Posts Tagged: "innovation"

The importance and profitability of diversity are already well-known by companies. Research conducted by McKinsey & Company shows that in 2019 companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. However, when we look at diversity in the patent sphere, a report published by the World Intellectual Property Office (WIPO) showed that, in 2021, women accounted for only 16.5% of all inventors listed in Patent Cooperation Treaty (PCT) applications.

The U.S. Senate Committee on Health, Education Labor & Pensions held a hearing today on why the United States pays “by Far, the Highest Prices in the World for Prescription Drugs.” Patents came up throughout the hearing as one barrier to lowering prescription drug prices, while pharmaceutical industry representatives underscored the cost of bringing innovative and life-saving drugs to market and the superior access Americans have to such drugs compared with other countries.

One day before comments closed on the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, published by the National Institute of Standards & Technology (NIST) and the Department of Commerce last month, the Department of Health and Human Services (HHS) denied an appeal of a decision not to march in on the blockbuster prostate cancer drug, Xtandi®.

Today, the U.S. Department of Health and Human Services (HHS) made its initial offers to pharmaceutical companies pursuant to the Biden Administration’s Inflation Reduction Act of 2022 (IRA), which allows the U.S. Government to “negotiate” Medicare drug prices under a set framework based upon the amount of time a drug has spent on the market. Opponents of the program, including the U.S. Chamber of Commerce, which is suing the government over the plan, argue it cannot be characterized as a voluntary negotiation since the affected companies would be subject to onerous excise taxes for refusing to participate and because it would have devastating consequences for patients if companies were to actually pull the affected drugs. The amounts of today’s initial offers were not revealed.

In a recent brief to the Patent Trial and Appeal Board (PTAB), Pfizer and BioNTech (Pfizer) told PTAB judges that Moderna’s dismissal of prior art listed in Pfizer’s August 2023 petition for inter partes review (IPR) of Moderna’s patent on mRNA vaccine technology is inconsistent with its declarations to the Food and Drug Administration (FDA) during the drug approval process. According to the brief, when Moderna was seeking approval for its COVID-19 vaccines, the company “candidly represented to the FDA that prior studies for related vaccines…supported an expectation of safety and efficacy. But now, faced with invalidating vaccine prior art…Moderna wrongly casts the same vaccine prior art as irrelevant.” The brief referred to this as a “litigation-driven one-eighty.”

With each new year comes an uptick in purchases of workout equipment, blenders, gym memberships and wearable devices of all shapes and sizes. Plans are made and uploaded to a wearable device—including smart rings, shoes and bands—and its accompanying app to track progress. These devices and apps share information with each other and across platforms, tracking a person’s diet, sleep or even sexual activity.

Both the Biden and Trump Administrations have made it abundantly clear that economic and technology security is now national security. In the latest National Security Strategy, the Biden Administration stated, “Technology is central to today’s geopolitical competition and to the future of our national security, economy, and democracy. U.S. and allied leadership in technology and innovation has long underpinned our economic prosperity and military strength. In the next decade, critical and emerging technologies are poised to retool economies, transform militaries, and reshape the world.”

Today, a letter signed by a coalition of top academics opposing the Biden Administration’s efforts to exercise march-in rights under the Bayh-Dole Act of 1980 was sent to the White House. Signed by academics in fields including law, economic policy and sciences, the letter warns the Biden Administration that its efforts to drive down drug pricing by seizing patent rights will “undermine fundamental principles that have made the American IP system the golden standard for supporting domestic innovation.” A growing topic during recent Congressional debates, march-in rights under Bayh-Dole took on a new focus in early December when the National Institutes of Standards and Technology (NIST) and the U.S. Department of Commerce released a draft framework of factors that federal agencies should consider for the exercise of authority codified at 35 U.S.C. § 203 that would compel patent owners holding rights to federally-funded inventions to license those rights to “responsible applicants.”

