BIO and USPTO Trace the Journey of Biotech Inventions

BIO will be co-hosting an event with the United States Patent and Trademark Office (USPTO) to celebrate the 30th anniversary of the issuance of U.S.patent 4,259,444 to Ananda Chakrabarty following the Supreme Court case, Diamond v. Chakrabarty, which held that Chakrabarty’s bioengineered bacterium was eligible for patenting.  The event will be held during the BIO International Convention on the morning of Thursday, June 30, at the Walter E.Washington Convention Center inWashington, D.C. 

See the BIOtech NOW article for more details.

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USPTO Remains Open for Six Business Days if Government Shuts Down

Press Release, 11-26

USPTO Prepares for Possible Government Shutdown

In the event of a government shutdown on April 9, 2011, the United States Patent and Trademark Office will remain open and continue to operate as usual for a period of six business days – through Monday, April 18, 2011 — because the USPTO has enough available reserves, not linked to the current fiscal year, to remain in operation until then. Should a shutdown occur and continue longer than the six-day period, we anticipate that limited staff will be able to continue to work to accept new electronic applications and maintain IT infrastructure, among other functions.  More information will be posted on this website as it becomes available. Thank you.

USPTO to Issue Proposal for “Track One” Accelerated Patent Examination in Flexible “Three Track” Patent Processing Program

In case you missed this last week, the USPTO will be issuing a Federal Register Notice requesting comments on their proposed Track One Accelerated Patent Examination requirements. 

The forthcoming Federal Register notice will request comments from the public on a number of different proposed requirements for participation in Track One, including (a) the proposed fee of $4,000 for each application (to recover the full cost of resources necessary to prevent the delay of other, non-prioritized applications); (b) limits on the number of claims to four independent claims and 30 total claims; (c) application filing through the USPTO’s electronic filing system (EFS-Web); and other such requirements.  The comment period will close 30 days after the notice is published. 

Press Release

Patent backlog hinders nation’s job creation

Article from the Milwaukee Journal Sentinel with interesting numbers. 

Highlights:

-Many of the missing jobs – hundres of thousands or possibly millions – are buried under the backlog of 1.2 million unprocessed patent applicatoins that have accumulated over the past 10 years at the U.S. Patent and Trademark Office.

-A single U.S. patent can create three to ten jobs. 

-Nothaft estimates more than 2 million new jobs are buried in the backlog

-“Innovation is our competitve advantage… It’s not manufacturing costs.  It’s not labor costs.  It’s innovation and our ability to protect those innovations and turn those innovations into products.”

PTO Director Kappos Remarks at Innovation Alliance Conference: IP leads to job growth

Thank you Roger [Martin], for that kind introduction.  I would like to thank the Innovation Alliance for having me in today to speak with you about intellectual property’s vital role in today’s innovation economy.

America stands at a critical juncture in our economic evolution, and intellectual property will play a key role in driving our economic growth and renewal.

As technological advances bring great change to the speed and complexity of American innovation, strong intellectual property protection and its effective enforcement will fuel innovation and jump-start our economy.

Today, I’ll speak about the critical role of IP in spurring innovation – and in increasing America’s competitiveness globally.

I’ll address the how the USPTO can ensure a well-functioning patent system; a patent system that enables small and medium sized businesses to secure the investment capital they need to bring their goods and services to market, and helps promote the free flow of goods and services across markets.  I’ll discuss the imperative for government leaders – the Executive branch, the Congress and the courts – to nurture an IP eco-system that will promote innovation, and ensure America’s economic well-being.

The economic success of the United States is deeply rooted in the history of American innovation.  This country was founded by pioneers who developed new ways to cope with an unfamiliar environment, who cured disease and connected a country, and who led the world into the age of flight.  American innovators discovered the power of information technology and digital communication that brought unprecedented commerce, economic growth, and prosperity.

So, our history has been driven by innovation. And our economic security continues to depend upon our ability to innovate – and to compete in an innovation economy.   The key to economic success lies increasingly in innovative product and service development, and in intellectual property protection, which creates value for innovation.

