throbber
No. 16-712
`
`IN THE
`Supreme Court of the United States
`_______________________
`
`OIL STATES ENERGY SERVICES, LLC.,
`
`
`
`
`
`Petitioner,
`
`v.
`
`GREENE’S ENERGY GROUP, LLC, ET AL.,
`
`
`
`
`
`Respondents.
`_________________________
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES
`COURT OF APPEALS FOR THE FEDERAL CIRCUIT
`__________________________________
`
`BRIEF FOR AARP AND AARP FOUNDATION
`AS AMICI CURIAE
`IN SUPPORT OF RESPONDENTS
`___________________________________
`
`JAMAICA P. SZELIGA
`SEYFARTH SHAW LLP
`975 F STREET, NW
`WASHINGTON, DC 20004
`202-828-5364
`
`
`BARBARA A. JONES
`Counsel of Record
`WILLIAM ALVARADO RIVERA
`AARP FOUNDATION
`LITIGATION
`601 E STREET, NW
`WASHINGTON, DC 20049
`323-215-6124
`
`bjones@aarp.org
`
`Counsel for Amici Curiae
`AARP and AARP Foundation
`
`
`
`

`

`i
`
`TABLE OF CONTENTS
`
`
`TABLE OF AUTHORITIES ......................................................... iii
`
`Page
`
`INTEREST OF AMICI CURIAE ................................................... 1
`
`SUMMARY OF THE ARGUMENT............................................. 2
`
`ARGUMENT ....................................................................................... 4
`
`I.
`
`II.
`
`III.
`
`IV.
`
`Congress Passed the AIA to Address a
`Growing Concern That Patent Litigation
`Was Negatively Affecting the Climate
`for Investment and Innovation .......................................... 4
`
`
`Prolonged Patent Litigation Can Inhibit
`Medical Research .................................................................. 6
`
`Invalid Patents Foreclose Competition
`and Increase Consumer Costs ........................................... 8
`
`The IPR Process Provides Distinct
`Advantages Over Litigating Invalid
`Patents ..................................................................................... 9
`
`The IPR Process Complements
`the Hatch-Waxman Act’s Statutory
`Scheme ....................................................................... 9
`
`A.
`
`
`
`B.
`
`Generic Companies Use the IPR
`Process to Cancel Invalid Patents ....................11
`
`
`

`

`ii
`
`C.
`
`Biosimilar Companies Use the IPR
`Process to Cancel Invalid Patents ....................14
`
`
`D. Medical Device Companies Use the
`IPR Process to Cancel Invalid
`Patents .....................................................................18
`
`
`CONCLUSION .............................................................................. 21
`
`

`

`iii
`
`TABLE OF AUTHORITIES
`
`
`Cases
`
`Akorn, Inc. v Senju Pharm. Co., Ltd.,
`
`No. IPR2015-01205 (Nov. 22, 2015). .............................. 13
`
`Alzheimer’s Inst. of Am., Inc. v. Avid
`
`RadioPharmaceuticals, No. 2:10-cv-
`
`06908-TJS, 2015 U.S. Dist. LEXIS
`
`40013 (E.D. Pa. Mar. 30, 2015) ..................................... 6, 7
`
`Alzheimer’s Inst. of Am., Inc. v. CoMentis, Inc.,
`
`No. 5:09-cv-01366-F, 2012 U.S.
`
`Dist. LEXIS 197821 (W.D. Okla.Dec. 17, 2012) ............ 7
`
`Alzheimer’s Inst. of Am., Inc. v. Elan Pharmaceuticals,
`
`Inc., No. 3:10-cv-00482-EDL, 2012 U.S. Dist.
`
`LEXIS 196376 (C.D. Cal. Aug. 3, 2012) .......................... 7
`
`Alzheimer’s Inst. of Am., Inc. v. Pfizer, Inc.,
`
`No. 4:09-cv-01026-CAS (E.D. Mo.
`
`dismissed Nov. 12, 2010). .................................................... 7
`
`Anacor Pharms., Inc. v. Matal,
`
` App. No. 17-1947 (Fed. Cir. appeal
`
`docketed, Apr. 25, 2017) .................................................... 13
`
`Ass’n for Molecular Pathology v. Myriad
`
`Genetics, Inc., 133 S. Ct. 2107 (2013) ........................... 2, 6
`
`BMC Medical Co. LTD. v. ResMed Limited,
`
`Nos. IPR2014-01196 (P.T.A.B. Jan. 19, 2016) ............. 19
`
`

