from the fixing-the-patent-system dept
This post is one of a series of posts we're running this week in support of Patent Quality Week, exploring how better patent quality is key to stopping efforts that hinder innovation.
A couple weeks ago, President Biden signed an executive order focused on promoting competition in the interests of American businesses, workers, and consumers, emphasizing the need to tackle high prescription drug prices that harm 1 in 4 Americans. Earlier this year, the President also signed an executive order to increase racial equity across all federal agencies.
Few agencies are as ripe for this kind of transformation as the U.S. Patent and Trademark Office (PTO)—the federal agency that oversees patents, trademarks, and designs.
The PTO’s work, which has often escaped scrutiny, is directly linked to issues of equity and rising prescription drug costs. As health and economic justice attorneys, we’ve worked for nearly two decades to increase equity in drug development and access, and have spent countless hours learning from patients, patent offices, community leaders, public health professionals, policymakers, scientists, economists and more. Based on our learnings from those most directly affected by the patent system, we offer ten actions the federal government should take to answer the President’s calls to promote competition and advance equity across government that can transform the patent system in the public’s interest.
1. Amend the PTO’s mission to include equity
Equity doesn’t currently factor into the PTO’s decision making or operations, and that’s no accident. Advancing equity is not part of the agency’s mandate so equity concerns are not considered relevant. The PTO’s mandate relies instead on this theory of change: granting intellectual property rights will spur innovation and economic growth, and people will be better off. This assumption has gone virtually unchallenged in the last 40 years, with no critical look at whether the current model is producing its intended benefits for everyone. And as America grapples with a drug pricing crisis, and vaccine nationalism threatens the global Covid-19 recovery, the consequences of this framework are becoming increasingly clear . If President Biden is truly serious about embedding equity into every agency, we will see the new PTO director amend the agency’s mission accordingly. The agency’s ability (and willingness) to implement the recommendations that follow will depend in large part on equity officially becoming part of its mandate.
2. Collect demographic data
The patent system has a long history of denying Black people opportunities for economic mobility. Even today, research by economist Dr. Lisa Cook indicates that less than one percent of patent holders are Black. In addition to racial inequities, gender inequities are present at the PTO. Women represent only 18 percent of patent holders, and leading economists predict it will still take 118 years to achieve gender parity in the patent system. We know about these disparities from academic studies and not from the PTO, which doesn’t track demographic data. Earlier this year, the bipartisan IDEA Act passed out of the Senate’s Judiciary Committee and companion legislation is pending in the House. This legislation would require the PTO to collect demographic information about applicants. Previously introduced in 2019, the bill’s advancement in this Congress is promising, but doesn’t guarantee passage given the political gridlock plaguing DC. In the meantime — since it can’t fix what it doesn’t measure — the incoming PTO director could voluntarily start collecting this data.
3. Redefine the “customer”
The charter of the PTO’s Public Advisory Committee, which advises the director on patent and operational issues, states that the Committee must “represent the interests of diverse users of the USPTO.” But the PTO defines its users narrowly, as the entities or individuals using the system for patents and trademarks. As a result, the Committee is composed primarily of representatives from corporations. People with non-commercial perspectives—members of historically marginalized communities, public health experts, and patient advocates—who have a tremendous stake in how monopolies operate, for example, don’t traditionally have a voice in decision making. That naturally leads to a system in which the public interest is overshadowed by commercial concerns. The PTO should redefine its customer base to include not just those who are directly applying for patents and trademarks, but also those whose lives stand to be fundamentally altered by these decisions. The deadline recently passed on the PTO’s request for nominations for new Committee members; the time is especially ripe for it to bring in new voices to better represent the public’s perspectives.
4. Raise the bar for what gets patented
Over the last 30 years, more and more patents have been sought and granted for things that aren’t novel inventions. Recent controversies illustrate the point well: these patents are often sought and granted for products derived from ancestral knowledge from countries with predominantly Black and Brown populations—the Colombian sweetener panela, or baby wraps, for example. The PTO should not be granting patents for knowledge appropriated from beyond America’s borders.
