Hans Sauer is Deputy General Counsel, and Vice President for Intellectual Property for the Biotechnology Industry Organization, a major trade association representing over 1,100 biotechnology companies from the medical, agricultural, environmental and industrial sector. At BIO, Mr. Sauer advises the organization’s board of directors, amicus committee, and various staff committees on patent and other intellectual property-related matters.
Prior to taking his current position at BIO in 2006, Professor Sauer was Chief Patent Counsel for MGI Pharma, Inc., and Senior Patent Counsel for Guilford Pharmaceuticals Inc. Mr. Sauer has 18 years of professional in-house experience in the biotechnology industry, where he worked on several drug development programs, being responsible for patent prosecution and portfolio oversight, clinical trial health information privacy, and sales and marketing legal compliance.
Mr. Sauer did his postdoctoral fellowship at Genentech, Inc. in South San Francisco, and holds a M.S. degree from the University of Ulm in his native Germany; a Ph.D. in Neuroscience from the University of Lund, Sweden; and a J.D. degree from Georgetown University Law Center.
Over the course of four months, close to 850 million doses of COVID-19 vaccines have been administered in over 100 countries. To the extent the unprecedented pace of research, development and manufacturing to combat the ongoing pandemic is a success, it has many fathers. But it would not have been possible without the participation of the U.S. biopharmaceutical industry and its collaboration with global partners. To ensure that developed and developing countries around the globe maintain and expand access to safe and effective COVID-19 vaccines, therapeutics and diagnostics, it is critical that the U.S. government support ongoing industry collaboration and oppose well-intentioned but counterproductive efforts to waive intellectual property (IP) rights.
In the spring of 2018, a district court invalidated a patent claiming methods of manufacturing a pickup truck drive shaft for failure to recite patent-eligible subject matter. Industry stakeholders, scholars, and legal commenters were more than a little incredulous, since methods of manufacturing such tangible objects have long been patentable in the United States. In due course, the Federal Circuit (in a 2-1 decision) drew even more exasperation when it affirmed the district court’s holding. If the ensuing stream of bewildered blog posts, amicus briefs, and statements by public officials are anything to go by, many viewed the case as another high water mark in our uniquely American Section 101 jurisprudence…. Then, enter the July 31, 2020 re-written majority opinion in American Axle. Rather than allow the case to go to the full court for consideration, the majority decided to edit some of the troubling language from the original panel opinion.
To the casual observer, the Supreme Court’s January 23 decision in Helsinn v. Teva may seem like no big deal. In just a few pages of text, the Court informs us that Congress did not change the established meaning of “on sale” prior art when it rewrote Section 102 of the Patent Act in 2011. Move along, nothing to see here, right? More than a few commentators seem to assume that we’ll simply return to the pre-America Invents Act (AIA) status quo, and that sales of an invention, whether public or private, will just continue to trigger a familiar statutory one-year clock for filing a patent application. But nothing could be further from the truth. In fact, the impact of private sales (and of non-public commercial uses) on the patentability of later-filed patent applications will be significant, and very different from pre-AIA law. Patent applicants and owners of patents that were issued under the AIA have every reason to worry about traps for the unwary.
Once we go down a path of government price controls and compulsory licensing we will have foregone opportunities for other, more rational policy choices and will soon find ourselves in a race to the bottom. Of course, making prescription drugs more affordable must be an important, shared goal. But the solutions we pursue cannot risk choking off America’s innovative ecosystem that leads the world in discovering new cures and treatments. As Nobel laureate and NIH Director Harold Varmus said in 1995, one must first have a new drug to price before one can worry about how to price it. Letting our federal government import foreign price controls and expropriate patents is not the way to go about it.
Since Merck & Co. v. Teva Pharmaceuticals, blocking patent arguments have arisen in the Federal Circuit primarily in the pharmaceutical patent context, and until now have largely been limited to undermining evidence of commercial success. But just like gremlins fed after midnight, this doctrine inevitably spawned unwanted offspring that are now wreaking havoc… Assuming that no one would ever develop a product that might infringe a patent is inconsistent with numerous Federal Circuit realities. It’s right up there with the Tooth Fairy (sorry, kids).
Hindsight bias, the phenomenon that things seem more predictable and obvious after they have occurred, is one of the most widely-studied “decision traps” in psychology… Patent litigation plays right into such human limitations, which affect judges and jurors alike. Patents are often litigated many years after the invention was made, and very often those who are accused of patent infringement will argue that the invention was obvious at the time it was made and a patent was applied for… And we accept a surprising amount of other conjecture in this analysis. For example, judges and jurors are told about a contemporaneous hypothetical person that – despite having only ordinary skill in the relevant technology – would have had super-human knowledge of all then-existing technical information, was fluent in every language under the sun, and would have done insane things to access information sources.
Imagine this: you become aware of a patent that might cover your products, so you reach out to the patentee to secure a license agreement. After negotiating and entering the agreement, you later decide you’d like to pay less or no royalties. So you threaten to file some IPR and PGR petitions, and when that fails to secure more favorable terms, you breach the contract. If you find yourself sued for patent infringement you protest to the court that as the agent of public interest, you must be allowed to simultaneously challenge the validity of the patents not only before that court, but also before the PTAB. On the same grounds. At the same time. This is what at least one licensee is trying, and the Federal Circuit may soon provide guidance on the viability of this double-adjudication-for-the-public-good-tactic.
Nothing in my own experience leads me to believe that the PTO applies a lower anticipation or obviousness standard to pharmaceuticals, and I expect this would be news to my colleagues in the industry too. I do, however, often get questions from policymakers, journalists, and others who have been misinformed and led to believe that pharmaceutical companies are re-patenting old drugs to keep prices high, and that our industry is spending “too much” effort on trivial modifications to old medicines rather than creating new ones. Be assured – there is no such thing as “re-patenting,” and our industry is spending plenty on true innovation – but Dr. Michelsohn is certainly raising a fashionable complaint. Public debate by and large seems to have accepted that any given smartphone model is covered by hundreds of patents, but when a complex pharmaceutical product is covered by more than one patent there’s immediate scrutiny and concern.