IP is – in effect — the global currency of innovation.

Today, as a share of gross economic value, the United States invests more in intangible assets than any of our major trading partners, and our intangible investments now exceed those in tangible assets by more than 20%.

And it is patent-reliant industries, specifically, that make up the most dynamic parts of the economy—from nanotechnology to pharmaceuticals, from computers to bio-tech, and from fiber optics to green technology.

Timely and high-quality patents are critical to small businesses, which create two out of every three American jobs.   They foster research and development, which requires capital and investment.

And they are essential to attracting the funds needed to bring innovation to market.

Let’s take the example of a company called Xencor—outside Los Angeles—which creates cutting-edge biotherapeutics to treat cancer, inflammation, and autoimmune disease.  Xencor uses patents to protect its proprietary design automation technology.

Xencor CEO Dr. Bassil Dahiyat put it simply: “without patents, you cannot get funding, and without funding, you cannot grow and create jobs.”

In Southeast Michigan, one of the areas hardest hit by the recession, the company Axletech International is a global manufacturer of machine hardware, with a significant patent portfolio upon which it depends heavily.  Since it began as a spin-off in 2002, Axletech has more than doubled its workforce and now employs more than 1,000 people.

Two different industries, two very different regions, two very different companies.  One thing in common: innovation protected by intellectual property creating jobs.

The United States Patent and Trademark Office was described in Harvard Business Review as the “biggest job creator you never heard of.”

As our country seeks to regain the 8 million jobs lost during the recent recession, the USPTO is a great place to start. Countless inventions that can spark new businesses are right there—sitting in the backlog. And reducing that backlog is one of Secretary Locke’s and my highest priorities.

The backlog of over 700,000 patent applications stands as a barrier to innovation and economic growth.  A 2010 report concludes that the backlog could ultimately cost the US economy billions of dollars annually in “foregone innovation.”

The next laser, the next energy breakthrough, the next cure for a debilitating disease, is buried in the files of the USPTO—and that is simply unacceptable.

So what are we doing about it?   First, we’re working to improve the quality of the patent application review process at the USPTO.  Quality patent issuances create certainty in the market.  Market certainty, in turn, facilitates growth.

Second, we are reforming the USPTO to reflect its criticality to our economy—and transforming the agency to match the fast pace of technology and innovation.

To this end, we’ve re-engineered the way we motivate and monitor our corps of examiners as well as our leaders; we’ve adopted new ways to recruit and retain top professionals; we’ve redefined performance plans to reflect the importance of high quality patent examination and backlog reduction; fostered more communication between applicants and examiners to improve quality and efficiency; and we’re working to build a new IT infrastructure that will speed patent application processing and improve search quality.

But—most critically—to decrease pendency while improving the quality of our work product, we have begun to recognize what companies in the shipping business figured out some time ago—that all packages don’t have to get to their destination at the same rate.  Some require next day service, while others can take a week.

It is clearly time for the USPTO—our nation’s Innovation Agency—to adopt private sector business practices and offer market-driven services.

So, the USPTO has instituted various programs enabling applicants to receive accelerated review, including for technologies in areas that are priorities for the Obama Administration – like green technology that is essential to battling climate change.

Very shortly, we will be issuing a notice regarding the details of Track 1 of the three track proposal we circulated last year, which is our plan to provide a comprehensive, flexible, patent application processing model offering different processing options more responsive to the real-world needs of our applicants.

Significantly, Track 1 will enable applicants – for a fee – to secure their patent within one year – thus enabling important new products and services to come to market sooner, create jobs and opportunity sooner, and make Americans healthier and more productive—a lot sooner.

Through programs like these, and through the tireless work of our examining corps, we will focus our efforts more effectively, reduce pendency, bring the backlog down, and foster innovation critical to the economic and social well-being of the United States.

But, America’s innovation success will require more than an effective USPTO.  It will be a function of many complex and overlapping innovation variables.