The consequences of setting the bar too low have been dire. 13% of Americans report losing a loved one in the last five years due to high drug costs, and people of color are twice as likely to have lost someone. Patent monopolies, which are increasingly being used to block competition, are a root cause of this crisis, and between 2006 and 2016, the number of drug patents doubled. Our research demonstrates that the ten best-selling drugs in America each have on average 131 patent applications, and monopoly protection of up to 38 years. At the same time, nearly 8 out of 10 medicines associated with new drug patents are for existing medicines, like insulin or aspirin, rather than new ones. The longer the monopoly on a single medicine remains, the longer prices stay high or continue to rise.
It’s long past time to raise the bar so that only things that are truly inventive are rewarded with a patent. For example, combining existing drugs or switching dosages should not receive additional patent protection. The administration could recommend that Congress amend the patent law to prevent weak patents from being granted.
5. Change the PTO’s financial incentives
The majority of the PTO’s funding comes from fees paid only if a patent is granted, which means the agency’s revenue is directly linked to the number of patents it grants. This creates a financial incentive to grant as many patents as possible, even if claims to inventiveness are weak.
At least one study found that the PTO grants patents at higher rates when revenue is strained, suggesting that patent decisions are being influenced by factors other than inventiveness. Over the last decade, over 40 percent of patents challenged after having been granted are invalidated either in whole or in part. Research shows that the push to grant ever-more patents puts a strain on patent examiners, who have less and less time to conduct a thorough review (today, the average patent review time is just 19 hours). Over the last 27 years, the PTO has granted as many patents as it had in the previous 155 years. The proliferation of low-quality patents harms people in a range of different ways, including driving up prescription drug costs.
The administration could investigate the link between revenue shortfalls at the PTO and the volume of patents being granted, and evaluate alternative funding streams for the PTO so that the agency’s financial sustainability isn’t tied to the volume of patents that it grants.
6. Modernize laws that are not serving the greater public good
The Bayh-Dole Act, the Hatch-Waxman Act, and the Federal Courts Act were enacted to increase innovation and economic growth. But these laws have also enabled the corporatization of medical research in ways that are deeply harmful to the public. For example, publicly funded research in universities is regularly transferred to pharmaceutical companies with few, if any, conditions to assure access to the resulting medical products. The public ends up paying twice—with tax dollars used for publicly-funded research and development, and through the often exorbitant price paid at the pharmacy. These outdated laws and other legal rulings have resulted in everything from skyrocketing drug costs, to the non-consensual appropriation of tissue from Americans like Henrietta Lacks and John Moore. (Their stories, and the ethical questions they raise, have been explored in-depth by bioethicist Harriet Washington).
The administration should establish a White House task force to assess how societal harm has offset the desired gains from these 1980s-era laws. The task force should include dedicated staff with a mix of patent and equity expertise, including staff from the Federal Trade Commission, the White House Office of Science and Technology Policy, the National Economic Council, and the Council of Economic Advisors. Ultimately, the task force would produce a report that examines the underlying impacts of these laws, and provide recommendations for legislative and executive action that would reform the patent system to enhance benefits to society.
7. Reduce the cost of patent challenges
Challenging a patent can be prohibitively expensive. Filing fees alone cost upward of $41,500 per patent, compared to the significantly lower financial cost of filing patent challenges in Europe and elsewhere.
In a system heavily weighted in favor of commercial actors, legally challenging harmful patent monopolies that may have been incorrectly granted is one of the only avenues for creating equity in the market.
We know this from firsthand experience. Our organization has, in collaboration with patient advocacy groups around the world, successfully mounted legal challenges to unjust patents. These challenges have made the market more competitive, saved health systems billions of dollars, and made medicines more accessible to millions of people across Africa, Asia, and Latin America. Americans deserve the same opportunities to participate in a system that directly affects their health and wellbeing. The PTO should bring its practices in line with other patent offices worldwide and reduce the financial costs associated with challenging a patent.
