The Intellectual Property Law Association of Chicago (IPLAC) Patent Committee will be hosting a presentation by Professor R. Carl Moy of the Mitchell Hamline School of Law, entitled "Cuozzo Speed Technologies-Broadest Reasonable Interpretation: A Nonsensical Scenario" on June 7, 2016 from 4:30 to 5:30 pm (Central) at Fitch, Even, Tabin, & Flannery LLP in Chicago, IL. Prof. Moy will provide his comments and insights on the Cuozzo Speed Technologies case that was recently argued at the U.S. Supreme Court. A reception will follow the presentation. The registration fee for the event is $20 (IPLAC members), $30 (non-members), and $5 (students). Those interested in registering for event can do so by here.
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The Intellectual Property Law Association of Chicago (IPLAC) will be holding its twenty-six annual Trade Secrets Seminar from 1:00 to 4:00 pm (Central) on June 23, 2016 at the John Marshall Law School in Chicago, IL. The Seminar will offer a discussion on data privacy and trade secret protection by Jason Logue, Associate General Counsel at Publicis Groupe, and Walter Kawula of Hahn Loeser, and a recap of trade secret developments by Mark Halligan of FisherBroyles, LLP. The registration fee for the Seminar is $20 (IPLAC members), $30 (non-members), or $5 (students). Those interested in registering can do so here. -
The American Law Institute (ALI) will be offering a telephone seminar/audio webcast entitled "The Defend Trade Secrets Act of 2016: What You Need To Know" on June 9, 2016 from 2:00 – 3:00 pm (Eastern). Claire Laporte of Foley Hoag LLP and Russell Beck of Beck Reed Riden LLP will provide information on the Defend Trade Secrets Act of 2016 (DTSA) and how it can be used to protect vital trade secrets. Topics to be covered during the webcast include:• Trade secrets
• Defend Trade Secrets Act of 2016 (DTSA)
• Uniform Trade Secrets Act (UTSA)
• Civil cause of action under DTSA
• Ex parte seizureThe registration fee for the program is $199. Those interested in registering for the program, can do so here.
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The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "New EU Trade Secrets Directive: What Does It Mean for IP Owners?" on June 9, 2016 from 2:00 to 3:00 pm (ET). Audra Dial of Kilpatrick Townsend & Stockton LLP, James Pooley of James Pooley PLC, and Mark Ridgway of Allen & Overy LLP will discuss and compare the EU Trade Secrets Directive and the U.S. Defend Trade Secrets Act and give advice on what their implementation means for U.S. companies. Topics to be discussed by the panel include "long-arm" provisions, which make it unlawful for a person who was aware or should have been aware of a trade secret theft to offer for sale infringing goods, and could offer a way to ban imports; protections for whistleblowers; and procedures to keep trade secrets private during enforcement and litigation.The registration fee for the webinar is $135 (government and academic rates are available upon request). Those interested in registering for the webinar can do so here.
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Patent Directed to Geographic Parcel Boundary Maps (for Tax Purposes) Not a Covered Business Method
By Joseph Herndon —
On May 24, 2016, the U.S. Patent Office Patent Trial and Appeal Board (PTAB) issued a decision denying institution of covered business method (CBM) patent review of U.S. Patent No. 7,092,957 owned by Boundary Solutions. This decision illustrates a "mini" trend of some PTAB boards requiring explicit or at least implicit language in the claims themselves referring to a financial product or service in order for the patent to qualify as a CBM patent.CoreLogic filed the Petition to institute a CBM patent review of claims 1–19 of the '957 patent. BSI filed a Preliminary Response and a disclaimer of claims 13, 16, 17, and 18.
The '957 patent relates generally to Geographic Information Systems ("GIS") and, in particular, to a National Online Parcel-Level Map Data Portal ("NPDP") that provides online delivery of parcel-level map data. The '957 patent describes the NPDP as an electronic repository for parcel-level maps and linked attribute data acquired from public and private entities. Databases from different jurisdictions are assembled and stored in a standard format, with each jurisdictional database placed in an individual directory. The system normalizes information to a single universal protocol. Parcel-level information includes parcel boundaries and geocodes linked using a parcel identifier to a non-graphic database containing property tax records.
