May Highlights: Debunking Patent Myths
As drug prices continue to be a focus for federal policymakers, anti-IP activists have seized the opportunity to blame the patent system. These attacks ignore the fundamental role that patents play in enabling the investment of billions of dollars that it takes to bring new, innovative treatments to market. Patents incentivize making those treatments better in ways that improve patient health outcomes and lower costs, such as formulations that can be taken once a day or devices that allow treatments to be taken at home rather than in a medical setting. Anti-patent myths threaten to halt this progress.
But the life sciences is far from the only sector that relies on strong patents. These attacks on our patent system threaten to undermine the development of all new technologies – including AI, communications, and much more.
As Senator Chris Coons (D-DE) stated during the Senate Judiciary Committee’s May 21 hearing on drug pricing:
“The patent system applies to a very wide range of products and goods, not just pharmaceuticals, and so what reforms and changes are made in order to pursue reductions in drug prices [must] not harm the patent system that protects everything from roof shingles to batteries to electric vehicles to paint coatings.”
Yet government proposals marketed as targeting drug prices – such as NIST’s guidance for march-in rights – openly admit to putting all types of technologies at risk of having their patents infringed.
For that reason, C4IP has worked to thoroughly dispel the anti-patent rhetoric and policy suggestions that have become prominent over the past month:
- C4IP Executive Director Frank Cullen sent a letter to the members of the Senate Judiciary Committee to dispel common myths about abuse of patent rights and affirm the importance of IP in drug development prior to the Committee’s May 21 hearing on lowering drug prices.
- IPWatchdog covered C4IP’s letter in an article published May 23.
“[S]ome Members of Congress mistakenly believe they can lower drug prices by undermining the patent protections responsible for creating those medicines in the first place… As you consider potential drug pricing legislation, we urge you to defend the patent protections that make groundbreaking medical innovation possible.”
- C4IP also released a new issue brief to debunk these common myths, including “patent thickets,” “patent evergreening,” and “product hopping,” in greater detail.
Additional Coalition Updates
- On May 30, C4IP Co-Chair Dave Kappos was featured in a Pharmavoice article on drug pricing and patent myths.
- On May 28, C4IP Co-Chairs and former USPTO Directors Andrei Iancu and Dave Kappos, alongside former USPTO Officials Drew Hirshfeld, Laura Peter, and Russell Slifer, sent a letter to USPTO Director Vidal urging the immediate withdrawal of the Notice of Proposed Rulemaking (NPRM) regarding continuations and terminal disclaimers.
- The letter was featured in IPWatchdog, Law360, and Bloomberg Law articles.
- On May 15, C4IP Executive Director Frank Cullen sent a letter to the members of the Senate Commerce Committee on the proposed “Invent Here, Make Here Act of 2023” (S. 1956), explaining that the draft bill’s overly restrictive requirements for domestic manufacturing beyond what the law already requires could inadvertently keep the fruits of federally funded research out of the marketplace.
- On May 13, C4IP Co-Chair Andrei Iancu and UC Berkeley official Mark Cohen published an opinion essay in the International Business Times calling on the White House to stand up against China’s illegal abuse of anti-suit injunctions in patent infringement cases.
“China must be held accountable. We must work with our allies to hold China to basic standards of transparency, due process and non-interference with the parties and courts of our own legal systems.”
- On May 13, C4IP Executive Director Frank Cullen submitted a public comment to the USPTO responding to its February guidance for AI-assisted inventions, cautioning that the guidance’s lack of clarity on IP rights could inadvertently deter innovators from taking advantage of AI technology.
- Law360, JDSupra, and Inside AI Policy subsequently referenced C4IP’s feedback in their coverage of this issue.
- On May 13, C4IP Executive Director Frank Cullen submitted a public comment supporting pro-patent legislative reforms, such as PERA and the PREVAIL Act, in response to the USPTO’s Request for Comments (RFC) on how to best translate innovation to the marketplace.
- On May 7, C4IP Co-Chair Andrei Iancu was a featured panelist in a Fireside Chat on AI and IP as part of the Special Competitive Studies Project’s AI Expo for National Competitiveness.
- On May 3, C4IP Executive Director Frank Cullen submitted a public comment to the USPTO expressing support for but also some concerns with its March Notice of Proposed Rulemaking (NPRM) regarding proposed rules governing amendment practice in trial proceedings under the America Invents Act (AIA).
- On May 2, former USPTO Director of Governmental Affairs Dana Colarulli published an opinion essay in RealClearHealth highlighting President Biden’s historical support for the Bayh-Dole Act and underscoring how upholding the act would help the president achieve his policy goals.
“By endorsing march-in rights as a means of price control, [Biden is] counteracting other ambitions he’s been vocal about: fostering economic growth, competing with China, generating high-skill U.S. jobs, and tackling cancer. All of these goals depend on secure patent rights.”
