Patent Law & Policy

I have posted answers to all the questions I received by 6:00pm today.

Best of luck to you all on your exam tomorrow, and have a great break from school.

1) How important is it to know the historical development of patent law we initially discussed (e.g. the Statute of Anne etc.)?

It is fair game for the exam.

2) I'm a little bit uncertain as to how to weigh the enablement standard on a multiple choice question. I realize the specification is sufficient if it enables a PHOSITA to make and use the claimed invention without undue experimentation. However, what assumptions are we going to be provided as to what a PHOSITA could do given a particular disclosure? For instance, on one of the commensurability hypos, you said that a claim for a "light signaling apparatus with lights" may be too broad given a disclosure of a "light signaling apparatus with red, yellow, green lights." Wouldn't a PHOSITA be able to make or use the claimed invention in this instance potentially based upon the disclosure? I think in class you mentioned that this might not meet the commensurability requirement. Is this hypo somewhat akin to the Gentry Gallery case?

I'm not following this question. Obviously on a multiple choice exam, I can't directly ask you whether a PHOSITA would or would not find a disclosure suitable. I can ask other things, like whether certain facts would make it more or less likely that a PHOSITA would find enablement, or what the standard for enablement is, etc.

3) How important is it to know the distinction between 102(a) and 102(b) that is in effect up until the AIA takes over? I don't recall spending much time discussing the difference between the two.

We didn't cover the current 102(b) very much at all, though I believe it was mentioned in some of the reading and was discussed in passing. I would expect a commensurate level of focus on it for the exam.

4) Is my understanding correct that KSR is the controlling test for all cases of obviousness? The test seems to focus largely upon combination patents so I was wondering whether it should be read only to cover combination patents. Perhaps in a way, it can just be assumed that in nearly all cases of obviousness it will just simply involve whether combinations of prior art are obvious anyways? Also, does the approach taken in Graham still guide the steps one should take in the obviousness analysis?

KSR is the current controlling law, though it doesn't have very clear rules. And you are right that we generally assume in a 103 context that all inventions are "combinations" of prior art concepts.

5) How important might it be on the exam to know the effects of the use of "comprising of" v. "consisting of" v. "consisting essentially of" in claim language?

We covered that. It is fair game.

6) Do I understand properly that with respect to the doctrine of equivalence in 112, par. 6 claims, traditional judge made equivalence applies to the function whereas equivalents as to the structure is distinct based upon the language in 112? What exactly is the distinction between the two types of equivalence?

They are the same basic analysis. Under 112/6 statutory equivalents, the function (in the claim) must be identical, while the structure (in the specification) must be equivalent. Under the traditional DOE equivalents, the function (and the structure) must be equivalent.

7) Regarding equitable intervening rights (pertaining reissue patents), I think you mentioned that at some point there may be a time those equitable rights may expire. How would one determine this when they expire? For instance (probably an unrealistic example), if a company poured millions of dollars into a production factory relying upon not infringing a patent prior to reissue, at what point would rights expire if the reissue covered what the factory was built to produce?

Well it is equitable, so it would be a case-by-case analysis. I would think that once the investment that was made prior to the reissue was recouped (plus perhaps some profits), then the intervening rights would expire.

8) In the lost profits analysis, I'm a little bit unclear on how the non-infringing substitutes fits in.

To show how much profit you would have made, you need to consider the impact of non-infringing substitutes. Eg, you can't say you would have charged $1000 per item if there was a non-infringing substitute available for $100.

9) What is the standard of evidence for a plaintiff to prove infringement for a patentee in a standard case, preponderance or clear and convincing?

Preponderance. Proving a patent invalid requires clear and convincing evidence.

I've received some questions via email, so I'll answer them here:

1) What is the rule for the written description requirement? Is it Johnson Worldwide which limited Gentry's holding to finding a failure of WD only when it is clear that a particular narrow understanding is an 'essential element' of the invention?

No. I think the most recent authoritative statement of the rule is from Ariad v. Eli Lilly, as quoted in the slides -- e.g., the "possession" test.

2) Regarding the exceptions to the new USC 102, in USC102(b)(1)(A) does "disclosures" refer to patents and printed publications only? (102(a)(1) also lists public use, sale, etc.)

No. I think "disclosure" refers to the items listed in 102(a), so it includes public use, sale, etc. This is the subject of some debate, however. (I actually looked at the legislative history and it is clear that Congress intended it to be as I suggested.)

3) Regarding the exceptions to the new USC 102, does USC102(b)(1)(B) mean the inventor can publically disclose their invention at any time and when they decide to file for a patent any prior art within a year of their effective filing date will not be considered prior art (even if the public disclosure happened years ago?).

No. If the inventor makes 102(a)(1) disclosures (patented, described in a printed publication, public use, on sale, etc) more than one year before their filing date, then those disclosures are good prior art, as 102(b)(1) would not apply. However, within one year, an earlier publication by the inventor will negate others' publications under 102(b)(1)(B).

4) Regarding the exceptions to the new USC 102, does USC(b)(2) apply to all disclosures, not just those made within a year of the effective filing date? So technically even if a disclosure was printed 3 years before the effective filing date, as long as the inventor can prove that the subject matter was derived from him the disclosure will not qualify as prior art?

Remember that 102(b)(2) is an exception to (a)(2), not to (a)(1). So the disclosures excepted here will have to be those in US patents and published applications. Given that, you are correct in that there is no time limit for this exception.

5) [Two students asked versions of this question] In analyzing the knowledge requirement for inducement and contributory infringement, is there really no distinction between the two anymore since after SEB the knowledge requirement for inducement was lowered to include "willful blindness" and they also seemed to have added a knowledge requirement (knowledge of the patent and capability of infringement) to contributory infringement?

I think that SEB collapsed the two concepts. The mental state for inducement was lowered, and the specific knowledge requirement for contributory infringement was raised. In some ways I think that inducement is now easier to prove than contributory, as you don't have to show the absence of acceptable non-infringing substitutes. I think it is hard to envision a case where there would be contributory infringement and not inducement as well.

6) Could you give an example of how a patentee could show "some other reason" why they couldn't have described the equivalent in question to overcome the PHE presumptive bar?

Nobody really knows. Perhaps that a word was not available? Maybe the technology that is now equivalent did not exist? (Though that would fall under the 'unforeseeable' prong.)

7) Can you explain when we have to go through the "but for" analysis under Panduit and when we would use the Rite-Hite forseeability test? Are they two separate tests so a patentee can prove either to receive lost profits? Or are the two tests complementary?

They are complementary. You have to prove that 'but for' the infringement you would have made X in profits. You can make that showing for all foreseeable consequences of the infringement.

