April Highlights: Reforming Patent Adjudication With PREVAIL
The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act was introduced by Senators Chris Coons (D-DE), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI) in August 2023 and remains one of the most important innovation policy priorities for the 118th Congress. The bill would reform patent adjudication standards at the Patent Trial and Appeal Board (PTAB) in order to ensure that inventors receive fair and equal treatment when their patents are challenged, no matter whether that is at the PTAB or in federal district court.
C4IP is actively engaged in and supportive of initiatives advocating for the swift passage of this important legislative reform:
- You can find additional resources on the PREVAIL Act here and below:
Additional Coalition Updates
- On May 7, the Special Competitive Studies Project (SCSP) will host a Fireside Chat on AI and IP, which will include C4IP Co-Chair and former USPTO Director Andrei Iancu and U.S. Copyright Office Director Shira Perlmutter. The event will take place from 1:50 to 2:20 p.m. EDT at the Walter E. Washington Convention Center in Washington, D.C.
- For more details and to register for the event, visit the SCSP AI Expo website.
- On April 29, C4IP Executive Director Frank Cullen released a statement recognizing Representatives Thomas Massie and Marcy Kaptur for introducing the Restoring America’s Leadership in Innovation Act (RALIA) of 2024.
- On April 26, C4IP Executive Director Frank Cullen released a statement marking this year’s World Intellectual Property Day, which focuses on how IP contributes to and promotes sustainable development.
- On April 25, C4IP Chief Policy Officer and Counsel Jamie Simpson was featured in a Bloomberg Law article covering Representative Adam Schiff’s new AI and copyright bill.
- On April 10, C4IP Board Member Judge Kathleen O’Malley (ret.) was interviewed in World Intellectual Property Review about her career as a woman in law and her tireless advocacy for strong IP rights.
- On April 9, C4IP Board Member Judge Paul Michel (ret.) was a featured speaker at CSIS’ 2024 LeadershIP Conference, the premier conference on IP, innovation, and national security policy. Other speakers included David Norquist, CEO of NDIA and former Undersecretary of Defense, and Walt Copan, senior adviser of CSIS’s Renewing American Innovation Project and former NIST Director.
- On April 8, C4IP Co-Chair and former USPTO Director David Kappos was interviewed by KSL.com in an article on Utah Senators Mike Lee and Mitt Romney’s efforts to protect innovation, which also drew heavily from C4IP’s recently released Congressional Innovation Scorecard.
- On April 8, C4IP Co-Chairs and former USPTO Directors Andrei Iancu and David Kappos published an opinion essay in the Buffalo News highlighting how the Biden administration’s proposal for march-in rights would undermine innovation across New York.
“Adopting the new framework would undermine four decades’ worth of trust in federally funded research and decimate innovation across all high-tech sectors.”
- On April 1, C4IP Co-Chair Andrei Iancu and President & CEO of UCLA Technology Development Corporation Amir Naiberg published an opinion essay in The Orange County Register explaining how the Biden administration’s march-in proposal threatens innovative research at universities across the country.
“[Public-private] cooperation has become the norm under Bayh-Dole. It will end abruptly if the Biden administration rewrites the rules of the game.”
- ICYMI: C4IP’s website now includes a “Key Issues” landing page featuring PERA, PREVAIL, March-In Rights, EU SEPs Reform, the TRIPS Waiver, and the SHOP SAFE Act.
Government Rundown
Senate Judiciary Committee, Subcommittee on Intellectual Property: The NO FAKES Act: Protecting Americans from Unauthorized Digital Replicas:
On April 30, The Senate Subcommittee on Intellectual held a hearing on the The Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act. Witnesses included University of San Diego School of Law professor Lisa P. Ramsey, Digital Media Association President and CEO Graham Davies, Warner Music Group CEO Robert Kyncl, SAG-AFTRA National Executive Director and Chief Negotiator Duncan Crabtree-Ireland, Motion Picture Association Senior VP and Associate General Counsel Ben Sheffner, and singer-songwriter Tahliah Debrett Barnett. (Senate Judiciary Committee, 4/30).
