The Dobrusin Law Firm - Intellectual Property

Strategic Intellectual Property Law

Month: April 2020

Can Patent Trolls Impact COVID-19 Testing and Treatment?

Even though patent protection has evolved over the years, 35 U.S.C. § 261 has always dictated that “patents shall have the attributes of personal property.” As a result, patents can be traded, licensed, purchased, sold, and transferred just like any other piece of property. However, due to patents being considered property – albeit intangible intellectual property – they can be treated like a commodity. The effect is a substantial dichotomy between two fundamental groups of patent owners: practicing entities, such as manufacturing companies; and non-practicing entities.

Non-practicing entities, more commonly known as patent trolls, are an individual or a firm that purchases a portfolio of patents and asserts the rights of those patents without ever creating or manufacturing a product using the patented technology. The exploitation of patents by patent trolls is a frequent point of contention. Scholars and practitioners alike argue that the use of patents by those not actually creating or manufacturing a product based on their patents goes against the very fabric of patent law. Additionally, these patent trolls have the potential to significantly burden development by other companies with threats of litigation and exorbitant licensing fees. But surely these patent trolls would not act in arguably bad faith in a true time of need, would they?

Here we are in 2020 fighting a pandemic. Pharma companies worldwide are furiously working to find a cure or treatment for COVID-19. Companies have already begun offering their technology for public use, including the likes of AbbVie, which announced it would not enforce its patent rights on the HIV drug Kaletra, and Gilead that sought to rescind its seven-year orphan drug exclusivity period for remdesivir. Yet even with such urgency to battle COVID-19, some patent trolls are still seeking to exploit the situation.

Labrador Diagnostics LLC, a subsidiary of the fund manager Fortress Investment Group LLC, filed a lawsuit on March 9 against BioFire Diagnostics, LLC, a company deeply involved in developing coronavirus tests. To add insult to injury, the patents Labrador sought to enforce were originally issued to the company Theranos, a company that shut down in 2018 in the midst of many claiming Theranos was conducting fraudulent blood testing. While Fortress recently announced that Labrador will grant royalty-free licenses for COVID-19 testing, the decision came only after extensive backlash and awful publicity forced its hand.

So what is stopping other patent trolls from asserting patent rights against companies currently developing and testing products to combat COVID-19? The short answer is nothing. But that does not necessarily mean these trolls can get away with their exploitations in a time of undeniable need.

The U.S. government may still hold the trump card over companies like Labrador. 28 U.S.C. § 1498 states that when any invention covered by a U.S. patent “is used or manufactured by or for the United States without license of the owner thereof… the owner’s remedy shall be by action against the United States… for recovery of his reasonable and entire compensation for such use and manufacture.” In other words, a patent owner, such as a patent troll, may only be able to sue for reasonable compensation and not seek injunctions against private entities working for the United States government.

While actions were not taken against Labrador based on 28 U.S.C. § 1498, it may stand to reason that the U.S. government could have invoked its power and shielded BioFire from injunction. The U.S. government could authorize BioFire to act on its behalf to develop much-needed COVID-19 tests. As a result, any forthcoming patent infringement suits would need to make the U.S. government the defendant.

Yes, pharmaceutical affordability and accessibility based upon patent rights are still significant hurdles to overcome when addressing COVID-19 cures and treatments, but as may be gleaned from the actions of Labrador, potential patent hurdles may extend well beyond just affordability and accessibility of drugs.

It is unlikely that disputes will stop between patent trolls and companies battling COVID-19. Yet there may be a way to ensure those disputes do not dictate the actions of these companies. But, at least for now, we are left to guess whether the U.S. government will interject themselves and assert authority that has rarely been used thus far.

– By Bryan Lemanski

Pharma Intellectual Property and COVID-19

Opinions abound regarding pharmaceutical patents, with some arguing that patent protection is needed to encourage innovation and allow for recouping of development costs, and others arguing that patents lead to skyrocketing prices and unaffordable health care. Regardless of viewpoint, there is no question patents are valuable to the pharmaceutical companies that own them. It is estimated that patents contribute to roughly 80% of the overall revenue of drug companies.

Currently, scientists, researchers, and drug manufacturers are racing to find a cure or a treatment for COVID-19, including turning to existing medicines used to treat other viruses. Drug manufacturers, while offering potential COVID-19 therapies, are taking vastly different approaches with respect to their intellectual property portfolios.

AbbVie announced last month that it was supporting the experimental use of its HIV medicine Kaletra (also sold as Aluvia in some markets) to address the COVID-19 public health crisis. Collaborating with the FDA, CDC, and NIH and European health authorities, among others, AbbVie is supporting clinical studies and basic research with lopinavir/ritonavir (Kaletra/Aluvia) to determine its efficacy in treating COVID-19.

In addition, the drug company announced that it would not enforce patent rights to Kaletra. This decision would allow generic drug producers to increase production to make the medication more readily available, should the drug be found effective.

