Patent Law in Focus

Trust the Leaders talked to Savannah K. Sundby, a partner in SGR's Intellectual Property Practice, about the current state of U.S. patent law and what changes and developments 2014 may bring to the practice of patent law.

TTL: What is the current state of U.S. patent law?

Suzannah Sundby: At present, patent law in the United States is complete chaos. Effectively, we are operating under two distinct sets of laws and rules – the old set of laws and rules where a patent is granted to the first inventor, and the new set based on the America Invents Act (“AIA”), which grants patents to the first inventor to file for a patent. Because the language of some provisions of the AIA are similar to parts of our old laws, we are left pondering how much and what parts of pre-AIA case law apply post-AIA. Since a patent term is 20 years from its application filing date, the possibility exists that there may be about 20 years or so more of court decisions on pre-AIA patent cases yet to come.

Even before the AIA was enacted, the number of patent cases appealed to the Federal Circuit and then reviewed by the Supreme Court was steeply rising. In many of these cases, the decisions by the Supreme Court indicated to the Federal Circuit and many in the patent bar that what they believed the patent law to be was incorrect. This was especially the case for subject matter patent eligibility. For decades, patents were being granted on isolated DNA itself. This year, the Supreme Court held that isolated DNA is not patent eligible, thereby rendering numerous patent claims directed to isolated DNA invalid and unenforceable.

TTL: What patent issues should we keep an eye on?

SS: Because a significant portion of my patent practice relates to biotechnology, pharmaceuticals, and medical treatments and diagnostics, the top three notable issues I have my eye on relate to (1) patent eligibility, (2) joint infringement, and (3) the scope of prior art and pre- and post-grant proceedings under the AIA.

Patent eligibility is and will continue to be a hot issue in the biotech and pharmaceutical industries. This issue is implicated by the Supreme Court’s decision in Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013), holding isolated DNA patent ineligible, and the Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), holding certain determining and correlating steps insufficient to make some diagnostic assays patent eligible. To date, it is unclear how far the Myriad and Mayo decisions will reach. Whether in vitro (i.e., in a test tube) cultured embryonic stem  cells are patent eligible is likely to be reviewed by the Federal Circuit, at which time we will see how that court applies Myriad and Mayo to other biomolecules and biotech inventions.

TTL: What are the implications of these decisions?

SS: One may argue that the lack of patents on these types of technologies will make life-saving diagnostics and treatments more accessible to the public. However, history evidences that patents encourage further innovation by adding to the public knowledge, motivating others to design around and improve upon existing technologies. Patents incentivize inventors to spend the time and money to obtain exclusivity – a patent upon which one can build a company or license to others for royalties. Without that carrot, we may see a decline in new and innovative therapeutics and diagnostics.

TTL: What is next for joint infringement and prior art?

SS: Joint, or divided, infringement is another major issue. The Supreme Court is scheduled to decide two questions in Akamai Technologies, Inc. v. Limelight Networks, Inc. The first question is whether a party may be liable for infringement under either 35 U.S.C. § 271(a) or § 271(b) where two or more entities join together to perform the steps of a process claim. If no one party performs all of the steps required by a process claim, can anyone be held liable for infringement? The second question is whether a defendant may be held liable for inducing infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a). If no one party is liable for direct infringement, can someone be liable for inducing infringement?

The decision of the Supreme Court in Akamai will significantly impact the biotech and pharmaceutical industries because often no one entity performs all the steps of a process claim, but to be patent eligible certain steps may have to be positively recited in the claim. For example, a process claim for making a pharmaceutical may require that a starting ingredient is made in a particular way and the starting ingredient is then  reacted with another ingredient. In the industry, the entity that mixes the starting ingredient with the other ingredient often purchases the starting ingredient from another company that made it in the specified way. As another example, a treatment claim may require, as part of its process steps, first testing a sample from the subject and then, according to the test results, administering a given drug to the patient. Often a doctor sends a patient’s sample to an outside laboratory for testing and then, after receiving the results, the doctor will treat the patient accordingly. Because of the uncertainty, the current practice of most patent drafters is to write numerous claims in various ways to cover the activities of single actors and multiple actors.

The third hot issue is the scope of prior art under the AIA and how such prior art can be used by third parties in pre-issuance submissions and post-grant proceedings. This is a topic that I will be speaking on at the American Conference Institute’s 3rd Comprehensive Guide to Patent Reform, which will be held in New York, NY on January 27-28, 2014.

TTL: What can patent attorneys do to stay current with the ever-changing landscape of patent law?

SS: I recommend spending about an hour each morning reading patent cases and blogs before jumping into client work. I like to do this while drinking my morning coffee. In addition, I recommend being active – not just being a member, but being active – in one or more professional organizations like the American Intellectual Property Law Association. Join a committee and be an active contributing committee member. The more active you are, the more information, ideas, contacts and know-how you obtain – even by osmosis.

TTL: What can clients do to minimize the adverse impact of the current laws and procedures?

SS: It’s important to regularly discuss your R&D plans, marketing strategies and concerns with your patent attorney. Don’t take a “wait and see” attitude. Patent attorneys do not bite and some of us actually have very good social and communication skills.

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