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Inventors participating in the group's Decade of Stolen Dreams rally - many whose lives and businesses "have been unjustly destroyed by PTAB rulings" according to US Inventor, will gather along with supporters and make their voices heard in front of USPTO regional offices in Alexandria, VA, Dallas, TX, Denver, CO, Detroit, MI, and San Jose, CA, as well as from the main Vermont office of Senator Patrick Leahy, the bill's principal sponsor. (For rally times, addresses, and additional information please seehttp://usinventor.org/rally-media)

"The PTAB was sold to Congress as an easier and faster but fair alternative to litigation in district court for patent disputes," says US Inventor Policy Director Josh Malone. "However, what it became instead was a powerful tool that a large infringer could use to challenge the validity of any small inventor's patent in order to use the inventor's technology royalty-free, or to prevent the inventor's disruptive technology from competing in the marketplace."

First, using the printed matter doctrine, the PTAB could expand the scope and power of IPRs to invalidate patents for ineligible subject matter under § 101. While the AIA supports an IPR petition can challenge claims under §§ 102 and 103,186 the AIA does not explicitly state that those claims must be invalidated under §§ 102 and 103. In Praxair, the majority distorted a clear § 103 nonobviousness analysis into a quasi-§ 101 eligibility analysis.1 87 If the patent clearly was obvious over the prior art, the majority should have left out the printed matter doctrine and followed the traditional non-obviousness analysis. The majority invalidated claims because they added ineligible subject matter (mental process or abstract idea) to ineligible information that was printed matter.' 88 Praxair may have a substantial impact on IPR petitions because the Federal Circuit allowed claims challenged under § 103 to be invalidated under § 101 based on the printed matter doctrine. This suggests that the PTAB may be able to expand the reach of future IPRs to invalidate patents under § 101 or, even further, allow petitions that bring subject-matter eligibility claims. Allowing the printed matter doctrine in IPRs may give power to the PTAB that Congress did not intend when it created the AIA postgrant proceedings. Additionally, IPR has the capacity to hear more challenges than the other post-grant proceedings because it has a lower institutional threshold and can hear patent filed under both the first-to-invent and first-to-file regimes.1 89 Combining those factors with Praxair's printed matter doctrine, future IPR proceedings will have more power and discretion to invalidate patents, thereby increasing the PTAB's influence over subject-matter eligibility under § 101.

Second, with the help of the Federal Circuit, the PTAB incorporated the printed matter doctrine into the Alice-Mayo two-step test. The PTAB addresses § 101 issues in different forums, like ex parte appeals. 9 ° This gives the PTAB many opportunities to develop the law surrounding subject-matter eligibility.' 9 ' Since the Federal Circuit's opinion, the PTAB cited Praxair about fifteen times in different ex parte appeals.' 92 From those cases, seven cases cite and discuss Praxair's use of the printed matter doctrine to determine whether the application is invalid under § 101. 93 In each case the PTAB affirmed examiners' § 101 rejections for patent applications because the claims were directed to printed matter that were not patent eligible subject matter.1 94 As a result, these cases show that examiners and the PTAB have incorporated the printed matter doctrine into the Alice-Mayo framework. The PTAB's application of the printed matter doctrine in subject-matter eligibility analysis is significant to note because the PTAB's jurisprudence is often adopted or followed by courts.'195

Turning to petitions pending alongside litigation, it appears that the PTAB mechanism has been a successful means for accused infringers to halt patent suits filed against them. As shown in Table 8 above, 83% of the patents challenged at the PTAB were asserted in federal courts simultaneously. Specifically, the software industry is using IPRs more frequently to fight back, with 89% of the challenged software patents also asserted in federal court litigation. In the biosciences industry, only 71% the challenged patents are also being asserted in federal court litigation.

While such trends confirm the popularity of using PTAB proceedings as a shield for those accused of patent infringement, it remains to be seen whether this popularity will continue, especially when institution rates are decreasing. Back in 2014, there was an 81.9% chance for a district court to grant stay if there was a pending PTAB petition 99 Now with more uncertainties in the institution process, it would be interesting to see whether district courts are still willing to grant stays, especially when it is unclear if the filed IPRs will get instituted or thrown out of the PTAB. If district courts do not grant stays, many patent owners would be forced to take on additional expenses to defend their patents on two fronts, both in front of the PTAB and in district courts. For smaller innovators, such double-whammies might drive them out of business.

