iThe summer solstice has come and gone, and now we can reflect on what has been a busy summer for patents. Fall, however, could be an even busier season in the patent world, and now is a good time for medtech companies to prepare. This article will discuss some of the major developments in medtech patent law over the summer and on the horizon.
There has been little down time for the U.S. Patent and Trademark Office (USPTO) following President Obama’s signing of the America Invents Act (AIA) into law on Sept. 16, 2011. The first major legislative overhaul of the U.S. patent system in 60 years, the AIA is triggering a series of fundamental process changes that aim to modernize the U.S. patent system. Among the major modifications are the implementation of post grant patent review and a move from a “first-to-invent” to a “first-inventor-to-file” system, which will impact who is entitled to a patent on an invention. To further streamline the patent process, and as mandated by the AIA, the USPTO is establishing regional locations, which were announced this summer. The USPTO also released proposed rules for micro-entity status for reduced patent fees for small companies, universities, and independent inventors. Most recently, the USPTO
extended its popular First Action Interview Pilot Program.
European patent law also is changing as the European Union recently agreed to set up a new European patent court that will pave the way for a single European patent, making it easier and less expensive for companies to better protect their inventions.
The U.S. Supreme Court has been equally busy by issuing its landmark patent decision regarding the medical diagnostic patents at issue in Mayo v. Prometheus Laboratories, and remanding the Myriad Genetics case to the U.S. Court of Appeals for the Federal Circuit, which heard oral arguments regarding the patentability of genes on July 20. The decisions in these cases will have a lasting impact on the patenting of inventions in the medical device, healthcare, and life sciences industries.
Below are some of the highlights from a very busy summer for patents.
First-Inventor-to-File on the Horizon
Among the most notable patent reforms under the AIA is the change from a first-to-invent to a first-inventor-to-file system. The switch to the first-inventor-to-file system takes effect on March 16, 2013, 18 months after the enactment of the AIA. Under the new standard, a patent will be granted to inventors who first filed a patent application with the USPTO, whereas the current patent system grants patents to the first inventor, regardless of which inventor filed a patent application first.
First-inventor-to-file introduces several benefits to the patent system and, in turn, to medtech companies. First, it harmonizes the U.S. patent system with the patent systems of most other countries that also use first-inventor-to-file rule. This synchronization simplifies the patent process and reduces confusion over foreign filing practices. Second, a first-inventor-to-file system provides clear standards for dispute resolution regarding questions of entitlement to a patent. Third, the new system encourages inventors and companies to file their patent applications quickly rather than rely on the ability to antedate prior art. This emphasis on a faster filing timeline may benefit medtech companies because of the rapidly evolving and short life spans of much of the medtech industry’s technology and products.
Despite these benefits, the first-inventor-to-file system carries several drawbacks, particularly for small and early stage medtech companies. The most visible result of the new system is the need to race to the USPTO to stake priority claims before competitors, a process that favors large, well-established companies with resources to file patent applications quickly and often. The pressure that the first-inventor-to-file system places on inventors to quickly file applications may potentially result in weaker, less-detailed patent applications that may be filed before the technology is fully understood. To counter this, medtech companies should file patent applications that not only cover their core technology, but also future improvements and alternative embodiments. This will make it more challenging for competitors to obtain designs around patents. Another prudent practice for medtech companies is to file multiple provisional applications as their technology evolves and combine them into a single non-provisional application at the one-year anniversary from the filing date of the first provisional application, which should secure the earliest possible priority date for all subject matter in the non-provisional application.
The AIA also created a new post-grant review proceeding for issued patents to be conducted before the Patent Trial and Appeal Board. Post-grant review permits reevaluation of a patent within nine months after the patent issues to determine if any of the patent claims should be cancelled as being unpatentable. The post-grant review provisions of the AIA take effect on Sept. 16, one year after the date of enactment, but generally apply to patents issuing from applications subject to first-inventor-to-file provisions of the AIA, which are effective on March 13, 2013. Thus, medtech companies need to adopt proactive patent strategies that account for post-grant review and the switch to a first-inventor-to-file system.
The most recent AIA reform this summer is the new option for a third party to submit prior art in pending patent applications. On July 17 the USPTO announced final rules, effective as of Sept. 16, that will regulate this new process. Third-party prior art submissions must include a concise description of relevance and will be subject to a fee depending on the number of references submitted.
USPTO Adds Satellite Offices
In accordance with the America Invents Act, the USPTO opened its first satellite patent office in Detroit, Mich., on July 13. The new Detroit patent office is the first ever U.S. Patent and Trademark Office outside the Washington, D.C., area and the first of four satellite patent offices planned to open in the next year. In early July, the USPTO announced its historic satellite patent office expansion and plans to open additional patent offices in Dallas, Texas; Denver, Colo.; and Silicon Valley, Calif., by Sept. 16, 2014.
During the selection process for the four satellite patent offices, the USPTO considered geographic diversity, the availability to hire scientific and technical experts in the region, and economic impact to the region.
