*This writing is a blog post. It is not a published IPTF Journal Article.
Sydney Closs
A patent grants an inventor the right to exclude others from “making, using, importing, and selling” a patented invention for a specified period of time. 35 U.S.C. § 271. This right allows an innovator to enjoy a limited monopoly over an invention, providing important incentives for innovation. See 35 U.S.C. § 103. Under current patent law, there are five principal requirements for a new innovation to be eligible to receive a patent: (1) patentable subject matter, (2) utility, (3) novelty, (4) non-obviousness, and (5) enablement. 35 U.S.C. §§ 100 – 112.
An invention meets the non-obviousness requirement if it would not have been an apparent innovation to a person of ordinary skill in that industry. 35 U.S.C. § 103. Although the intent behind “non-obviousness” is to provide a metric for the degree of innovation required to justify the award of a patent, this definition is highly subjective and clouded by hindsight bias. Gregory Mandel, Patently Non-Obvious II: Experimental Study on the Hindsight Issue Before the Supreme Court in KSR v. Teleflex, Yale J.L. & Tech. 1, 3 (2007). Predictably, such complex and unclear instruction presents the issue of determining when an invention is unique enough to be patented. Id.
The concept of non-obviousness goes hand in hand with the current dilemma of the patent thicket landscape.Carl Shapiro, Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting (2001). A patent thicket occurs when one company owns many overlapping patent rights, which forces competitors to obtain numerous licenses from the patent holding company. Id. This encourages companies to patent any variation of a new technology, even if the variation is minor, leading to bloated intellectual property portfolios of similar or overlapping patents. Stefan Wagner, Are ‘Patent Thickets’ Smothering Innovation? Yale Insights: Faculty Viewpoints (Apr. 22, 2015), https://insights.som.yale.edu/insights/are-patent-thickets-smothering-innovation This anticompetitive structure allows for artificial price inflation, which in turn results in higher prices for the consumer. See Letter from Six US Senators to Kathi Vidal, Director of the U.S. Patent and Trademark Office, (hereinafter Letter from Six Senators), (Jun. 8, 2022) (on file at cassidy.senate.gov).
Patent thickets have become especially prevalent in pharmaceutical patenting as a way to prevent generic brands from entering the market. Id. To illustrate, “[b]etween 2005 and 2015, 78% of drugs associated with new patents were not new drugs, but existing drugs, and in this timespan the number of drugs with three or more patents added to them in one year doubled.” Letter from Senators Hassan and Cassidy to Kathi Vidal, Director of the U.S. Patent and Trademark Office (May 25, 2022) (on file at cassidy.senate.gov). Companies create patent thickets by obtaining a patent on a minor variation of a drug shortly before its exclusive patent rights are set to expire. Letter from Six Senators. This variation may merely be cosmetic, but is able to stifle generic competitors and keep drug prices high. Id. Higher drug costs and a lack of generic brands most impacts those who are uninsured or from low-income backgrounds, compounding systemic inequalities. See id. In acknowledgment of this, a bipartisan group of six US Senators urged the US Patent and Trademark Office (USPTO) to reexamine its practice of granting similar or overlapping patents in a June 2022 letter. Id.
While there is not yet a clear solution to the anticompetitive impact of patent thickets, the answer may lie in amending the non-obviousness requirement. See id. Perhaps the addition of a “good faith” element could require the Patent Office to evaluate whether an entity is claiming a patent to “prop up the market for an existing, expiring patented product” as part of the patent application process. Hangzhou Chic Intelligent Tech. Co. v. P’ships & Unincorporated Ass’ns Identified on Schedule “A”, 2022 U.S. Dist. LEXIS 63948 1, 4 (2022).
Accordingly, this good faith element may require a patent applicant to disclose, on their application, all patents in their portfolio expiring within a specified time period to aid in this judgment. See Stefan Wagner, supra. This could help contextualize a company’s patent application and prevent the effective extension of patents past their original expiration dates. See Letter from Six Senators.