Patent reform is back on the docket. And just as bedbugs are drawn to a warm body, so now are special interests doing their best to latch onto the proposed reforms and drain them of their substance.
In the case of patent reform, the biggest, fattest bloodsucker of them all is none other than the architects of Obamacare itself, Big Pharma. Specifically, Big Pharma has been trying to talk down a procedure that has been in place in patent law since 2012: a process known as the Inter Partes Review (IPR), from which they want Congress to exempt their patents.
To briefly summarize what an IPR is, it essentially allows any party with an interest in a particular patent’s validity to challenge that patent in front of the Patent Trial and Appeal Board (PTAB), an arm of the U.S. Patent and Trademark Office (USPTO). The kicker is that this challenge can be heard before the case goes to federal court, where patent lawsuits are heard, thus potentially voiding a lawsuit before it begins if the PTAB decides that the patent involved is bogus.
Recognizing that the only way to get this procedure weakened in a Republican Congress is to go through conservatives, Pharma’s lapdogs in Congress and the commentariat have advanced two arguments. Firstly, they have tried to brand this procedure as an unfair run around the court system. Secondly, they have tried to scare patent holders with claims that the PTAB amounts to a “patent death squad,” which destroys legitimate patents willy-nilly and leaves inventors out in the cold.
These charges, along with the frivolous patent litigation for which they act as cover, are utter balderdash.
To begin with, even in the criminal justice system, there are numerous proceedings which can stop a case from reaching full trial, or eliminate trials completely. For example, lawyers have to get an indictment before they can proceed with a criminal trial, which involves sitting before an entirely different body (a grand jury) than will adjudicate the trial itself, if there even is a trial. Military commissions rather than traditional courts have been used to try terrorists. The PTAB is essentially no different. It is a sort of “grand jury” for patents, except unlike grand juries, which are often made up of non-experts, this is a jury made up entirely of lawyers who specialize in patent law, also known as administrative patent judges or APJs. In other words, to the extent this type of proceeding differs from traditional court proceedings, it is the least susceptible to being misled about the subject matter. Conservatives who value the rule of law should welcome the existence of institutions like this, not scorn them.
What’s more, the PTAB’s existence is uniquely necessary because of the failure of the USPTO to navigate patent applications. In a perfect world, PTAB-level experts would simply deny invalid patents before they’re ever issued. Unfortunately, this is not a perfect world. For example, the tech blog Ars Technica reports that due to the inability of the USPTO to cope with the number of patent applications filed every year, the USPTO decided to lower standards for what constitutes a legitimate patent in 2013.
As for the charge that the PTAB is a “patent death squad” that leaves inventors’ property rights slaughtered in their wake? Well, let’s just say that based on their results, they’d basically be to death squads what the Keystone Cops are to law enforcement. I quote from the usually stridently pro-patent blog IPWatchdog’s report on this year’s Lex Machina PTAB report:
One major takeaway from this PTAB trends report is that, despite claims of high rates of patent invalidation, the reality is that many patents escape the PTAB petitioning process unscathed. To be fair, 18 percent of all PTAB trials lead to an invalidation of every claim challenged in the patent, but one-fifth of all trials are terminated because the petitioning party is denied institution.
So not only isn’t PTAB a death squad — it actually is slightly more likely to side with patent holders than with their challengers. In other words, it’s an institution that safeguards legitimate property rights just as zealously as it ferrets out invalid ones. Conservatives who favor strong property protections should cheer this.
So why is Pharma so scared of the IPR process? Probably because, while literally every single one of their patents has survived an IPR challenge when first issued, their constant practice of trying to modify patents ever so slightly in order to extend their shelf life (or “evergreening,” as some call it) sometimes gets them in hot water. In other words, pharma is trying to pull the wool over consumers’ eyes in order to keep their monopolies on certain drugs longer than they should be able to, and the PTAB is calling BS on their fraudulent claims to government-sponsored monopoly. Last I checked, government-sponsored monopoly is a form of corporate welfare, and that’s not exactly a conservative idea.
In short, conservatives should allow their timeless ideals to guide their judgment on the subject of the Inter Partes review process, and the PTAB which enforces it, no matter how much the crocodile tears of Big Pharma try to erode those bedrock principles.