Legal

SCOTUS to biopharma: Inter partes reviews are here to stay, deal with it

The Supreme Court will not be coming to the rescue of a biopharma industry that is desperately unhappy with the inter partes review system for patents.

Writing for a 7-member majority on the court, Justice Clarence Thomas ruled that the IPR process is a part of the legal structure surrounding the Patent and Trademark Office’s authority to grant a patent. And it is entirely constitutional.

From the ruling:

Inter partes review involves the same basic matter as the grant of a patent. It is “a second look at an earlier . . . grant,” Cuozzo Speed Technologies, LLC v. Lee, 579 U. S. ___, ___, and it involves the same interests as the original grant, see Duell, supra, at 586. That inter partes review occurs after the patent has issued does not make a difference here.

That’s not what the drug developing industry wanted to hear. Biopharma companies view the IPR process — set up by legislation in 2011 to weed through a thicket of often flimsy patents — as a second and distinct threat to their patents covering valuable drug franchises. Fighting against low-priced generic rivals has now involved a wide range of IPR squabbles.

Brent Saunders

Allergan CEO Brent Saunders even went so far as to hand off the company’s patents on the blockbuster drug Restasis to a Mohawk tribe and then leased them back, leaving the tribe to claim sovereign status that left them immune to IPRs. It didn’t work, though, managing only to anger a group of high-profile officials in Congress, several of whom are looking to pass new legislation to prohibit anyone else from trying it.

IPR, though, does have plenty of champions in Silicon Valley, where high tech groups see it as a way to guard against patent trolls.

Only John Roberts and Neil Gorsuch voted against IPR, leaving a mix of liberal and conservative members to come together in a rare display of consensus thinking.

Gorsuch wrote the opinion for the minority. He noted:

After much hard work and no little investment you devise something you think truly novel. Then you endure the further cost and effort of applying for a patent, devoting maybe $30,000 and two years to that process alone. At the end of it all, the Patent Office agrees your invention is novel and issues a patent. The patent affords you exclusive rights to the fruits of your labor for two decades. But what happens if someone later emerges from the woodwork, arguing that it was all a mistake and your patent should be canceled? Can a political appointee and his administrative agents, instead of an independent judge, resolve the dispute? The Court says yes. Respectfully, I disagree.

So is the scrap over? Not a chance. The Supreme Court found that the IPR process is completely constitutional, but that doesn’t mean that lawmakers have to leave it that way. PhRMA, which had pushed to end the IPR process, had this to say:

The Supreme Court’s decision in Oil States Energy Services v. Greene’s Energy Group was narrowly tailored, finding only that IPR is constitutional, not that it is efficient or fair. Given this narrow decision, we call on Congress and the PTO to take steps to address the Supreme Court’s ruling in SAS Institutes v Iancu and concerns raised by stakeholders, and we stand ready to work with policymakers to make the IPR process more fair for all.


Image: The United States Supreme Court. SHUTTERSTOCK


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