Patent

What Young Innovative Companies Want: Formulating Bottom-Up Patent Policy for the Internet of Things

What Young Innovative Companies Want: Formulating Bottom-Up  Patent Policy for the Internet of Things
The potential anticompetitive sequences of standard essential patents have been identified by the European Commission as a key area of policy formulation for the Internet of Things. Throughout the process of policy formulation, the input of young innovative companies may require additional consideration as illustrated by the series of thirty-one in-depth interviews undertaken with key figures in young innovative companies (YICs) across Europe. The information gathered shows that that the way the E.C. conceptualized the policy issues at stake is not wrong, but may be incomplete. While it is important to promote a better understanding of what the FRAND promise entails, young innovative companies showed a remarkable disconnect to the patent system as a whole. They not only lacked intellectual property awareness, but many also thought that the Internet of Things could be helped by open source software, rather than a standard essential patents regime. Against this background, this study strongly encouraged the European Commission to better integrate young innovative companies in the process of patent policy formulation. The fair, reasonable and non-discriminatory (FRAND) guideline the Commission issued at the end of November 2017, reflected the findings of this study by recognizing the need to raise FRAND awareness among YICs and SMEs (Small and Medium Sized Companies). Keywords: Internet of Things, patents, standards, FRAND, European Union policy, competition, young innovative companies, governance, patent policy

An Empirical Study of University Patent Activity

An Empirical Study of University Patent Activity
Since 1980, a series of legislative acts and judicial decisions have affected the ownership, scope, and duration of patents. These changes have coincided with historic increases in patent activity among academic institutions. This article presents an empirical study of how changes to patent policy precipitated responses by academic institutions, using spline regression functions to model their patent activity. We find that academic institutions typically reduced patent activity immediately before changes to the patent system, and increased patent activity immediately afterward. This is especially true among research universities. In other words, academic institutions responded to patent incentives in a strategic manner, consistent with firm behavior, by reacting to the preferences of internal coalitions to capture unrealized economic value in intellectual property. University patent activity, as a response to patent law changes, carries important economic and normative implications. The patent system uses private economic incentives to promote innovation, but academic institutions are charitable organizations intended to promote the public good. This study demonstrates that patent incentives may have encouraged academic institutions to invest in patentable innovation—in ways that potentially limit access to innovation—in order to internalize private economic value.

Patent Working Requirements and Complex Products

Patent Working Requirements and Complex Products
Patent working requirements exist throughout the world to ensure that the exclusive rights granted through patents result in an economic benefit to the granting jurisdiction. In India, if a patent is not locally worked within three years of its issuance, any person may request a compulsory license, and if the patent is not adequately worked within two years of the grant of such a compulsory license, it may be revoked. The potency of Indiaís patent working requirement was demonstrated by the 2012 issuance of a compulsory license for Bayerís patented drug Nexavar. In order to provide the public with information about patent working, India requires every patentee to file an annual statement on ìForm 27î describing the working of each of its issued Indian patents. We conducted the first comprehensive and systematic study of all Forms 27 filed in India with respect to a key industry sector: mobile devices. We obtained from public online records 4,916 valid Forms 27, corresponding to 3,126 mobile device patents. These represented only 20.1% of all Forms 27 that should have been filed and corresponded to only 72.5% of all mobile device patents for which Forms 27 should have been filed. Forms 27 were missing for almost all patentees, and even among Forms 27 that were obtained, almost none contained useful information regarding the working of the subject patents or fully complying with the informational requirements of the Indian Patent Rules. Patentees adopted drastically different positions regarding the definition of patent working, while several significant patentees claimed that they or their patent portfolios were simply too large to enable the reporting of required information. Many patentees simply omitted required descriptive information from their Forms 27 without explanation. It is likely that a combination of factors have led to this high degree of non-compliance, namely technical and administrative failures of the Indian Patent Office, and inadvertent or deliberate omissions by patent holders. However, it is also likely that there are more fundamental issues concerning the very notion of working requirements with respect to complex, multi-patent products. In effect, products that embody dozens of technical standards and thousands of patents may not necessarily be amenable to individual-level reporting of working, or even working requirements themselves. We hope that this study will contribute to the ongoing global conversation regarding the most appropriate means for collecting and disseminating information regarding the working of patents.

