Month: September 2020

The outbreak of Covid-19 has set the eyes of the world towards finding a suitable vaccine for the virus. This prevailing situation has made various countries to re-think some of the most pressing issues with regard to the regulation. linkage is perhaps one of the most debatable aspects of regulation around the world.

The system of ‘ linkage’ refers to the practice of linking the market approval of the generic product to the status of the innovator’s product. It involves the regulatory body, granting market access, and the office, granting rights to the patentee. If there being an existing patent on the subject drug then the regulatory authority can refrain from providing market approval to the generic manufacturer. This denial often concerns the availability of generic drugs being subjected to such preceding conditions irrespective of any proven affecting the larger issues of access to medicine and in the larger picture, the public health issue.

US’s Hatch Waxman Act brings the linkage regime into force for the explicit need to balance the brand pharmaceuticals firms and the generic firm for the purpose of bringing cheaper medicine “as soon as possible”. The US publishes the Orange Book containing all the approved drugs having the same Therapeutic Evaluation. The Food and Drug Administration (FDA) updates the list of all the drugs and provides the exclusivity information and all the industry while filing for the Abbreviated New Drug Application (ANDA) must show the drug has been used and its expiration. Claims made for favoring linkage regulations imply providing incentives to originator firms making high risk in research and development. The US has favorably insisted on the linkage regulation in its various free trade agreements, and even to the extent, some Asian Countries have amended their local laws to insert the linkage clause. China, South Korea, Singapore being some along with Taiwan being the latest entrant in 2019.

European Union does not have a system of linkage. There were instances where various industries have tried to introduce such provision but they failed and even in a 2006 press release, the European Generic Medicines Association had stated that linkage is contrary to EU regulatory law as it undermined the Bolar provision which sought to encourage quick access to the post-market for EU generic medicines.

Linkage shifts the onus of regulating the from the holder to the regulatory authority. Some previous research claimed that linkage is generally used for delaying the entry of generic drugs, especially by major pharmaceuticals companies following the tendency for positive incentives and reward. But the primary problem might not be linkage as a whole but the nexus between the regulatory authority and office, of which regulatory authority having no expertise, unnecessarily delays the generic entry without proven.

This pandemic does make us realize the importance of not only cheap medicines but also rapid access to medicines. Prompt and affordable access to essential medicines is a component of all domestic and public health models and barring the generic drugs is doctrinally weak which prejudices the historical, epistemological, and jurisprudential foundation of intellectual property.

Introduction

Intellectual property (IP) rights are incentives that fuel innovation and creativity in our ecosystem, however, they are not universal. laws are territorial in nature, hence something patentable in the US may not get protection in India and vice versa. Therefore, it is highly probable that when any invention falls outside the eligibility compartments established under the patent law, it is not patentable. The US judiciary with Alice Corp. v. CLS Bank, S. Ct. (2014), had interpreted the patent eligibility criteria in a narrower sense w.r.t computer-related inventions (CRI). while the Indian Judiciary with Ferid Allani v. Union of India has widened the scope of patentability. This write-up analyzes the repercussions of Alice’s case, and compares and contrasts the CRI in India and the US.

The Building Blocks

With Alice’s case, the Court limited the patent eligibility standards under 35 U.S.C. § 101 for CRI. It applied the mayo test in the context of software. The Supreme Court in Mayo v. Prometheus (2012) a judicial exception of ‘Law of Nature’ that applied besides the novelty and obviousness patent eligibility criteria. The two-step test (1) applied in Alice’s case held that the mere application of abstract ideas using the software will not make a patentable. The narrowing down could be taken as a step to trim off unreasonable CRI applications pending with the USPTO. However, this was done without specifying what would amount to an abstract idea. Now, the task was to show that the invention, however, built on an abstract idea is more than just the idea itself. This inevitably introduced uncertainty within the concerned industry.

