Issue Date: June 27, 2016 | Web Date: June 24, 2016
Process for resolving U.S. patent disputes stays
The U.S. Supreme Court last week delivered a win to generic drug manufacturers in patent fights with pharmaceutical and biotechnology companies. In an 8-0 decision, the justices upheld a lower court ruling that makes it easier for challengers to invalidate patents without engaging in costly and lengthy lawsuits.
The case (Cuozzo v. Lee) focused on a system used by an appeals board at the U.S. Patent & Trademark Office to settle disputes over patent validity. Congress created the system in 2011 as a way to resolve patent challenges far more cheaply and quickly than in a federal court.
Since then, the board has canceled hundreds of patents and has been dubbed a “death squad” by critics. The board uses a broad legal standard to interpret patent claims, which makes it easier to discover information that could show a patent does not cover anything new.
Brand-name drug makers, who depend on strong patent protection to attract investment for R&D, are opposed to the current system. They argue that the appeals board should use the same narrow standard as federal courts do when it comes to interpreting patent claims.
The Pharmaceutical Research & Manufacturers of America, the brand-name drug industry’s trade group, warned justices in a brief that the standard adopted by the appeals board “breeds uncertainty and stifles innovation” in American medicine.
But the Supreme Court ruled that the USPTO was within its legal authority when it adopted a broader standard than federal courts for interpreting patent claims.
The generic drug industry supports the current system, saying it is a cost-effective way to weed out dubious patents that make weak claims to new inventions. The process allows more lower-priced drugs to get into the hands of patients sooner, the Generic Pharmaceutical Association (GPhA) told the justices in a brief.
GPhA welcomed the ruling, saying “the Court recognizes the vital need for an efficient patent review process—one that promotes a competitive, affordable prescription drug market for consumers.”
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