Life sciences firms claimed a temporary victory on the eve of major changes to the patent application process after a Virginia federal court judge granted pharmaceutical giant GlaxoSmithKline a preliminary injunction, stalling new rules that were to take effect Nov. 1.
GlaxoSmithKline argued that the rules imposed by the U.S. Patent and Trademark Office, which would limit the number of times a patent applicant can contest or amend rejected or pending patent claims, would stifle innovation. The world’s second largest pharmaceutical company also claimed the new rules would harm roughly 100 of its pending applications.
The company initially filed suit Oct. 9, and U.S. District Court Judge James Cacheris granted the request Oct. 31.
Local patent attorneys said they were surprised to learn of the last-minute decision but were pleased with the outcome. Many said they thought GlaxoSmithKline presented a strong case, and pointed to the likelihood of it winning a permanent injunction.
Lisa Haile, an intellectual property attorney and partner in the University Towne Center offices of DLA Piper, called the judge’s decision a “pleasant surprise” given its timing. But she said the verdict would do little to lighten her own workload.
“Just because we found out on Oct. 31 there was an injunction, we needed to prepare as if the rules were going into effect,” Haile said.
Patent attorneys have been scrambling to identify clients whose applications are pending and haven’t received initial action from the patent office because those cases would be grouped retroactively under the proposed new rules. Many rushed to file documents that would allow them to continue arguing their case before they were limited from doing so.
“We filed a lot of extra patent applications in advance of these rules that limit what we can file,” said Mike Fuller, a partner in the San Diego office of Knobbe Martens Olson & Bear LLP. “It’s almost the antithesis of what the patent office wanted.”
Step Up Efficiency
The patent office has said the new restrictions would improve the effectiveness and efficiency of patent examination, which has struggled to keep up with a rising number of applications. Currently, the number of pending applications has reached 750,000, although last year examiners approved more than half of the applications.
“Interest shown by the U.S. Supreme Court and the U.S. Congress in patent modernization indicates that the system needs change,” read a statement issued by the patent office following the judge’s decision. “The USPTO continues to believe that the rules are an important component of modernizing the patent system.”
Changes to the patent rules impact life sciences firms because many rely on the process to broadly claim potential classes of new drugs while continuing to research which could be brought to the market. Their ability to file limitless claims allows them to secure their original filing date while narrowing the scope of their discoveries.
Under the current system, applicants can file as many continuations, claims and requests for continuing examination as they deem necessary. Continuations are especially important in the life sciences field because they allow applicants who have received a final rejection letter to continue arguing a case.
Under the new rules, applicants will be limited to filing two new continuing applications and one request for continued examination, which allows the inventor to pay an additional filing fee and argue a case after the office issues a final rejection.
“In the 15 years I’ve been practicing patent law, this is probably the most drastic change I’ve seen proposed by the patent office,” said Peter Albert Jr., a partner in the San Diego office of Foley & Lardner LLP.
One of the main issues facing the court is whether the patent office has the authority to limit the number of claims and continuations a patent applicant can file. GlaxoSmithKline argued that the matter is a “substantive” change to the process, which, it argued, an administrative agency such as the patent office had no authority over.
The question of authority also has implications to a bipartisan bill making its way through the Senate that promises to be the biggest patent system overhaul in 50 years.
The bill aims to convert the U.S. patent system into a “first-to-file” system, which would give priority to the earlier-filed application for a claimed invention and align the system with the rest of the world. But it would also give the USPTO certain authorities to change current systems.
Fuller pointed out that if the patent reform measure passes, GlaxoSmithKline’s case could become null.
“I think that’s where the war is going to be,” he said.