The Infused Uncertainty

With Alice’s decision, the invention industry felt a shockwave as the Court had been strict while interpreting the patent eligibility thresholds. Below mentioned are a few repercussions of the decision that significantly affected the predictability of software .
1. An invention to secure a had to pass the threshold of the trinity of novelty, prior art, and non-obviousness. However, with this decision, the courts stepped in to analyzing the scope of claims. This allows the Courts to inspect even the technical aspects of a claim.
2. In the Post-Alice environment, it is a struggle to secure a for a software-related invention because now the USPTO will reject a CRI blueprint unless it specifically mentions the procedure used to travel from the ‘functionally’ to ‘the code written to achieve this functionality’. In other words, a CRI to get a must lie somewhere in between the claimed functionalities and the code, and this makes describing a CRI a challenging task.
3. On a conjoint reading of the above, it becomes apparent that the business models, engaged in aggregating known parameters/functionalities and making them available in one e-frame, are struggling the most to get a .
4. Undoubtedly, computer software fuels the engine of the Fourth Industrial Revolution, but the distractions surrounding USPTO and lower courts have increased the cost and decreased the quality of a .
5. In 2019, the USPTO attempted to clear the confusion associated with Alice’s decision by issuing guidelines to explain the evaluation process of the claims for eligibility under 35 U.S.C. 101.

The Crossover Journey of CRI patenting

The jurisprudence of computer-related inventions getting patent protection in India is now moving in a direction where it may cross path with the US regime, to some extent. The recent Delhi High Court decision in Ferid Allani v. Union of India interpreted section 3(k) of the Indian Patent Act in the light of the 2016 Guidelines indicating the patentability of CRI in India. It was held that “per se”, in sec. 3(k), should not disturb the patentability of genuine computer-based inventions. This judgment overnight changed the fate of CRI in India, now we have moved from a complete ban to a bit relaxed regime providing room for genuine CRI. The Court observed that the ‘technical contributions shall be examined before rejecting a CRI patent application’. But again, it did not address which inventions can be said to reflect ‘technical contribution’.
The US patent law does not prohibit computer-related inventions to secure patent rights unless otherwise disqualified, on the contrary, the Indian patent law, prior to Ferid Allani’s case, specifically bars CRI from patentability. The US innovation sector after Alice’s decision has faced threats of uncertainty. Meanwhile, in India, Ferid Allani’s decision to some extent has brought certainty and hope for inventors of CRI. In other words, with the judicial interpretation, in the US many pending patent applications were rejected while in India many applications may become eligible for a patent.

Conclusion

The patentability of a CRI, apart from the statue’s requirements, now largely depends on the quality of the patent application and the intelligent of patent claims. These swards help an inventor to successfully defend her case in the courts. It is worth noting that even after roughly six years of Alice’s case the confusion surrounding the subject matter eligibility is deteriorated and hampered the speed invention, now that we are in the age of machine learning and IoT. The economy demands a categorically clear picture regarding the CRI patenting regime owing to the financial aspects of .

Introduction

What is the economic viability of Patents? Ever thought of how patent valuation is done and how patent rights and antitrust laws co-exist? The existence of antitrust laws proves that market dynamics must promote fair competition. However, in the same market, patent rights guarantee a monopolized position. How are they co-existing? And why are they co-existing? An obvious answer is that the market craves for innovation and development. Hence, we need to reward the inventors, but with checks and balances. Therefore, National laws like patent laws and antitrust laws harmonize conflicting interests existing within society and commerce. Further, the ecosystem is full of patents, but the questions worth deliberating upon are whether all the patents have sound economic value? Why do companies go for patent valuation? Indeed, not all patents have economic viability. The quality of patents is directly proportional to the financial returns. Estimation of the worth of a patent forms an indispensable part of constructing business strategies. This post precisely makes two contributions;

1. Outlining the parameters to judge the economic value of a patent.
2. Elaborating on the legal constructs of patent valuation.

Parameters one must consider

1.Patent families and demography

The territorial limitations of patent laws interlock the commercial value of an invention with the demographic boundaries. A study on the patent family size, based on the GDP of a country, while doing multiple international filings will positively affect the patent filing decision of the owner. Because the owner of a valuable patent goes for international protections (1).

