Bio/Pharma Patentee Challenges Ahead
As discussed last week, the USPTO’s Patent Trial & Appeal Board (PTAB) offers significant benefits to generic drug companies seeking to enter the market of a branded competitor. That is, the PTAB offers a short circuit to expensive district court litigation for challenging high value drug patents.
In addition to the proceedings discussed last week, three recent PTAB decisions involving DNA sequencing patents owned by the Trustees of Columbia University in the City of New York, the PTAB cancelled all challenged claims in the three patents, IPR2012-0006 and 00007 and IPR2013-00011. While not technically drug patents, their fate is indicative of what the drug industry faces in PTAB challenges. Read the rest of this entry »
IPRs and Drug Litigation
Since Post Grant Review (PGR) is designed to challenge patents on 112 and 101 grounds not available in Inter Partes Review (IPR), it is often assumed that Bio/Pharma is somewhat unconcerned with the growing trend to challenge patents in IPR at the PTAB. Today, my partner Richard Kelly and I explain that ethical drug companies are in fact very concerned with IPR.
The generic drug industry enjoyed a run of almost 20 years of enormous profits from the 180 day exclusivity period granted to the first ANDA file under the Hatch-Waxman Act — this all changed in 2003. In response to perceived abuses, The Medicare Prescription Drug Improvement and Modernization Act became law in 2003. One unintended consequence of the act was that most exclusivity periods became shared. That is more than one generic company received the right to sell during 180 day exclusivity period.
The impact on the generic industry’s profitability has been marked. First, if there is only one generic, it has been estimated that the generic company will receive about 94% of the ethical company’s wholesale price and will capture 80% or more of the ethical drug company’s market volume. In contrast, with a shared exclusivity between two competitors, only 52% of the ethical company’s price is captured, at 9 competitors only 20%, but still collectively capturing about 80% or more of the ethical company’s volume. In the recent Crestor litigation, 9 companies are eligible for the 180 day shared exclusivity. This changes the economics of drug patent litigation tremendously. No longer can generic companies afford to pay $10 million or more in legal fees to challenge a drug patent listed in the FDA Orange Book. Like many patent challengers the generics are looking to cut litigation costs — enter the PTAB. Read the rest of this entry »
Spring CLE Events
For attorneys seeking post grant patent CLE this spring, there are a number of high quality programs scheduled over the next few weeks.
On March 20, 2014, Strafford Legal offers the webinar Parallel Patent Proceedings Before the PTAB and Federal Court Post AIA. This program provides a special emphasis on litigation strategy, including motions to stay and parallel discovery issues.
Closing out March is the return of the highly acclaimed Practicing Law Institute program entitled USPTO Post-Grant Patent Trials 2014. This day long program, dedicated entirely to post grant practice will be held on March 27, 2014 in New York, and again on April 28, 2014 in San Francisco. A live webcast is available for the San Francisco location.
Heading into April, Post-Grant Patent Practice: Review and Reexamination is offered March 30-April 1 in Bonita Springs, Florida
Post-Grant Patent Practice: Reissue, Owner-Request Reexamination, and Supplemental Examination is offered the next day, April 2, in Bonita Springs, Florida.
On April 3rd, the American Bar Association (ABL) Spring Meeting in Arlington Virginia will host Game Over: The Game Changing Impact of the Patent Trial & Appeal Board on Non-Practicing Entities (NPEs).
I hope you can join me and my colleagues at one of these upcoming events.
IPR…Not Just For Trolls
With Congress on the verge of passing still more legislation directed at alleviating the dreaded “patent troll” problem, perhaps Congress should pause to consider what has already been accomplished over the last 18+ months. As pointed at by Gene Quinn at IPwatchdog last week, Congress is in a rush to pass further patent reform legislation in the name of “helping Main Street America.” Yet, since September 16, 2012 the America Invents Act (AIA) has been wildly successful in providing a cheaper, faster, low cost alternative to patent litigation. Inter Partes Review (IPR) in particular has become the favorite anti-troll measure.
Typically, an IPR is pursued against the subject patent so that a stay of the costlier litigation can be obtained. Depending upon the jurisdiction/judge involved, the ability to stay a litigation pending USPTO review has increased significantly since the passage of the AIA. While this change in landscape is welcome news for those battling trolls, IPR is equally concerning for those patentees considered to be true technology innovators. Read the rest of this entry »
Mark-Up Scheduled for Senate Judiciary Committee March 27th
Senator Leahy will dust off his proposed bill S. 1720 entitled Patent Transparency and Improvements Act of 2013 next week. The Bill has been the subject of fairly intense lobbying over the past few months, stalling the otherwise fast track effort. With the mark-up scheduled for Senate Judiciary Committee consideration on March 27th, it is expected that debate on the revised bill will be pushed for early/mid April.