`

`iv
`
`Cardiocom, LLC v. Robert Bosch Healthcare
`Systems, Inc., No. IPR2013-00431
`(P.T.A.B. Jan. 15, 2015). .................................................... 19
`
`
`
`Chums, Inc. v. Cablz, Inc.,
`
`No. IPR2014-01240 (P.T.A.B. Feb. 8, 2016). ................ 18
`
`Coal. For Affordable Drugs II LLC v. NPS
`
`Pharm., Inc., No. IPR2015-00990
`
`(Oct. 21, 2016). ...................................................................... 13
`
`Coal. For Affordable Drugs X LLC v. Anacor
`
`Pharms., Inc., Nos. IPR2015-01776;
`
`IPR2015-01780; IPR2015-1785
`
`(Feb. 23, 2017). ..................................................................... 13
`
`Covidien LP v. Ethicon Endo-Surgery, Inc.,
`
`No. IPR2013-00209 (P.T.A.B. Jun. 9, 2014) ................. 19
`
`Cuozzo Speed Techs., LLC v. Lee,
`
`136 S. Ct. 2131 (2016) .................................................. 2, 10
`
`Edward Katzinger Co. v. Chicago Metallic Mfg. Co.,
`
`329 U.S. 394 (1947) ............................................................... 8
`
`Elan Pharmaceuticals v. Mayo Found. for Med.
`
`Educ. & Research, 346 F.3d 1051 (Fed. Cir. 2003). ...... 7
`
`Fed. Trade Comm’n v. Actavis,
`
`133 S. Ct. 2223 (2013). ............................................ 2, 8, 10
`
`Fresenius Kabi USA, LLC v. Bass,
`
`App. No. 17-2402 (Fed. Cir. appeal docketed,
` Aug 8, 2017) .......................................................................... 14
`
`

`

`v
`
`
`In re Barr Labs., Inc.,
`
`930 F.2d 72 (D.C. Cir. 1991). ............................................ 11
`
`In re NPS Pharms., Inc.,
`
`App. No. 17-1392 (Fed. Cir. appeal
`
`docketed, Dec. 21, 2016) ..................................................... 13
`
`Karl Storz Endoscopy-America, Inc. v.
`
`Novadaq Technologies, Inc.,
`
`No. IPR2015-01847 (P.T.A.B. Mar. 8,
`
`2017) ....................................................................................... 19
`
`J. Kyle Bass et al. v. Fresenius Kabi USA, LLC,
`
`No. IPR2016-00254 (June 7, 2017). ................................ 14
`
`Lear, Inc. v. Adkins,
`
`395 U.S. 653 (1969). .............................................................. 8
`
`McNeil-PPC, Inc. v. L. Perrigo Co.,
`
`337 F.3d 1362 (Fed. Cir. 2003). .......................................... 8
`
`Medtronic, Inc. v. Norred,
`
`Nos. IPR2014-00110 (P.T.A.B. Apr. 23, 2015) ............ 18
`
`Mercoid Corp. v. Mid-continent Investment Co.
`
`320 U.S. 661 (1944) ............................................................... 8
`
`Mylan Pharms, Inc. v. Yeda Research & Development
`
`Co., Nos. IPR2015-00830 (P.T.A.B. Sept. 1,
`
`2016), IPR2015-00643 (P.T.A.B. Aug. 24,
`
`2016), IPR2015-00644 (P.T.A.B. Aug. 24, 2016) ......... 12
`
`
`
`

`

`vi
`
`Norred v. Medtronic, Inc.,
`
`640 Fed. Appx. 994 (Fed. Cir. 2016) ............................... 20
`
`Novartis AG v. Noven Pharms, Inc.,
`
`853 F.3d 1289 (Fed. Cir. 2017) ................................. 11, 12
`
`Pope Mfg. Co. v. Gormully,
`
`144 U.S. 224 (1892). .............................................................. 8
`
`Sandoz Inc. v. Amgen Inc.,
`
`582 U.S. ___ (2017) ....................................................... 15
`
`Senju Pharm. Co., Ltd. v. Akorn, Inc.,
`
`App. No. 17-1511 (Fed. Cir. appeal docketed,
`
`Jan. 24, 2017) ....................................................................... 13
`
`Tissue Transplant Technology, Ltd. v. MiMedx
`Group, No. IPR2015-00420 (P.T.A.B. July 7,
`2016). .................................................................................... 18
`
`
`
`Zimmer Biomet Holdings, Inc. v. Four Mile Bay, LLC,
`
`IPR2016-00012 (P.T.A.B. Mar. 10, 2017). .................... 19
`
`Statutes and Regulations
`
`21 U.S.C. § 355(c)(3)(E)(ii)-(iv) ........................................................ 11
`21 U.S.C. § 355(j) ............................................................................... 10
`21 U.S.C. § 355(j)(2)(A)(vii)(IV) ....................................................... 10
`21 U.S.C. § 355(j)(5)(B)(iii)(I) ........................................................... 10
`21 U.S.C. § 355(j)(5)(F)(ii)-(v). ......................................................... 11
`
`35 U.S.C. § 102. .................................................................................... 3
`35 U.S.C. § 103. .................................................................................... 3
`35 U.S.C. § 156 ................................................................................... 11
`
`