Inter partes and post-grant reviews were created for a worthy purpose: to decrease the cost and time involved in litigating against baseless patent trolls. Specifically, legislative history indicates that the intent was to prevent these baseless cases primarily in the technology sector. Whatever the original intent, it seems that the greatest harm from IPRs is being felt in the biopharmaceutical industry.

The extent of IPR abuse has become so prevalent it was covered in the Wall Street Journal 76 and is largely attributable to one company in particular.7 7 The technique of shorting a company's stock and then filing an IPR is completely legal and available because of the lack of a standing requirement for an IPR; "a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent."78 In addition, the requirement to get an IPR instituted is a very low bar: a petitioner need only demonstrate a "reasonable likelihood" that it will prevail in showing at least one challenged claim to be unpatentable.7 9 This has been construed to be low enough that the likelihood could be even less than a 50% chance of a claim being unpatentable.so

If patent owners cannot have full faith and confidence in the patent granted by the Federal Government, and they similarly cannot have full faith and confidence in a final adjudication by the federal courts, how can they be expected to invest the millions, and sometimes billions, required to bring technology to the marketplace? [11].

If this question is to be answered to the satisfaction of those domestic and international inventors and companies expecting U.S. patent protection for their inventions, further analysis of more recent (2018–21) patent-related validity data should be undertaken. In addition, evaluating the impact of the recently enacted CREATES Act on the strength of patent protection for biopharmaceutical patent-holders should be factored into this future research program. The complexity of the interactive effects of public policy enacted and implemented among the judicial (federal courts), executive (USPTO), and legislative (U.S. Congress) branches has the potential for deleterious impacts not only on international biopharmaceutical firms entering the U.S. marketplace, but also on U.S. patients who potentially may not get access to drugs and biologics (both patent-protected and generic versions) that will treat maladies and improve the quality of their lives.

A fourth reason biotech products are so sensitive to patent challenges is the expense and risk involved in developing a new drug. The average cost of developing a new drug and getting it to market is a staggering $2 billion.67 The problem is apparent from an earlier report showing a funding gap of over $1 billion in the European market.6 8 Coupled with the expense, developing a new drug is an incredibly risky financial undertaking. The percentage of drugs that make it to clinical trials is only about 30%, and only 0.02% of all drugs developed ever make it to market.69 Because it takes over a decade to begin to recoup such costs, biotech companies must rely heavily on patent certainty in the future.70 With less certainty of a return on investment comes a far more difficult time enticing venture capitalists to finance a new business. 71

E. Biotech Companies Provide a Valuable Service to the Public

PGR may be the most powerful proceeding for invalidating patents. 27 PGR's scope is the broadest of any other post-grant proceeding 128 because a petitioner "may request to cancel as unpatentable one or more claims of a patent on any ground."'129 This includes novelty, obviousness, utility, indefiniteness, written description, enablement, and most importantly, for this Note's purpose, subject-matter eligibility. Unlike CBMR, PGR does not limit a petitioner to business method patents. But a major limitation for PGRs is petitioners may only challenge patents that issue under the AIA's first-to-file regime (i.e., have an effective filing date on or after March 16, 2013).130

Since the Supreme Court's ruling in Bilski, Mayo, Myriad, and Alice, petitioners have been challenging patents on the basis of subject-matter eligibility under § 101. In American Simmental Ass 'n v. Leachman Cattle of Colorado, LLC, one of PGR's first final written decisions, the PTAB invalidated a patent under §§ 101 and 103. The patent "relate[d] generally to genetic quality and relative market value of livestock." 131 The patent specifically disclosed embodiments of the invention that facilitated "an owner or potential buyer of one or more sale groups of livestock to evaluate the relative market value of the sale groups based on predictions derived from genetic merit estimates of the herd., 132 With respect to § 101, the PTAB followed the Alice-Mayo two-step. 133 First, the PTAB found that the claims were directed to the fundamental concept of "'determining an animal's relative economic value based on its genetic and physical traits,' and that such a fundamental concept is a patent ineligible abstract idea.' '134 After determining that the claims were directed to an abstract idea, the PTAB found that "all computer recitations in the challenged claims [were] recitations to generic computer hardware used in a conventional manner, which [were] insufficient to impart patentability under Alice." Following the Alice-Mayo framework, the PTAB held the claims were invalid because they were not patentable subject matter. 13

