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Senate Subcommittee on IP Feels our PAIN

In lengthy hearings conducted by the Senate Subcommittee on Intellectual Property (of the Committee on the Judiciary) on June 4th and 5th (Parts I and II; Part III will be held on June 11th), the Subcommittee, chaired by Senators Tillis and Coons, 30 IP thought leaders testified on the draft legislation to amend ss. 101 and 112. I blogged on the draft legislation on May 24th: The draft bill would eliminate the requirement for novelty in s. 101 and defines the word “useful” as meaning “any invention or discovery that provides specific and practical utility in any field of technology through human intervention.” So, the only questions to be answered when determining if a claim patent eligible is whether or not the claim is directed to a process, machine, manufacture or composition of matter and whether or not it is “useful.” The definition of “process” was not changed. Oh, “PAIN” is my abbreviation for “phenomenon of nature, abstract idea and natural product,” categories ruled not to be patent-eligible in Chakrabarty. It’s interesting that the “Additional Legislative Provisions” accompanying the draft legislation states that “all cases establishing or interpreting [PAIN] are hereby abrogated.”

The testimony of the witnesses and their full names titles are given at the Subcommittees website, so I won’t give them in full to save time and apologize in advance for any errors. My challenge is how to summarize the extensive, though often duplicative, testimony. I think I will try to identify some notable points and take-aways.

1. The IP world at these hearings was divided between the software developers and the life sciences representatives. The life scientist reps, including Bob Armitage (retired from Lilly), Sherry Knowles (once at Glaxo), Hans Sauer (BIO), Scott Partridge (past President of ABA-IP Committee), Henry Hadad (IPO President -BM Squibb), Phil Johnson (21-C, Johnson and Johnson), David Taylor (SMU), Rick Brandon (AAU) and Natalie Derzko (PhRMA) argued that the current state of PE law, post-Mayo/Myriad is, as David Kappos termed it, a “mess.” Retired Fed. Cir. Judge Paul Michel and Q Todd Dickinson (with Kappos, past Directors of the PTO) agreed that neither the Supreme Court post- Alice or the Fed. Cir., sitting en banc post-Bilski, had done anything to clarify the law of PE, despite the large number of petitions for rehearing en banc or for a grant of cert.

The software contingent included David Jones (High Tech Investors Alliance – was at Microsoft), S Martz (“United for Patent Reform”), Charles Duan, W Jenks (Internet Assn),  Chris Mohr (SIIA), and Alex Moss (EFF) among others, told scary stories about patent trolls and how valuable (literally) it is to be able to get dismissals at the pleading stage of litigation. Mr. Jones, Mr. Mohr and Mr. Jenks essentially said that their groups opposed s. 101 reform. Paul Morinville attacked the outcry over “patent trolls” and “bad patents” as myths that were suppressing investment in start-ups and universities. He also opposed the draft bill’s attempts to define “utility” using terms that would not remedy the problem of uncertainty in PE determinations.” However, there was also much discussion about the negative effect that the proposed s. 112 amendments would have on software development, since, according to Jeff Birchak and Paul Morinville argued that  any functional term in a claim would need to be exhaustively described in the specification, to avoid easy design-arounds.

2. At the beginning of both sessions, Senator Tillis tried to get the panels to tell him if human genes would be patentable – would Myriad be reversed by the legislation. I didn’t think that he got (as far as I am concerned) a clear answer, which should have been “yes”, if a particular gene had been isolated and found to be useful. Senator Tillis stated that a “gene as it exists in the body would not be patent eligible” and so the draft bill would not overturn Myriad, but he seemed to miss the distinction between the knowledge gained from sequencing the entire human genome and the need to locate and characterize the individual genes. Ironically, Kate Ruane (ACLU) was asked if the fact that the human genome had been sequenced would prevent the damage that she had testified was caused by gene patents and she answered that the draft bill would permit patenting isolated genes. Someone should have replied that an isolated gene (or any stretch of DNA) is a chemical compound, like aspirin or sucrose, and it should be PE if it meets the proposed utility requirement. On the other end of the gene-patenting spectrum, Hans Sauer testified that Myriad is blocking patents on vaccines and enzymes and that “preparations of DNA molecules might be patentable” if the draft legislation was adopted.

3. Two contrasting human-interest stories were told by Kate Ruane (ACLU) and Sherry Knowles. Ms. Ruane told a story about a person she knew who had been wrongly diagnosed as low-risk for cancer by an early version of Myriad’s BRACA gene test that missed some important mutations. She felt that this was due to Myriad’s preventing improvements in the test by third party researchers who were afraid of lawsuits. She did not think that the Hatch-Waxman safe harbor would alleviate the problem. However, she also noted that five companies began offering BRACA gene tests soon after the Myriad patent was invalidated. Mr. Duan also called for a robust research exception to infringement.

After arguing that the judicial exceptions to PE were unconstitutional, Ms. Knowles revealed that she is a cancer survivor. She was treated with Adriamycin, a natural product,  and discovered that a small Italian company would not have developed it as a drug if it could not have obtained patent protection in the US. She stated clearly that the draft legislation would reverse Myriad.

4. One witness seemed to have been scheduled for a hearing on a different bill. Jeff Francer (Assn for Access to Medicines) argued that the draft bill would make it easier for drug companies to create patent thickets that would inhibit competition and raise costs to consumers. Interestingly, Senator Blumenthal asked the Wednesday panel if the draft bill would do anything to prevent the construction of patent thickets or what he called “patent hopping”, which I presume is the use of later-developed patents on improvements on the originally-approved drug to effectively extend the innovators monopoly. Ms. Derzko and Mr. Sauer both stated that patents on subsequent improvements, e.g., in dosing regimens, might well be patentable. Ms. Derzko testified that the proposed legislation was technology neutral and forward-looking. Bob Armitage testified that the uncertainly caused by PE law encouraged thicket-building because the innovator had little certainty that any given patent would survive a PE challenge.

5. While it is one of the technology areas most afflicted by the current state of PE, diagnostic methods based on naturally occurring correlations, were not extensively discussed. Ms. Derzko summarized Athena as a poster child for the untoward extension of the standards of PE, particularly since the diagnostic method claims recited the use of man-made reagents. Rick Brandon testified that diagnostic tests should be PE, but that the requirement for a specific and practical utility could raise questions about aspects of a given diagnostic test, e.g., how specific would be results need to be? Phil Johnson seemed to want to split this “baby” legislation, arguing that human genes would remain unpatentable, at least as they occur in vivo,  but diagnostic tests should be patentable as resulting from human intervention. (This seems a bit in line with Ariosa, in which the Fed. Cir. held that mere observation of a known natural product in a new situs is not a patent-eligible invention.

So, these are my impressions of just some of the points raised in the hearings to date. The panelists also answered questions posed by the Subcommittee members, some of which I missed due to loss of my internet connection. If you have any interest in the future of PE, you should set aside Wednesday afternoon for the final 15 panelists. At least, Judge Michel, the former Directors and the life science contingent, there is broad agreement that it is time for Congress to act.

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