The '957 patent describes retrieving a parcel-level map based on the address of a parcel requested by an end user. The system searches a jurisdictional lookup table to identify the jurisdiction in which the requested parcel is located. The system searches the non-graphic database for that jurisdiction for a record matching the address, and uses the parcel identifier for that record to access a graphic database containing the selected parcel. The system can display the selected parcel and surrounding parcels, with the selected parcel shown as a highlighted polygon. The system can also display the parcel's linked data (e.g., tax record).
The '957 patent describes a business revenue model that "begins with the establishment by the NPDP service provider of a publicized parcel-level map data web site with links to a tax record database." For example, the model contemplates generating revenue through various subscription agreements.
Claims 1–19 are the subject of the Petition, and claims 13 and 16–18 have since been disclaimed by Patent Owner. Claim 1 is representative and is reproduced below.
1. An interactive computer implemented method for retrieving geographic parcel boundary polygon maps and associated parcel attribute data linked to a non-graphic database, wherein the data is acquired electronically, comprising:
a. activating a computer terminal connected to a computer network;
b. accessing an applications program for access to the data;
c. accessing a data entry screen and entering a parcel attribute to call up the parcel selected;
d. subsequently accessing a national parcel map database comprising multiple jurisdictional databases which have been normalized to a common data protocol;
e. searching a jurisdiction look up table associated with the national parcel map database, said look up table indexed for identification of the pertinent jurisdictional database, whereby a numerical jurisdictional identifier for the selected jurisdiction is located, and the identified jurisdictional database thereafter accessed; and,
f. thereafter displaying on screen a parcel boundary polygon map, along with surrounding parcel boundary polygons, the default scale of the displayed map selected to fill the computer display screen with parcel boundaries within a selected distance around the subject parcel, the selected parcel boundary polygon highlighted, defining both the location and boundary of the parcel, and associated attribute data for the highlighted parcel displayed.A threshold question is whether the '957 patent is a CBM patent, as defined by the AIA. CoreLogic bears the burden of persuasion. The AIA defines "covered business method patent" as "a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions." A patent need have only one claim directed to a covered business method to be eligible for review.
CoreLogic contended that claim 1 of the '957 patent claims data processing or other operations that are financial in nature or, at a minimum, incidental or complementary to a financial activity. CoreLogic also relied on dependent claims 13 and 16–18, but because BSI disclaimed claims 13 and 16–18 at the same time it filed its Preliminary Response, the statutory disclaimer had the effect of canceling the claims from the patent and the patent is viewed as though the disclaimed claims had never existed in the patent. Thus, the disclaimed claims are not consulted when determining whether the patent is a covered business method patent under AIA § 18(d)(1).
The PTAB noted that other Board decisions have evaluated compliance with CBM standing requirements at the time of filing, but found those cases to be distinguishable and not binding here (e.g., examples of canceling claims after institution are distinguishable). Any suggestion in those cases that a decision on institution should address the disclaimed claims because they existed at the time the petition was filed is inconsistent with Federal Circuit precedent instructing to treat the claims as if they never existed. Thus, the disclaimed claims 13 and 16–18 were not considered in the analysis.
With respect to claim 1, CoreLogic argued that the Specification confirms that this claim is directed to processing data as part of a financial process because the Specification describes a "financial process in which subscribers pay to gain access to parcel boundary data using the claimed method." CoreLogic argued that the '957 patent is explicit that the purpose of the claimed method is to provide data in exchange for money.
CoreLogic also contended that the Specification describes using the maps retrieved in the claimed method for business purposes and financial activities. According to CoreLogic, determining real estate parcel boundaries is a fundamental business practice used by various companies, including title companies, insurance providers, and land developers.
The PTAB noted that CoreLogic had not explained adequately how any of the claims of the '957 patent recite a method or apparatus "for performing data processing or other operations used in the practice, administration, or management of a financial product or service." AIA § 18(d)(1). While CoreLogic focused on claim 1, CoreLogic failed to identify any limitation in claim 1 or any other claim that relates to a financial activity in any way.
The PTAB noted that CoreLogic's reliance on portions of the Specification was unavailing. CoreLogic did not direct the PTABs to any claims or claim limitations that require users to pay for access to the map database or use of the claimed methods. The PTAB also noted that CoreLogic failed to address portions of the Specification that indicate the claimed invention can be used "for free," i.e., without any generation of revenue or financial aspect at all. Given that the Specification contemplates use of the claimed inventions for free, it is not apparent that the "purpose of the claimed method is to provide data in exchange for money," as CoreLogic suggests.
