Patent Law: A Primer and Overview
of Emerging Issues
In an increase over prior terms, the Supreme Court of the United States issued six opinions involving patent law during its October 2016 Term. These decisions addressed issues ranging< from patent exhaustion, multicomponent products, and biosimilar patents to procedural issues like venue and the statute of limitations for infringement claims. The growing number of Supreme Court opinions involving patent law over the past decade may also speak to the rising importance of intellectual property more broadly; a reported 84% of the S&P 500 Market Value in 2015 is ascribed to intangible assets. With this increased attention on patent law, an understanding of patent law and the cases issued during the High Court’s recently concluded term will likely be of interest to Congress.
The patent law regime in the United States is grounded in the U.S. Constitution itself; article I, section 8, clause 8 of the Constitution provides: “The Congress Shall Have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to … Inventors the exclusive Right to their respective … Discoveries.” Nonetheless, the rights associated with patents do not arise automatically. Rather, to obtain patent protection, the Patent Act of 1952 requires inventors to apply with the U.S. Patent and Trademark Office (PTO).
A patent may be obtained by “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter,” subject to the requirements of the Patent Act. A valid patent bestows upon its holder the right to take action against anyone who “makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent,” unless authority to do so is secured from the patent holder. In addition to examining patent applications, the PTO conducts other proceedings to determine the validity of issued patents, which can result in the revocation of previously issued patents. These proceedings play a central role in the country’s patent system. Final decisions from the PTO are appealable to the U.S. Court of Appeals for the Federal Circuit, which has exclusive, nationwide jurisdiction over most patent appeals.
With the Supreme Court hearing an increasing number of cases involving patent law and other areas of intellectual property over the last decade, the Court is playing a larger role in the development of patent law. During its October 2016 Term, the Court issued two patent law opinions involving procedural issues that will affect when and where patent cases may be filed. In another pair of cases heard during the October 2016 Term, the High Court dealt with issues related to patents on multicomponent products—one in the context of determining infringement and another in the context of calculating damages. A final pair of patent cases decided during the Term may have major implications for the pharmaceutical industry—one addresses whether postsale restrictions, commonly used in the pharmaceutical industry, are enforceable under patent law,
and the other will likely affect the speed at which biosimilars come to market.
In addition to the effects of the Supreme Court’s patent decisions issued during its October 2016 Term on patent law, there are a number of patent-related issues on the horizon. The constitutionality of one of the PTO’s post-grant review proceedings has been called into question in a case that will be heard during the Court’s upcoming October 2017 Term. In addition, with patent reform being of perennial concern to Congress, certain legislative proposals have the potential to alter various areas of patent law.
Judges Urge Congress to Revise What Can Be Patented
Updated March 23, 2020
UPDATE (March 23, 2020): On January 13, 2020, the Supreme Court denied the petitionfor a writ of certiorari in Athena Diagnostics, Inc. v. Mayo Collaborative Services. Accordingly, the Supreme Court will not review the decision of the U.S. Court of Appeals for the Federal Circuit. The original post on Athena, from August 26, 2019, is reproduced below.
What can be patented? A series of Supreme Court decisions beginning nearly a decade ago catapulted that question to the forefront of patent law. Since then the U.S. Court of Appeals for the Federal Circuit (Federal Circuit)—the only federal appeals court that hears patent law appeals—has issued a number of decisions limiting patent eligibility. Some stakeholders, however, view the current law as discouraging important innovations like medical diagnostic tests. One commenter has lamented that “thanks to the Supreme Court the most exciting scientific discoveries, technological advances[,] and innovations of the twenty-first century are no longer patent eligible in America.” Supporters contend, however, that current law weeds out bad patents and “facilitates the early resolution” of patent infringement cases. This issue has attracted significant interest from the 116th Congress. For instance, in early June, the Senate Judiciary Committee held three days of hearings (Part I; Part II; Part III) on “[t]he State of Patent Eligibility in America” and draft amendments to the relevant statutory provisions. And the debate over patent eligibility has extended beyond Capitol Hill. In July, in Athena Diagnostics, Inc. v. Mayo Collaborative Services, the Federal Circuit denied full-court review of a decision holding that a diagnostic method was patent-ineligible. In eight separate opinions, all of the active judges of the Federal Circuit called for the law to be changed to allow for the patenting of diagnostic methods. In light of this debate both in and outside of Congress, this Sidebar provides a brief overview of the current law of patent eligibility, before discussing the opinions in Athena and the importance of the issue for Congress.
The Law of Patent Eligibility
Patent eligibility is governed by, among other provisions, 35 U.S.C. § 101, which reads that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of” the Patent Act. (Section 101 is not the only requirement for patentability; an invention must also be novel and nonobvious, and the application must describe and set forth the invention in a manner clear enough for others to make it.) Despite section 101’s seemingly broad language, the Supreme Court has long held that laws of nature, natural phenomena, and abstract ideas are not patentable. For example, the Court has opined that “a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter,” nor is Albert Einstein’s “celebrated law that E=mc2 .” The basis for this limitation on patentability is the belief that allowing “the basic tools of scientific and technological work” to be patented “might tend to impede innovation more than it would tend to promote it.” The Court has recognized, however, that interpreting these judicially-created exceptions too broadly “could eviscerate patent law” because “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”
Bringing COVID-19 Vaccine to the Market Might Be Delayed by Patent Issues
If the clinical trials are successful, the sponsor may seek FDA approval to market its new vaccine. FDA approves new vaccines through biologics license applications (BLAs) reviewed by CBER. BLAs contain data from the laboratory and clinical studies and information about how and where the biologic will be manufactured. As courts have recognized, FDA exercises its scientific judgment when deciding whether to license vaccines based on such studies. Biologics that are approved through a BLA receive 12 years of regulatory exclusivity, during which time FDA cannot approve any biosimilars (i.e., abbreviated applications for the same biologic that depend on the clinical data in the BLA to demonstrate safety, potency, and purity). (These exclusivity rights and separate patent rights raise potential intellectual property questions that are discussed in more detail in this Sidebar.)