Quarterly Journal 45-4 Volume 45, Issue 4 October 2017

Shielded by Sovereignty

Given the perception that patents are much more likely to be invalidated through challenges at the Patent Trial & Appeal Board (PTAB) than in district court proceedings, patent owners have worked hard to avoid or circumvent the PTAB’s post-grant review processes, such as inter partes review.  Most recently, state entity-patent owners, including public universities, have had some success at the PTAB in arguing that their patents are insulated from IPR by the doctrine of sovereign immunity. 

This Article reviews several recent decisions by the PTAB concerning the application of sovereign immunity in the IPR context, and discusses the various steps (some potentially drastic) that non-state-actor patent holders might take in order to try to insulate their patents from IPR proceedings at the PTAB under the Board’s reasoning—including, for example, partnering with state actors or other sovereigns, such as Native American nations.  Finally, this Article considers some of the potential risks of such strategies, ranging from contrary decisions by the PTAB or superseding decisions by the Federal Circuit or Supreme Court to the danger of losing control of the patents at issue.

Who Decides Enhanced Damages?

The Supreme Court’s decision in Halo Electronics, Inc. v. Pulse Electronics, Inc. has eased both the evidentiary burden and the substantive standard required to show willful patent infringement.  What the Supreme Court did not address, however, is who decides the level of enhanced damages under Section 284.  By statute, Congress has placed that decision in the hands of the trial judge.  Despite a similar statutory scheme under the Copyright Act, in Feltner v. Columbia Pictures Television, Inc. the Supreme Court held that there is a Seventh Amendment right to a trial by jury when imposing statutory damages, including the amount and enhancement of any such damages. 

Considering the factors addressed in Feltner, there is at least a reasonable argument that a plaintiff that can demand a jury must assess the amount of enhanced patent infringement damages under the Seventh Amendment.  But, if that argument is ultimately rejected, then the corollary question should be assessed: why have juries assessed willfulness at all?  If there is no right to a jury trial on the amount of enhancement, then the issue should simply be committed to the trial judge’s discretion and a jury finding on willfulness would be neither efficient nor necessary to the trial court’s exercise of discretion. 

The Supreme Court Says Conditional and Foreign Sales Cannot Avoid IP Exhaustion And What Should IP Owners Do?

On May 30, 2017, the United States Supreme Court handed down its long-awaited decision Impression Products, Inc. v. Lexmark International, Inc. And, in holding all patents exhausted at first purchase, irrespective of the location of purchase, the Court profoundly implicated intellectual property owners, manufactures, sellers, retailers, resellers, and consumers across the globe. This Article tracks the history of the Supreme Court’s IP exhaustion jurisprudence, discusses the Supreme Court's Lexmark decision at length, and recommends ways in which IP owners may, in light of the decision, better protect their intellectual property rights.

If It Walks Like a Duck

The Biologics Price Competition and Innovation Act (BPCIA) was passed in 2010 as part of the Affordable Care Act with the hope of creating a similar regulatory system for biologics as currently exists for small-molecule drugs; i.e., a system that lowers the cost of medicine while maintaining incentives for companies to invest in innovative new healthcare products. 

Similar to the Hatch-Waxman Act, the BPCIA allows for “generic” versions of biologic drugs, called biosimilars, to be approved in an abbreviated application process. The BPCIA requires that these biosimilar products must be “highly similar” to the reference product, and can be further determined to be “interchangeable” if additional similarity requirements are met. Biosimilar developers often face a paradox because they must show the FDA that their product is at least highly similar to the reference product, but in many cases they must also ensure that the product avoids infringing one or more patents covering the reference product.

This note examines the two opposing sides of this paradox. First, it examines all the FDA Guidance that provide more detail on the meaning of the terms “highly similar” and “interchangeable” in the context of biosimilar products. Next, it surveys various patent infringement decisions involving biologic products, focusing on ways in which biologic products have differentiated themselves from patent claims. It discusses issues that will impede the success of the BPCIA, and suggests ways in which biosimilar developers and innovator pharmaceutical companies can shape their product development strategies to deal with this paradox.

I Used to Steal Jokes

There exists a lack of practical copyright protection available to jokes told by stand-up comedians. Although a verbatim joke may be protected, joke theft in comedy typically involves comedians stealing the premise of a joke, not the verbatim joke. Because copyright law does not allow protection for ideas, joke theft in comedy is largely legally irrelevant.

This note discusses the various barriers to recovery for comedians who are victims of joke theft, and suggests a new judicial test as a solution. This test, analogous to the “similar elements” test employed by courts, involves expanding protection for the punchline of a joke, if both the set-up and structure of the punchline are similar. This method will protect true joke misappropriation without providing comedians with too broad of a copyright in the form of a copyright for a joke idea.

Side Effects of Evergreening

The patent system as currently designed enables pharmaceutical companies to prolong their periods of market exclusivities through a practice called evergreening. Companies utilize the lenient standards set by the Patent Act’s utility and nonobviousness requirements to obtain secondary patents on already-patented drugs. Obtaining additional patents on these drugs ensures that the pharmaceutical companies retain exclusivity for longer than the 20-year term of the original patent.

This lack of competition allows companies to charge profit-maximizing prices at the expense of patients and the healthcare industry. The utility requirement does not require much more than a showing of operability, and the nonobviousness requirement is relatively easy to satisfy, thanks to several convoluted tests applied by the courts.  An industry-specific amendment to the utility requirement conditioned on a showing of increased efficacy would ensure that patents are only granted for real improvements on already-patented drugs. This would drive innovation in the industry and increase competition, leading to better drugs and lower prices for patients.