While a study published in The New England Journal of Medicine found that “no benefit was observed with lopinavir–ritonavir treatment beyond standard care,” it is still worth noting that AbbVie is the first pharmaceutical company to take such a bold stance in choosing not to enforce its patent rights on all formulations of the HIV medication while it is being evaluated.

Several clinical studies are also underway to evaluate the safety and efficacy of remdesivir, an experimental drug from Gilead Sciences, in adults diagnosed with COVID-19. This comes after the FDA accepted Gilead’s investigational new drug (IND) filing. However, due to “overwhelming demand,” the company temporarily stopped granting patients access to remdesivir.

Remdesivir was granted “orphan drug status” by the FDA in February 2020. Under the 1983 Orphan Drug Act, pharmaceutical companies are given a seven-year market exclusivity period for developing treatments for “rare disease.” Through this orphan drug status, Gilead can, therefore, block generic drug manufacturers from supplying the drug.

While potential benefits and risks of treatment with remdesivir for COVID-19 are not yet known, it stands to reason that if remdesivir is found to be effective, a patent “may prove to be a blockbuster hit for its patent owner,” leading someto wonder whether it is not only the overwhelming demand keeping Gilead from allowing its experimental drug to be made widely available.

Public backlash has also perhaps made some entities change their minds about pursuing patent infringement suits at this time.

Labrador Diagnostics LLC, owning patents from the now-defunct health technology company Theranos, sued BioFire, a company making COVID-19 tests, for patent infringement. Shortly after reports surfaced of the lawsuit—described as “the most tone-deaf IP suit in history” by Mark Lemley, director of the Stanford Law School Program in Law, Science and Technology—Labrador announced that it would grant royalty-free licenses for COVID-19 testing, asserting that “the lawsuit was not directed to testing for COVID-19.”

– by Katherine Pacynski

Intellectual Property Updates From the United States, Europe, China, and Canada

As we continue to be affected by the COVID-19 outbreak, Intellectual Property Offices around the world are extending deadlines or making other exceptions to accommodate the challenges inventors and business owners are currently facing. If you have upcoming deadlines and are concerned about being able to meet them due to refocusing or shifting priorities, we highly recommend speaking with your attorney to see if a deadline extension may be applicable.

While subject to change, here’s what some of the Offices are saying:

United States Patent and Trademark Office

March 31, 2020 – “The United States Patent and Trademark Office (USPTO) today announced extensions to the time allowed to file certain patent and trademark-related documents and to pay certain required fees. These actions are an exercise of temporary authority provided to the USPTO by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed by President Trump on March 27.”

In addition to the relief provided under the CARES Act for certain due dates between, and inclusive of, both March 27, 2020 and April 30, 2020, the USPTO has previously waived the fee under 37 C.F.R. §1.17(m) for petitions to revive applications, when applicants were unable to timely reply to an office communication due to the COVID-19 outbreak, as described in the Office’s March 16, 2020 notice.

March 16, 2020 – “The United States Patent and Trademark Office (USPTO) considers the effects of coronavirus to be an “extraordinary situation” within the meaning of 37 CFR 1.183 and 37 CFR 2.146 for affected patent and trademark applicants, patentees, reexamination parties, and trademark owners. Therefore, the USPTO is waiving petition fees in certain situations for customers impacted by the coronavirus. This notice does not grant waivers or extensions of dates or requirements set by statute.”

European Patent Office

March 15, 2020 – “In view of the disruptions to public life caused by the COVID-19 outbreak, the EPO has taken measures to safeguard users’ rights. All time limits expiring on or after 15 March 2020 are thus extended until 17 April 2020. As regards time limits expiring before 15 March 2020, the EPO has facilitated the use of legal remedies for users located in areas directly affected by disruptions due to the COVID-19 outbreak. The extensions and remedies apply to parties and representatives in proceedings under the EPC and the PCT. The following notice provides all relevant information and will be published in the EPO’s March Official Journal. If the disruption should continue after 17 April 2020, the EPO may publish another notice informing users about further extensions and remedies in respect of time limits.”

March 30, 2020 – “The extension of time limits also applies to periods for paying fees, including renewal fees. The following notice contains information about the amounts due following the general fee increase on 1 April 2020. This notice will be published in the April edition of the EPO’s Official Journal.”

China National Intellectual Property Association

January 28, 2020 – CNIPA announced that patentees and applicants can restore their patent rights without payment of a restoration right request fee if lost rights were due to the coronavirus. Applicants and patentees need to submit a request for the restoration of the right, explain the reason, attach the corresponding certification materials, and go through the corresponding formalities before the loss of rights.

March 4, 2020 – CNIPA will waive late fees for missed patent annuity payments if the reason can be traced back to the COVID-19 epidemic.

March 27, 2020 – CNIPA confirms missed deadline policies apply to non-Chinese applicants

Canadian Intellectual Property Office

March 27, 2020 – The CIPO announced that all deadlines on IP matters that fall before 30 April 2020 are now extended until 1 May 2020. A further extension could occur depending on circumstances, the registry added.

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