With these new satellite patent offices, the USPTO aims to streamline the patent filing process by establishing a localized connection with patent filers and innovators, decrease the backlog of nearly 700,000 patent applications waiting for examination, and improve the quality of patent examination. Medtech companies should benefit from the new satellite patent offices by having more opportunities to engage with USPTO patent examiners about their patent applications.
USPTO Extends First Action Interview Pilot Program
On July 9, the USPTO announced that it is extending the First Action Interview Pilot Program, an initiative expediting disposition of a patent application by enhancing communication between the applicant and the USPTO patent examiner at the beginning of the examination process. The program allows an applicant to have an interview with the USPTO patent examiner prior to the USPTO issuing a first office action on the merits in a new patent application. The USPTO believes that this early communication with the applicanteducates the USPTO patent examiner on the essence of the invention, while the USPTO patent examiner can address issues and discuss the prior art with the applicant before work begins on a first office action.
During the extension period, the USPTO will conduct a comprehensive review of theprogram to determine if any adjustments are needed and whether to further extend the program or make it permanent. Medtech companies should take advantage of the First Action Interview Pilot Program, which can result in patent applications issuing as patents much more quickly.
USPTO Proposes Rules for Micro-Entity Status
The America Invents Act created a new “micro-entity” category of patent applicants, and in July this year, the USPTO released proposed rules for micro-entity status. These proposed rules set out procedures for claiming micro-entity status, paying micro-entity patent fees, notification of loss of micro-entity status and correction of payments of erroneously paid micro-entity fees. Applicants filing under micro-entity status would benefit from a 75 percent reduction of certain USPTO patent fees.
To qualify for micro-entity status, patent applicants must not have been named on more than four patent applications and must have an income less than three times the average gross income
reported by the U.S. Department of Labor for the previous calendar year. Also, the patent applicants must not have assigned or licensed the invention (and not be obligated to do so) to an entity with an income higher than this amount. If the patent applicants have assigned or licensed the invention (or are obligated to do so) to an institution of higher education, regardless of income level, the applicants qualify for micro-entity status. Micro-entity status, once established, remains in effect until changed by an applicant. Applicants should determine each calendar year whether micro-entity fee status is warranted, as applicants’ gross income and the median household income each may change from year to year.
Beginning Sept. 16, U.S. patent applications can be filed by assignees rather than only by the inventors. Consequently, the USPTO has invited comments on whether “inventor” should be used in place of “applicant” in the micro-entity rules. The micro-entity rules will not go into effect until after the public comment period and the USPTO sets micro-entity patent fees sometime in early Spring 2013.
The Saga Continues in Two High-Profile Patent Cases
In March, the U.S. Supreme Court issued its unanimous decision in Mayo v. Prometheus Laboratories, which reversed the U.S. Court of Appeals for the Federal Circuit ruling and held that Prometheus’ two diagnostic method patents covering blood monitoring were not eligible for patent protection. On July 3, the USPTO issued a memorandum to all USPTO patent examiners implementing new procedures for examining process claims for subject matter eligibility in view of the Supreme Court decision in Mayo v. Prometheus. The USPTO memorandum explains that the new procedures are intended for analyzing process claims in which a law of nature, natural phenomenon, or naturally occurring relation or correlation is a limiting element or step.
One week after its landmark ruling in Mayo v. Prometheus, the Supreme Court sent another shockwave through the patent community by remanding Association for Molecular Pathology et al. v. Myriad Genetics, Inc., et al. to the U.S. Court of Appeals for the Federal Circuit for further consideration in light of the decision in Mayo v. Prometheus.
On June 15, the American Civil Liberties Union, the U.S. Department of Justice, and others filed third party amicus briefs challenging patents covering Myriad’s human breast cancer genes, BRCA1 and BRCA2. The amicus briefs argue that the isolated genes are not patent-eligible because they are not man-made inventions, but are simply products of nature.
On July 20, the Court of Appeals for the Federal Circuit heard oral arguments before a packed courthouse with the judges grilling attorneys for both sides. The eagerly anticipated Myriad decision will issue in a few months and will closely be watched by the biotechnology and diagnostic industries.
European Patent Court Established
After more than 30 years of negotiations, on June 29, the European Union (EU) finally reached an agreement to establish a new patent court with a goal of less expensive, simpler and more efficient patent litigation in the EU. The EU patent court headquarters will be in Paris, France, with Munich, Germany, as the designated court to handle patents related to engineering, while London, England, will handle patents related to the pharmaceutical industry and life sciences.
Under a single EU patent litigation system, it will be possible to resolve disputes across Europe through a single court system. The Unified Patent Court will have exclusive jurisdiction for cases regarding the infringement or validity of a European unitary patent. The single EU patent court aims to eliminate the chance of multiple patent lawsuits involving the same patent in different EU countries, and the risk that court rulings on the same patent might differ from one EU country to another.
Despite this long-awaited breakthrough in European patent litigation, potential challenges remain. The complexity of the new system may encourage a wave of patent infringement actions brought in Europe by patent trolls and non-practicing entities. Critics also argue that judges with minimal patent experience may cause long delays in hearing cases that could threaten the effectiveness of the new EU patent court.