8) What is the black letter law for §101 subject matter for ideas/business models/software? Is it the machine or transformation test held by Gottshalk and Diehr (altho Bilski clarified that it is not the sole test to determine if subject matter is met)? The Fed Cir holdings seem to be all over the map with extremely permissive holdings in Alappat, State, and AT&T, but then extremely restrictive after the dissent in Labcorp. Bilski didn't seem to add much to the rule except to note that business methods are not categorically excluded from patentability and that the MOT is not the "exclusive test".

What, you think that the Supreme Court would actually, you know, give some actual rules? No. The best I can give you is what Bilski said: "Rather than adopting categorical rules that might have wide-ranging and unforeseen impacts, the Court resolves this case narrowly on the basis of this Court's decisions in Benson, Flook, and Diehr, which show that petitioners' claims are not patentable processes because they are attempts to patent abstract ideas." That is a punt. It is clear that the FedCir pre-Bilski cases are of limited use. But the SCOTUS didn't say anything definitive, other than what you suggested -- that MOT is not the sole test, that business methods are not categorically excluded.

9) Are the short answers questions also fact-pattern associated or more of a general issue/policy kind?

Both. And also claim analysis.

10) You recommend to keep track of the fact pattern. Is there a chance, that after moving to a new/different fact pattern (assuming that we answer the questions in the order they are printed), we encounter Qs that are related to a previous Hypo?

No. The questions related to the fact patter appear together, and immediately after the fact pattern.

11) I know it is subjective and one can allot the time as he prefers, but in your opinion how could a general-default break-up of the time be described? (i.e. 2h 20 min for multiple choice and 40min for short answer)?

It depends on how long it will take you to complete the short answer. Your breakdown sounds reasonable, but I think everyone will have different ideas.

Here is the first page of the exam. Let me know if you have any questions.

One change from what I said in class is that I'm not allowing the Internet. So please download anything you need to your computer prior to the exam.

First Page of the Exam

The Utility Requirement: When Undeclared Policy Choices and Epistemological Barriers Derail the System.

The utility requirement is the hated step-child of patent law. Like Cinderella, at first it seems to have a very marginal role, if one at all, in the game. The big factors in patent are obviousness, claim construction, and the doctrine of equivalents. Of course, novelty (even if not as complex as the others) is crucial as well for all the prior art implications. Utility, on the other hand, seems almost redundant. Scholarship has abundantly explained how the advantages of the utility requirement are limited and, should the requirement not even exist, the market would probably perform the same function anyway. As for its gatekeeper role and its contribution to alleviate the administrative burden on the PTO, some experts suggest that these could easily be accomplished through a more appropriate fee system. So what's left? It is probably time for Cinderella to retire and let the more accomplished dancers lead the show.

Well, maybe not so fast. There is at least one ball where our Cinderella still deserves some attention.

The background music of this dance is the substantial utility requirement, the stage is biotechnology and the significant example addressed by this paper is the Brenner genealogy and, in particular, the In re Fisher decision.

The whole of the utility requirement is contained in the word "useful" within § 101. Through the courts' application the requirement has manifested its function in three different configurations: the operable utility, the beneficial utility and the more relevant one, the practical or substantial utility. The "operable" version simply requires that the invention can actually work according to the inventor's description. The "beneficial" adaptation has its origin in XIX century decisions, which meant to keep at bay inventions considered harmful to society, mainly those related to gambling. It is the "practical" or "substantial" variation that has become more relevant through the interpretation and application of the courts and it is the only kind of utility this paper analyses. The term "substantially useful" in patent law means that the invention needs to have a "concrete, specific, and real-world use" (Nard & Wagner). It is specifically with regard to chemicals compounds and biotechnology industry though that the "practical" utility requirement develops its full potential. This is the stage for our Cinderella. In particular, the application of the requirement becomes more critical in the "upstream" portion of the biomedical and biotech research process (Nard), where the main activity concerns results that are still disconnected from downstream products and applications (those that can ultimately and directly benefit society at large).

The first significant example of this "subject-matter" custom-made application of the substantial utility requirement is the Supreme Court decision in Brenner v. Manson. Brenner articulates an enhanced standard of utility for research intermediates. The Court finds that an "object of scientific research" falls short of the utility threshold because the benefit that the public gains from such accomplishment is too weak and uncertain to justify the quid pro quo inherent in the grant of a patent monopoly. "Unless and until a process is refined and developed to the point where specific benefit exists in a currently available form, there is insufficient justification...a patent is not a hunting license. It is not a reward for the search, but compensation for its successful conclusion". A patent must relate to "commerce rather than philosophy". We can't help but notice that there isn't any trace of a "commerciality" requirement in the statute and that between "commerce" and "philosophy" there is a whole ocean of intermediate conditions. It is not within the functions of the PTO or the Court to establish the probability of business success of the invention. This is the role of the market, which in turn is not an arbiter on patentability.
Almost thirty years after Brenner, the Federal Circuit steps in and remodels the application and the procedural guidelines for the utility requirement in Brana. Besides the shift of the burden of proof (now the PTO has the burden of challenging the veracity of the asserted utility contained in the application), the substantial standard seems to be more lenient towards the applicant: "useful in patent law (...) necessarily includes the expectation of further research and development. The stage at which an invention in this field (pharmaceutical) becomes useful is well before it is ready to be administered to humans." The divergence from Brenner appears undisputable.
About six years after Brana, the PTO enters the game and tries to move the pendulum back towards Brenner. With the 2001 Utility Examination Guidelines, the PTO clearly attempts to raise the bar for the applicant in biotech: the utility has to be "well-established" to avoid rejection. In order to meet the standard of the PTO, the invention must pass a two-prong test: a) a Person Having Ordinary Skills In the Art (PHOSITA) would immediately appreciate why the invention is useful based on its characteristics and b) the utility is specific, substantial, and credible. (§ 2107). Although, because the utility issue is a question of law, Brana's holding seems to be controlling (Nader & Wagner), the oscillation of the pendulum is unequivocal and conveys the tension between the conflicting interests involved in the matter.

