patents

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Patents for software and genetic code could be revived by two bills in Congress

EFF, Gene patents, Linux Foundation, patents, pera, Policy, prevail, software patents, Tech / /

Patently retro —

PERA and PREVAIL want to re-enable patents struck down by Supreme Court rulings.

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Image from the patent office of a patent for

Enlarge / An image from the U.S. Patent and Trademark Office, where in 1874, the newest thing was not software or genetic compositions, but shutter fastenings from H.L. Norton.

Andrew Harrer/Bloomberg via Getty Images

The Senate Judiciary Committee is scheduled to consider two bills Thursday that would effectively nullify the Supreme Court’s rulings against patents on broad software processes and human genes. Open source and Internet freedom advocates are mobilizing and pushing back.

The Patent Eligibility Restoration Act (or PERA, S. 2140), sponsored by Sens. Thom Tillis (R-NC) and Chris Coons (D-Del.), would amend US Code such that “all judicial exceptions to patent eligibility are eliminated.” That would include the 2014 ruling in which the Supreme Court held, with Justice Clarence Thomas writing, that simply performing an existing process on a computer does not make it a new, patentable invention. “The relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea of intermediated settlement on a generic computer,” Thomas wrote. “They do not.”

That case also drew on Bilski v. Kappos, a case in which a patent was proposed based solely on the concept of hedging against price fluctuations in commodity markets.

Open source groups hunker down

Software and Internet advocates have taken notice. This week, the Linux Foundation, working with the Cloud Native Computing Foundation (CNCF), announced an expanded partnership with Unified Patents, intended to defend open source software against what it gamely calls “non-practicing entities” (NPEs), but most people would term patent trolls. “As the risk and volume of frivolous litigation against open source projects grows, the need to provide accessible protection from NPEs has become crucial,” the Linux Foundation writes.

In interviews with The Register, leaders at CNCF and Unified Patents described patent trolls as actively chasing any widespread technology, aiming for settlements over the cost of trials. Nearly 98 percent of NPE claims are settled, according to Unified Patents, but NPE claims challenged at the US Patent and Trademark Appeals Board lose 67 percent of the time.

Challenging patent claims, however valid, could get tougher under the PREVAIL Act, the other bill being considered by the Senate Judiciary Committee this week. PREVAIL would, among other changes, limit patent challenge petitions to 14,000 words, hampering attempts to debunk complex patents. The Act would also eliminate clearance patents, which companies can use to clear any infringement claims prior to their own products’ release.

Clearing the way for genome patents

Another wrinkle in the PERA bill involves genetic patents. The Supreme Court ruled in June 2013 that pieces of DNA that occur naturally in the genomes of humans or other organisms cannot, themselves, be patented. Myriad Genetics had previously been granted patents on genes associated with breast and ovarian cancer, BRCA1 and BRCA2, which were targeted in a lawsuit led by the American Civil Liberties Union (ACLU). The resulting Supreme Court decision—this one also written by Thomas—found that information that naturally occurs in the human genome could not be the subject to a patent, even if the patent covered the process of isolating that information from the rest of the genome. As with broad software patents, PERA would seemingly allow for the patenting of isolated human genes and connections between those genes and diseases like cancer.

The Electronic Frontier Foundation (EFF) describes PERA and PREVAIL as “a huge gift to patent trolls, a few tech firms that aggressively license patents, and patent lawyers. For everyone else, it will be a huge loss.” The EFF maintains a collection of stories of people claiming their jobs or avocations were “Saved by Alice” (the Supreme Court ruling).

The Judiciary Committee is set to debate and potentially amend or rewrite PREVAIL and PERA (i.e. mark up) on Thursday. Tillis told Axios that the bills are necessary for “Biotech, a number of emerging sectors [needing] relief, or we’re just going to stifle innovation.” Most Judiciary Committee members have not indicated their votes on the bills. Pharmaceutical trade group PhRMA supports the bills, while numerous advocates for lower-cost drugs and biosimilars oppose them.

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Big Pharma’s fight against drug price reforms takes weird, desperate turn

drug pricing, ip, medicare drug price negotiations, patent thickets, patents, PhRMA, Science / /

🙃 —

PhRMA claims price negotiations raise costs and that drug patents lower them.

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Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America (PhRMA), speaks during a Bloomberg Live discussion in Washington, DC, in 2017.

Enlarge / Stephen Ubl, president and chief executive officer of Pharmaceutical Research and Manufacturers of America (PhRMA), speaks during a Bloomberg Live discussion in Washington, DC, in 2017.

After a series of decisive court losses, the pharmaceutical industry appears to be taking its fight against Medicare drug price negotiations directly to the people—and the White House is not impressed.