The Challenging Economics of the Companion Diagnostics Industry: A Compelling Case for Invigorated Patent Protection

The Challenging Economics of the Companion Diagnostics Industry: A Compelling Case for Invigorated Patent Protection
Diagnostic tests are a core component of modern health care practice: they determine a patient’s susceptibility to developing cancer and other disorders; they diagnose biological conditions; they monitor the progress of disease; and they can assess the risk of disease recurrence. Ensuring their innovative growth is therefore an important issue in innovation policy. While legal scholarship addresses much about the relevance of patents and other forms of intellectual property protection for diagnostic methods as a general matter, far less attention has been paid to a distinct class of diagnostic tests that deserves its own innovation policy debate: companion diagnostic tests. This note seeks to draw more attention to the economic challenges facing the companion diagnostics industry. It begins by providing the necessary background to understand what companion diagnostic tests are, and why they are vital to the future of modern healthcare. It then explores the unique underlying incentive structure amongst the key industry stakeholders, revealing how the incentives of these stakeholders are misaligned in ways that impede the industry’s growth. Relying on empirical data from case studies collected in pharmacology and biotechnology business literature, this note ultimately argues that the microeconomics of the companion diagnostics industry present a compelling case for invigorated patent protection of companion diagnostic tests.

Correlative Obligation in Patent Law: The Role of Public Good in Defining the Limits of Patent Exclusivity

Correlative Obligation in Patent Law: The Role of Public Good in Defining the Limits of Patent Exclusivity
In light of the recent outrageous price-spiking of pharmaceuticals, this Article questions the underlying justifications for exclusive rights conferred by the grant of a patent. Traditionally, patents are defined as property rights granted to encourage desirable innovation. This definition is a misfit as treating patents as property rights does a poor job of defining the limits of the patent rights as well as the public benefit goals of the system. This misfit gradually caused an imbalance in the rights versus duties construct within patent law. After a thorough analysis of the historical and philosophical perspectives of patent exclusivity, this Article concludes that the extent of exclusivity that patent monopoly currently bestows is unsupported by the philosophy of patent exclusivity that asserts strong public benefits. Alternatively, this Article presents the law of contracts as embodying a framework within which patent law can fit better. By viewing the grant of a patent as a contract with the government in exchange for the patent holder providing a benefit to society, patent owners shall have duties to the society that correspond to their rights under the patent.

Disrupting the Balance: The Conflict Between Hatch-Waxman and Inter Partes Review

Disrupting the Balance: The Conflict Between Hatch-Waxman and Inter Partes Review
Since the enactment of the America Invents Act, inter partes review has been a new pathway for challenging patents. This administrative proceeding at the Patent Trial and Appeal Board has had a pro-challenger bias. IPR proceedings apply a lower standard of proof than federal district courts, use the anti-patentee claim construction standard of broadest reasonable construction, and lack the Article III standing requirement of district court litigation. This Article explains how these differences create great uncertainty in pharmaceutical patents, and what could be done to restore the balance that was created in the Hatch-Waxman Act. Pharmaceutical patents have their own alternative litigation pathways with the Hatch-Waxman Act, passed by Congress over three decades ago, and the recent Biologics Price Competition and Innovation Act. Both balance between stimulating innovation from brand companies who hold patents and facilitating market entry from generic companies who challenge the patents. Hatch-Waxman and BPCIA litigation occur in the federal district courts, which have significantly lower patent invalidation rates than IPR proceedings. The Article argues that this uncertainty in patent rights will harm pharmaceutical innovation by decreasing incentives. Pharmaceutical companies will not spend the billions of dollars needed to research, develop, and bring a drug to market if patent validity in IPR proceedings is uncertain. In the end, the author proposes several reforms for Congress to enact that can reduce the disparities between IPR proceedings and Hatch-Waxman litigation so the balance between patent holders and patent challengers is restored.

