The previous post analyzed the bill for 18-month publication that will be discussed in committee at the Knesset on December 7, and explained how one of the provisions in the bill, which would enable third-party comments on pending application, is problematic. One point I didn’t mention is that in the USA, third parties are statutorily barred from communicating with the USPTO about pending applications. See MPEP 1134 and 1134.01.
The inclusion in the bill of a provision explicitly allowing third party comments on pending applications, while maintaining pre-grant oppositions, is consistent with behind-the-scenes lobbying by the local generic drug industry. But it may just be the tip of iceberg: rumor has it that that industry wants to use the 18-month publication bill to make a host of other changes in local practice, all of which would work to the detriment of patent applicants – i.e., those parties that actually invent things, instead of free-riding on others’ investments, which is the generics’ modus operandi. The changes would adversely affect not only the innovator pharma companies that develop new life-saving medicines, but patent applicants in all fields of endeavor. [Update: the relevant Knesset Committee's web site now contains a marked-up version of the bill, including comments from the committee's legal advisor regarding the generics' wish list.]
Specifically, the generics want to (a) preclude applicants from amending their applications once those applications have published; (b) be granted rights to practice inventions that are disclosed but not claimed in the published application, and only claimed after publication (and eventually granted in the patent); and (c) be able to force early examination of others’ patent applications. I will discuss each of these in turn.
No Amendment After Publication: as discussed in an earlier post, the draft version of the bill included such an amendment, but it was removed in the bill that passed a first reading in the Knesset. To anyone who has ever engaged in patent drafting and/or prosecution, the idea that one should be precluded from amending one’s claims during prosecution is ludicrous. If you’re a reader who doesn’t fall into that category – and unfortunately, no members of Knesset, to the best of my knowledge, have ever applied for a patent, which is why the generics can try to get away with something like this – I’ll try to explain.
The patent system is meant to encourage innovation, but even when an inventor has perfect knowledge and is a soothsayer, a patent is one of the most difficult legal documents to draft properly. Not only does the invention itself have to meet the substantive requirements that it be useful, novel and non-obvious, but the patent application must meet the procedural requirement of enabling others in the field of endeavor to practice the invention. The application has to provide support for whatever is eventually claimed. And the application is frozen in time, as the addition of new matter is after filing is prohibited. In short, the deck is stacked against the applicant from the outset – here in Israel even more so than elsewhere, due to the existence of pre-grant oppositions.
And because inventors do not have perfect knowledge and are not oracles, drafting a patent application is a lot like driving down the highway with a blindfold on: you may have some idea where you want to go but you don’t what curves lie ahead. Usually, at the time a company has to file a patent application, it has incomplete information regarding what the marketplace will look or what embodiments of the invention it plans to commercialize. Often, the applicant does not have in hand all the data it needs to establish why its invention is non-obvious in view of the prior art. Or it may have tried its best to find relevant prior art but still missed something. And budgetary limitations may cause an applicant to restrict the number of claims it initially includes in its patent application, either because of constraints on attorney time or because of fees for excess claims (such as Israel’s imposition two years ago of a 500 shekel fee for each claim over 50).
So the applicant does its best to prepare and file a patent application that describes as many aspects and variations of its invention that it can, while excluding from the scope of the invention the prior art of which the applicant is aware. But the applicant may (and usually does) nevertheless find it necessary to amend its claims after filing, for example in order to overcome previously unknown prior art found by the examiner, or to better claim an embodiment that in view of clinical test results or market research obtained after filing appears more likely to be the commercial embodiment than the one that was considered the most likely commercial embodiment when the application was filed.
To prevent an applicant from amending claims once the application has been published is the epitome of putting form over substance. In most cases, such a stricture would deprive patent applicants of the ability to obtain meaningful protection for their inventions. In some cases, it would result in inventions being maintained as trade secrets, rather than risk disclosing the invention only to be denied commercially meaningful patent claims due to formal strictures on claim amendments. And in the case of medicines, the inability to amend claims would undoubtedly lead to potentially useful medicines never being developed, because without adequate patent protection, no one will invest the hundreds of millions of dollars necessary to obtain FDA or EMA approval.