`

`vii
`
`35 U.S.C. § 285. .................................................................................... 7
`35 U.S.C. § 271(e)(2)(A) .................................................................... 10
`35 U.S.C. § 311(b). ............................................................................... 3
`
`42 U.S.C. § 262(k)(7)(A).................................................................... 11
`
`Public Laws and Statutes
`
`Biologics Price Competition and Innovation
`Act (BPCIA), Pub. L. No. 111-148, 124
`Stat. 119 (2009) .................................................................... 15
`
`
`Drug Price Competition and Patent Term
`Restoration (Hatch-Waxman) Act,
`Pub. L. No. 98-417, 98 Stat. 1585 (1984). ...................... 10
`
`
`Leahy-Smith America Invents Act (AIA),
`Pub. L. No. 112-29, 125 Stat. 284 (2011) ......................... 2
`
`
`Legislative History
`
`157 Cong. Rec. S1034,1036-37 (daily ed. Mar. 1,
`
`2011) (statement of Sen. Klobuchar) ................................ 5
`
`157 Cong. Rec. S1323, 1326 (daily ed. Mar. 7, 2011)
`(statement of Sen. Sessions). ......................................... 3, 5
`
`
`157 Cong. Rec. S5370, 5374 (daily ed. Sep. 7, 2011) ................... 5
`157 Cong. Rec. S7413-14 (daily ed. Nov. 14, 2011)
`
`(statement of Sen. Kyl). ....................................................... 5
`
`H.R. Rep. No. 98-112, pt. 1, at 39-40, 48 (2011). .......................... 4
`
`
`
`

`

`viii
`
`Other Authorities
`
`CDC, Nat’l Ctr. for Health Stats., Number of Deaths
`
`for Leading Causes of Death,
`
`https://goo.gl/jkVxKE .......................................................... 20
`
`Jillian Dabney, Shire’s Acquisition Gives It Natpara
`
`and Gattex, Market Realist (Apr. 7, 2015) ...........................14
`
`Fed. Trade Comm., To Promote Innovation: The
`
`Proper Balance of Competition and Patent
`
`Law and Policy 28 (Oct. 2003),
`http://1.usa.gov/1d7fQwQ. ................................................... 6
`
`
`GoodRx, https://www.goodrx.com. ................................ 12, 13, 14
`
`Erica Check Hayden, Patent Dispute Threatens
`
`US Alzheimer’s Research, 472 Nature 20
`
`(2011). ............................................................. 6, 7
`
`Ben Hirschler & Michael Shields, Novartis
`
`launches first U.S. ‘biosimilar’ drug at
`
`15 percent discount, Reuters (Sept. 3,
`
`2015) ....................................................................................... 15
`
`Int’l Trade Admin., Medical Technology Spotlight,
`
`https:// www.selectusa.gov/medical-
`
`technology-industry- united-states. ................................ 18
`
`Harriet Komisar, The Effects of Rising Health Care
`
`Costs on Middle-Class Economic Security,
`
`Middle Class Security Project, An Initiative
`
`of the AARP Public Policy Institute (Jan. 2013) ............ 9
`
`
`