In 2005 the Federal Circuit continues the Brenner genealogy with its decision of In re Fisher. Fisher and Lalgudi, who had previously unsuccessfully applied for a patent covering "expressed sequence tags" (ESTs), now challenge the Board of Patent Appeals and Interference's decision in front of the Federal Circuit. Fisher admits that she is not aware of any function of the genes to which EST's corresponds. The Federal Circuit affirms the Board's decision. Chief Judge Michel, writing for the majority, clarifies the meaning of "substantial" and "specific" utility. To meet the qualification of "substantial" utility, the applicant must show a "significant and presently available benefit to the public", while to meet the "specificity" requirement the invention needs to offer "a well-defined and particular benefit". The majority finds that none of the ESTs provides a benefit that can be qualified as substantial or specific. Therefore, the court argues, the claimed ESTs are "mere objects of use-testing" and there is no certainty that any useful discovery can stem out of them. Fisher replies with the analogy of the microscope: her ESTs are research tools that can facilitate scientific progress. The majority doesn't accept this rhetoric argument and emphasizes the difference between the "immediate benefit" of the microscope (magnification) and the absence of a comparable quality in the ESTs for which any use remains a mere unverified hypothesis. The dissent of judge Rader stresses the distinction between "claims for methods" and claims for "research tools" which hold independent utility. Judge Rader embraces the microscope analogy and notices how it is inherent to scientific progress to advance by small incremental steps. More importantly, he comments that the proper gatekeeper for Fisher's claims would be obviousness, an option deeply affected by the Deuel decision which substantially cancelled the hurdle of non-obviousness for DNA sequences and confined the enquiry of the decision-maker to the analysis of the novelty requirement.

In re Fisher raises, among other issues, two general orders of problems that affect the current patent system. One pertains to policy implications associated with a higher or lower utility requirement, the other to the possibility that epistemological factors can determine an industry-specific courts' approach. Let's review them in order.

A relaxed utility requirement is an incentive for early applications whereas an enhanced one favors later applicants (Merges & Duffy). According to the so-called "prospect theory," early patents are considered a stimulus for subsequent additional investments in areas with a high margin of technological advancement. Put differently, early patents operate efficiently when the competition is imperfect and the divergence between potential claimants is more accentuated. A third theory emphasizes how early patents, because they also expire early, increase the share of benefit gained by the public. On the negative side, there is the risk of inducing a "gold rush" effect with associated dissipation of rents especially when the initial pool of participants is aligned on a similar starting line. This scenario, in some scholars' view, is typical of DNA sequences research (Merges & Duffy). Even giving credit to the insight of these theories, it does not appear that early patents and not- enhanced utility standards represent an over-all inefficient choice in the biotech area. The prevalent observation is that early patents give a better opportunity to pools of researchers who can not afford the initial investment that a completed route (from preliminary lab findings to final application) would require and tend to reward strong intuitions and pure talent while offering an opportunity to attract additional funding to "sprint-runner" researchers. The very same homogeneity at the starting line that some theories allege as typical of DNA sequences research, and view as an argument against early patents in biotech, represents, on the contrary, one of the more convincing arguments against a specifically higher standard in the field of DNA research.
The majority in Fisher is not receptive of these arguments and simply endorses the Brenner standard.

The decision in Fisher raises another systemic issue, a fundamental question that patent law has to face and will face even more intensely in the future. Clearly the subject matter of the application can influence the analysis and what would seem clear cut in one field, can appear much more fuzzy in another field. On this ground an epistemological factor seems to vitiate the game. The reality is that patent is a unique kind of law, and a unique kind of discipline indeed. Patent law is a body of rules meant to regulate intellectual accomplishments of the most diverse nature, from the almost intuitive mechanical applications to the most intricate and obscure scientific methodologies. Despite this wide range of contents and specificities, the individuals who legislate, enforce, decide, prosecute, research, teach and study patent law are not experts in many of the underlying subject matters and often do not have proper technical expertise in any of those fields. This (almost inevitable) circumstance induces a spontaneous mechanism. Let's take for example judges: when they consider and decide a case, they have in mind a prototypical model of the idea of invention. Maybe, because more intuitive and familiar, they have in mind a mechanical application or an electronic one. This sort of unconscious blue print influences the way they think about any invention. Biotech is certainly one of the most advanced and specialized ground fields for patent law. It is arguably the field where the knowledge gap between judges and experts is most apparent. Judges seem to surreptitiously level down this inequality applying epistemological criteria that are formed for a much more simplistic world. This process can be unconscious but is never the less highly consequential: the risk being what the Supreme Court fears in Benson, "to freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technologies." The result in front of us is that courts are playing down the level of knowledge and enhancing the standard of patentability with a subject matter specific approach. They are not allowed to do that, at least not until Congress decides to embrace a subject matter specific approach. The recent words of the Supreme Court in Bilski, quoting Chakrabarty, resonate quite loudly on the point: "courts should not read into the patent laws limitations and conditions which the legislature has not expressed". Judges should instead do the opposite: they should have complete deference for the diverse knowledge and expertise levels typical of different areas and they should refrain from raising the hurdle of utility for specific subject matters. Their choice is not only counterproductive on an efficiency basis; it is also seriously flawed on a pure juridical ground. Introducing industry specific standards, as for general category bans, is too relevant of a policy determination to be entertained by the judiciary on a sole journey. These are decisions that are going to affect every-day life for all of us, therefore they need a wider consensus that only the legislative process can express.

It would be unfeasible to have different patentability rules for different subject matters (also the costs of such a system would raise to prohibitive levels), but it is apparent that some issues, like the utility requirement can be perceived in a different light depending on the subject to which the invention pertains. At this point a question remains to be addressed: if there is agreement on the necessity of uniform patentability rules that are not subject-specific, and if under a common standard of utility, we either risk to allow inventions that are not particularly finalized or to exclude inventions that (as in the biological area) could represent a significant progress in the state of the art, although not one with immediate meaningful applications, which option do we want to endorse? Because both outcomes are suboptimal, the decisive criterion becomes what drawbacks we want to consider more inefficient from a policy perspective. In my opinion the less inefficient alternative is to depart from a higher utility standard for biotech and allow the benefit of patent exclusivity to inventions that can lack an immediate applicative translation. The risk of discouraging researchers who have the talent but not the necessary infrastructures to pursue their inventions and who must wait until a possible break through discovery gets to the stage of practical and significant applications tips the balance in favor of a standard utility requirement. It is instead more appropriate to allow the courts to decide if a particular scientific endeavor represents a significant enough leap from the status of the prior art without "industry-specific" interpretative devices. This can be properly done with a non-enhanced utility requirement combined with an orthodox use of the obviousness requirement. From this perspective, a refutation of the unfortunate Deuel holding should be among the Court of Appeals priorities. Besides an overdue return to a standard use of the obviousness requirement, judges have at their hand another device which is perfectly apt to address the different knowledge levels involved in fields with such high levels of specialization as biotech: the interpretative device that shapes the majority of the critical evaluations in patent law: the PHOSITA. This is a flexible instrument that, as a professional standard of competence, is supposed to reflect the real expertise in the field (Burk & Lemley). The PHOSITA is indeed inherently subject-matter specific. His approximation to the real field of the subject matter of the invention is an incredibly powerful interpretative device and plays a key role in correctly assessing the patentability requirements. In biotechnology, a more correctly construed PHOSITA would see utility more often than a currently utilized one does, and would not see non-obviousness and novelty as often as the current one does.

