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7 October 2021AmericasMuireann Bolger

LSPN Live: ‘Unimpressive’ Arthrex remedy fuels uncertainty

The unpredictable nature of the US legal landscape has arguably kept IP practitioners on tenterhooks over the past decade.

Landmark rulings such US v Arthrex delivered by the US Supreme Court have exerted a significant impact on the life sciences industry, which is also braced for the upheaval that could be wrought by the proposed Leahy Bill and other legal developments.

These issues were explored in-depth during an LSPN Live session, “ US patent legal landscape outlook: What are the main challenges facing the US patent system and how do we prepare for them?” 

Moderated in an entertaining fashion by Ha Kung Wong, partner at Venable, the session featured the expert insights of Wei Campbell, director and patent counsel at Alnylam Pharmaceuticals and Christine Cochran, assistant general counsel at Astellas Pharma.

The US Supreme Court’s decision in Arthrex and its transfer of greater power to the director of the US Patent and Trademark Office (USPTO) continued to fuel uncertainty, according to the panellists. Since the decision, they noted, the acting USPTO leader, Drew Hirshfeld has yet to approve a rehearing review petition.

Arthrex sensitivities

“I’m not particularly impressed by the process of earmarking for review to the director rather than the Patent Trial and Appeal Board (PTAB) panel,” noted Wong.

“It is unclear what needs to be done to make the director pay attention to a petition. All of the denials so far have been one sentence denial with no explanation as to why. Right now, it seems like it’s a rubber stamp. I’m not sure this is the insight that the Supreme Court was looking for. Is what is in place now, really what the Supreme Court envisioned?” he queried.

Cochran took the view that the Supreme Court had been determined to avoid as much upheaval and change as possible while acknowledging that the interim nature of the acting director position was “creating sensitivities”.

This point prompted the panel to address the issues flagged by tech company Vilox, which in its petition for director review argued that it may challenge the authority of Hirshfeld.

But according to Hong, this strategy was unlikely to meet with success. “Given that the Supreme Court has bent over backwards to see that nothing changes, it is a stretch for them to say that Hirshfeld's decisions have no authority. I don’t see it panning out.”

A pro-business decision

Another landmark case Minerva v Hologic offered a much clearer and positive path forwards for the life sciences sector, contended the panel.

In that case, the US Supreme Court upheld the principle of assignor estoppel, as an  “equitable doctrine that prevents the assignor (or parties in privity with the assignor) of a patent or patent application from later challenging the validity of the patent” but constricted its scope in future cases.

“The ruling was a compromised yet fair decision. The Supreme Court did not abolish it in total but it did narrow it,” noted Campbell, who added that the case would demand more future contractual obligations.

“The purchaser of patents will have to resort to some safeguards, some extra measures, eg by adding in a non-challenge clause to dissuade [inventors] from later challenging the patent’s claims,” she said.

Cochran echoed Campbell’s view that the ruling was a pro-business decision. “We’re looking for certainty because you can’t go back in time and modify an employer contract. The Supreme Court took a reasonable approach.”

The proposed Restoring the America Invents Act, however, met with considerably more criticism, with Cochran dismissing the bill as a “Christmas tree of presents for the tech industry”.

Proposed by Democratic Senator William Leahy, the bill, if enacted, will abolish the PTAB’s power to deny petitions for reasons other than the merits of the case, effectively removing the application of Fintiv factors.

It also confirms that a voluntary dismissal of an infringement action would not preclude a PTAB challenge and requires any decision by the USPTO director to be issued as a separate written opinion.

Leahy Bill ‘risks’ for life sciences

According to Cochran, the bill will create considerable risks for the pharma sector.

“It will create a number of inefficiencies that the USPTO and the courts have worked hard to overcome. The USPTO has achieved some great work in reducing serial and harassing petitions that this legislation would undo. I think the Fintiv factors have been really useful in ensuring that we have a smooth predictable process.”

This bill was an easy approach for Leahy to take in a bid to cement his legacy, according to Cochran. “We all want high-quality patents, we want the processes to be predictable and certain and we want to have some idea before we get started of how we can expect a return on investment. But this is a powerful senator, and he is trying to make himself the darling of the tech industry.”

Campbell took the view that the pharma sector was being unfairly blamed by influential figures such as Leahy for drug price inflation. Additionally, she argued that the industry was being “tried in the court of public opinion” in the wake of a letter issued by the US Food and Drug Administration (FDA) to the USPTO urging more action.

While the letter’s call for more engagement between government agencies was a laudable one, she pointed out that some of the FDA’s solutions were disallowed under US patent law.  “These well-intended suggestions, but I don’t know how, in practical terms, they would play out,” she concluded.

To listen to the session, please visit and register at  LSPN Live. Today is the last day you can register and revisit the three-day conference via the on-demand videos.

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