In the proud history of the United States—innovation led development—IP led development—has created economic vitality and good jobs.

In fact, technological innovation is linked to three quarters of our Nation’s post WWII growth rate.  And between 1990 and 2007, compensation for jobs in innovation-intensive sectors increased by two and a half times the national average.

And the US government has always played a critical role in ensuring innovation-driven growth.

During the deep recession of the 1970’s—innovation slowed dramatically and the manufacturing sector declined significantly.   In response, the US government launched a Domestic Policy Review aimed at reviving American industrial innovation.  This study, and others like it, led to the creation of the Court of Appeals for the Federal Circuit, which brought clarity to the law and improved certainty around IP rights—increasing their value.

At the same time, Congress realized the critical role of patents in innovation through university research and development.  So it passed the Bayh-Dole Act, which encourages university patenting.

The increase in patent value and R & D that resulted from the patent system improvements of the late 1970’s and early 1980’s paved the way for a new era of economic growth and opportunity that lasted for the better part of two decades.

Now, as in the 1970’s and 1980’s, the United States stands at a crossroads of innovation.  Today we are presented with another innovation opportunity – and we again need sound IP policy and enforcement to increase the value of innovation.

To this end, the USPTO strongly supports comprehensive patent reform and applauds the significant efforts of Members of both the House and Senate to continue to push for these reforms, particularly Chairman Leahy and Chairman Smith who are making getting this bipartisan jobs legislation passed a top priority.

Proposals in this legislation – many that will help USPTO do its job better — have been discussed for the better part of the last 10 years.  And this is the Congress where we should and must finish those many years of work.

Parties have debated proposals and amended language many times, to where we now have key provisions that most parties support and that – without a doubt – will add more certainty to litigation, enable greater work sharing between USPTO and other countries, and help USPTO continue with the operational changes we know are needed to support innovators, help companies create jobs and put new, and better products in the marketplace.

President Obama talked about patent reform in his meeting with CEOs last month.  Secretary Locke has been and will continue to be a true champion in this endeavor.  And I am committed to continue working with Congress as they work to put forth the best piece of legislation possible.

And to do so, we’ll use what we’ve learned from recent litigation and court decisions and from the previous Congressional attempts to make Patent Reform law.   We’ll also need your continued feedback and support.  But make no mistake—the time is now, this year, to restore our nation’s innovation system to the global platinum standard it must be.

In parallel with reform of the patent system, it is incumbent upon us to develop a comprehensive and robust national IP policy focused on leveraging our IP system for economic growth and job creation.

America’s economic security depends on it.  So, in coordination with the White House, the Department of Commerce, and as a part of the President’s Innovation Strategy, the USPTO will lead in creating a National IP Strategy.

And we’ll reach out to the inventor, university and business community to play an active role in formulating this policy, based on sound practices.

We must provide an environment that allows American innovators, small and large, to protect their IP and attract capital based on their ideas. For businesses to flourish, we must provide timely and high quality access to IP rights.  And we must ensure that universities press forward the frontiers of science, while working with the private sector to ensure that the value they create is both protected and diffused quickly for the benefit of the communities they serve.

All parts of the US innovation value chain must remain vibrant…and if amplified by good government policy, the current re-aligning trends can support one another to preserve American leadership in the decades to come.

A sound national IP policy will lead to the creation and success of more innovative companies like Xencor and Axletech.  And it will ensure that we can leverage IP to safeguard our economic well-being.

If we act to meet these challenges, we can fuel decades of American economic growth.  The simple prerequisite:  a national focus on intellectual property as the currency of innovation.

Thank you.

Link to the USPTO website and speech

BIO’s IP Priorities for 2011

As we start a new year, the BIO Intellectual Property Department has determined their 2011 priorities.  Intellectual Property remains a foundational priority for BIO and our 1100 biotechnology company members.