Government Rundown
Senate Committee on the Judiciary Hearing: Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market:
On May 21, the Senate Judiciary Committee held a hearing on potential reforms to lower drug prices, which included discussion of patents. Witnesses included George Mason University School of Law professor Adam Mossoff, PhRMA Vice President Jocelyn Ulrich, Dr. William Feldman, physician, Duke Law professor Arti Rai, and Patients for Affordable Drugs President David Mitchell. (Senate Judiciary Committee, 5/21)
House Committee on Small Business Hearing: Stifling Innovation: Examining the Impacts of Regulatory Burdens on Small Businesses in Healthcare:
On May 8, the House Small Business Committee held a hearing to discuss how regulations in the healthcare sector limit small companies’ ability to innovate and compete. Witnesses included Johns Hopkins University School of Medicine assistant professor Dr. Brian Miller, Community Oncology Alliance chair Dr. David Eagle, Sutro Biopharma CEO William Newell, and National Center for Health Research president Dr. Diana Zuckerman. (House Small Business Committee, 5/8)
House Committee on the Judiciary, Subcommittee on Courts, Intellectual Property, and the Internet Hearing: Intellectual Property: Enforcement Activities by the Executive Branch:
On May 7, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet held a hearing to discuss federal agencies’ enforcement of intellectual property rights. Josh Goldfoot of the Department of Justice, Michael Ball of the Department of Homeland Security, and Brandon Lord of U.S. Customs and Border Protection testified as witnesses. (House Judiciary Committee, 5/7)
USPTO Event: Invention-Con San Jose:
On May 1, the USPTO held an event in conjunction with the Silicon Valley Chapter of the Licensing Executives Society to kick off its “Successful Inventing” series of educational events for inventors and entrepreneurs. The event took place at the USPTO’s Silicon Valley Regional Office in San Jose and featured several successful Bay Area entrepreneurs as guest speakers. (USPTO, 5/1)
USPTO Event: World Intellectual Property Day 2024 – Capitol Hill:
On May 1, the USPTO held an event at the U.S. Capitol Visitor Center in Washington, D.C. to celebrate World IP Day, which took place on April 26. The event included remarks from Senators Chris Coons (D-DE) and Thom Tillis (R-NC) of the Senate IP Subcommittee, Representatives Darrell Issa (R-CA) and Hank Johnson (D-GA) of the House IP Subcommittee, USPTO Director Kathi Vidal, and U.S. Copyright Office Director Shira Perlmutter. (USPTO, 5/1)
Fact Check
Like inventors in every sector, drug developers rely on strong patent protections to create new and innovative medicines. However, because of the prices of many drugs, activists frequently blame patents and accuse companies of abusing the patent system with tactics such as “product hopping,” “evergreening,” and “patent thicketing.”
This troubling trend continued during the Senate Judiciary Committee’s May 21 hearing on drug pricing, at which several witnesses argued that patents were responsible for high drug costs. But their arguments, and the evidence they provided, did not show that patents were preventing generic competition.
Claim: “By switching their market to a “new drug” [through a “product hopping” strategy], brand-name companies effectively eliminate the market for new generics.” |
In reality: Drugs, like any other technological product, are sometimes phased out of the marketplace when newer and more updated versions become available. This is a normal practice for any company that creates updates to its technology. But more importantly, the development and patenting of a new version of a drug does not inhibit generic manufacturers from copying prior versions of the drug whose patents have expired. Consequently, when patients and providers do choose brand-name drugs over generics – something that happens for just one in every 10 prescriptions – their decisions are largely explained by a preference for the latest, most up-to-date versions of drugs rather than by a lack of available options. |
Claim: It constitutes an anti-competitive “patent thicket” when a company registers new patents on a product that increase the “density” and “duration” of its patent portfolio. |
In reality: The reason that many drugs are protected by a large number of patents is simply that they rely on a combination of numerous different inventions. The “density” of patents protecting a particular product reflect this—for example, the first iPhone was covered by about 200 patents. For drugs, a competitor remains able to make use of the technology protected by any single patent once that patent has expired or to “design around” a given patent to achieve the same or similar result with different technology. The fact that many drugs cannot be replicated until all patents have expired is a result of the fact that all of their constitutive innovations are unique and essential – not an inherent result of patent “density.” Additionally, characterizing the “duration” of a drug’s patent protection as “the time from approval until expiration of the last-to-expire patent” is disingenuous, as newly granted patents have no effect on the life of an existing patent. Once the original patent(s) on a drug expires, that original formulation can then be copied by any competitor. |
Celebrating American Innovation
Inventor Spotlight
This month, C4IP is celebrating Ivan Getting, who made possible the invention of the Global Positioning System (GPS) and transformed the way that people around the world travel and do business.
Getting was born in 1912 in New York City and studied at MIT and Oxford before the onset of World War II pushed him into a career in defense technology, first with the Air Force and then at the Raytheon Corporation and the Aerospace Corporation.
He conceived of using satellites to precisely track moving objects such as airplanes and missiles and patented the first technology for this purpose in 1955.
- Getting’s invention was later refined by innovators Roger Easton and Bradford Parkinson, who ultimately launched the GPS system we use today.
As of 2019, the invention of GPS was estimated to have directly created almost $1.4 trillion in economic value in the United States alone.
- The market for GPS technologies, which have become integral features of smartphones and cars, was estimated at nearly $95 billion in 2022.
- GPS is also fundamental to other large and growing industries, such as e-commerce (estimated at $5.8 trillion in 2023), food delivery ($923 billion), and ridesharing ($154 billion).
Getting’s innovation has reshaped modern life: As many as 93% of American drivers are now dependent on GPS, according to a survey of the 20 most car-dependent cities.
- More than six in 10 Americans use their GPS at least once a week, per the same survey.
(Photo credit: https://ethw.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 may well 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.