Within the CBMR, the PTAB has been known to be very "aggressive, particularly with respect to its interpretation of section 101."'12 This is likely because the USPTO has a large amount of discretion in determining what patents are subject-matter eligible for a CBMR.113 Unlike IPR or PGR, "a person may not file a petition for a [CBMR] . . . unless the person or the person's real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent."' 14 Another key distinction is that CBMRs only apply to covered business method patents, 5 which the AIA defines in § 18(d)(1): The term 'covered business method patent' means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions. 16

In addition to this broad definition, the AIA directs the USPTO to further define "technological invention." 117 The USPTO decides "whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution." 1 8 This broad definition of "technological invention" gives the USPTO a fair amount of discretion in determining the subject matter that is eligible for instituting a CMIBR.119 Typically, CBM reviews are limited to patents that are "financial in nature," "incidental to financial activity," or "complementary to financial activity." 120 In the past, a majority of the CBMR petitions challenged claims on subject-matter eligibility. 121

On January 16, 2024, the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office issued a Final Written Decision in a post-grant review (PGR) (PGR2021-00030) of claims in US Patent No. 10,808,039 ("the '039 patent") owned by Seagen. The PGR, filed by Daiichi Sankyo, Inc. and AstraZeneca Pharmaceuticals, LP, requested review of claims 1-5, 9, and 10 of the '039 patent, which are directed to antibody-drug conjugates (ADC) capable of intracellular cleavage. The '039 patent is at issue in a patent infringement lawsuit brought by Seagen against Daiichi Sankyo over Daiichi's FDA-approved ADC cancer therapy ENHERTU®. Previously, a federal jury has found that ENHERTU infringed the '039 patent and awarded $41.8 million in royalty revenue to Seagen.

Issues raised in the PGR included whether claims 1-5, 9, and 10 of the '039 patent were not patentable for lack of written description and enablement under 35 U.S.C. §112(a), indefiniteness under 35 U.S.C. §112(b), and anticipation under 35 U.S.C. §102.

Within the same year, the Court took a different direction in SAS Institute Inc. v. Iancu.66 In the opinion penned by Justice Gorsuch, who objected to Oil States in the same term, the Court denied the PTAB the discretion for partial institution or partial decision. 67 The Court reasoned that the PTAB "cannot curate the claims at issue but must decide them all," effectively banning the agency's long-time practice of reviewing only a subset of claims. 68 The holding of SAS Institute forces the PTAB to address the patentability of all claims challenged by the petitioner in its final written decisions. 69 As a result, decisions on IPRs become more final, which in turn incentivizes district courts to grant stays when there is a concurrent IPR proceeding under review. This could be a step in the right direction to protect patent owners because pre-SAS Institute guidance, petitioners feared little in being over-inclusive in their arguments. 7 0 Before SAS Institute, there was no harm in putting forward failed arguments.71

On the other hand, PTAB opponents see IPRs as the cause for the increased uncertainty of the patent system, and they vocally and passionately disapprove of the mechanism. One major criticism describes IPRs as "an unfair process that tilts too much in favor of the petitioner."55 In the process of screening out low-quality patents, good patents are also inadvertently invalidated. Critics of the PTAB usually cite the high invalidation rate of 80% (percentage of instituted petitions that were partially or entirely invalidated).5 6

Another line of criticism stems from the USPTO Director's discretion to institute petitions. Currently, the PTAB follows NHK-Fintiv, in which it was held that the Director of USPTO has discretion in whether to institute a PTAB proceeding. 57 Opponents argue, however, that such discretion would lead to "forum shopping and gamesmanship" in patent assertion.58 Because the Director has discretion to deny a petition for IPR,59 the availability of IPRs is theoretically limited to one political appointee's preference. In addition, opponents also complain about the further delegation of such discretion, as well as ever-increasing factors PTAB uses for its decision to institute. 60 For example, in 2021, the Board further articulated an additional standard that bases institution decisions on the pendency of litigation over the validity of the same patent claims, factors of which that are not exactly enumerated under the AIA. Opponents argue that such discretionary rulemaking is denying petitioners the alternative to litigation without due process.