Intervening Rights: if they don’t succeed in preventing claim amendments, the generic manufacturers want the right to practice any invention that is disclosed but unclaimed in the published patent application, should the unclaimed material eventually be claimed in the patent. That would apparently work in two ways:
(a) Suppose that I file a patent application disclosing an invention that contains elements A, B and C, and optionally D and E. My published claims recite ABCD. If the generic drug companies have their way, a competitor will be able to begin work on ABC, since I haven’t claimed it. When I then broaden my claims during prosecution, so that my issued patent includes a claim on ABC, my competitor will still be free to practice ABC, even if my claim on ABC is valid.
(b) Conversely, the competitor starts to work on ABCDE. During prosecution I amend the claims so that the patent issues with claims on ABCD and ABCDE. I sue for infringement. It’s found that ABCD is invalid over the prior art, but ABCDE is valid. I still lose: since ABCDE wasn’t among my originally published claims, my competitor now has an intervening right to practice ABCD.
Like the proposal to limit claim amendments, this proposal would put form over substance, punishing an inventor for a set of claims that he didn’t realize at the time claimed more or less than he was entitled to claim. Creating intervening rights based on published patent applications would undermine the public policy behind the patent system, which says that an inventor is entitled to a patent on anything useful, new and non-obvious that he’s invented and adequately described in his patent application.
The generic companies apparently assert that they need these intervening rights because otherwise they’ll be stuck on the sidelines, waiting to see what claims the application eventually gets. But that’s specious. Aside from the stupidity inherent in making patent policy for everyone based on the interests of one narrowly-focused industry – and in Israel’s case, an industry that is based entirely on the idea of reaping the rewards of others’ efforts – the fact (to which any veteran patent attorney can attest) is that third parties, including generic drug companies, can make reasonable determinations as to what valid claims can and can’t arise from a particular patent application. But don’t take my word for it. As Unipharm, one of the local generic companies, proudly says on its web site:
“In the current pharmaceutical-IP environment where major pharmaceutical companies are protecting their product with multiple patents, Unipharm has the capabilities of accurately evaluating a product's patent protection suit [sic] and to act accordingly: either to stay off the market until the patents expire, to try to go around the still valid patents or to try to invalidate the patent and launch a generic version as soon as legally possible.”
The world’s leading patent systems allow an applicant to amend his claims during prosecution to include anything supported by the specification, whether or not that claim was present in the application as originally filed or published. They recognize that allowing such amendment is imperative if the patent system is to serve the ends to which it was created, and that there’s no good public policy reason to restrict an inventor’s protection to that which he claimed in a published application. There’s no reason for Israel to deviate from this. Unless it wants to be in the same category as such invention powerhouses as Venezuela.
Third Party Requesting of Examination: The generics also want to amend the law to allow third party requests for expedited examination of others’ patent applications. In U.S. terms, they want to be able to file requests to make special in others’ patent applications. Their argument is that the indeterminacy inherent in the delay between publication and patent grant leaves them in an untenable legal limbo, and that the big, bad innovative drug companies game the system, using multiple patent filings and prolongation of ex parte patent prosecution to keep a sword hanging over the generics’ heads.
Now, I’m the first to agree that in an ideal world, inventors would at the outset be able to conceive of the exact commercial embodiments of their inventions. They’d be able to write perfect patent applications that describe and claim exactly the inventions to which they’re entitled over the prior art – not an inch more and not an inch less. The day that patent applications were filed, they would immediately be allowed, because there would be no backlogs at any of the world’s patent offices. Competitors would know exactly what they can and can’t do in view of the immediately-granted patent, because there would be no ambiguity in any claim language.
And if pigs had wings they could fly.
In other words, the generics’ tale is a good yarn, but it doesn’t stand up to scrutiny. Ours is not an ideal world. Patent applications are rarely perfectly written, and they’re never examined on the day they’re filed. Inventors and their associated small businesses usually need time and money to develop and commercialize their inventions, but they have to file patent applications before they can seek funds. In the pharmaceutical industry, patent applications have to be filed years before clinical testing begins, let alone a new drug is approved for use, and this is true regardless of whether the company is one of the industry giants or a start-up.
In short, both patent applicants and their competitors are inconvenienced by the fact that the patent system is designed and operated by people, not omniscient beings. But that’s life. What entitles generic drug companies to now receive special treatment so that they won’t be inconvenienced? Indeed, as shown by the quote from Unipharm’s web site, they’re not really inconvenienced, since they can assess what claims their competitors can validly obtain and what claims they can’t.
