Tag Archives: Policy

Purpose of the Patent System Is to Raise the Bar for Invention

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Writing in concurrence in Meyer Intellectual Properties Limited v. Bodum, Inc. (Fed. Cir. 2012), Judge Dyk questioned why the patent in dispute issued and why it was not found obvious on summary judgment:

While I agree with and join the thorough majority opinion, in looking at this case from a broader perspective, one cannot help but conclude that this case is an example of what is wrong with our patent system. The patents essentially claim the use of a prior art French press coffee maker to froth milk. Instead of making coffee by using the plunger to separate coffee from coffee grounds, the plunger is depressed to froth milk. The idea of frothing cold milk by the use of aeration rather than steam is not new as reflected in the prior art Ghidini patent.  Under the Supreme Court’s decision in KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 420 (2007), and its predecessors, it would be reasonable to expect that the claims would have been rejected as obvious by the examiner, and, if not, that they would have been found obvious on summary judgment by the district court. But no such thing. The parties have spent hundreds of thousand of dollars and several years litigating this issue, and are invited by us to have another go of it in a second trial. Such wasteful litigation does not serve the interests of the inventorship community, nor does it fulfill the purposes of the patent system.

Judge Dyk specifically refers to the private costs of this litigation. In practice, this is at least a million dollars wasted on legal fees, if both parties’ costs are taken into account. The public also has spent a substantial amount of resources on this case. These resources include a federal district court’s time and resources, a jury’s time (and perhaps a future second jury), and the Federal Circuit’s time spent correcting the errors in an 44-page opinion (PDF).  Beyond monetary costs, Judge Dyk’s concurrence suggests an even greater public cost: the undermining of public confidence in the ability of the patent office and the courts to get patentability decisions right on even relatively technologically simple inventions. This waste is felt intensely by practitioners, patent owners and courts. Perhaps the U.S. Patent Office can take note and do its job better by raising the bar for patentability for inventions.

Unencrypted Email Messages Still Acceptable for Attorney-Client Privileged Communications

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It is good to be reminded that some things stay the same. In 1999, the American Bar Association issued Formal Opinion 99-413 and concluded that cell phones and unencrypted email messages are acceptable for attorney-client communications that include privileged information or advice. The opinion reasoned that a reasonable expectation of privacy attaches because interception of conversations and messages is illegal under the Electronic Communications Privacy Act or ECPA, 18 U.S.C. §§ 2510-2522. There has been no change in this opinion – either in the public sector or within most legal circles such as the ABA.

The lesson is that even in 2012, clients and lawyers can still feel secure in transmitting highly confidential information by email messages and phone calls over cellular networks.

Cautionary Tale of Using Patents to Extend Protection of One Cholesterol-lowering Drug, Tricor

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The Washington Post recently (20 April 2012) published an article titled, “Want to cut health care costs, start here.”  A small change in prescribing cholesterol-lowering drugs would save Americans $700 million a year. The story is heavily excerpted below, and has been the subject of many blog posts.

Every year, Americans pay $700 million more for cholesterol-lowering drugs than they need to. The reason? Abbott Laboratories. Abbott Labs is a pharmaceutical company based in Illinois. In 2000, it faced a problem. The company had recently acquired exclusive rights to sell Tricor-1, a cholesterol-fighting drug. It was profitable, a name-brand drug and Abbott was the only company with rights to sell it.

Drug (i.e., patent) exclusivity does not, however, last forever. After a name-brand drug has five years on the U.S. market, generics are allowed to come in and compete. That’s what a generic pharmaceutical company wanted to do with Tricor-1. Novopharm submitted an application to the Food and Drug Administration to produce a generic version of the drug.

In theory, that was bad news for Abbott Labs. With generics tending to sell at about 80 percent less than brand-name drugs, the generic medication had the potential to seriously undercut its Tricor-1 business.