Due to its petitioner-friendly features, IPRs have been popular within patent challengers. From September 16, 2012, the first date on which IPRs could be filed, to September 16, 2020, the USPTO received a total of 11,091 petitions seeking IPR, which amounts to 93.5% of the total 11,860 petitions filed for all types of PTAB trial proceedings.3 1 According to one Federal Circuit judge, the new PTAB post-grant proceedings "have become the new frontier of patent litigation." 32

Procedurally, an IPR is indeed cheaper and faster. While a patent infringement litigation in a district court could cost between $2 million to $7 million, a PTAB invalidation proceeding usually only costs around $300,000.33 An IPR also resolves faster than a typical district court patent case, as it is required by statute that the PTAB issues final verdicts within a year.34 District court litigation, on the other hand, could take years to get to trial. It is very common for to wait over a year just to receive the court's interpretation of the claims."

Imagine a well-known pharmaceutical company produces several patent-protected drugs. One of the company's drugs is protected by a single patent and the patent's validity is challenged and subsequently [*303] invalidated in a post-grant review proceeding 1 in front of the United States Patent and Trademark Office (USPTO). As a result, the pharmaceutical company's shares immediately plummet. Recognizing an opportunity for profit, hedge funds have recently adopted a new investment strategy in which they take a short position in a pharmaceutical company's stock and then challenge the validity of one or more of that company's pharmaceutical patents. By taking a short position, hedge funds are essentially betting that the patent will be invalidated and stock prices will fall. As a result, the shareholder's loss likely goes into the hedge fund's pockets. Unfortunately for the shareholders, hedge funds are not prohibited from petitioning for post-grant review and this investment behavior is legal.

The Leahy-Smith America Invents Act (AIA), patent reform legislation enacted in 2011, 2 significantly developed post-grant patent opposition procedures, which permit individuals to challenge the validity of patents after grant by the USPTO. Among the major changes the statute introduced is a new post-grant review proceeding, known as inter partes review (IPR), which does not require a challenger to have legal standing. 3 Therefore, any unrelated third-party may request review of an issued [*304] patent. 4 The absence of a standing requirement opens the door for investors and hedge funds to instigate IPR proceedings; pharmaceutical patents in particular have become a major target of these investor-initiated post-grant patent challenges. Investors challenging pharmaceutical patents do so mainly through IPR proceedings.

One of Penn Central's first analytical prongs is the character of the governmental action. 78Regulatory taking proves harder to identify than a physical taking of land. 79A key factor in determining if the governmental action fits the character of a taking is whether the public program interferes with economic benefits or burdens by adjusting them to promote common good. 80PTAB IPR proceedings can significantly interfere with the economic interests of the patent holder in the name of the public good, suggesting the character of the governmental action leans toward excess regulation that equals a taking. 81

Such economic interferences can occur in the pharmaceutical industry due to the high volume of patent applications filed, and the high cancellation rate of such patents' claims by the PTAB. 82In July 2018, the PTAB issued fifty-one IPR and Covered Business Method ("CBM") Final Written Decisions, cancelling 79% of the challenged instituted claims. 83The adverse [*215] parties in these IPRs usually argue that the challenged patent is too vague, a stolen idea, or an obvious claim. 84