Biotech patents - Gene-uine controversy.

When discussing the issue of patenting objects associated with the human body, the initial reaction among the general populace may be distaste. It seems unnatural and unethical that individuals be given ownership of something that occurs naturally. Biotech and DNA patents may elicit particularly strong reactions because genetic material built from DNA building blocks encodes who and what we are.

Although early patents on medical products of biotechnology, such as insulin, and early genetic engineering techniques have since expired, there is an expanding rate of new patent applications for novel processes and gene discoveries. One particular concern is that patents make the cost of genetic tests and genetic therapies unacceptably high by stifling competition, a concern demonstrated in the controversy over patenting the BRCA1 and BRCA2 genes associated with cancer. By detecting those genes, such as the genes that predispose women to breast cancer, doctors can offer preemptive treatment. There is one caveat: the gene is actually the property of a biotech company that has taken out a patent on it, even if a woman carries a copy of it naturally. This leads to a concern that gene patents may inhibit biomedical innovation by blocking scientists' access to genes and genetic materials that are essential to research. In this post, I will summarize the development of gene patents, the ethics of bio-medical patents, and the implications of the 2011 Myriad decision. Though the Association for Molecular Pathology v. U.S. Patent and Trademark Office ruling restores the status quo that existed for more than a decade after the U.S. Patent Office issued the patents to Myriad, the Federal Circuit's ruling does not help patients fighting cancer access these technologies, nor does it solve inherent problems in the system of patenting isolated genes.

Obtaining gene patents.

Patents for human genes are permitted if they can be distinguished from genes that occur naturally in the human body. To reach the bar for patentability in the U.S. an object or process must count as an invention, not a discovery, in addition to meeting further legal tests such as those for novelty, non-obviousness and usefulness.

Molecules, cells and even whole organisms are subject to patent protection if they represent a human innovation that is not found in nature. This has been true ever since the Supreme Court ruled in the leading biotech case Diamond v. Chakrabarty, 447 U.S. 303 (1980) where a lab-created bacterium that broke down crude was found to be patentable subject matter under 35 U.S.C. 101. The decision, written by U.S. Supreme Court Justice Burger, held that "Congress plainly contemplated that the patent laws would be given wide scope" and concluded that Congress had intended patentable subject matter to "include anything under the sun that is made by man." But human genes are discovered, not invented.

Background of Gene Patents

For the biotechnology industry, gene patents are the cornerstone of investment in research and development. Although the USPTO has granted patents on genes for over 20 years, the discretion of gene patenting continues to stir controversy. Some have questioned the ethics of monopolizing a resource that is basic to all living organisms. It has also been argued that patents unfairly restrict the use of genes, impeding both basic and commercial research. Though the genes are not patentable while they are in the body, genetic sequences that have been isolated, altered, or manipulated may receive patent protection.

Initially, patents were issued on whole genes with known functions. Inventors then began to seek patents on sequences of DNA, which focused on less than the entire gene. It became clear to researchers that future gene discoveries would be at the mercy of those who already held patents. In response, the USPTO published a revision to 35 U.S.C. 101 in. 2001:
If a patent application discloses only nucleic acid molecular structure for a newly discovered gene, and no utility for the claimed isolated gene, the claimed invention is not patentable. But when the inventor also discloses how to use the purified gene isolated from its natural state, the application satisfies the "utility" requirement. That is, where the application discloses a specific, substantial, and credible utility for the claimed isolated and purified gene, the isolated and purified gene composition may be patentable.
According to the revised guidelines, the USPTO sets the grounds for a utility requirement and states that a novel DNA sequence is patentable only if a demonstrable usefulness of the DNA sequence is disclosed in the application.

Ethical concerns
Opponents of gene patenting fear that permitting patents for DNA then turns human genes into commodities. Professor Suzanne Holland expresses this point when she comments that, "Biotechnology products are not widgets." She addresses a prevalent concern that gene patents may erode our dignity and personhood, since the end result allows the purchase and sale of human elements. Additionally, Professor Holland argues that these ownership rules as applied to the human body may result in a diminished commitment to human flourishing at the societal level.

However, these arguments fail to address the complexity involved in patent ownership: a patent does not necessarily confer legal ownership of anything. One can have a legal patent on an invention, but lack any legal rights to use that invention, let alone to license others to use or manufacture it. The only legal right conferred by a patent is the right to prevent others from using or possessing one's invention. Therefore, a patent on a human gene does not confer ownership of that gene, let alone ownership of all genes made according to the patent. Moreover, the concern that government endorsement of patents for genetic information reduces life to a commodity is arguably misguided and one-sided. While patenting DNA may run the risk of diminished human dignity, this trade-off may lead to an increase in human well-being. For decades, humans have manipulated the natural states of plant and animal species. The difference between these practices and the use of the current technology is that biotechnology makes it easier, and potentially more economical, for us to select preferred genetic traits.

It seems reasonable that a regulatory and legal framework like the one monitored and enforced by the USPTO in mechanical or electrical invention should give the same reward to biological advances. It controls incentives by properly keeping discovered items from receiving patent protection. However, the system in place today in the United States provides for almost unrestricted patenting of biomedical materials, which may be more industry-friendly than public interest oriented.

Myriad case

Last year, the United States District Court for the Southern District of New York shocked the American biotech industry by declaring Myriad's BRCA gene patents invalid. The striking decision in Association for Molecular Pathology v. US conflicted with practice in the United States for the past three decades, which maintained that genes, associated products, and methods are patentable. In July 2011, the Court of Appeals for the Federal Circuit reversed the district court's decision and affirmed the validity of Myriad's cancer screening claims.

The substantive questions posed by Myriad were as follows: Are genes patentable subject matter? How do gene patents impact medical research and health care? Do gene patents promote innovation as required by the Constitution?

Myriad sells a genetic test called BRAC Analysis, which detects mutations in two tumor suppressor genes called BRCA1 and BRCA2. Under normal conditions, these genes repair DNA that is damaged or help destroy the cell where DNA is unable to be fixed. Women with mutations in these genes are five times more likely to develop breast cancer during their lives. Many women with a history of breast and ovarian cancer in their families opt to undergo genetic testing to determine if they have the mutations on their BRCA genes that put them at increased risk for these diseases. This information is critical in helping these women decide on a plan of treatment or prevention.

