidance extracts and synthesizes key concepts identified by the courts as abstract ideas to explain that the abstract idea exception includes certain groupings of subject matter: mathematical concepts, certain methods of organizing human activity, and mental processes.
   
• Second, the revised guidance includes a two-prong inquiry for whether a claim is “directed to” a judicial exception. In the first prong, examiners will evaluate whether the claim recites a judicial exception and if so, proceed to the second prong. In the second prong, examiners evaluate whether the claim recites additional elements that integrate the identified judicial exception into a practical application. If a claim both recites a judicial exception and fails to integrate that exception into a practical application, then the claim is “directed to” a judicial exception. In such a case, further analysis pursuant to the second step of the Alice/Mayo test is required.

The “Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. § 112” guidance emphasizes various issues with regard to § 112 analysis, specifically as it relates to computer-implemented inventions. The guidance describes proper application of means-plus-function principles under § 112(f), definiteness under § 112(b), and written description and enablement under § 112(a).

These guidance documents have been issued concurrently to ensure consistent, predictable, and correct application of these principles across the agency. 

The USPTO is seeking public comments on the new guidance. 

Hatch-Waxman Integrity Act is Introduced in U.S. House of Representatives

U.S. Representative Tom Flores has introduced the Hatch Waxman Integrity Act in the House of Representatives.  The Act has also been introduced in the Senate.  The Act is designed to curb the use of some methods to challenge patents at the United States Patent and Trademark Office.  A Press Release from Representative Flores’ Office states:

The Hatch-Waxman Integrity Act of 2018 would require a generic manufacturer wishing to challenge a brand-name drug patent to choose between the Hatch-Waxman framework, which affords certain advantages such as being able to rely on the drug innovator’s safety and efficacy studies for FDA approval, and inter partes review, or IPR, which is cheaper and faster than Hatch-Waxman litigation but does not provide the advantages of a streamlined generic approval process. The bill would apply similarly to patents on biologics.

The bill would preserve Hatch-Waxman as the standard path for generic manufacturers to challenge brand patents, while keeping IPR as an option where other interests come into play. It would not have any impact on the use of IPR by the tech community.

Senators Thom Tillis and Orin Hatch have released statements concerning the bills along with Representative Flores:

The Hatch-Waxman Integrity Act ensures that America remains a leader in developing life-saving and accessible therapies, cures and treatments for patients," said Flores. "It restores an effective balance between the interests of brand-name and generic drug manufacturers so that innovation and competition will continue to flourish.  It is fulfilling to work with Senator Hatch to modernize the Hatch-Waxman Act so that hardworking American families continue to benefit from health care innovation."

"As the coauthor and namesake of Hatch-Waxman, I have a keen interest in ensuring we have a well-functioning generic drug industry," said Hatch. "This means making sure that generic companies are able to develop drugs while also ensuring that brand companies have sufficient protections in place to recoup their investments. Hatch-Waxman struck a careful balance that achieved these goals and in doing so helped to create the modern generic drug industry. The Hatch-Waxman Integrity Act, which I’m pleased to be introducing today with Senator Tillis and Representative Flores, will help preserve that careful balance going by ensuring that newer, alternative procedures for challenging drug patents do not give one side an unintended advantage."

"The biotechnology and life sciences industry undertakes tremendous risk and costs to develop new, life-saving drugs, with the vast majority of products never making it to the market at great expense to the manufacturer. These drugs save millions of lives every year and are a critical component of our nation’s healthcare system. While it is important to call out bad actors who price gouge, we must allow sufficient time and balance so companies can continue to develop life-saving drugs and help people with the countless illnesses and diseases that affect millions of Americans," said Tillis. "The Hatch-Waxman Integrity Act of 2018 will restore a proper balance in the market so that companies will continue to spend billions of dollars to develop life-saving and life-altering treatments. I want to thank Senator Hatch for his leadership on this issue and I look forward to building support for this bill within the Senate."

A copy of the bill is here, and a summary analysis of the bill is here.