Interview: Trial by Jury of Patent Cases Symposium

Interview: Trial by Jury of Patent Cases Symposium
In this interview, Anne Hassett, the Executive Director of NYU School of Law’s Engelberg Center on Innovation Law & Policy, discusses her experience conceiving and bringing to fruition the Trial by Jury of Patent Cases Symposium. The conference was co-hosted by NYU School of Law’s Engelberg Center and the Civil Jury Project on September 30, 2016. Distinguished federal jurists, academics, and practitioners discussed whether the 7th Amendment guarantees a right to a jury trial in patent cases and analyzed, in presentations and roundtable discussions, current issues and trends in how patent jury trials are conducted. Given her rich and varied background in the patent law sphere, Anne Hassett also discusses her own views on the matters brought up in the symposium, including the observations and experiences that shape her perspective on patent jury trials.

Antitrust Treatment of the No Challenge Clause

Antitrust Treatment of the No Challenge Clause
This Article examines a patent licensing practice that has hitherto escaped the attention of U.S. antitrust law: the no challenge clauses. Under these clauses, a patent licensee is prohibited from challenging the validity of the licensed patent. These clauses have so far only been examined under patent law in terms of enforceability. This oversight by antitrust law is unfortunate, as no challenge clauses can create consumer harm by protecting an otherwise invalid patent from challenges and artificially extending the exclusive period granted by the patent law. This means that consumers have to bear supra-competitive prices for longer than necessary. A number of factors are relevant to the analysis of the legality of no challenge clauses, such as market power, patent validity, and market structure at the licensee level. This Article proposes a framework based on the Rule of Reason that incorporates all of these relevant factors and structures them in a way that renders the framework easy to apply. Lastly, the Article rejects a number of justifications that have been offered to argue for the legality of these clauses across the board.

Let’s Be Reasonable! The Broadest Reasonable Interpretation in the PTAB

Let’s Be Reasonable! The Broadest Reasonable Interpretation in the PTAB
While the Patent Trial and Appeal Board (PTAB), a part of the United States Patent and Trademark Office, uses the “broadest reasonable interpretation” for inter partes review proceedings (IPRs), district courts apply the “ordinary and customary meaning” standard for civil litigation. The disparity between standards in similar adjudicatory proceedings is not explicitly justified by existing law and creates uncertain outcomes for practitioners. This note explores the usage of the broadest reasonable interpretation in IPRs, the problems created by dichotomous claim construction standards between the two forums, and possible avenues of correcting this disparity. The Supreme Court acknowledged the issue posed by disparate standards by granting certiorari in Cuozzo Speed Technologies, LLC v. Lee. Therefore, this note argues that the Supreme Court, in this case, ought to require the PTAB to use the district court’s “ordinary and customary meaning” standard.

Obviousness Guidance at the PTO

Obviousness Guidance at the PTO
An invention is patentable only if it is “nonobvious to a person having ordinary skill in the art.” This obviousness determination is prone to two types of errors: type I errors, which are patent rejections that should have been granted, and type II errors, which refer to granted patents that are actually invalid. Although such errors can occur at both the agency level and the court level, this note focuses on errors at the level of patent prosecution at the United States Patent and Trademark Office (PTO). The note proposes that the PTO, in order to clarify its policy position on obviousness issues long before courts have the opportunity to weigh in, should promulgate forward-looking obviousness guidance under its nonlegislative rulemaking authority. This would increase the determinateness of the obviousness doctrine, producing more uniform results and reducing the level of uncertainty and error in patent prosecution. Guidelines of this sort are feasible under the current regime of institutional authority and will withstand judicial challenges. Moreover, they would be particularly suitable for the field of emerging technology, in which legal guidance is the most lacking.