The Plaintiff's argument hinged on whether DNA is that is isolated from the chromosomes is statutory subject matter or whether it is the product of nature. Myriad is the exclusive licensee of the family of patents relating to these isolated genes and genes sequences. As a result, the company controls all sequencing of the BRCA genes as well as the diagnostic testing for the BRCA mutations. However, Myriad refuses to grant any licenses for second-opinion BRCA testing. The limited research licenses it has granted are restrictive and often prevent patients from disclosing their test results to independent agencies to double-check results.
In the Federal Circuit, Myriad argued that patents allow companies time to recover their sizable R&D investments necessary for such advancements. If companies are not able to patent their technologies, Myriad contends, then there is no incentive to invest in medical research, and progress will suffer overall. Patents for tests, such as the one held by Myriad, give companies a monopoly on a critical diagnostic test, allowing them to charge the monopolistic prices necessary to recoup such large investments.

With three judges writing the decision and voting 2-1, we were left with three different opinions. The majority and concurring opinions gave great weight to the Patent Office's long-standing position that isolated genes are patentable. Judge Alan D. Lourie (who earned a PhD in chemistry), writing for the Circuit, reasoned that the isolated BRCA gene was chemically different from the gene in its naturally occurring state. Similarly, Myriad's patient screening included enough transformation to be patent-eligible. Judge Lourie summarized more than a century of cases dealing with all kinds of substances with natural precursors or analogs. He concluded that the test was whether the claimed substances were "markedly different - have a distinctive chemical identity and nature" - from the naturally occurring version. The court held that the BRCA gene as it appears in nature was not the same as the BRCA gene as separated by Myriad. Although the exact peptide sequence was present in both instances, the two molecules were chemically different compositions. The court cited the PTO's long-standing policy in favor of the patentability of isolated DNA and other natural products.

Judge Kimberly A. Moore (who earned her degree in electrical engineering) agreed with Judge Lourie that the plaintiffs had standing to fight Myriad's patent in court and that most of Myriad's patents were valid. However, her decision focused on the new utility the isolated DNA would have and her analysis stated that the different chemical nature of the isolated DNA was not the sole material factor to be considered in determining the validity of Myriad's patents.

Implications for commercialization and patients

Since Myriad was the sole provider of the BRCA tests, the opportunity for others to offer the tests could harm patients. Patients cannot have their test results confirmed by independent
companies, and the tests were offered only at monopoly prices, so there were many claimants that could not afford the test.

Myriad argued that gene patents were necessary to incentivize research. Such patents made commercial profits possible, and potential financial rewards drove research. On the other hand, such patents have the potential to limit patient access to tests and stifle research. Existing gene patents would likely not incentivize researchers to explore and study portions of the genome that were already claimed, as expensive licensing fees would be another hurdle.

Potential solutions and future of Myriad

The latest round of the Myriad decision does not harmonize the plain language of Section 101 of the Patent Act and the Constitutional mandate to promote progress of the useful arts. The Constitutional mandate to promote progress should include balancing any grant of exclusive rights against providing access. Patenting isolated genes and gene sequences can limit access to research for the duration of the patent. Categorizing these genes as chemically different despite their biological equivalence is gaming the system. This interferes with progress and is therefore in direct violation rights empowering Congress to grant exclusive rights, such as patents and copyrights, for "limited timed times to promote Progress of Science and the Useful Arts."
In terms of patent litigation, if genetic patents hold up in court, third-party research by those who do not hold patents would be restricted. On the other hand, if gene patenting were voided, then the company that invested resources and time into research would not benefit financially. A solution that adheres to the patent rights system and also enables commercialization of affordably priced genetic diagnostic tests that physicians seek will make the best possible diagnoses and treatment plans for their patients.
One such potential solution to balance private interest and public desires to achieve treatments would involve the creation of an independent, non-profit body that would serve as an independent agency for human gene patents. Rights holders could license their patents to the patent pool, where aggregation may be permitted. Such a system may lower the barriers to entry and ensure that monopolies do not prevent inventors from being shut out. Alternatively, limited use patents may provide some financial profits for research companies without severely impacting scientific research.

Commentators of the Myriad decision believe that this long debate will continue for years to come and the case is likely heading to the Supreme Court. Whichever way the court ultimately comes out on this issue, whether following the broader precedent of the Diamond case or narrowing their scope in light of the lower court's reasoning, patenting human genes should be permissible but closely regulated to ensure a balance between the conflicting interests of information sharing while protecting company's hefty investments. Genes offer opportunities for new scientific discoveries, and restricting the barriers of gene patents may open up new progress on this front.

==========

Jeanne Yan. A Pathway to Follow-On Biologics. Winter, 2010, 3 Hastings Sci. & Tech. L.J. 217 (pg. 217).
Gene Patents. http://www.thehastingscenter.org/Publications/BriefingBook/Detail.aspx?id=2174

Id.
The Myriad Case: Protecting Research or Stifling Innovation? Friday, September 23rd, 2011
Office of the Law Revision Counsel, U.S. House of Representatives. http://uscode.house.gov/uscode-cgi/fastweb.exe?getdoc+uscview+t33t36+1483+0++()%20%20AND%20((35)%20ADJ%20USC)%3ACITE%20AND%20(USC%20w%2F10%20(101))%3ACITE%20%20%20%20%20%20%20%20%20.
Davis, Dena S., Holland, Suzanne.
 Kennedy Institute of Ethics Journal - Volume 11, Number 3, September 2001, pp. 219-220.
Association for Molecular Pathology v. U.S. Patent and Trademark Office, No. 09-cv-4515, 94 USPQ2d 1683 (S.D.N.Y. March 29, 2010).
Newly Published Study Finds High Prevalence of BRCA Mutations in Breast Carcinoma in Situ (CIS). http://investor.myriad.com/releasedetail.cfm?releaseid=536858
Profile on Circuit Judge Alan D. Lourie, http://www.cafc.uscourts.gov/judges/alan-d-lourie-circuit-judge.html.
653 F.3d 1329, 1351 (2011).
Id.
Profile of Circuit Judge Kimberly A. Moore, http://www.cafc.uscourts.gov/judges/kimberly-a-moore-circuit-judge.html
Andrew Pollack, Despite Gene Patent Victory, Myriad Genetics Faces Challenges. http://www.nytimes.com/2011/08/25/business/despite-gene-patent-victory-myriad-genetics-faces-challenges.html?pagewanted=all
35 U.S.C. 101 Inventions patentable. - Patent Laws
U.S. Constitution - Article 1 Section 8 http://www.usconstitution.net/xconst_A1Sec8.html
Allison Williams Dobson Classen: Has the Federal Circuit Lost Interest in Patentable Subject Matter? http://www.genomicslawreport.com/index.php/category/badges/myriad-gene-patent-litigation/

Shifting Remedies: Encourage Innovation?

