A large group of patent holders sent a letter to Congress expressing concern that, since the US Patent and Trademark Office (USPTO) Director Iancu might soon be leaving, recent policies making it harder to challenge bad patents might be reversed. The letter concerns a process created somewhat recently, called inter partes review (IPR), that allows the USPTO to take a second look at the patents they issue based on a public request.
This is important because 43% of all issued patents challenged in court are ultimately found to be invalid, albeit at great expense due to the high costs of patent litigation. An IPR, by contrast, offers a far faster and less expensive way to challenge patents than using the courts, with the average IPR costing around $350,000 compared to litigation costs just shy of $1 million when defending against infringement claims brought by an NPE. It is no surprise that many who profit off patents do not like a process that makes it easier to find out if those patents are valid.
The letter states that “Director Iancu has clearly changed the dialogue surrounding patents, defined the patent system by the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to our economy and society as a whole.” While a lot of this is true, celebrating the brilliance of inventors and the benefits of patents ignores the very real direct and indirect costs of the current patent system. Patents can issue for inventions that don’t actually work or exist. This was true of Theranos, a company built around patents with technology that didn’t work or exist. Patents can also be used to try to win big paydays on seemingly unrelated products. This happened again with Theranos, whose patents were bought and used against a company making covid-19 tests.
Then there are also many, many, silly patents that get issued that usually don’t matter because very few people want the thing the patent describes. It would be weird if these inventors got to dictate patent policy. But here we are, as a large number of the inventors signed to this letter have very silly patents (feel free to find your own favorites):
US 7,814,680 – Overshoe Unit For Indoor Use (it’s a shoe that you put on your shoe)
US 5,178,576 – Apparatus And Method For Manipulating A Spring Toy (expired due to non-payment of maintenance fee)
US 9,009,870 – Garment Pocket For Rapid Extraction And Deployment Of A Concealed Weapon (does what it says it does)
APP 16/199,080 – Peeball (“a potty-training slide apparatus for boys that temporarily clips onto the toilet seat and provides an ornamental target (target has a hole through it) that boys aim and pee through and on the back side of the target is a permanently affixed ornamental slide that the urine travels down and into the toilet water.”)
US 9,278,737 – Remote Control Fishing Robot (when you just don’t feel like fishing yourself)
US 6,923,299 – Wallet For Retaining a Plurality of Credit Cards (for holding all the credit cards you used to pay for the other weird stuff on this list)
To quote Thomas Jefferson, “these monopolies produce more embarrasment than advantage to society.”
While those with silly patents have a low chance doing any harm, even if their patent were invalid, the changes the inventors advocate for can be life or death for others. These patent policies would make it harder to challenge weak drug patents that could be holding up generic competition. Cancelling drug patents and enabling competition can save patients 79%, on average, for small molecule drugs. While biosimilar competition is nascent it is projected to save patients 15%-45% or more over the next five years, possibly more. For some, this is the difference between being able to afford a treatment and not being able to afford a treatment.
It would be a travesty if those that filed these silly patents swayed policymakers to make it harder to cancel all bad patents. Many of the inventors on this letter haven’t even had their listed patents challenged in an IPR–of the 240 listed, only 18 have had any IPRs instituted–making their perspective even less relevant. This makes sense, as many of these patents describe products that are probably not economically viable due to low demand. Indeed, our casual search found several that were allowed to lapse without paying maintenance fees, a sure sign that the inventions did not produce value.
The policies being championed by the letter are already having a large effect. Procedural denials, meaning denials based on something other than the actual merits of the petition, are spiraling upward. The inventor letter makes it seem that these denials are good because they happen when a court challenge of a patent is moving faster than the IPR challenge. The letter claims that since IPR was intended to be an alternative, not an addition, it makes sense to do away with these cases. But in practice these procedural denials are being applied nonsensically and for many other reasons.
For example, sometimes drug patent challenges are so complicated that petitioners have to file multiple petitions at the same time just to get around word counts. The USPTO’s Trial Practice Guide Update says this can be fine “when the patent owner has asserted a large number of claims in litigation.” However, the USPTO is using the “in litigation” language as an excuse to deny all but one of the petitions when there isn’t parallel litigation. So much for IPR being an alternative! These denials happened to challenges to patents on the important diabetes medication Lantus, which costs $357, and a Narcan injector that can save the lives of those overdosing on opioids, costing $126 for two doses. Narcan is only expensive because of the injector patent, the active ingredient – Naloxone – is available as a low cost generic.
The USPTO has also gotten rid of a petition because of the trial date of a completely different company. This concerned a drug used to treat schizophrenia , Invega Sustenna, that costs patients $1,853.
Another denial, concerning vaccine patents, was because the USPTO refused to allow a petitioner to step into the shoes of another company that settled. This was even though the petitioner could have not known that the other company would settle and withdraw their challenge.
Patents are legal instruments with real consequences. When patents represent true innovation, those consequences are usually positive. Patents often incentivize innovation, especially when inventions are difficult to discover but easy to copy. When patents do not represent true innovation, when they should never have been granted, they can be a drag. They can be used to hold up competition or harass other innovators. Common sense dictates there should be a quick and inexpensive system for sorting out bad patents from those that are good. However, any such system is a threat to those that make money off patents that could be cancelled. These voices should be taken with the huge grain of salt they deserve.