Pharma Has Nothing to Fear from High-Quality Patents

By Beau Phillips, Executive Director, US*MADE

The pharmaceutical industry has long opposed the practice of inter partes review (IPR) at the U.S. Patent and Trademark Office (USPTO). Now, their trade group, PhRMA, has announced opposition to the Restoring the America Invents Act (RAIA), which would have the IPR process function as Congress originally intended. But, in a recent blog post, PhRMA has highlighted why their objections are misguided and that it’s time for the pharmaceutical industry to rethink its position.

IPR, established through the America Invents Act (AIA), provides a fair and transparent patent review by Patent Trial and Appeal Board (PTAB) judges who are experts in patent law, science, and technology. This review process provides critical protection for manufacturers and other innovators who are often the targets of frivolous patent infringement claims. Through IPR, low-quality patents – that never should have been issued by the patent office in the first place – can be assessed on their merits by experts. If they are invalidated, this can avoid the expensive litigation and extorted settlements when such reviews are held in federal courts. 

However, over the last several years, the USPTO unilaterally implemented the so-called NHK-Fintiv rule. Requests for IPR are issued “discretionary denials” by the USPTO if litigation related to the infringement claim is already pending. This rule change flies in the face of the AIA law and prevents innovators from accessing IPR in precisely the situations where it is most needed. A new bipartisan bill, the Restoring the America Invents Act (RAIA), has been introduced to roll back the illegal administrative change made by USPTO and return IPR to functioning as intended by an overwhelming bipartisan majority in Congress. 

It makes no sense for pharmaceutical innovators to oppose the RAIA and a restored IPR process. Patents for truly innovative drugs face no threat of being invalidated by the patent experts at the PTAB, nor should they – that’s not what IPR was intended for. The IPR process is there to weed out poor-quality patents which were incorrectly granted in the first place. 

 Patents, and the window of exclusivity they offer, are essential for incentivizing the development of new technology and new medicines. But patents must be high-quality, covering only novel, nonobvious, and useful technologies. When they are not, everyone suffers, including pharmaceutical innovators and the public that relies on them to develop groundbreaking treatments and cures. 

In a recent blog post announcing why they oppose the RAIA, PhRMA instead makes a powerful argument for why it’s time for the pharmaceutical industry to rethink its historical opposition to IPR. Citing research from the Robins Kaplan law firm, PhRMA notes “only a minuscule 8 out of 604 relevant PTAB trial institution decisions had mentioned Fintiv” and that discretionary denials of IPR under Fintiv “are relatively rare in the biopharmaceutical industry.”

PhRMA acknowledges that research shows the RAIA would not negatively impact their industry. As a result, it’s hard to understand why they are opposed. This is especially true given that the legislation also has significant positive implications for manufacturers and American innovation. As I have discussed previously about both the AIA and the RAIA, restoring IPR improves the quality of our patent system, bolsters U.S. innovation, and protects American jobs. Congress should prioritize the RAIA and protect American manufacturers from abuse of the patent litigation system.