At most, CoreLogic established that the claimed methods could be used to generate revenue in a number of ways, even though the language of the claims does not require any exchange of money or other financially related step. Under these circumstances, the PTAB concluded that the "financial prong" had not been met. Thus, because neither the claim language nor the Specification supported CoreLogic's contention that the '957 patent claims a financial product or service, the '957 patent did not qualify as a CBM patent under § 18 of the AIA.
The PTAB noted that "financial product or service" should be interpreted broadly, but that does not mean interpretation of "financial product or service" to encompass any claimed invention that might be used to generate revenue when the Specification describes the methods of generating revenue. The PTAB stated that if the mere ability to make money selling a claimed invention, or providing access to a claimed method, were sufficient, the "financial product or service" requirement would be rendered nugatory.
The PTAB referenced prior Board decisions finding the "financial products or services" requirement met even in the face of claim language that does not expressly mention financial activity, based on analysis of the Specification. The PTAB noted that those cases turn on their particular facts as well as the claim language and Specifications at issue, and were not binding here.
Before Administrative Patent Judges Lynne E. Pettigrew, Peter P. Chen, and Richard H. Marschall
Decision by Administrative Patent Judge Peter P. Chen -
BIO and Biosimilars
By Andrew Williams —
The 2016 BIO International Convention begins next week in San Francisco. This convention has become an important destination for all organizations working in the biotechnology space, but the large amount of information and opportunities available can appear daunting at first glance. To assist our readers, we recently provided information about the convention, and listed sessions that might be of interest to Patent Docs readers. In addition, with this post, we begin a more in-depth series of previews highlighting a few sessions or other opportunities, in thematic fashion, to help navigate the convention. Of course, as we previously reported, Patent Docs authors and contributors will be present at BIO as part of the MBHB contingent. Patent Docs readers are encouraged to stop by the MBHB booth (#504) to discuss these sessions (or whatever other topics are of interest to you).One topic that is sure to be on the minds of many of the patent practitioners in the biotech and pharmaceutical space is the increased usage of the Biologics Price Competition and Innovation Act ("BPCIA"). Last year at this time, Sandoz had already obtained approval to market the first such drug, Zarxio™, which is a biosimilar version of Amgen's NEUPOGEN® (filgrastrim) biologic drug product. At the same time, the Federal Circuit was sorting out whether two aspects of the BPCIA were either mandatory or optional: (1) the disclosure and patent exchange provisions (the so-called "Patent Dance") and (2) the Notice of Commercial Marketing provision. The Court ultimately held that the first was optional but the second was mandatory (at least in cases where the biosimilar applicant did not participate in the patent dance). This year, we are in a similar situation in the biosimilar space. The FDA has recently approved its second biosimilar application, this time Celltrion's application for a biosimilar therapeutic antibody related to Janssen Biotech Inc.'s REMICADE® (infliximab). However, the Federal Circuit is again considering whether the Notice of Commercial Marketing is required, this time in the context where the biosimilar applicant disclosed its aBLA. Interestingly, that case does not relate to Celltrion's application, but instead arose from a litigation related to an aBLA filed by Apotex directed to Amgen's NEULASTA® (pegfilgrastim).
Last year, the Intellectual Property track at the BIO convention did not contain any sessions focused directly on the BPCIA, likely because the pathway had not been utilized in the preceding years since the BPCIA was enacted. This is not the case this year. In fact, the session that will kick off the Intellectual Property track is entitled "Rise of the Biosimilars: Recent Developments and Strategies for Innovators and Biosimilar Applicants for Resolving Patent Disputes Under the BPCIA." The description of the session notes that the process for resolving patent disputes under the BPCIA was modeled after the Hatch-Waxman Act, but that there are substantial differences which have allowed biosimilar applicants to pursue varied approaches. As such, the panel will explore the recent legal developments, and will discuss strategies from both the innovators and biosimilar applicant perspective. The speakers on the panel will be Christof Bull, Associate General Patent Counsel of UCB; Charles Sholtz, VP of Intellectual Property at Coherus Biosciences; and Immac (Casey) Thampoe, Managing Counsel, Biologics & Vaccines at Merck & Co., Inc. The session will be moderated by John Labbe of Marshall Gerstein & Borun LLP.