`

`ix
`
`Steven Kozlowski, et al., Developing the Nation’s
`
`Biosimilar Program, 365 New Eng. J.
`
`Med. 385 (Aug. 4, 2011). .................................................... 14
`
`Shayna B. Kravetz & Rosemary Frei, Patent
`
`Reform Proposals Raise the Stakes for
`
`Researchers, Manufacturers of Biologics,
`
`1(2) Am. Health & Drug Benefits 13 (Mar. 2008). ...... 16
`
`Hilal Maradit Kremers, et al., Prevalence of Total
`
`Hip and Knee Replacement in the United
`
`States, 97(17) J. Bone Joint Surg. Am.
`
`1386 (Sept. 2015) ................................................................ .19
`
`Megan M. La Belle, Standing to Sue in the Myriad
`
`Genetics Case, 2 Calif. L. Rev. Circuit 68
`
`(2011) ................................................................................... 8, 9
`
`Brianna Lennon, Antitrust Implications of
`
`Technology Patents, 1 ABA Young
`
`Lawyer Div. Antitrust Law Comm.
`
`Newsl. 8 (2012), http://bit.ly/1fej47A................................. 8
`
`Letter from James C. Greenwood, Pres. & CEO of
`
`BIO & John C. Castellani, Pres. & CEO of
`
`PhRMA to Members of House & Senate
`
`Judiciary Comm. (July 15, 2015). ................................... 11
`
`Doug Lichtman & Mark Lemley, Rethinking
`
`Patent Law’s Presumption of Validity,
`
`60 Stan. L. Rev. 45 (2007) ................................................... 6
`
`Robert Love, Why our Drugs Cost So Much, AARP
`
`Bulletin (May 2017) .............................................................. 2
`
`

`

`x
`
`
`Joe Matal, A Guide to the Legislative History of the
`
`America Invents Act: Part II of II, 21 Fed.
`
`Circuit B.J. 539 (2012). ........................................................ 3
`
`Francis Megerlin, et al., Biosimilars and the
`
`European Experience: Implications for the
`
`United States, 32 Health Aff. 1803 (Oct.
`
`2013). .............................................................................. 14, 15
`
`Shruti Mehta, Copaxone Litigation in the US:
`
`Generics soon to be launched? IMS Health
`
`(Mar. 2017) .................................................................... 12, 13
`
`John Molenda & Richard Praseuth, Current Trends
`
`In Biologics-Related Inter Partes Reviews,
`
`Law360 (July 20, 2017) .................................................... 17
`
`Matthew R. Reynolds, et al., Cost-Effectiveness of
`Transcatheter Aortic Valve Replacement
`With a Self-Expanding Prosthesis Versus
`Surgical Aortic Valve Replacement, 67(1)
`J. of Am. Coll. of Cardiology 29 (Jan. 2016) .............. 20
`
`
`
`
`
`Eric Sagonowsky, Targeting a $5B brand,
`
`Samsung and Merck launch Remicade
`
`biosim at 35% discount, FiercePharma
`
`(July 24, 2017) ...................................................................... 16
`
`Stephen W. Shondelmeyer & Leigh Purvis, AARP:
`
`Rx Price Watch Brand Name Prescription
`Drug Prices Increase by Double-Digit
`Percentage for Fourth Straight Year
`(Dec. 2016) ............................................................................... 2
`
`

`

`xi
`
`
`Michael T. Siekman & Oona M. Johnstone, Impact
`
`of Post-Grant Proceedings on Biologics and
`Biosimilars, BioProcess Int’l (Jan. 19, 2017) ................ 16
`
`
`Lars G. Svensson, Aortic valve replacement: Options,
`Improvements, and Costs, 80(4) Cleveland
`Clinic J. of Medicine (Apr. 2013).............................. 18, 20
`
`
`
`John R. Thomas, The Responsibility of the
`
`Rulemaker: Comparative Approaches to
`
`Patent Administration Reform, 17
`
`Berkeley Tech. L.J. 727 (2002)........................................... 8
`
`USPTO Perf. and Accountability Rep. FY 2016 ......................... 5
`
`United States Food and Drug Administration,
`
`Orange Book : Approved Drug Products
`
`with Therapeutic Equivalence Evaluations,
`
`“Patent and Exclusivity for: N020622,” ......................... 12
`
`
`
`
`