Moreover, Israel is a country in which private property is respected. We don’t allow one individual to tell another how and when to spend his money. But that’s just what the generic companies’ proposal would do: since patent prosecution involves an expenditure of an applicant’s resources, the proposal would allow party A to force B into spending his resources, at A’s convenience.
In fact, inventors often rely on the fact that there will be a delay between filing and examination of patent applications: as mentioned above, the post-filing, pre-examination period provides additional time to develop results demonstrating non-obviousness or to hone in on a commercially significant embodiment of the invention.
To illustrate how ridiculous, and how self-serving, the third party request proposal is, let’s look at some numbers. According to ILPTO database, in 2007 and 2008 respectively, Pfizer filed 104 and 62 patent applications in Israel; Eli Lilly’s figures for the same years were 49 and 37, respectively. (The numbers are significantly lower, and likely incomplete, for 2009 and 2010.) Now suppose that the fee for filing a third-party request is set at 1500 shekels (presently about $400), which is a relatively high fee by ILPTO standards – it’s higher than the patent filing fee as well as the fees for opposing or seeking to revoke a patent. What’s to stop one of the local generic drug companies from filing such a request against every application filed by a particular innovator drug company? According to these numbers, even in a year with lots of patent filings, it would only take about $60,000 to force early examination of every Pfizer and every Lilly application. Moreover, were all the generics band together, they would easily have the resources to force early examination of every patent application filed by an innovator company. But those companies will certainly have prioritized their research efforts differently, and no doubt are relying in part on the natural delay in the examination queue to develop results necessary to either support some of those applications or to allow them to decide to discontinue prosecution.
There’s also the problem that by forcing the unnatural allocation of examination resources on a large scale toward the applications of certain large companies, the examination corps will spend most of its time examining those companies’ applications, at the expense of examination of the applications of smaller companies (who are not yet known and won’t necessarily attract others’ attention) for whom patent grants are critical in securing funding.
Bad Ideas From Self-Serving Players: As I’ve said previously in this blog, I’m a fan of generic drugs. But I’m also a fan of new drug development. And I’m a fan of the development of new technology generally. Those new developments rely on patents. The proposals put forward by the generic drug industry and discussed in this and the previous post are the sorts of things that could only be raised by parties that don’t rely on patents for their livelihoods. Which should come as no surprise, since according to the ILPTO database, those generic drug companies whose primary or exclusive business base is Israel have negligible patent portfolios. For instance, according to the database, in its 36 years of existence Unipharm has filed four patent applications. Two of those were abandoned during prosecution and one of the granted ones was abandoned before its 20-year term. Another company, Trima, has in its nearly 50-year history filed one application.
The generics’ proposals are hyprocritical and self-serving. For years these companies have been whining because Israel doesn’t have early publication of patent applications. Now that the state seems poised to adopt early publication, the generics say they’ll somehow prejudiced because they don’t know what claims will issue, and therefore applicants should be limited in their ability to amend, and the generics should get intervening rights based on the published application, and they should be able to request that someone else’s application be examined out of turn.
The EPO has been doing early publication since its inception, yet the EPO neither precludes applicants from broadening their claims, nor grants intervening rights to third parties on the basis of the published application (although some EPO countries do grant provisional rights to the applicant based on the published application), nor allows third parties to request examination of a competitor’s patent application. The USA has been publishing applications for over 10 years now, it lets applicant broaden claims during prosecution, it doesn't grant intervening rights on the basis of the non-claimed material in published applications, and it doesn’t let third parties even communicate about pending applications, let alone request examination of another’s application.
The Israeli generic drug companies have thrived under the present patent regime. They have nothing to complain about. They don’t need 18-month publication, nor do they need any of the additional changes they would now to like to see wrought in the system. If the generics don’t like the idea of early publication, they should lobby against it. But it’s disingenuous for them to lobby for early publication, then argue that they will somehow be prejudiced by the very thing they asked for, and to demand additional entitlements. What did they do to deserve such a windfall? These proposals are greed, pure and simple, that will serve no one but the generic companies themselves, at the expense of all the others (including players far afield from the pharmaceutical industry) who do the hard work of inventing and developing new technologies.