Of course, the Intellectual Property issues related to biosimilars are not the only roadblock to patient access to these follow-on drugs. For those interested in these issues, the Value, Patient Access, & Commercialization track will host a session entitled "The Future of Biosimilars: How Will Policy and Market Dynamics Impact Patient Value and Access in the US?" The description of this session highlights the fact that, unlike small-molecule generic drugs, biosimilars are not automatically interchangeable. The complex and expensive process for manufacturing these drugs may impact any potential cost reduction. Moreover, there is concern over how payers will structure biosimilar policies. This could impact patient access to branded biologic drugs, and could impact long-term innovation in the biopharmaceutical space. The panel will address questions such as whether formulary restrictions will direct patients away from innovator products, what role will the FDA's guidance regarding interchangeability impact these decisions, and what sort of post-market surveillance will be implemented to ensure safety and efficacy of biosimilar drugs. The speakers will be Kathleen Arntsen, President/CEO and Patient Advocate of Lupus and Allied Diseases Association; Geoffrey Eich, Executive Director of External Affairs and Biosimilars at Amgen; Darius Lakdawalla, Quintiles Chair in Pharmaceutical Development and Regulatory Innovation at the University of Southern California; and Tomas Philipson, Professor at the University of Chicago. The session will be moderated by Dana Goldman, Leonard D. Schaeffer Director's Chair at the University of Southern California Leonard D. Schaeffer Center for Health Policy & Economics.
The Value, Patient Access, & Commercialization track will also host a session related to the impact of the rise of biosimilars in Europe. Entitled "Biosimilar Medicines: Creating Sustainable Competition in an Era of a New Patent Cliff in Biological Medicines," this session will look at how European governments have worked to ensure competition in pharmaceutical markets that are no longer protect by patents. The industry itself believes that the sustainability of the healthcare systems hinges on access to new treatments and competition. As such "[c]ompetition between different biological medicines . . . creates increase choice for patients and clinicians, and enhanced value propositions for individual medicines." In this session, IMS Health will present a study that analyzes the uptake of biosimilar medicines and their impact in the European Member States. The panel will discuss the goals and challenges of solving health inequalities and improving access to medicines for patients already undergoing treatment. The speakers will be Douglas Gregory, Executive Director, European Union Government Affairs at Amgen; Gregory Oakes, Vice President and Head of Biopharmaceuticals at Sandoz; and Per Troein, VP Strategic Partners at IMS Health. The panel will be moderated by Hilda Juhasz, Policy Officer at the European Commission in Brussels, BE.
Please be on the look-out for future preview posts, and we look forward to seeing you next week at BIO 2016.
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By Donald Zuhn —
In December, the U.S. Patent and Trademark Office invited stakeholders to submit patent quality-related topics that could be used as case studies in a new Enhanced Patent Quality Initiative (EPQI) pilot program. At the time, the Office noted that it regularly performs case studies to investigate specific quality-related issues and analyze how those issues are being treated or addressed across hundreds or thousands of applications, and where appropriate, take action to remediate quality issues or to formulate best practices to further enhance quality.Earlier this month, in a post by Deputy Commissioner for Patent Quality Valencia Martin Wallace on the USPTO's Director's Forum blog, the Office announced that six topics had been selected for the case study pilot program. The six topics were selected from more than 135 case study submissions from 110 submitters, which included intellectual property organizations, law firms, companies, and individuals. All of the case study submissions have been made available on the USPTO website.
The Deputy Commissioner noted that the six topics selected for the case study pilot program were picked from among the numerous submissions by determining whether a submitted topic was capable of being timely assessed via a case study, and then eliminating topics for which other programs or mechanisms within the USPTO were more appropriate for addressing the topic. Submissions that were deemed to be better addressed by other USPTO programs or mechanisms were forwarded to the appropriate offices for further evaluation.
The six topics selected for the case study pilot program are as follows:
1) Evaluation of the deviation of 35 U.S.C. §101 rejections from official guidance, correctness of rejections and completeness of the analysis. This study will evaluate whether examiners are properly making subject matter eligibility rejections under 35 U.S.C. §101 and clearly communicating their reasoning.
2) Review of consistency of the application of 35 U.S.C. §101 across art units/technology centers. This study will take a look at applications with related technologies located in different art units or technology centers and determine whether similar claims are being treated dissimilarly under 35 U.S.C. §101.