`

`1
`
`INTEREST OF AMICI CURIAE1
`
`
`
`AARP is the nation’s largest nonprofit, nonpartisan
`organization dedicated to empowering Americans 50 and
`older to choose how they live as they age. With nearly 38
`million members and offices in every state, the District of
`Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP
`works to strengthen communities and advocate for what
`matters most to families, with a focus on health security,
`financial stability, and personal fulfillment. AARP’s charitable
`affiliate, AARP Foundation, works to ensure that low-income
`older adults have nutritious food, affordable housing, a steady
`income, and strong and sustaining bonds.
`
`AARP and AARP Foundation have a longstanding
`interest in individuals’ access to affordable healthcare,
`including access to lower-cost prescription drugs. In light of
`the impact that the cost of drugs in particular has on
`healthcare expenditures, AARP’s Public Policy Institute (PPI)
`has been tracking the cost of widely used prescription drugs
`since 2004 and publishes the Rx Price Watch series, reporting
`on changes in the cost of drugs widely used by older
`Americans.2 In a report dated December 2016, PPI
`determined that brand name prescription drug prices
`
`
`1
`In accordance with Supreme Court Rule 37.6, AARP and AARP
`Foundation state that: (1) no counsel to a party authored this brief, in whole
`or in part; and (2) no person or entity, other than AARP Foundation, AARP,
`its members and its counsel have made a monetary contribution to the
`preparation or submission of this brief. The parties have consented to the
`filing of amicus briefs through the filing of blanket consent letters.
`
` 2
`
` The latest reports on trends in the retail prices of generic, brand-name,
`and specialty drugs are available at http://www.aarp.org/ppi/info-2016/trends-
`in-retail-prices-of-drugs.html.
`
`
`

`

`2
`
`increased for the fourth straight year by double digits.3 Other
`data collected suggest that almost 20% of those taking
`prescription drugs have skipped a drug or cut the dose to
`reduce the cost.4 AARP and AARP Foundation have filed
`several amici curiae briefs before this Court in cases that
`impact the cost of healthcare. E.g., Ass’n for Molecular
`Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013); Fed.
`Trade Comm’n v. Actavis, 133 S. Ct. 2223 (2013). AARP and
`AARP Foundation briefs also have supported the use of inter
`partes review (IPR) to expedite the removal of invalid patents
`and thus enable faster drug entry for the benefit of consumers
`and the U.S. healthcare system. Cuozzo Speed Techs., LLC v.
`Lee, 136 S. Ct. 2131 (2016).
`
`Inasmuch as invalid patents have a direct impact on
`the cost of healthcare, to the detriment of older individuals
`and the general public, AARP and AARP Foundation submit
`this brief urging the Court to affirm the decision below.
`
`
`SUMMARY OF THE ARGUMENT
`
`
`
`Congress passed the Leahy-Smith America Invents
`Act (AIA), Pub. L. No. 112-29, 125 Stat. 284 (2011), to improve
`patent quality and address a growing concern that patent
`litigation was negatively affecting the climate for investment
`and innovation. The AIA created IPR, a time-limited review
`
`3 Stephen W. Shondelmeyer & Leigh Purvis, AARP: Rx Price Watch
`Brand Name Prescription Drug Prices Increase by Double-Digit Percentage
`for
`Fourth
`Straight
`Year
`(Dec.
`2016),
`http://www.aarp.org/content/dam/aarp/ppi/2016-12/brand-name-prescription-
`drug-prices-increase.pdf.
`
` 4
`
` Robert Love, Why our Drugs Cost So Much, AARP Bulletin (May 2017),
`http://www.aarp.org/health/drugs-supplements/info-2017/rx-prescription-
`drug-pricing.html.
`
`

`

`3
`
`process, that allows the Patent Trial and Appeal Board
`(PTAB) to review the patentability of one or more claims in a
`patent only on the limited grounds of 35 U.S.C. §§ 102 or 103.
`See 35 U.S.C. § 311(b). The IPR process is designed to correct
`the issuance of invalid patents. The process provides no right
`to monetary damages; it affords only the relief of cancellation
`of a patent.
`
`they undermine
`invalid,
`When patents are
`
`competition and increase healthcare and other consumer
`costs, with no offsetting benefit to consumers. The cost of
`litigating patent claims that result from poor patent quality is
`exceedingly high to both businesses and consumers. See Joe
`Matal, A Guide to the Legislative History of the America
`Invents Act: Part II of II, 21 Fed. Circuit B.J. 539, 600 (2012).
`The intent of the AIA was to create a streamlined process to
`correct the errors of the Patent and Trademark Office (PTO)
`and allow “invalid patents that were mistakenly issued by the
`PTO to be fixed early in their life, before they disrupt an entire
`industry or result in expensive litigation.” 157 Cong. Rec.
`S1323, 1326 (daily ed. Mar. 7, 2011) (statement of Sen.
`Sessions).
`
`As a result of the monopolies created by drug patents,
`
`healthcare consumers pay ever-increasing prices
`for
`prescription medications. The public has a paramount
`interest in seeing that patent monopolies are kept within their
`legitimate scope. Invalid patents can have a direct impact on
`the cost of pharmaceutical drugs to the public, generally, and
`particularly to the detriment of older individuals, who
`disproportionately rely upon pharmaceuticals for their health.
`Medical device costs also may be artificially inflated when
`invalid patents are issued. The PTAB should be permitted to
`correct the PTO’s errors (including errors in not finding
`
`