The U.S. National Science Foundation (NSF) announced today that it is launching the National Artificial Intelligence Research Resource (NAIRR) pilot, as directed by President Biden’s Executive Order on AI in October 2023. The U.S. Patent and Trademark Office (USPTO) is one of 10 government agencies that are partnering with NSF on the pilot. Biden’s October Executive Order (EO) announced a series of new agency directives for managing risks related to the use of artificial intelligence (AI) technologies, prioritizing risks related to critical infrastructure, cybersecurity and consumer privacy. The EO in part directed NSF to launch a pilot for NAIRR within 90 days, which it said was “consistent with past recommendations” of a task force on the subject.

The Senate Judiciary Committee’s Subcommittee on Intellectual Property today held a hearing featuring eight witnesses who testified about the need to restore certainty to U.S. patent eligibility law. Most, but not all, agreed such a need exists and urged quick passage of the Patent Eligibility Restoration Act of 2023 (PERA). Senators Chris Coons (D-DE) and Thom Tillis (R-NC) introduced PERA in June of last year. The bill would eliminate all judicially-created exceptions to U.S. patent eligibility law.

When licensing standard essential patents (SEPs), the SEP licensor and the standard implementer (also known as the SEP licensee), go through two phases of negotiation. The first phase is the technical phase, followed by the second phase, the commercial discussion. In the technical phase, the SEP licensor must provide evidence that at least one patent of its portfolio is valid and standard essential. This is done by providing rigorously conducted claim charts that map claims against the standard’s sections, providing evidence that all claim elements read on the technical standard specification. Typically, only a few claim charts are needed in this first technical phase, since only one patent must be valid and essential to make the case that the standard implementing party is infringing. The second phase, the commercial discussion, is much more complex. Here, the SEP owner must provide evidence of the value of its SEP portfolio for a given standard supporting why the proposed royalty rate is FRAND (fair reasonable and non- discriminatory).

As reported on IPWatchdog, the UK Supreme court recently ruled that a trained neural network (an Artificial Intelligence known as DABUS) could not be listed as the inventor on two patent applications filed by Dr. Stephen Thaler at the UK Intellectual Property Office (UKIPO). As a result, the two applications were treated as withdrawn for failing to comply with the requirements of the UK Patents Act 1977. This not a surprising decision for reasons that will be set out below, and it is consistent both with the earlier UK court decisions, and with the decisions of other jurisdictions around the world where Dr. Thaler has argued his case. The decision has, however, sparked interest in the questions of artificial intelligence and its ability both to “autonomously” devise inventions and to subsequently own them.

At the end of 2023, Law 14,785/2023 was published in Brazil’s official gazette, creating a new regulatory framework for chemical pesticides and environmental control products. The result of decades of discussions in the National Congress, the new law brings provisions that represent improvements to the system, such as the mandatory use of risk analysis in the process of granting registration of products and the requirement to harmonize with internationally established standards.

The Bayh-Dole Coalition yesterday submitted comments to the National Institute of Standards and Technology (NIST) asking the agency to withdraw the recently published Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights. The Coalition’s Executive Director, Joseph Allen, who authored the letter and formerly served as the Senate Judiciary Committee staffer to Senator Birch Bayh (D-IN), explained that “the framework would irreparably undermine one of the most successful laws in American history.” While Bayh-Dole contemplates march-in rights, the law strictly limits the situations in which such rights can be exercised and does not make any reference to pricing as a criterion for marching in. March-in requests have been rejected on a bipartisan basis multiple times since the bill became law and even then-Senator Joe Biden himself has opposed attempts to inject price controls into the law.

Reasonable compensation for standard essential patent (SEP) holders is crucial to create the incentives for adequate investments in standards. In particular, high-quality standards have underlain the development and proliferation of the global wireless technologies that have played such a central role in the innovation-driven growth of the internet economy. (For the key role of strong standards in technological innovation, see, for example, here, here, here, and here). It follows that the discriminatory reduction of compensation for SEP holders would reduce their incentives to participate and invest in standard setting. This in turn would reduce quality of future standards that will be key to economic growth and vitality.