As we start the New Year, here’s a look back at the most significant intellectual property law developments in 2017 affecting medical device companies. It was a record-breaking year for the number of patent cases (seven) being considered by the U.S. Supreme Court. Here are the five most noteworthy updates for the past year:
One: TC Heartland v. Kraft Food. The Supreme Court overturned decades of legal precedent in this decision about where infringement litigation can be filed. The Court held that patent suits can only be brought where the accused infringer is incorporated or has a regular and established place of business. See my June 9, 2017 MedTech Briefs post for the full story.
Two: Impression Products v. Lexmark. Here the Supreme Court held that a patent owner’s decision to sell a product exhausts all of its patent rights in that item, regardless of the location of the sale or any restrictions the patent owner purports to impose.The main question answered by this decision is whether restrictions placed on a patented product can be enforced through an infringement suit, which is typically a more viable legal mechanism for the patent owner than an action for breach of contract. Like TC Heartland, this decision also overturns decades of legal precedent. It both simplifies patent law and adds new complexities, challenges and opportunities to global sales of medical devices.
Three: Helsinn Healthcare v. Teva Pharmaceuticals. This Federal Circuit opinion clarifies how sales of an innovative device that occur prior to filing a patent application can void the patent. The court held that under the American Invents Act, there may be an invalidating sale if the mere existence of the sale is public, regardless of whether the details of the invention were publicly disclosed in the terms of sale. Such sales threaten future patent protection of any inventions disclosed, even if the sales only generally disclose the inventions. Therefore, this opinion puts extra pressure on innovators to file patent applications before device sales occur.
Four: Oil States v. Greene’s Energy. The U.S. Patent and Trademark Office (USPTO) has been conducting America Invents Act (AIA) trials for about five years. The trials were designed by Congress to be a faster and less expensive alternative to district court litigation for challenging the validity of a patent. The most common type of AIA trial is called an Inter Partes Review (IPR.) Since 2012, over 7,000 requests for IPR trials have been received by the USPTO, most of which have been granted.
In Oil States, the constitutionality of the IPR trials themselves is being challenged. The basic question to be answered in this case is whether an administrative agency (the USPTO), rather than a federal court with a jury, can extinguish patent rights, which may be considered private property rights. The Supreme Court heard oral arguments on November 27 and a decision is expected before the end of the current term in July.
Five: IP organizations call for Congress to amend subject matter patentability law. Patent law Section 101 (U.S. Code Title 35) indicates what types of things are and are not patentable. Over the past five years, the Supreme Court has decided a number of cases that attempt to clarify Section 101, including:
- Mayo v. Prometheus (2012) – Diagnostic method patent is not patentable subject matter because it claims a law of nature.
- AMP v. Myriad (2013) – Naturally occurring isolated DNA is not patentable subject matter, but cDNA is.
- Alice v. CLS Bank (2014) – Adding a generic computer to the abstract idea of intermediated settlement does not make it patentable subject matter.
After these cases and others, patent subject matter law is now murkier and construed more narrowly than ever before. Accordingly, throughout 2017 several major intellectual property organizations proposed legislative fixes to the recent court decisions on this subject. With Europe and China becoming more lenient with what subject matter may be patented in those jurisdictions, many believe that Congress may soon start building momentum to amend Section 101. This would be a welcome development, particularly for innovators trying to bring new medical diagnostics and software to patients.
Wishing you all a happy, healthy and prosperous New Year. Stay tuned as we await at least several more patent decisions from the Supreme Court, and look for further patent reform developing on Capitol Hill.
If you have any questions regarding IP strategies, please feel free to discuss with me at firstname.lastname@example.org. Further IP resources for early stage medical device companies may be found at www.medtechbriefs.com.
Doug Limbach is a registered patent attorney in Silicon Valley representing early stage medical device companies, the entrepreneurs who found them and the investors who fund them. He has represented more than 50 such companies, including TheraSense (acquired by Abbott Laboratories), Archus Orthopedics (acquired by Facet Solutions), Facet Solutions (acquired by Globus Medical), Novare Surgical (acquired by a major robotic-assisted surgery company), Aragon Surgical (acquired by Aesculap), Tibion (acquired by AlterG) and Xlumena (acquired by Boston Scientific). Mr. Limbach has been working in patent law since 1991.
Any opinions expressed herein or on www.medtechbriefs.com are solely those of the author and may not necessarily be shared by Shay Glenn or its clients.