Lawmakers urge USPTO to curb IPR denials under Fintiv
Several US lawmakers have called upon the US Patent and Trademark Office (USPTO) to curb the increase in inter partes review denials to combat the “soaring cost” of prescription drugs.
Eleven US senators and members of Congress, including Massachusetts Senator and former presidential campaigner Elizabeth Warren, co-signed the open letter addressed to the temporary USPTO leader Drew Hirshfeld on 16 September.
“While the patent system plays a critical role in incentivising innovation in the prescription drug market, aspects of the system have also allowed drug companies to engage in anti-competitive practices that drive up the cost of drugs and keep competitors from entering the market,” said the letter.
Specifically, the letter highlighted the increase in IPR petition denials, which the signatories say has made it more difficult to curtail anti-competitive practices by prescription drug companies.
Fintiv effect
The rise of denials has been driven partly by the Patent Trial and Appeal Board’s precedential ruling in Apple v Fintiv (2020).
Fintiv outlined six scenarios for the PTAB to consider before instituting a review of a patent, including the trial date in the parallel case, whether the court has stalled its case for the PTAB review, and any overlap between the issues in both proceedings.
The rule effectively allows the PTAB to refuse to institute an IPR of a patent or patents also subject to parallel litigation in US district courts.
The May 2020 decision has been cited in many IPR denials since and has resulted in “a disturbing rise” of discretionary denials of IPR petitions, making it harder for generic manufacturers to secure the rights to make a lower-cost variant of the drug, according to the letter.
This has led to several petitions from legislators and generics manufacturers to reexamine the ruling.
Antitrust practices
The lawmakers claim that common practices such as “product hopping” and “patent thickets” help block generic competition and “shut out competition from other manufacturers” and allow for “monopoly pricing that drives up healthcare costs”.
Product hopping is a tactic used by pharmaceutical companies to take an old drug formulation off the market when the patents are set to expire and ask patients to switch to a newly-patented formation in order to maintain a monopoly.
Patent thickets describe an overlapping set of patents that requires generic manufacturers to litigate or secure licensing deals for multiple patents when creating their own variant, effectively delaying the process.
“As long as discretionary denials of IPRs under Fintiv continue, the public will lose one of the few tools available that can help address the root cause of high prescription drug prices and drive competition in the marketplace,” the letter concludes.
This news follows a similar open letter from the US Food and Drug Administration sent earlier this month urging the USPTO to curb drug costs by tackling antitrust issues, including product hopping.
Generics companies have openly opposed the Fintiv rule, with 12 of the biggest companies in the space supporting Apple’s petition against the ruling in an amicus brief before the US Supreme Court.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox.