I. Introduction
In Rite-Hite Corp. v. Kelley Co., Inc. the court came to an expansive conclusion based upon the "but for" standard of calculating lost profits after patent infringement. In Grain Processing Corp. v. American Maize-Products Co., lost profits were found impossible to calculate, and the court calculated only a method for determining reasonable royalties. Lastly, in In re Seagate Technology, LLC., the court moved from an old standard for determining willful infringement and instead instituted a new "objective recklessness" standard. Both Rite-Hite and Grain Processing attempt to state "but for" infringement, what profits of the patentee might look like, but the results were vastly different, and neither was encouraging of innovation. Alternatively, Seagate initiated stricter limitations on prosecuting willful infringement designed to encourage innovation. Because of Rite-Hite, innovators may be less likely to attempt a design around, or more likely to create but not implement their patents, and similarly in Grain Processing, there may be consequences for research and development. In Seagate because it has become more difficult to prove willful infringement, innovators do not need to worry as much about potential infringements. While neither Rite-Hite nor Grain Processing is a perfect implementation of "but for," Seagate at least attempts to increase the motivation for innovation.

II. Money Damages and the Transition from Rite-Hite to Grain Processing.
Section 284 of the United States Patent Act (35 U.S.C. § 284) allows for monetary compensation to patent holders to recompense loses due to an infringement. These damages are awarded to restore the patent holder, not to punish the infringer, except in cases of willful infringement. To receive lost profits, a patentee must demonstrate the profits they would have made "but for" the infringing device. To show profits "but for" infringement, patentees will often use a test, articulated in Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., which has four criteria that a patentee must establish in order to recover damages in the form of lost profits. In order to argue that the patentee would have made profits "but for" the infringement, the patentee needs to establish that there was (1) a demand for the patented product, that there was (2) an absence of non-infringing substitutes, (3) a manufacturing and market capability to exploit that demand, and (4) an amount of profit to be made.
The cases of Rite-Hite Corp. v. Kelley Co., Inc., and Grain Processing Corp. v. American Maize-Products Co. are used to demonstrate the dispersal of money damages in action. In Rite-Hite the Appellate Court held that damages from 35 U.S.C. §284 should include reasonably and objectively foreseeable competitive injuries, in particular the loss of both ADL-55 and ADL-100 sales, when only Rite-Hite's patent for ADL-55 had been infringed by Kelley. The Court calculated damages using a "but for" test, where the majority found that lost sales of products unprotected by the patent, but directly competing with the infringing device, specifically the ADL-100, are included in damage calculations. In contrast, the dissent found that if "damages" include unprotected products, then property rights are expanded outside of what is granted by the patent.
The "but for" test is the standard by which a patentee can claim damages based on lost profits, but this is not the only way to recoup damages suffered by an infringer. In Grain Processing Corp. v. American Maize-Products Co. the district court could not find lost profits because a non-infringing alternative was available, though unavailable on the market. Because it would be too difficult to measure lost profits, the court found a reasonable royalty of 3% and gave this to the Grain Processing Corp. as damages for infringement. The "reasonable royalty" method involves looking at comparable royalties, or if none exist, creating a hypothetical and historical negotiation between the two parties, to determine what a reasonable royalty might have been. The theory here is that the reasonable royalty standard is in theoretical agreement with the "but for" standard because the Panduit standard is not the sine qua non for proving "but for" causation.
An interesting shift happens in the transition of the "but for" standard between Rite-Hite and Grain Processing. Before Grain Processing, the standard was the above-mentioned "but-for" standard, where damages depended on the non-infringing substitutes that the infringer could have used. Crucially, before Grain Processing, this inspection of substitutes looked only at products that were "actually sold in the marketplace" (Hausman et al., 826). After Grain Processing, the standard became less restrictive: an infringer could now claim that "it would have offered a noninfringing product that, although not actually sold in the marketplace, was technically feasible at the time and could have been made commercially available relatively quickly" (826).
Because these products would have been identical to the consumer, damages were calculated on a reasonable royalty basis only, despite the increased cost to the infringer. Hausman et al. call this the "free option" where "a firm may keep its options open by using potentially infringing technology rather than technology that definitely does not infringe" (826). As a result of Grain Processing, though there are damages to pay, the risk of choosing this option are dramatically reduced because the potential size of the damages award is so drastically diminished. Hausman et al. argue that "by providing potential infringers with increased option value if they use the patented technology, Grain Processing reduces the deterrent effects of litigation and therefore encourages infringement. Consequently, it reduces the returns to research and development, and so also the incentives to innovate" (826-27).
I agree with Hausman et al. on this question. From a sensible, non-legal perspective, it makes the most sense to me to consider the infringer's alternative item rather than the hypothetical market and competitiveness against existing products when considering damages. Incentives to innovate are decreased when infringers need only pay royalties and not lost profits. As the book remarks about Rite-Hite, patents are made to protect the intellectual property of a company, not to protect the company from the market. But this requires innovation, research and development, all of which are costly. The incentives for companies are questionable: where is the incentive to invest time and money if the risks of an alternative route, as noted by Hausman, are so (relatively) costless.

III. Willful Infringement and Enhanced Damages
Before touching on willful infringement and enhanced damages, Nard discusses equitable relief and preliminary injunction, offering the example of Amazon.com, Inc. v. BarnesandNoble.com, Inc. But more interesting is the transition--somewhat like the change in standards from Rite-Hite to Grain Processing--of the legal standard on willful infringement.
The key case in the changing willful infringement standard is In re Seagate Technology, LLC. The new Seagate standard changes the burden of proof required by the patentee to illustrate willful infringement. Previously, it was the "duty of care" standard, but Seagate makes it the "objective recklessness" standard "that first requires a patentee to show by clear and convincing evidence that the alleged infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. If the patentee meets this first step, it must then show by clear and convincing evidence that the alleged infringer knew or should have know of this objectively high likelihood" (Bernstein).
This was a good transition on the willful infringement standard. It continues to punish those who are clearly in the wrong by potentially doubling or tripling fines for willful infringement. By raising the standard of willfulness and increasing the challenge of proving willfulness, it creates an environment where accidental infringers need not worry about violating willful infringement, as they might have with the previous standard. Some of the literature, including Bernstein, argues that the new standard makes it unduly hard for patentees to prove infringement, which I don't necessarily consider a good thing. But there is a small area, maybe easily overlooked, that I think redeems much of Seagate. Seagate seems to reward research and development and innovation in a way that Grain Processing doesn't. Before the new standard, companies would need to spend large amounts of money early on in the development process to investigate all possible permutations of patents to ensure they were nowhere near infringing on existing patents. By allowing these companies to innovate, with at least a temporary ability, to a degree, to ignore potential fines, the new willful infringement standard continues to encourage development. It is for this key reason that I believe the transition on willful infringement standards was a good and necessary transition.