This week, the high-powered industry group PhRMA (the Pharmaceutical Research and Manufacturers of America) released two eye-catching attacks on federal efforts to lower America’s singularly astronomical drug prices. In a press release Tuesday, PhRMA announced an analysis suggesting that the Medicare drug price negotiations—part of the Biden administration’s 2022 Inflation Reduction Act—could actually cost some seniors and people with disabilities slightly more in out-of-pocket costs. The analysis, however, relies on a key—and questionable—assumption that the federal government will set price limits using the highest possible estimate for maximum fair prices in 2026.

Milliman, the consulting firm PhRMA commissioned to do the study, cautioned that the actual prices “will certainly vary due to differences in unit cost and utilization trend, 2026 benefit designs, and actual 2026 maximum fair prices.”

On Wednesday, PhRMA then announced an “educational campaign” on how the US intellectual property system “is actually the vehicle for lower [drug] costs.” The bold claim is likely jarring to the many critics of the pharmaceutical industry, who for years have noted how drug companies exploit double patenting or “patent thickets” to extend monopolies on drugs and hold off low-cost generics from entering the market.

“They’ll lose”

For instance, staunch drug pricing critic Sen. Bernie Sanders (I-Vt.) has railed against patent thickets in congressional reports, noting that companies often file dozens of patents for a single drug. Merck, for instance, has 168 patents on its cancer drug Keytruda, most of which were filed after the drug was approved by the Food and Drug Administration. Johnson & Johnson, meanwhile, filed 57 patents on arthritis treatment Stelara, 79 percent of which were filed after FDA approval.

Merck and Johnson & Johnson are both members of PhRMA, along with many other big-name drug companies, including Pfizer, Bayer, GSK, Lilly, Novo Nordisk, and Sanofi.

A 2022 study in Nature Biotechnology found that of 179 patents covering nine biologic drugs that were the focus of patent infringement lawsuits, 94 percent of the patents covered minor or peripheral aspects of a drug, such as manufacturing techniques. Only 11 of the 179 patents, 6 percent, were related to the actual active ingredient in a drug. However, these tangles of secondary patents effectively allowed drug companies to extend market exclusivity well beyond the 12-year period provided by federal laws.

In an attempt to uproot some of those thickets, the US Patent and Trademark Office proposed a rule last month that would affect certain add-on patents, called terminal disclaimers. Under the proposed rule, if a drug company puts a terminal disclaimer on several patents, and one of those patents gets invalidated for any reason, the drug company would agree not to enforce any of the other patents linked by the terminal disclaimer.

On Wednesday, the Biden administration hit back at PhRMA’s attacks on drug pricing reforms. In a statement that provided links to PhRMA’s efforts this week, White House spokesperson Andrew Bates called Big Pharma’s pricing on drugs “corporate rip-offs.” He noted that the pharmaceutical industry spent an “unprecedented $372 million lobbying against” drug pricing reforms but lost the fight against the passage of the Inflation Reduction Act.

“Now that President Biden is delivering real savings for the families who have been overcharged by Big Pharma for medicines they desperately need, they’re continuing to fight tooth and nail against the financial interests of American seniors,” Bates said. “They’ll lose this fight, too.”

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US says AI models can’t hold patents

AI, AI ethics, Biz & IT, copyright, machine learning, patents, US Patent and Trademark Office, USPTO / /

Robot inventors dismayed —

Inventors must be human, but there’s still a condition where AI can officially help.

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An illustrated concept of a digital brain, crossed out.

On Tuesday, the United States Patent and Trademark Office (USPTO) published guidance on inventorship for AI-assisted inventions, clarifying that while AI systems can play a role in the creative process, only natural persons (human beings) who make significant contributions to the conception of an invention can be named as inventors. It also rules out using AI models to churn out patent ideas without significant human input.

The USPTO says this position is supported by “the statutes, court decisions, and numerous policy considerations,” including the Executive Order on AI issued by President Biden. We’ve previously covered attempts, which have been repeatedly rejected by US courts, by Dr. Stephen Thaler to have an AI program called “DABUS” named as the inventor on a US patent (a process begun in 2019).

This guidance follows themes previously set by the US Copyright Office (and agreed upon by a judge) that an AI model cannot own a copyright for a piece of media and that substantial human contributions are required for copyright protection.

Even though an AI model itself cannot be named an inventor or joint inventor on a patent, using AI assistance to create an invention does not necessarily disqualify a human from holding a patent, as the USPTO explains:

“While AI systems and other non-natural persons cannot be listed as inventors on patent applications or patents, the use of an AI system by a natural person(s) does not preclude a natural person(s) from qualifying as an inventor (or joint inventors) if the natural person(s) significantly contributed to the claimed invention.”