8. Reverse “discretionary denial” policies
Bipartisan legislation passed in 2011 allowed any person to mount administrative challenges to patents after they were granted. Since then, opponents have repeatedly sought to weaken the authority of the Patent Trial and Appeal Board (PTAB), the body tasked with reviewing patent challenges. For example, the most recent PTO director, Andre Iancu, restricted participation by expanding the circumstances in which the agency could unilaterally decline to review patent challenges. “Discretionary denials,” as they are called, were rare in 2016 but have surged in recent years. Blocking access to one of the agency’s already limited avenues for public participation will lead to more weak patents, undeserved monopoly power for corporations, and less access to medicines and other goods that benefit public wellbeing. The administration should reverse recent policies that effectively shut the door on public participation in the patent system, and accept more challenges to weak patents.
9. Support and invest in increasing access to COVID-19 medical products
Wealthy governments have swallowed up the vast majority of existing COVID-19 vaccines stock, leaving countries with predominantly Black or Brown populations virtually nothing. More than 85 lower-income countries will not have widespread access to coronavirus vaccines until 2023, which increases the risk that new vaccine-resistant variants will emerge. Indonesia and twenty African countries are the latest to feel the crushing blow of the pandemic as they face an overwhelming surge of cases without the resources and tools necessary to avoid preventable hospitalizations and deaths. These inequities are echoes of the early HIV/AIDS epidemic, a moral failure in which medicines existed to save people’s lives but were inaccessible to the vast majority of high-burden countries in the Global South.
The World Trade Organization (WTO) is currently considering a proposal by South Africa and India to waive certain intellectual property provisions related to the “prevention, containment and treatment of COVID-19.” The U.S. has already voiced its support for the waiver, which if adopted would allow drugmakers in other countries to manufacture desperately needed vaccine supply and other medical products. While the waiver negotiations continue to unfold, the U.S. should remain a steadfast champion of global access to COVID-19 medical products—including vaccines—and press further. It should also compel U.S. pharmaceutical companies that used taxpayer funding to develop a vaccine to share that technology and know-how with manufacturers in other countries. These measures would set a precedent for global cooperation that would end the current pandemic sooner, and better prepare us for the next one.
10. Create a new Office of Technology Assessment
New technologies, like artificial intelligence and gene editing, are raising urgent questions about ownership, inventiveness, equity, and ethics. In Congressional testimony, Dr. Shobita Parthasarathy, a professor of public policy at the University of Michigan, outlined the need to incorporate equity considerations earlier and more robustly into the innovation pipeline. President Biden should request sufficient funding for a new Office of Technology Assessment in their annual budget request to Congress (an office of the same name was defunded in 1995). Rampant misinformation on Facebook, disparities in the use of facial recognition software, and other ramifications of emerging science and technology underscore the need for a body dedicated to preventing prospective future harm. This reimagined office would engage experts and members of the public to better understand the potential consequences of new technologies, and advise the administration and Congress on how to mitigate inequitable and other socially damaging outcomes.
Conclusion
As the Administration commits to increasing equity and lowering drug prices, it cannot do so without transforming our nation’s patent system. Centering equity within an agency that has historically lacked it is no small task. It requires a commitment to challenge the status quo in small ways and large, and a shared belief that all our political and economic systems are stronger when they are truly inclusive. These solutions do not stand alone—they must all be integrated into the PTO’s structure and ethos to truly effect meaningful advances. By acting on these recommendations, President Biden can improve the lives of millions of Americans, and show bold global leadership in creating an economy that works for all.
Priti Krishtel and Tahir Amin are the co-founders and co-executive directors of the Initiative for Medicines, Access & Knowledge (I-MAK), a nonprofit organization working to address structural inequities in how medicines are developed and distributed. They are participating in Patent Quality Week, with Engine Advocacy and others across the country, to encourage conversations on quality and balance in the patent system. Learn more here.
Filed Under: equity, incentives, ipr, joe biden, office of technology assessment, ota, patent challenges, patent quality, patents, public good, uspto