`

`4
`
`relevant prior art), and third parties should be able to ask
`them to do so without spending millions of dollars in
`traditional district court litigation. The Court should affirm
`the judgment of the Federal Circuit.
`
`
`ARGUMENT
`
`
`I.
`
`Congress Passed the AIA to Address a
`Growing Concern That Patent Litigation
`Was Negatively Affecting the Climate for
`Investment and Innovation.
`
`Congress passed the AIA to “improve patent quality”
`and address a growing concern that the costs of patent
`litigation were negatively affecting the climate for investment
`and innovation. H.R. Rep. No. 98-112, pt. 1, at 39-40, 48
`(2011). The cost of litigating patent claims that result from
`poor patent quality was noted to be exceedingly high to both
`businesses and consumers. See Matal, supra, at 600 (noting
`that the cost of litigating against a dubious patent can be
`millions of dollars and that “it is often prohibitively expensive
`or even impossible to test the validity of a newly-issued patent
`that is of dubious validity, and that the continued existence of
`a patent can disrupt product development in a field of
`technology for years.”)
`
`Congress created the IPR process to “establish a more
`efficient and streamlined patent system that will improve
`patent quality and limit unnecessary and counterproductive
`litigation costs,” in response to “a growing sense that
`questionable patents are too easily obtained and are too
`difficult to challenge.” H.R. Rep. No. 98-112, pt. 1, at 39-40.
`Essentially, the AIA was designed to get rid of patents that
`should not have been issued in the first place. One of the
`
`

`

`5
`
`purposes of the act was “to correct egregious errors” made by
`the PTO in granting patents. See 157 Cong. Rec. S7413-14
`(daily ed. Nov. 14, 2011) (statement of Sen. Kyl).
`
`In discussing the bill that became the AIA, Senator
`Amy Klobuchar observed that the PTO “too often issues low-
`quality patents” and noted that:
`
`The legislation also provides a modernized
`streamlined mechanism for third parties who
`want to challenge recently issued, low-quality
`patents that should never have issued in the
`first place. Eliminating these potentially trivial
`patents will help the entire patent system by
`improving certainty for both users and
`inventors.
`
`
`157 Cong. Rec. S1034,1036-37 (daily ed. Mar. 1, 2011)
`(statement of Sen. Klobuchar); see also 157 Cong. Rec.
`S1323,1326 (daily ed. Mar. 7, 2011) (statement of Sen.
`Sessions) (“This will allow invalid patents that were
`mistakenly issued by the PTO to be fixed early in their life,
`before they disrupt an entire industry or result in expensive
`litigation”); 157 Cong. Rec. S5370, 5374 (daily ed. Sep. 7, 2011)
`(statement of Sen. Whitehouse) (“Unfortunately, numerous
`poor quality patents have issued in recent years, resulting in
`seemingly endless litigation that casts a cloud over patent
`ownership”).
`
`It is well known that the PTO receives a large number
`of patent applications. In 2016, applicants filed over 650,000
`new patent applications requiring examination. USPTO Perf.
`and Accountability Rep. FY 2016, at 78. The PTO’s initial
`determinations granting patents are often reached “under
`
`