2.Game-changing patents

Path-breaking inventions drive future IP business strategies and fuel up the rate of inventions in that area. These finest inventions hold great market value. The quality of the patent is definitely associated with technological resources that a company spends on R&D. Therefore, apt investment in the R&D paves way for great economic returns.

3.The Grant time

Pierre Regibeau, back in 2010, stated that the relationship between patent value and patent grant time is inversely proportional (2). The researchers have proved that valuable inventions get speedy approvals.

4.Claims defining the scope

The scope of rights and liabilities are ascertained by looking at the claims. Therefore, more claims mean the invention will be commercially exploited over a broad market spectrum. This, to some extent, speculates on the economic value of the invention.

5.Future mentions

Future references by fellow inventors of a patent reflect that the patented technology holds a great value in the industry. This also significantly improves the company’s standing in the market.

6.The novelty of a patent

Novelty is coupled with patent value but in a narrow way. The novel patent but a general one may not fetch you high value. The key is to diversify the resources and knowledge base to construct novel results and economic value.

Let’s talk law

The pyramid constructed for economic exploitation of an invention would crumble without a legal shield. Below mentioned are a few essentials to be kept in mind.

1.Ownership and renewal

Patents can have complicated titles, while ownership dictates the control, licensees can only use it. A valuation document will have a checkbox ascertaining the nature of the contract of employment during which the invention was developed. In contractual or work for hire types of employment, the company loses ownership over the invention. Therefore, the valuation of a patent owned by the company would be much higher than the one licensed to it. Further, the renewal is a sine qua non to protect flourishing patents. Generally because, If a patent owner files for renewal, it signifies that there is a market for her patent. Therefore, the length of the patent will directly affect its value.

2.Scope of the invention

An invention to exclude others from copying in the US market must be protected with the USPTO’s patent regime. The specifications and claims, generally, define the scope and ambit of the patent protection. Conventionally, a wider bandwidth of claim results in a high valuation of the patent. An inherent feature of patents is that it can be licensed, therefore, it becomes relevant to consider the terms of licensing to identify legal implications of licensing. Concurrent licensing unlike exclusive licensing will surely reflect lower economic value.

3.Potential lawsuits

An invention generally affects third party players in the industry. Therefore, to ensure that third party rights are not disturbed, the applicant must thoroughly inspect the relevant prior art. Litigation can cost a hefty amount of dollars and loss of reputation. It can stretch over years and can even eat-up on the term of protection. Lawsuits can severely affect the value of a patent, hence, all necessary steps must be taken to avoid it.

4.Indispensable legal support

Legal support is imperative to conduct frictionless business transactions related to patents. Drafting unambiguous contracts is one of the most important tasks. These contracts include both patent and non-patent contracts affecting the value. Consumer relations, workforce intangible assets, etc are equally important to construct value and are smoothly worked out because of legal interference. A pool of money could flood out of the corporation if the legal ends are loosely tied.

Key Takeaways

● The intangibility of a patent makes the process of its valuation complex as the considerations involved are multifold.
● Patent valuation helps enterprises to devise business strategies and gain a competitive advantage in the market.
● The economic exploitation of an invention stands on the shoulder of law, and this dimension shall be given adequate importance. Loose legal support can devalue even economically viable patents.

Bibliography

1. Flignor, P. and Orozco, D. (2006), “Intangible asset and intellectual property valuation: a multidisciplinary perspective”, World Intellectual Property SMEs Newsletter, July, available at: www.wipo.int/sme/en/documents/ip_valuation.htm
2. Squicciarini, Mariagrazia & Dernis, Hélène & Criscuolo, Chiara. (2013) Measuring Patent Quality: Indicators of Technological and Economic Value. 10.1787/5k4522wkw1r8-en.
3. Francois P. Kabore & Walter G. Park, (2019) Can patent family size and composition signal patent value?, 51:60 Appl. Econ 6476, 6476-6477.
4. Pierre Re¤gibeau & Katharine Rockett, (2010), Innovation cycles and learning at the Patent office: Does the early patent get the delay?, 58 J Ind Econ 222, 243- 244