It will be interesting to see the mark-ups and differences between the initial version of the Bill and its House counterpart (Goodlatte bill) — a veritable patent lobby report card.
PTAB Breaks 1000 Threshold for CBM and IPR Filings
Last week, the USPTO issued the official tallies/progress statistics for Inter Partes Review (IPR), Post Grant Review (PGR) and the Covered Business Method (CBM) proceedings. As of March 6, 2014 the Patent Trial & Appeal Board (PTAB) has received 924 IPR petitions and 127 CBM petitions, 1056 petitions in total. Since the last update in January, the PTAB has seen 150 additional petition filings. These numbers are well beyond the 281 filing limit per year Congress envisioned in the America Invents Act. The PTAB is seeing 281 filings roughly every 2-3 months. (Click to Enlarge)
Not surprisingly, the vast majority of IPR petitions remain in the predictable arts, significant concentrations being in consumer electronics and mobile communication technologies. (a favorite haunt of non-practicing entities (NPEs))
Although difficult to gauge from the numbers due to the lag in filing of preliminary responses across yearly boundaries and larger sample in 2014 filing numbers, it seems that patent owner’s are beginning to appreciate the limited value of preliminary responses. The number of waived responses in 2014 has already surpassed 2013 numbers.
Based upon the growing sample, the settlement/adverse judgment rate appears to be leveling out at around 15-20%. As more proceedings mature toward written decision the rate may increase. Of course, it is within the discretion of the PTAB to continue to written decision for late stage settlements, especially those attempted after the patent owner response. (See CBM2012-00007)
NDCA vs. EDTX
Prior to the passage of the America Invents Act (AIA) many district courts were less than impressed with the lenghty pendencies of patent reexamination proceedings at the USPTO. For this reason, motions to stay a litigation pending patent reexamination were often denied based upon the perceived prejudice of a 5-6 year delay (typical of reexaminations through appeal). The patent challenge proceedings of the AIA (IPR, CBM and PGR) were specifically designed, at least in part, to remedy the pendency issue.
The new patent challenge proceedings of the AIA are conducted before the USPTO’s Patent Trial & Appeal Board (PTAB) and must conclude, by statute, within 12 months of trial order. (There is a provision allowing for 18 month schedules in exceptional cases but the PTAB has yet to avail themselves of that exception). Many districts across the country have recognized the improved speed of the PTAB. Not surprisingly, the success rate for staying cases pending USPTO review has significantly improved.
That said, there are still significant differences of opinion on the PTAB —across districts, and even across judges of a same district. Read the rest of this entry »
Refusal to Stay Pending CBM Unusual
Last week I discussed the creation of a “Track B” docket by the Eastern District of Texas (EDTX) and explained how this docket could force some defendants away from the more cost effective alternatives of the USPTO’s Patent Trial & Appeal Board (PTAB). On the heels of the Track B announcement, the Court issued a second denial of a stay of the patent dispute between VirtualAgility Inc., v. Salesforce.com Inc., et al. (here) pending PTAB review. In this case, a Covered Business Method (CBM) challenge was filed against the patent at issue. By way of reminder, CBM is the proceeding created by Congress that does all but mandate a stay pending CBM…..at least outside of Texas. Read the rest of this entry »
EDTX Judge Davis Announces New, Faster “Track B” for Patent Cases
Last week, Chief Judge Leonard Davis of the Eastern District of Texas (EDTX) issued an Order (here) creating a second, Track B for patent cases. Track B as the name implies establishes a different, accelerated track as compared to the typical EDTX schedule (Track A). Litigants may opt for Track B by agreement, or be selected for such by the court. Track B is designed to reduce costs by accelerating milestones and limiting certain filing and discovery practices. These same concepts are expressed in many of the proposals of the pending patent reform legislation. The judiciary has been rather vocal on opposing the various proposals floating around Congress on issues of district court case management. While the goal of Track B is to resolve disputes sooner with less cost to litigants, the timing also suggests a deliberate amplification of the judiciary’s position.
To be sure, the proactive efforts of the judiciary to reduce time and expense of litigation are greatly welcomed, and the EDTX effort is to be applauded for taking the lead. Yet, based upon the dynamics of what is going on in the world of patent assertion post America Invents Act (AIA), the EDTX Track B docket could aid certain non-practicing entities that were only recently left for dead. Read the rest of this entry »
Board to Host Overview of Operations
Wednesday, February 26th, the USPTO will host a program entitled “State of the PTAB” at their new Silicon Valley location. The program will cover an overview of the PTAB, Board growth — past and planned, day in the life of a judge, and training for new judges. While primarily a recruiting event for new judges, the program is sure to provide some interesting insight (flyer here)
The event will be webcast 6-8PM (PST) http://www.uspto.gov/ip/boards/bpai/index.jsp