`

`6
`
`tight time constraints and on an ex parte basis allowing
`minimal opportunity to hear a third party’s opposing views.”
`Fed. Trade Comm., To Promote Innovation: The Proper
`Balance of Competition and Patent Law and Policy 28 (Oct.
`2003), http://1.usa.gov/1d7fQwQ. Given the fact that patents
`are granted on an ex parte basis, without the benefit of the
`views of other interested parties, several commentators have
`noted that it is not surprising that mistakes in granting
`patents are made. E.g., Doug Lichtman & Mark Lemley,
`Rethinking Patent Law’s Presumption of Validity, 60 Stan. L.
`Rev. 45, 47 (2007) (noting that, given the high volume of
`patent applications, “it is hardly a surprise that the PTO
`makes mistakes during the initial process of patent review,
`granting patents that, on the merits, should never have been
`issued”). The IPR process is designed to correct these
`mistakes. The process provides no right to monetary damages;
`it affords only the relief of cancellation of a patent.
`
`II.
`
`Prolonged Patent Litigation Can Inhibit
`Medical Research.
`
`
`Prolonged patent litigation and the omnipresent
`threat of multi-million dollar patent lawsuits are known to
`have a chilling effect on medical research. As an example,
`prior to the decision in Association for Molecular Pathology v.
`Myriad Genetics, supra, there were a number of patent
`infringement lawsuits that “cast a pall over the Alzheimer’s-
`research field.” Erica Check Hayden, Patent Dispute
`Threatens US Alzheimer’s Research, 472 Nature 20 (2011),
`http://www.nature.com/news/2011/110405/full/472020a.
`html. For example, the Alzheimer’s Institute of America, Inc.,
`sued several defendants who were in the course of Alzheimer’s
`Disease research. See, e.g, Alzheimer’s Inst. of Am., Inc. v. Avid
`RadioPharmaceuticals, No. 2:10-cv-06908-TJS, 2015 U.S.
`
`

`

`7
`
`Dist. LEXIS 40013 (E.D. Pa. Mar. 30, 2015); Alzheimer’s Inst.
`of Am., Inc. v. CoMentis, Inc., No. 5:09-cv-01366-F, 2012 U.S.
`Dist. LEXIS 197821 (W.D. Okla. Dec. 17, 2012); Alzheimer’s
`Inst. of Am., Inc. v. Elan Pharmaceuticals, Inc., No. 3:10-cv-
`00482-EDL, 2012 U.S. Dist. LEXIS 196376 (C.D. Cal. Aug. 3,
`2012); Alzheimer’s Inst. of Am., Inc. v. Pfizer, Inc., No. 4:09-cv-
`01026-CAS (E.D. Mo. dismissed Nov. 12, 2010). Elan
`Pharmaceuticals, Inc., which owns Athena Neurosciences,
`Inc., also filed a lawsuit against the Mayo Foundation,
`alleging that Mayo’s use and distribution of transgenic mice
`infringed patents held by Elan. Elan Pharmaceuticals v. Mayo
`Found. for Med. Educ. & Research, 346 F.3d 1051 (Fed. Cir.
`2003).
`
`
`The cost of eliminating invalid patents in these
`lawsuits can be devastating to the defendants—particularly
`for universities and other non-profit institutions. In the Avid
`RadioPharmaceuticals case above, Avid spent over $6.5
`million in attorneys’ fees and $222,000 in costs trying a patent
`case that resulted in a defense verdict. Declaration of L. Scott
`Burwell in Support of Avid RadioPharmaceuticals’ Motion for
`Attorney’s Fees under 35 U.S.C. § 285, Avid, No. 2:10-cv-
`06908-TJS (E.D. Pa. June 1, 2012), ECF No. 317-4; Avid
`RadioPharmaceuticals’ Bill of Costs and Incorporated
`Supporting Memorandum, Avid, No. 2:10-cv-06908-TJS (E.D.
`Pa. June 1, 2012), ECF No. 318-1. Additionally, as one
`Alzheimer’s researcher noted,
`lawsuits over patents
`“constitute a large drain on valuable scientific resources at a
`time when scientific funds are increasingly tight.” Hayden,
`supra, at 20 (quoting Benjamin Wolozin, an Alzheimer’s
`researcher at Boston University).
`
`
`
`

`

`8
`
`III.
`
`Invalid Patents Foreclose Competition
`and Increase Consumer Costs.
`
`
`This Court recently reaffirmed the important patent
`policy of eliminating unwarranted patent grants so that the
`public will not “continually be required to pay tribute to would-
`monopolists without need or justification.” Actavis, 133 S. Ct.
`at 2233 (quoting Lear, Inc. v. Adkins, 395 U.S. 653 (1969)).
`When patents are improperly granted, competition in the
`marketplace is foreclosed and the public is forced to pay higher
`prices. McNeil-PPC, Inc. v. L. Perrigo Co., 337 F.3d 1362, 1368
`(Fed. Cir. 2003). This Court has often recognized that “[i]t is
`the public interest which is dominant in the patent system.”
`Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S.
`394, 401 (1947) (quoting Mercoid Corp. v. Mid-continent
`Investment Co., 320 U.S. 661, 665 (1944)) (internal quotation
`marks omitted). It is as “important to the public that
`competition should not be repressed by worthless patents, as
`that the patentee of a really valuable invention should be
`protected in his monopoly.” Pope Mfg. Co. v. Gormully, 144
`U.S. 224, 234 (1892). “Large numbers of improvidently
`granted patents may create
`in terrorem effects on
`entrepreneurship, ranging from holdup licensing to patent
`thickets.” John R. Thomas, The Responsibility of the
`Rulemaker:
`Comparative
`Approaches
`to
`Patent
`Administration Reform, 17 Berkeley Tech. L.J. 727, 731
`(2002).
`
`Unfortunately, the costs of patent litigation “are
`inevitably passed onto consumers, regardless of the outcome
`of the case.” Brianna Lennon, Antitrust Implications of
`Technology Patents, 1 ABA Young Lawyer Div. Antitrust Law
`Comm. Newsl. 8, 9 (2012), http://bit.ly/1fej47A; Megan M. La
`Belle, Standing to Sue in the Myriad Genetics Case, 2 Calif. L.
`
`