USPTO Program: Military Entrepreneurship Summit:
On April 22, the USPTO hosted a summit at its headquarters in Alexandria, VA to educate veterans and other military service members about the fundamentals of entrepreneurship. The event included multiple “fireside chats” with military and veteran entrepreneurs and included remarks from top USPTO and Commerce Department officials, including Commerce Secretary Gina Raimondo, USPTO Director Kathi Vidal, and USPTO Deputy Director Derrick Brent. (USPTO, 4/22)
USPTO Notice of Proposed Rulemaking: Patent Trial and Appeal Board Rules of Practice for Briefing Discretionary Denial Issues, and Rules for 325(d) Considerations, Instituting Parallel and Serial Petitions, and Termination Due to Settlement Agreement:
On April 19, the USPTO published a Notice of Proposed Rulemaking that would adjust the processes for inter partes review and post-grant review proceedings at the Patent Trial and Appeal Board (PTAB). The USPTO will accept comment submissions on the proposed changes through June 18. (USPTO, 4/19)
House Small Business Committee, Subcommittee on Economic Growth, Tax, and Capital Access Hearing: Exploring SBA Programs: Reviewing the SBIC and SBIR Programs’ Impact on Small Business:
On April 16, the House Subcommittee on Economic Growth, Tax, and Capital Access held a hearing to examine the effectiveness of the Small Business Administration’s programs to fund startups and small businesses and how they might be improved. Witnesses included the leaders of the Small Business Investor Alliance and Small Business Technology Council as well as two small business executives. (House Small Business Committee, 4/16)
House Judiciary Committee, Subcommittee on Courts, Intellectual Property, and the Internet Hearing: Artificial Intelligence and Intellectual Property: Part III — IP Protection for AI-Assisted Inventions and Creative Works:
On April 10, the House Subcommittee on Courts, Intellectual Property, and the Internet held its third hearing in a series on the IP rights that should be afforded to inventions developed with the use of AI. Witnesses included Ginkgo Bioworks’ Claire Laporte, the Computer and Communications Industry Association’s Joshua Landau, and law professors Sandra Aistars and Kristelia Garcia. (House Judiciary Committee, 4/10)
USPTO Program: Green Energy, Intellectual Property, and a Solar Eclipse Panel Discussion:
On April 8, the USPTO’s Texas Regional Office held a solar eclipse viewing event that also included a panel discussion on developing and patenting innovative green energy sources such as solar energy. The panel, which was also broadcast virtually, included Solar One CEO Aaron Wilson, Cooksey Communications Vice President Anna Clark, and Hunt Institute Executive Director Eva Szalkai Csaky. (USPTO, 4/8)
Fact Check
Bringing a new therapeutic to market is a challenging and costly endeavor. Strong intellectual property protections, which enable manufacturers to recoup their successful investments into new treatments, are absolutely essential to encouraging innovation. However, activists and government regulators who seek to weaken IP rights often fail to recognize this fundamental reality.
One recent example of this is a recent JAMA article published on March 27, which argues that certain diabetes medicines — such as insulins and GLP1As — would be more widely accessible if their prices were regulated to around the cost of production. This is untrue and reveals a crucial misunderstanding of how strong IP rights promote competition to increase the availability of innovative drugs.
| Claim: “Patents prevent competition and play a leading role in keeping prices high for a wide range of medicines.” |
| In reality: Patents play an essential role in promoting competition. Strong patent rights ensure that a company that develops a useful innovation — no matter the company’s current size or market share — will have a fair chance to succeed in the marketplace on the basis of its own ingenuity. In contrast, without protection for intellectual property, large companies would be able to copy competitors’ innovations with impunity, stifling competition and allowing established giants to set their own prices unopposed. Patent protections also only apply for a limited time, meaning that all but the newest drugs have generic alternatives available. Indeed, more than 90% of prescriptions filled in the United States are for generics. |
| Claim: Regulating drug prices to only slightly above the cost of manufacture would “afford manufacturers returns, while avoiding excessive profit margins.” |
| In reality: The cost of manufacturing, by itself, is just a small portion of the total costs that go into producing a drug. While per-unit manufacturing costs are often low, the cost of developing a drug and shepherding it through clinical trials is steep. When accounting for the cost of failure — the fate of nine in 10 clinical drug candidates — the average cost of developing a new drug is $2.6 billion. The market prices for drugs are designed to not only offset their manufacturing costs but also their R&D costs, which can take drug developers many years to recoup. Excessive regulation of drug prices would detract from developers’ R&D budgets, not just their profits. |
| Claim: Weakening drug patents and forcing lower prices would “enable expansion of diabetes treatment globally.” |
| In reality: Forcibly lowering drug patents by weakening IP would likely restrict worldwide access to diabetes treatment by preventing the development of new and more cost-effective medications. Reliable IP rights in the United States drive the development of innovative drugs that benefit Americans and those around the world, with more than half of new drugs being launched first in the United States. At the same time, evidence from countries like India and South Africa demonstrates that weaker IP laws do not result in lower medication prices — a fact the article itself acknowledges. Blunt tools such as price controls are much more likely to affect patients by reducing their treatment options than by making medicine more affordable.. |
Celebrating American Innovation
Inventor Spotlight
This month, C4IP is recognizing William Coolidge, who transformed medicine with his invention of the modern X-ray.