BIO’s IP department has approved the following priorities for 2011:

1) PTO reforms to improve efficient, timely and quality examination

2) Congressional patent reform legislation

3) Improving IP protection in key foreign markets

4) IP legal developments in the courts

5) Protecting the breadth and flexibility of the patent and technology transfer system.

Innovation Alliance Event “Patents, Innovation and Job Creation: A Virtuous Circle”

An event is coming up on patents, innovation and job creation at the Newseum on Friday January 21.  The keynote speakers are  PTO Director David Kappos and Retired Chief Judge of the Federal Circuit Paul Michel. 

Other industry experts and executives will participate in panel discussions.  Below is the news release.

As the U.S. economy struggles with high unemployment, the Innovation Alliance hosts a half-day discussion with inventors, entrepreneurs, business leaders, and industry experts on the economic value of patents and a vigorous USPTO. The conference features remarks from David Kappos, Director of the U.S. Patent and Trademark Office, and Paul Michel, U.S. Court of Appeals for the Federal Circuit, Retired Chief Judge. Gene Quinn, founder of IPWatchdog, Inc and Kim Hart, reporter at Politico will moderate morning panels on creating jobs and the impact of patents on the modern innovation economy. Email Innovation Alliance to RSVP

Here is the advertisement with further details.

USPTO Economic Research Agenda

The USPTO has a new Office of the Chief Economist and they have recently published their research agenda.

The OCE is embarking upon an aggressive economic research program to provide evidence on a range of matters relevant to policymaking and the effect of IP on economic outcomes more generally.  These include:

(1) Relating IP to economic growth, performance and employment, including:             

            (a)  IP and entrepreneurship                                 

            (b)  IP and wider economy-wide growth.                              

(2) IP in de facto standards, standard setting, and standards policy.

(3) Researching the economics of trademarks and trademark examination.

(4) Understanding the economics of USPTO initiatives, including initiatives to reduce application backlogs, by better understanding their costs, benefits, and effects.

(5) Analyzing the role that IP plays in the markets for technology and knowledge 

Report on a conference discussing the “Research Agenda”  at the University of California (09/10/2010)

For more specifics from the PTO website click here.

Is the Myriad Case Decision and/or the DOJ Brief TRIPS Compliant?

Judge Sweet seemed to dismiss Myriad’s constitutional taking and TRIPS claims by indicating:

“Finally, Myriad’s suggestion that invalidating the patents-in-suit would constitute an unconstitutional taking in violation of the Fifth Amendment of the Constitution or a violation of the United States’ obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) is unpersuasive. Myriad’s novel taking argument runs counter to a long history of invalidation of patent claims by the courts and is unsupported by legal precedent. Similarly,Articles 8.1 and 27.3 of TRIPS permit governments to incorporate public health concerns into their intellectual property law and to exclude from patentability diagnostic, therapeutic, or surgical methods as well as particular inventions on the grounds of public interest. As a result, invalidation of the patents-in-suit would constitution neither a constitutional violation nor a conflict with the Untied States’ treaty obligations.” Pages 106-107. Emphasis added.

Alnylam’s Appellate Brief to the Circuit Court in the Myriad case argues that “excluding certain “compositions of matter” from patent-eligibility would violate the United States’ treaty obligations under the TRIPS Agreement.” pg. 17  The Brief goes on to discuss this legal issue as well as international policy implications.  pg. 18-19

Questions for thought:

1.  Would ‘isolated DNA’ even constitute an “invention” under TRIPS Article 27.1?  How do other nations view patentability of ‘isolated DNA’ and how does that affect a TRIPS analysis? See European Union Biotechnology Directive and WIPO’s “Information provided by WIPO Member States Concerning Practices Related to the Protection of Biotechnology Inventions.”

According to practice, a Dispute Panel would use the ordinary meaning of the word (probably from the Oxford English Dictionary) and look at common practice around the world.  Isolated DNA seems to meet the definition of ‘invention’ and the resources mentioned above seem to back up the assertion. 