`

`9
`
`Rev. Circuit 68, 85 (2011) (“[W]hen private parties invalidate
`bad patents the public as a whole benefits from robust
`competition, increased consumer choice, and lower prices. . . .
`While patent litigation certainly implicates private interests,
`the public is the primary intended beneficiary of our patent
`system.”)
`
`
`Improperly granted patents also increase the cost of
`health care to the detriment of older people and the public,
`generally. Health care costs are a growing burden for middle-
`class families across all age groups. A significant number (one
`in five) have problems paying medical bills. Many of these
`families experience serious financial stress, such as problems
`paying for other necessities such as food, clothing, and
`housing, or medically related bankruptcy.5
`
`
`IV.
`
`The IPR Process Provides Distinct
`Advantages Over Litigating Invalid
`Patents.
`
`A.
`
`The IPR Process Complements the
`Hatch-Waxman Act’s Statutory
`Scheme.
`
`Drug manufacturers that intend to market a generic
`version of a patented brand-name drug product may pursue
`expedited Food and Drug Administration (FDA) approval by
`filing an Abbreviated New Drug Application (ANDA)
`
`
`5 Harriet Komisar, The Effects of Rising Health Care Costs on Middle-
`Class Economic Security, Middle Class Security Project, An Initiative of the
`AARP
`Public
`Policy
`Institute
`1,
`6
`(Jan.
`2013),
`http://www.aarp.org/content/dam/aarp/research/
`public_policy_institute/security/2013/impact-of-rising-health
`AARP-ppi-sec.pdf.
`
`care-costs-
`
`

`

`10
`
`pursuant to the Drug Price Competition and Patent Term
`Restoration (Hatch-Waxman) Act, Pub. L. No. 98-417, 98 Stat.
`1585 (1984). See 21 U.S.C. §355(j) (describing ANDA
`procedures). In response to a common form of ANDA filing
`known as Paragraph IV certification, where the generic
`certifies that the patent either does not apply to it, or is
`invalid, patented brand-name drug makers may bring patent
`infringement suits against the ANDA applicant under the
`Hatch-Waxman Act. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV)
`(allowing Paragraph IV certification, whereby a generic
`manufacturer certifies that the brand-name product’s
`underlying patents are invalid or will not be infringed); 35
`U.S.C. § 271(e)(2)(A) (authorizing suit following Paragraph IV
`certification). When such suits are brought, the FDA is
`statutorily prohibited from approving the applicant’s ANDA
`for thirty months unless the district court decides the patent is
`invalid or not infringed before the expiration of this thirty-
`month stay. 21 U.S.C. § 355(j)(5)(B)(iii)(I); Actavis, 133 S. Ct.
`at 2228. As noted by the Generic Pharmaceutical Association,
`“[b]rand-name drug makers have a strong interest in delaying
`resolution of such cases to maximize the benefits of the 30-
`month stay, and thus often sue in slower jurisdictions.” Brief
`of Generic Pharmaceutical Association and America’s Health
`Insurance Plans as Amici Curiae at 2, Cuozzo Speed Techs.,
`LLC v. Lee, 136 S. Ct. 2131 (2016). ANDA applicants and the
`consumers who depend on generic and biosimilar drugs have
`a correspondingly strong interest in the resolution of patent
`issues as quickly as possible.
`
`The IPR system for challenging patents created by the
`AIA is a valuable tool for ANDA applicants. While amici
`curiae PhRMA and the Biotechnology Industry Organization
`urged Congress

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