However, the USPTO says that significant human input is required for an invention to be patentable: “Maintaining ‘intellectual domination’ over an AI system does not, on its own, make a person an inventor of any inventions created through the use of the AI system.” So a person simply overseeing an AI system isn’t suddenly an inventor. The person must make a significant contribution to the conception of the invention.

If someone does use an AI model to help create patents, the guidance describes how the application process would work. First, patent applications for AI-assisted inventions must name “the natural person(s) who significantly contributed to the invention as the inventor,” and additionally, applications must not list “any entity that is not a natural person as an inventor or joint inventor, even if an AI system may have been instrumental in the creation of the claimed invention.”

Reading between the lines, it seems the contributions made by AI systems are akin to contributions made by other tools that assist in the invention process. The document does not explicitly say that the use of AI is required to be disclosed during the application process.

Even with the published guidance, the USPTO is seeking public comment on the newly released guidelines and issues related to AI inventorship on its website.

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Big Pharma spends billions more on executives and stockholders than on R&D

bernie sanders, Bristol-Myers Squibb, drug pricing, Johnson & Johnson, merck, patents, PBMs, Pharmaceutical industry, research and development, Science / /

Greed —

Senate report points to greed and “patent thickets” as key reasons for high prices.

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Big Pharma spends billions more on executives and stockholders than on R&D

When big pharmaceutical companies are confronted over their exorbitant pricing of prescription drugs in the US, they often retreat to two well-worn arguments: One, that the high drug prices cover costs of researching and developing new drugs, a risky and expensive endeavor, and two, that middle managers—pharmacy benefit managers (PBMs), to be specific—are actually the ones price gouging Americans.

Both of these arguments faced substantial blows in a hearing Thursday held by the Senate Committee on Health, Education, Labor and Pensions, chaired by Sen. Bernie Sanders (I-Vt.). In fact, pharmaceutical companies are spending billions of dollars more on lavish executive compensation, dividends, and stock buyouts than they spend on research and development (R&D) for new drugs, Sanders pointed out. “In other words, these companies are spending more to enrich their own stockholders and CEOs than they are in finding new cures and new treatments,” he said.

And, while PBMs certainly contribute to America’s uniquely astronomical drug pricing, their profiteering accounts for a small fraction of the massive drug market, Sanders and an expert panelist noted. PBMs work as shadowy middle managers between drugmakers, insurers, and pharmacies, setting drug formularies and consumer prices, and negotiating rebates and discounts behind the scenes. Though PBMs practices contribute to overall costs, they pale compared to pharmaceutical profits.

Rather, the heart of the problem, according to a Senate report released earlier this week, is pharmaceutical greed, patent gaming that allows drug makers to stretch out monopolies, and powerful lobbying.

On Thursday, the Senate committee gathered the CEOs of three behemoth pharmaceutical companies to question them on the drug pricing practices: Robert Davis of Merck, Joaquin Duato of Johnson & Johnson, and Chris Boerner of Bristol Myers Squibb.

“We are aware of the many important lifesaving drugs that your companies have produced, and that’s extraordinarily important,” Sanders said before questioning the CEOs. “But, I think, as all of you know, those drugs mean nothing to anybody who cannot afford it.”

America’s uniquely high prices

Sanders called drug pricing in the US “outrageous,” noting that Americans spend by far the most for prescription drugs in the world. A report this month by the US Department of Health and Human Services found that in 2022, US prices across all brand-name and generic drugs were nearly three times as high as prices in 33 other wealthy countries. That means that for every dollar paid in other countries for prescription drugs, Americans paid $2.78. And that gap is widening over time.

Focusing on drugs from the three companies represented at the hearing (J&J, Merck, and Bristol Myers Squibb), the Senate report looked at how initial prices for new drugs entering the US market have skyrocketed over the past two decades. The analysis found that from 2004 to 2008, the median launch price of innovative prescription drugs sold by J&J, Merck, and Bristol Myers Squibb was over $14,000. But, over the past five years, the median launch price was over $238,000. Those numbers account for inflation.

The report focused on high-profit drugs from each of the drug makers. Merck’s Keytruda, a cancer drug, costs $191,000 a year in the US, but is just $91,000 in France and $44,000 in Japan. J&J’s HIV drug, Symtuza, is $56,000 in the US, but only $14,000 in Canada. And Bristol Myers Squibb’s Eliquis, used to prevent strokes, costs $7,100 in the US, but $760 in the UK and $900 in Canada.

Sanders asked Bristol Myers Squibb’s CEO Boerner if the company would “reduce the list price of Eliquis in the United States to the price that you charge in Canada, where you make a profit?” Boerner replied that “we can’t make that commitment primarily because the prices in these two countries have very different systems.”

The powerful pharmaceutical trade group PhRMA, published a blog post before the hearing saying that comparing US drug prices to prices in other countries “hurts patients.” The group argued that Americans have broader, faster access to drugs than people in other countries.

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