IV. Conclusion
Because Rite-Hite unfairly punishes the infringer, and Grain Processing does not punish the infringer enough, neither motivates inventors to innovate. The cases raise questions such as "Why design around an existing patent (for example the ADL-100) if I might accidentally infringe another patent (ADL-55) and have to pay lost sales for both?" and "Why develop a new technology if the old technology only requires me to pay royalties?" Seagate tries to improve innovation by marking a shift in the standard for determining willful infringement. The Seagate decision might make it harder for patentees to prove willful infringement, and therefore it may incentivize research and development with less risk. Patent laws should exist to encourage innovation by protecting the rights of patent owners without discouraging new competing, non-infringing, inventions. We will have to wait to fully understand how the patent system as a whole reacts to these transitions.


Sources:
Bernstein, Matthew Cook. "Difficulties Prevailing on Willful Infringement Post-Seagate." May 2010. Accessed 26 November 2011. http://www.mintz.com/newsletter/2010/Newsletters/0430-0510-NAT-IP/web.html

Hausman, Jerry A., Gregory K. Leonard, and J. Gregory Sidak. "Patent Damages and Real Options: How Judicial Characterization of Noninfringing Alternatives Reduces Incentives to Innovate." Berkeley Technology Law Journal 22:825 (2007): 825-853.

Nard, Craig Allen. The Law of Patents. New York: Aspen Publishers, 2011.

After years of advocating the introduction of a post-grant patent review mechanism in the U.S. patent system, the 2011 enactment of the America Invents Act retains current reissue and Ex Parte Reexamination proceedings, replaces Inter Partes Reexamination with Inter Partes Review, and adds new Post-Grant Review and Supplemental Examination proceedings. These five proceedings allow the USPTO to take a second look at an issued patent, make changes to the claims, and reconsider information that both had or had not been considered in the original examination of the patent. Congress's intent in making these proceedings available was to reduce the burden on the judiciary and to lower litigation costs by moving the determination of validity back into the USPTO. In this short overview I will discuss the current state of the U.S. Patent System, the former alternatives for challenging the validity of a patent pre-AIA, and end with an overview of the new inter partes review and post-grant review proceedings.

USPTO
It is no secret that the USPTO is currently overburdened and subject to limited resources. There has been a rapid and consistent increase in the number of patent applications over the years, leading to a greater workload for each examiner at the Patent Office. The number of utility patents has risen from about 100,000 per year from 1970 through 1980, to about 330,00 in 2001, and almost 500,000 in 2010. A parallel increase in patent litigation has been seen as well, suggesting that the number of valuable patents is increasing and that greater uncertainty surrounds the scope of claims and validity of patents in general. Experts suggest that the patentability standard in the U.S. patent system has declined and resulted in the issuance of patent claims that are too broad in scope and whose validity are in question.

Uncertainty over the validity and breadth of a patent claim can lead to several negative results. Ambiguity in what inventions and features are protected in a patent can deter innovators in a particular field because they fear litigation by competitors who hold large numbers of patents in that area. This fear is particularly problematic in fields characterized by cumulative inventions, where an inventor's technical advance relies on previous inventions in their field. In order to protect the innovation incentive the patent system was designed to enforce, there needs to be sufficient review of applications during the examination process and post-grant review mechanisms which catch errors soon after patents have issued so that the public can have confidence in the validity of patents and make important business decisions accordingly.

Alternatives to Challenge the Validity of a Patent
Litigation is currently the predominant mechanism used to challenge the validity of a patent. Reexamination was created by the 1980 Act to Amend the Patent and Trademark Laws and was envisioned to be a cheaper and faster alternative to litigation. The procedures for ex parte reexamination became effective on July 1, 1981, permitting the patent owner or any other party to notify the USPTO and request reconsideration of the grounds upon which a patent was originally issued. In order to initiate reexamination, the patent owner or third party must submit previously undisclosed "new" and relevant prior art to the Patent Office. The prior art considered is limited to prior art patents or printed publications under §§ 102 or 103. Then, a request for reexamination is granted only if the Patent Office finds a "substantial new question of patentability." A third party requestor has no right to participate in the reexamination process after notifying the USPTO of the triggering prior art. The inability of the requestor to play a meaningful role in the reexamination proceedings after initiating the process led to the enactment of inter partes reexamination procedures in 1999. Inter partes reexamination follows the ex parte procedures listed above with a few exceptions. First, all documents filed by the third-party requester will be served to the other party. Second, whenever a patent owner files a response to an action on the merits from the USPTO, the third-party requestor has the opportunity to file a written comment regarding issues raised in the action. Finally, a third-party requestor is estopped from raising any issues they raised or could have raised during the inter partes reexamination proceedings in a later civil action regarding invalidity of any claim.

Since the establishment of ex parte and inter partes reexaminations, there has been a slow increase in the number of requests for reexamination filed. For ex parte reexamination, since July 1, 1981 through June 30, 2011 there have been 11,604 requests for reexamination with 33% requested by the patent owner and 66% requested by third parties. To date 92% of total requests have been granted and of those 23% resulted in all claims confirmed, 11% resulted in all claims cancelled, and 66% resulted in amendment to at least one claim. The average pendency for reexamination (filing date to certificate issue date) is 25.7 months. For inter partes reexaminations, the total number of requests filed between November 29, 1999 and June 30, 2011 is 1,286 and 95% have been granted. Only 13% resulted in all claims confirmed, 44% resulted in all claims canceled, and 43% resulted in amendments to at least one claim.

Although the increase in number of reexamination requests over the years suggest that alleged infringers are beginning to recognize reexamination as a viable alternative to litigation, potential patent challengers are clearly not taking advantage of this proceeding even though 77% and 87% of ex parte and inter partes reexamination requests respectively result in some amendment to the claims. Reexaminations require only a preponderance of evidence to prove invalidity, where as litigation has a much higher bar of "clear and convincing evidence." Unlike litigation, patents are not presumed valid in reexamination proceedings.