- Coolidge was born in 1873 in Hudson, Massachusetts, and studied electrical engineering at Massachusetts Institute of Technology (MIT) and the University of Leipzig before joining the General Electric Research Laboratory.
- He earned more than 80 patents during his career, which spanned diverse inventions from improvements to incandescent light bulbs to a system for detecting submarines.
- Coolidge is best known for inventing the Coolidge tube, a vacuum tube patented in 1916 that became the foundational technology for modern X-ray machines.
- Today, the X-ray machine industry is estimated at nearly $18 billion.
- It supports over 230,000 jobs in manufacturing and radiology across the United States.
- Coolidge’s invention left a permanent impact on General Electric, which today is worth over $160 billion and remains one of the three largest manufacturers of X-ray equipment in the world.
- More importantly, his invention continues to save lives: Roughly 3.6 billion diagnostic medical examinations are performed globally each year to identify and treat dangerous illnesses such as cancer and heart disease.
(Photo courtesy of https://www.harvardsquarelibrary.org/)
What’s Happening in Congress
As Democratic and Republican members of Congress continue to weigh legislative priorities during the 118th Congress, top of mind for those who follow intellectual property policy are:
The Patent Eligibility Restoration Act of 2023:
In June 2023, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) reintroduced legislation aimed at restoring patent eligibility for important categories of inventions – including life sciences diagnostics, gene therapies, and computer-implemented inventions – as well as resolving questions regarding the scope of patent eligibility. In so doing, the Patent Eligibility Restoration Act will foster the development of next-generation technologies across innovative industries.
The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act:
In June 2023, Senators Chris Coons (D-DE), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI) – joined by Deborah Ross (D-NC), and later cosponsored by Nathaniel Moran (R-TX), on the House side – introduced legislation that will eliminate redundant patent invalidity challenges and safeguard Americans’ right to participate in a fair and accessible patent system. The PREVAIL Act contains important reforms to the Patent Trial and Appeal Board, which will return the body to its original purpose of providing an efficient alternative to district court litigation, and will curtail the practice by patent infringers of forcing inventors to defend their patents repeatedly and in multiple fora.
The Prohibiting Adversarial Patents (PAPA) Act:
In September 2023, Representatives Scott Fitzgerald (R-WI), Mike Gallagher (R-WI), Darrell Issa (R-CA), and Blaine Luetkemeyer (R-MO) introduced legislation that raises a number of concerns. With the well-intended goal of protecting U.S. national security, the PAPA Act has the potential to trigger significant unintended consequences. These include potential retaliatory moves by China and other nations to suspend or render unenforceable patents owned by American companies, further enabling theft of American IP overseas. The actions called for by the bill could also violate U.S. treaty obligations, which would in turn embolden other nations to violate IP-related treaties in various ways. In addition, confiscating patents, or rendering them unenforceable, violates basic principles of property, and therefore could weaken the concept of patents as property rights. These and other considerations are of the utmost importance as U.S. lawmakers study the full scope of the PAPA Act. C4IP stands ready to work with Members of Congress to address the threat posed by foreign entities, while maintaining the integrity of the U.S. patent system.
The Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act:
In September 2023, Senators Chris Coons (D-DE) and Thom Tillis (R-NC) introduced legislation designed to protect online consumers from harmful counterfeit products. By establishing trademark infringement liability for e-commerce platforms that allow the sale of dangerous counterfeit items, requiring brand owners to notify platforms of their mark(s) in advance, and providing safety from liability to platforms that appropriately vet and remove counterfeit sellers, the SHOP SAFE Act will protect American families as well as businesses and IP holders.
The Improving Efficiency to Increase Competition Act:
In January 2024, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) introduced legislation intended to reduce the administrative burden on universities and other institutions that receive federal research grants so that they can focus more intently on producing new innovations. Specifically, the legislation would direct the Government Accountability Office (GAO) to conduct a study on intellectual property reporting requirements under the Bayh-Dole Act, which vary between federal agencies. Such a study will offer important insights into how the government can make the reporting process more efficient and remove barriers that may have inhibited the development of new inventions.
The Interagency Patent Coordination and Improvement Act of 2023:
In January 2023, Senators Dick Durbin (D-IL), Chris Coons (D-DE), Thom Tillis (R-NC), and Chuck Grassley (R-IA) introduced the Interagency Patent Coordination and Improvement Act of 2023. The bill would create an interagency task force to share patent filing information and technical assistance between USPTO and FDA officials. IP experts warn that interagency entanglement could weaken the patent system by inserting officials from multiple federal agencies – without patent law expertise – into the examination process. They submit that it is premature to implement such substantial changes without conducting a thorough evidence-based study.