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Quarterly Journal 44-1

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Table of Contents

Creating Leverage: A Practitioner’s Guide To Inter Partes Review And Its Effects On Intellectual Property License Negotiations Members Only  

Jake Berdine & Matt Rosenberg
By replacing the inter partes reexamination (“IPX”) system with the inter partes review (“IPR”) proceeding, Congress gave the United States Patent and Trademark Office (“USPTO”) unprecedented tools to eradicate invalid patents that the USPTO issued by mistake. The America Invents Act structured the IPR system to significantly reduce the costs associated with defending against patent suits, particularly when the asserting entity has patents of questionable validity or is simply seeking nuisance value for the suit. The likelihood of invalidation, truncated timeline, estoppel effects, amendment provisions, settlement flexibility, and ability to stay co-pending litigation, each make the USPTO an attractive forum for defendants in patent assertion situations.

When evaluating a company’s alternatives to licensing a particular intellectual property portfolio, attorneys must focus on their best alternative to a negotiated agreement (“BATNA”). Because a patent infringement suit can cost up to $5 million for each side to litigate, litigation can create an incredibly unappealing BATNA for prospective licensees, even if they have a strong belief that they do not actually infringe the patent. Because of the advantages associated with IPRs over district court litigation, defendants may now have a tool to induce favorable settlements. The coercive tactic of investing capital before a negotiation session and arriving with a fully-prepared and ready to file petition may be the appropriate solution for patent assertion defendants.

The Patent System Is Under Assault -- Startups, Should You Care? Ten Things About Patents That Startups Need To Consider Members Only 
John R. Harris
The U.S. patent system is under extreme assault. The emergence of “patent trolls” has brought attention to issues in the patent system to whole new sectors of the economy that are not used to dealing with patents. The U.S. Supreme Court has muddied the waters on the patentability of computer-implemented and medical diagnostic method inventions, increasing the uncertainty as to patents. Congress passed a comprehensive patent reform bill in 2011 (the “AIA”) that was supposed to improve the system, but it just added complexity and uncertainty. The USPTO’s Patent Trial and Appeal Board (PTAB) has become known as a “patent death squad.” Despite the assaults, the U.S. Patent Office continues to receive record numbers of patent applications -- but at the same time, relying on the AIA and recent Supreme Court decisions, increasingly refuses to grant deserving patents.

Based on all these assaults—is it time to give up on patenting? Perhaps not, but intellectual property strategies are in flux. Companies that have patents, or think they may need patents, will want to consider these ten points about patents: (1) patents assist in enterprise value creation and enhancement; (2) patents signal quality to investors; (3) patents help establish and reflect ownership of technology and inventions; (4) patents can be a weapon to assert against competitors; (5) patents help understand and avoid the IP of competitors and others in the market; (6) patents can provide a vehicle for revenue generation / licensing / monetization; (7) patents facilitate collaborative research and open innovation (OI); (8) patents can help block competitors; (9) the patent laws will continue to change; and (10) although trade secrecy and copyrights offer some alternative protections, there is really no alternative to patents.

Breast Cancer, Politics, And Patents Members Only 
Tamsen Valoir
This note explores the abysmal medical and political history of breast cancer and traces its continuing political importance to a recent Supreme Court case.  Perhaps believing some of the mis-information generally available about the patents and the cost and availability of testing, the Supreme Court held that the Myriad patents on isolated breast cancer genes are not patent eligible because the breast cancer genes are—or were—natural products.  This puts at risk many medical patents since many of our medicines are or derive from natural products, and thus shifts the economic balance significantly. Yet Myriad continues to hold significant market share in the breast cancer testing market, and costs have not significantly changed for consumers.  Not surprisingly, Myriad is now keeping what was once patented, thus beginning to enter the public domain on patent expiry at 20 years, a trade secret.  Whatever the drivers behind the Supreme Court’s decision, it is hard to see a public benefit from this holding.   

Student Notes

Terror In The United States: How The Terrorist Attacks Of September 11th Impacted The Patent System In Addition To The National Security Of The United States Of America Members Only 
George Soussou
Any patent application presented to the United States Patent and Trademark Office can be deemed secret in the interest of national security.  The applicant cannot receive the benefits of a patent until the government removes the secrecy order.  This situation exists because of the Invention Secrecy Act, which became law in 1951.  The United States government has used the Invention Secrecy Act as a means to protect the national security of the country. This note looks at the history of invention secrecy in the United States, and looks to assess and balance the interests of individual inventors with the interests of the government for national security.  After an assessment of the case law, the statistics of secrecy orders, and the historical context of national security for the United States, this note suggests additional safeguards for individuals subject to the Invention Secrecy Act.  This note assesses the practicality of the Court of Appeals for the Federal Circuit and the Foreign Intelligence Surveillance Act Courts and suggests that the Court of Appeals for the Federal Circuit be utilized as a forum for individuals to challenge secrecy orders under the Invention Secrecy Act. 

Patent Eligibility Of 3d-Printed Organs Members Only 
Xiaoban Xin
In Myriad, the Supreme Court held that an isolated gene is not patent eligible because the product was isolated from its natural state and not significantly different from a natural gene. Following Myriad, the Federal Circuit and several district courts have held other artificial or synthetic compositions patent ineligible because they closely resembled natural products. This development of patent law would have a negative impact on the industry in which the successful products are copies of natural products, such as 3D-printed organs. Under current law, patent eligibility of a 3D-printed organ would depend on the similarity between the printed organ and its natural counterpart. Organs with non-natural functional and/or structural characteristics are likely to meet the requirement for patent eligibility. On the other hand, 3D-printed organs indistinguishable from a natural organ may be deemed products of nature and face patent eligibility challenges. Although these organs could be claimed together with certain non-natural components or precursors to pass the patent eligibility test, composition claims on a 3D-printed organ that is an exact copy of its natural counterpart could be highly challenging.