Abbott Labs was able to delay Novopharm by a bit, a story that health-care researchers recount in a recent Annals of Internal Medicine article. The company filed a patent infringement lawsuit that ate up some months, and in the meantime, they came up with Tricor-2. It looked a lot like Tricor-1 — same active ingredients, same uses, nearly the same name. But there was one hugely important difference: Dosage. Where Tricor-1 came in 67 and 134-milligram formulations, Tricor-2 would come in 54 and 160-milligram dosages. However, little or no research supported the change for the new dosages.

By the time Novopharm’s generic came onto the market, Abbott Labs had already rolled out Tricor-2 and made it doctors’ prescription of choice. Six months after its introduction onto the U.S. market, Tricor-2 accounted for 97 percent of all prescriptions for this type of medication, known as fenofibrates.

Over the past decade, this has happened two more times for Abbott. Tricor-3 replaced Tricor-2. Abbott did get a little creative with the name this last time, replacing Tricor-3 with a different dosage branded Tripilix. “As soon as direct, generic competition seemed likely at the new dose level, where substitution would be allowed, Abbot would launch another reformulation, and the cycle would repeat,” Yale University’s Nicholas Downing and his co-authors write.

The cost implications of Abbott’s strategy are pretty big: The Annals of Internal Medicine estimates that, if the health-care system had come to rely on Novopharm’s generic medication, our health-care system would be saving $700 million every year. Overall, the use of generic drugs is estimated to save the country $158 billion annually, which breaks down to $3 billion a week.

Part of the blame, the researchers say, goes to doctors, who have predominantly stuck with Abbott’s brand-name drugs as their prescription of choice. They call their findings “a cautionary tale for physicians, who must accept some responsibility for the continued use of branded [drugs].”

“Despite the availability of many generics during the past nine years, physicians have continued to prescribe Abbott’s more expensive formulations,” they write. “Which in December 2009 accounted for more than 75 percent of all prescriptions.”

Some of the issue has to do with the regulatory system, too. Each time Abbott Labs faced a new generic, it would launch a patent infringement lawsuit. Each time it did that, it would create a huge delay for the generic pharmaceutical company, as the FDA requires all applicants to have resolved any outstanding patent disputes before seeking approval. Looks like abuse of the legal system to protect a patent monopoly.

The more fundamental question, though, is about whether the new dosages of brand-name drugs ought to get new exclusivity periods in the first place. The new Tricor dosages, after all, never showed improved outcomes for patients over previous formulations. Most of them didn’t require financing for new patient trials or testing. Without the new Tricors, we’d have the same outcomes – and $700 million less each year in additional health-care spending.

Community Revisions to the MPEP

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The director of the U.S. Patent Office recently asked for comments on how to re-engineer the MPEP. Clearly, the U.S. needs to change the way we promulgate administrative rules.

Wouldn’t it be great if law could be refined and updated like releasing a new version of an open-source software application! After all, isn’t law for the people? Don’t we have a community of deeply caring professionals willing to donate a few minutes to improve their body of law? If we did “open-source” the MPEP, we could get substantive, meaningful updates on a rigorous schedule every few months. If computer programmers can do it, so should lawyers and patent agents.

In order to handle a large body of administrative law, we need something like a wiki for a draft version of the MPEP with a deadline to freeze the draft version. A large number of users (the “community”) could then comment and revise it. After the deadline, we could turn a draft version, subject to moderators, into the official version.

Further, we need a system that accepts meaningful footnotes to current case law. We need a place for persistent comments from practitioners where the comments persist from version to version – but only if accepted by a moderator. The comments would not be part of the official MPEP but could be an authoritative, or at least trusted, source for tutoring practitioners and educating self-filing inventors. We need a moderator for each section of the MPEP, a moderator with real power to authoritatively accept and reject changes. We need to open up each section to comments, have deadlines for a new revision  Overall, something that should get simpler over time, not more complex. Any thoughts welcome.