STRONGER Patents Act ignores real problems with patent mistakes
Patents are at the center of the current drug pricing crisis. As government-granted privileges to sue competitors over their products, patents give industries such as the pharmaceutical industry protection from competition in the form of price-lowering generics. This frees them up to charge monopoly prices.
Examiners at the U.S. Patent and Trademark Office are the bulwark against abuses of these powerful privileges. They’re only supposed to give out patents for novel, new technologies, rather than trivial, obvious modifications of existing products. Yet USPTO examiners regularly make mistakes: By some estimates, 28% of patents in force today were granted erroneously.
We all bear the costs of a wrongly granted patent, usually in the form of higher prices.
Patent-mistake overcharges are found across all fields, but they are most evident in medicine. Lawyers for the pharmaceutical industry are experts in getting “thickets” of patents on small tweaks and adjustments to drugs — dosing amounts, forms of pills, methods of administration — that tack on extra years of patent term.
Every additional day of extra patent term resulting from these pharmaceutical industry shenanigans can cost consumers millions of dollars.
That USPTO mistakes are costly is not news, one can find officials from a century agocomplaining of the “granting of improper and illegal patents.” In 2011, Congress took an important step toward addressing this problem by creating a new, low-cost mechanism for the USPTO to reconsider its own patents and cancel those granted in error. This “inter partes review” process, lower in cost and more efficient than litigation, has been a key tool for undoing erroneous patents. Given the mass of erroneous patents currently in force, inter partes review is of critical importance.
Yet the government could also make fewer mistakes in the first place.
Currently, patent examiners receive meager time for examination: about 22 hours per application, according to the Government Accountability Office. That is less than three working days to learn a new technology, study the legal language of the patent application, review the technical literature, and write a detailed opinion. With such limited time, it’s no wonder examiners sometimes make mistakes.
One solution may be as simple as giving examiners more time. Based on extensive analysis of 2.6 million patent applications and associated litigation data, one study finds that doubling examiners’ review time would drop the rate of patent issuance by 27%, presumably due to greater accuracy in the examiners’ work.
While the cost of giving examiners more time would be about $660 million, the authors estimate that the reduction in mistakes would save at least $904 million per year.
Yet disappointingly, the hearing today was not about these costly errors of the federal agency that issues patents. Instead, the bill under discussion, the STRONGER Patents Act, is all about making the inter partes review process for challenging patents harder to use — cutting off people from using it and imposing lopsided rules that disfavor challengers, among other things. The result of hamstringing inter partes review is that wrongly issued patents will go unchallenged.
In other words, the STRONGER Patents Act, rather than trying to tackle the problem of Patent Office errors, sweeps $904 million in mistakes under the rug.
No doubt there are difficult conversations to have as to how best to realize a patent system that issues patents correctly — how much extra time to allocate examiners, how to measure their performance, and what training regimes are efficient, among other things. But the time for those conversations is now. Besides just wasted money, at stake are the lives and welfare of patients who are priced out of medical treatments because of wrongly granted patents.
Congress should look for solutions that enhance not the strength of patents, but the strength of patent correctness.
Image credit: Olivier Le Moal