Even before the Federal Court of Appeals endorsed PTAB regarding its rules and procedures, 55 two years of IPR reporting have shown that IPRs are quite combative to patents.25 6 One study reviewing the first two years of IPR proceedings has shown that (1) USPTO institutes IPR petitions for at least one challenged claim 84% of the time, (2) USPTO institutes IPRs for all challenged claims 74% of the time, and (3) PTAB reached a final written decision, on the merits, and invalidated or disclaimed all instituted claims more than 77% of the time. 25 7 As of September 30, 2014, IPRs, on average, are filed at the rate of 75.1 per month, for a total of 1,841 IPRs filed in IPR's first two years.258 This IPR filing per month rate is six times the IPX filing rate in IPX's entire history.259 In total, IPRs in the first two years have nearly totaled the maximum number of IPX filings in IPX's thirteen-year history.260 In February 2015, PTAB "invalidated 93% of the claims from all industries that reached a final written decision." 261 In a new study that analyzed over four hundred final written decisions by PTAB from September 2012 through August 1, 2015, 88% of final written decisions resulted in at least one claim being invalidated; 21% of all final written decisions resulted in a complete patent invalidation; 82% of instituted IPRs result in final written decisions that result in some type of patent invalidation, thus "PTAB's first impression of the petitions strength appears to affect the entire proceeding and ultimate outcome."26 2 If IPRs are so effective in invalidating patents, the concern is that if an IPR invalidates a patented drug that is financially important to a pharmaceutical company, it could seriously deter potential investors from providing the funding that is needed to complete an NDA. These results could potentially destroy an entire business and thereby result in thousands of lost jobs. 26 3 In February 2015, it was reported that IPR challenge rates against biotech/pharmaceutical patents have tripled and the total number of IPRs already filed in 2015 (73 as of March 26) has exceeded the total number of combined IPRs filings against biotech/pharmaceutical patents from 2012 to 2014.264 During the 2015 fiscal year, 167 of the total 1,897 AIA petitions have been petitions to challenge bio/pharma patents. 265 That is an increase from the 2012-2014 combined totals of 111 petitions. 266 Pharmaceutical companies alone have filed a combined total of 115 IPRs. 267 Broken down further, of the bio/pharma petitions filed in the past three years: 45 IPRs were filed in 2013, 91 IPRs were filed in 2014, and 176 were filed in 2015, a yearly increase. 268 With respect to bio/pharma IPRs: 51 are not yet decided, 61 have fallen under the settled/dismissed category, and 193 have been instituted on the merits.269 However, PTAB is less likely to institute a bio/pharma petition, holding a 61% institution rate compared to 72% all other tech challenges.27 Even if instituted, bio/pharma claims are more likely to survive than any other technical field.271 Their survival rate is still low because bio/pharma patents have a 34.4% survival rate compared to the 13.4% survival rate in all other technical fields.272 This is because pharmaceutical drugs are seen as the "unpredictable arts," and thus patent owners can argue more effectively to save the patent.273 In 2016, PTAB began issuing its first PGR final decisions. 274 This means an increase in bio/pharma challenges by both IPR and PGR. 275 In 2016, IPR and PGR institution rates have increased. 276 Examining a combined 254 IPR and PGR decisions against bio/pharma patents, PTAB instituted these petitions 65.7% of the time.277 On all other patents, institution rates have been at 66.8%. Institution rates are understood to mean one, more, or all of a patent's claims will likely be invalidated, which means a win for the patent challenger. 278 In contrast, an IPR petition that is not instituted means the patent is strong and it is a win for the patent holder.

The PTAB will have this devastating impact for three reasons. First, rather than solving problems within the existing agency, the creation of the PTAB inserted an additional and inefficient layer of bureaucracy into the USPTO. Second, the post-issuance review proceedings provide multiple ways for competitors and others to harass patent owners. Third, the PTAB creates extensive uncertainty surrounding patent rights.

A.  A New, Inefficient Bureaucracy Overreacts to Existing Problems

In the realm of pharmaceuticals, patents stand as the most prevalent form of Intellectual Property Rights (IPRs). Unlike other sectors, the pharmaceutical industry leans heavily on its research and development segment, playing a pivotal role in the creation, advancement, production, and marketing of medical products. This article delves into the critical role of pharmaceutical patent in fostering pharmaceutical innovation, examining their substantial contribution to market revenue, India’s significant presence in the generic drug industry, and future trends.

The Significance of Pharmaceutical Patent

In recent months the board has overturned patents on a computer memory technology, a popular videogame, and a system for monitoring car tires. The PTAB has invalidated at least one “claim”—or part—in almost 80% of the patents it has ruled on, according to a study in the University of Chicago Law Review. Some patent experts such as Randall Rader, former chief judge at the U.S. Court of Appeals for the Federal Circuit, have referred to the 300-odd administrative judges, attorneys and legal aids on the board as “patent death squads.”

Patent challengers have jumped at the chance to exploit the board’s lax standards. Since it began to operate in September 2012, the PTAB has received more than 2,600 patent challenge requests—three times more than it expected.

Global heating could become "catastrophic" for humanity if temperature rises are worse than many predict or cause cascades of events we have yet to consider, or indeed both. The world needs to start preparing for the possibility of a "climate endgame."

This is according to an international team of researchers led by the University of Cambridge, who propose a research agenda for facing up to bad-to-worst-case scenarios. These include outcomes ranging from a loss of 10% of the global population to eventual human extinction.

China may be accelerating its efforts to develop a nuclear arsenal, according to a new report from the Pentagon, as part of its ongoing efforts to modernize and revamp its fighting forces in order to match U.S. military capabilities.

The latest assessment from the Defense Department said China had increased its arsenal of operational nuclear warheads from an estimated 400 in 2021 to more than 500 as of May this year.