2.  What about Alnylam’s “discriminatory… as to the field of technology” argument?  Does Judge Sweet’s opinion discriminate against DNA based patents and/or the Biotechnology Industry?  How does the DOJ’s Brief fare? 

Based on a WTO Dispute Panel analysis on discrimiation in a similar context (see CANADA – PATENT PROTECTION OF PHARMACEUTICAL. PRODUCTS), it seems that both Judge Sweet and the DOJ Brief are discriminating against DNA based patents and the biotechnology industry.  Judge Sweet creates a patentability exemption for ‘isolated DNA’ and DNA based inventions (to an unknown point).  The DOJ seem to create a new ‘isolation’ test which implicates much more than ‘isolated DNA’.  Both approaches specifically target the biotechnology ‘field of technology’ and have devastating effects on the industry.

BIO’s Comments on proposed PTO Humanitarian Technologies and Licensing Through the Intellectual Property System

Here are the highlights from BIO’s recent submission on the proposed PTO “Request for Comments on Incentivizing Humanitarian Technologies and Licensing Through the Intellectual Property System.”  

Background:

1.  “BIO’s members also understand that problems with access to medicines and other biotechnology products in the developing world have very little to do with the patent system, and are generally caused by other factors outside the control of individual stakeholders, such as lack of adequate local manufacturing, delivery, public health and sanitation infrastructure, trade and tariff barriers, regulatory obstacles, lack of market incentives, inequitable local distribution and corruption, diversion of products to more lucrative markets, and a chronic underinvestment in public health, education and environmental conservation. In fact, access issues persist even in countries where there are no patents covering humanitarian products and technologies.”

 2.  “While the patent system cannot be a primary policy lever to address these complex questions above, BIO nonetheless believes that innovative businesses from all sectors of the U.S. economy, including the biotechnology industry, can help improve the lives of underprivileged populations in the developing world. Indeed, BIO member companies have long participated in specific access and licensing initiatives that have informed the policy choices of members of the industry.”  (See http://www.globalhealthprogress.org/, http://www.ifpma.org/healthpartnerships, http://www.bvgh.org/LinkClick.aspx?fileticket=867bPGw-kYo%3d&tabid=105, http://www.aatf-africa.org/, and http://www.cimmyt.org/.)

 “Most recently, in May of this year, BIO announced a policy statement containing its Options for Increasing Access to Medicines in the Developing World that it believes should be considered during the development and commercialization of biotechnology products.  Accordingly, BIO commends the USPTO for likewise exploring creative and market-oriented ways to incentivize the development and distribution of humanitarian technologies, a goal that BIO and its members have long shared and are working hard to achieve. In addition, BIO would support efforts to bring together all potential stakeholders to explore various approaches and initiatives.”

Key Points:

1.  Any program should be technology-neutral – “In BIO’s view, such a program should be applicable to innovators from all sectors who engage in the creation and dissemination of technology that has the potential to address the needs of impoverished populations in the developing world.”

 2.  Any proposal should ensure USPTO’s core mission is maintained and adequately resourced.

 3.  Value of any proposed vouchers should be maximized, but will remain limited – “BIO believes that the commercial value of the proposed voucher could be substantial under some situations, but difficult to express in monetary terms at this time.” 

4.  Clarity of standing for voucher use needed – “BIO members are seriously concerned that vouchers could potentially be used by third party requesters, or even unrelated third parties, to accelerate the ex parte reexamination of other party’s patents without the patentee’s consent.”

5.  Policy options for voucher award process require further discussion – “BIO members also raised the question whether the proposed vouchers should be awarded as an entitlement for meeting certain objective criteria, or as a more subjective prize for extraordinary humanitarian licensing efforts.”

Conclusion:

“BIO understands this Federal Register notice to be a first conceptual step in what will be a deliberative process with additional opportunities for public review and comment as more specific details and approaches are proposed. With this understanding, we look forward to engaging further on this effort in partnership with the USPTO and other industries and stakeholders.”

BIO’s Full Comment