Several disadvantages to reexamination have led to its under-use as an alternative to litigation. In reexaminations, alleged infringers can only rely on prior art patents and printed publications to prove invalidity. In litigation, an alleged infringer can also purport invalidity or unenforceability based on prior use or sale, §112, inequitable conduct, and patent misuse. However, the most controversial issue regarding reexamination are the estoppel effects. If a third party decides to pursue reexamination of a patent and later files an invalidity suit in the district court as well, they are estopped from raising issues they raised or could have raised during reexamination.

The limitations and disadvantages of the reexamination process has led many experts to recommend a post-grant opposition procedure similar to that currently used in the European Patent Office. For years, several policy review boards have advocated the introduction of post-grant review mechanism and finally, this past September, a patent reform bill was passed that puts several post-grant review processes in place to re-examine recently issued patents.

Overview of New Proceedings under the AIA
As a result of the enactment of the America Invents Act ("AIA"), there are now five separate post-grant review proceedings available: Reissue, Supplemental Examination, Ex Parte Reexamination, Post-Grant Review, and Inter Partes Review. While the reissue and ex parte reexamination procedures have been available and are largely unchanged, both supplemental examination and post-grant review are entirely new. Inter partes review replaces the old inter partes reexamination with a few key changes from the old reexamination process. For the purposes of this paper I will focus on the new inter partes review (IPR) and post-grant review (PGR) proceedings.

IPR is effective September 16, 2012 and applies to all patents regardless of their application filing date. The main function of IPR has not changed, it gives third parties the opportunity to cancel one or more claims on the grounds that the claims are anticipated or obvious in view of prior art consisting of patents or printed publications. However the procedure has greatly changed from inter partes reexamination. Unlike inter partes reexamination, a request for IPR will not be granted if the requesting party has already filed a civil action challenging the validity of the patent claim. If the petitioner files a civil action challenging the validity of a claim after filing a petition for reexamination, the civil action is subject to an automatic stay that can be lifted only under special circumstances. The old reexamination process encouraged strategic behavior from third parties who would initiate reexamination requests and civil proceedings at the same time, hoping that litigation would be over before the reexamination certificate issued so that they could circumvent the estoppel effects of reexamination. The new proceeding no longer allows third parties to engage in this type of strategy. The estoppel effects of the IPR are largely the same, a third party may not challenge the validity of a claim in a later civil action on any grounds they could have raised during reexamination. Whereas the old reexamination proceeding could be requested at any time during the enforceability of the patent, IPR requests must be filed after the later of 9 months after patent grant or termination of post-grant review. Another notable change is the elevated threshold that must be met for review to be granted. The AIA raises the threshold from "a substantial new question of patentability" to "a reasonable likelihood that the petitioner would prevail" with respect to a least one challenged claim. While most of the changes to IPR does not take effect until September 16, 2012 when the AIA is fully in effect, the change in the threshold is effective immediately for all patents and not just those issued after the law was enacted. The higher threshold will require petitioners to provide stronger evidence and be fairly certain of the invalidity of at least one claim before requesting review. The "reasonable likelihood" test is currently used in evaluating whether a party is entitled to preliminary injunction and effectively requires the petitioner to present a prima facie case justifying rejection of the claims in the patent. The AIA allows the PTO to develop rules concerning discovery, which is limited to depositions of anyone submitting an affidavit or declaration during the proceeding or where it is necessary in the interest of justice. Finally, a final determination in an IPR must be issued within one year and may be extended for up to six months upon a showing of good cause. By speeding up the IPR process and allowing for limited discovery, it will be a more attractive option for third parties who want a quick resolution. However, the Patent Office will have to carefully define the limits of discovery in order to realistically meet the one year turnaround time frame.

The other major proceeding for challenging the validity of a patent under the AIA is the PGR. PGR applies to patents issued from applications having an effective filing date of March 16, 2013 or later. While similar to IPR proceedings, PGR is more broad because it is not limited to invalidity arguments based on prior art patents and publications. It permits a third party to raise any grounds for invalidity including lack of patentable subject matter, anticipation, obviousness or lack of an adequate written description (except best mode). The estoppel effects are the same as IPR: PGR may not be instituted if the petitioner has already filed a civil action challenging the validity of the patent, any civil action filed after a PGR has been granted will be automatically stayed and lifted only under special circumstances, and the petitioner is barred from challenging the validity of a claim on any grounds he could have raised during the PGR process after a final decision has been made. The threshold for granting PGR is whether the petitioner demonstrates that "it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable." The petition for PGR must be filed within nine months and a final determination must be issued within a year with up to six months extension for good cause. PGR also allows for limited discovery for evidence directly related to factual assertions advanced by either party in the proceeding.

While the PGR provision of the AIA was meant to identify invalid patents earlier by allowing any party to petition review within nine months of the patent being issued, it remains unclear whether third parties will utilize this proceeding and how effective it will be. The patent reform bill calls for the USPTO to establish the procedures for a faster and more expansive post-grant review process that will likely be difficult for the agency to transition into and places new burdens on patent owners and challengers. It may not be easy for third parties to identify patents they'd like to challenge within the nine month time frame. While PGR is supposed to be a cheaper alternative to litigation, it will likely still be considerably expensive for patent owners to defend against since it can involve discovery and oral hearings. This puts individual inventors and start-up companies at a disadvantage because attorneys are unlikely to work on a contingency fee basis since there are no infringing products on the market from which to seek damages. This may weed out good patents whose owners simply do not have the funds to defend them. PGR also imposes a heavy estoppel burden on patent challengers. Since petitioners are able to assert a broader range of invalidity arguments such as lack of patentable subject matter and §112 issues, they are estopped from making any invalidity argument they asserted or could have asserted during PGR in a later civil proceeding. The estoppel provision for IPR is more narrow since they may only raise §§ 102 or 103 invalidity arguments, and therefore are free to raise other issues later in civil proceedings. The fear of being barred from raising an invalidity argument in civil litigation may be enough for many potential patent challengers to forgo PGR and choose to litigate instead.

While Congress had noble intentions in setting up IPR and PGR, it is unclear whether potential patent challengers will utilize these proceedings. A larger concern is the ability of the USPTO to handle the enormous task that Congress has put on their plate. For years the Patent Office has been receiving more applications than it can handle and as a result many believe that the quality of review has diminished, leading to patents being granted for claims that have uncertain scope and validity. The Patent Office is currently understaffed and underfunded, and to task them with the job of new proceedings seems unfair and doesn't address the problem at it's core. In order to have a more efficient and reliable patent system we need to prevent errors before patents issue instead of coming up with new ways to correct them after the patent is granted.