3) The practice of compact prosecution when 35 U.S.C. §101 rejections are made. This study will determine whether all appropriate rejections are being made in a first Office action when a subject matter eligibility issue is also identified.
4) Correctness and clarity of motivation statements in 35 U.S.C. §103 rejections. This study will evaluate whether reasons for combining references set forth in rejections under 35 U.S.C. §103 are being set forth clearly and with correct motivation to combine statements.
5) Enforcement of 35 U.S.C. §112(a) written description in continuing applications. This study will evaluate claims in continuing applications to determine if they contain subject matter unsupported by an original parent application and whether examiners are appropriately enforcing the requirements of 35 U.S.C. §112(a) written description.
6) Consistent treatment of claims after the May 2014 35 U.S.C. §112(f) training. This study will determine whether claims invoking 35 U.S.C. §112(f) are being properly interpreted and treated.
The Deputy Commissioner noted that the Office would provide updates on the selected case studies, and expected to publish results of the case studies by early 2017 (if not earlier). Results of the case studies will be posted to the Office's Case Studies Pilot Program website.
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By Sherri Oslick —
About Court Report: Each week we will report briefly on recently filed biotech and pharma cases.Allergan, Inc. et al. v. Somerset Therapeutics, LLC
1:16-cv-00392; filed May 26, 2016 in the District Court of Delaware• Plaintiffs: Allergan, Inc.; Vistakon Pharmaceuticals, LLC
• Defendant: Somerset Therapeutics, LLCInfringement of U.S. Patent No. 8,664,215 ("Ocular Allergy Treatments with Alcaftadine," issued March 4, 2014), licensed to Allergan, following a Paragraph IV certification as part of Somerset's filing of an ANDA to manufacture a generic version of Allergan's Lastacaft® (alcaftadine ophthalmic solution 0.25%, used for the prevention of itching associated with allergic conjunctivitis). View the complaint here.
Forest Laboratories, LLC et al. v. Accord Healthcare, Inc. et al.
1:16-cv-00375; filed May 20, 2016 in the District Court of Delaware• Plaintiffs: Forest Laboratories, LLC; Forest Laboratories Holdings, Ltd.; Allergan USA, Inc.; Adamas Pharmaceuticals, Inc.
• Defendants: Accord Healthcare, Inc.; Intas Pharmaceuticals Ltd.Infringement of U.S. Patent Nos. 8,039,009 ("Modified Release Formulations of Memantine Oral dosage Forms," issued October 18, 2011), 8,058,291 ("Methods and Compositions For the Treatment of CNS-Related Conditions," issued November 15, 2011), 8,168,209 ("Method and Composition for Administering an NMDA Receptor Antagonist to a Subject," issued May 1, 2012), 8,173,708 (same title, issued May 8, 2012), 8,283,379 ("Method and Compositions for the Treatment of CNS-Related Conditions," issued October 9, 2012), 8,293,794 (same title, issued October 23, 2012), 8,329,752 ("Composition for Administering an NMDA Receptor Antagonist to a Subject," issued December 11, 2012), 8,338,485 ("Compositions for the Treatment of CNS-Related Conditions," issued December 25, 2012), 8,338,486 ("Methods for the Treatment of CNS-Related Conditions," issued December 25, 2012), 8,362,085 ("Method for Administering an NMDA Receptor Antagonist to a Subject," issued January 29, 2013), 8,580,858 ("Compositions For the Treatment of CNS-Related Conditions," issued November 12, 2013), and 8,598,233 ("Method for Administering an NMDA Receptor Antagonist To A Subject," issued December 3, 2013) following a Paragraph IV certification as part of Accord's filing of an ANDA to manufacture a generic version of Forest's Namzaric ® (memantine hydrochloride extended-release and donepezil hydrochloride, used for the treatment of moderate to severe dementia of the Alzheimer's type). View the complaint here.
Lotus Pharmaceutical Co. Ltd v. GlaxoSmithKline LLC et al.
1:16-cv-00377; filed May 20, 2016 in the District Court of Delaware• Plaintiff: Lotus Pharmaceutical Co. Ltd
• Defendants: GlaxoSmithKline LLC; Glaxo Group Ltd.Declaratory judgment of non-infringement of U.S. Patent Nos. 8,637,512 ("Formulations and Method of Treatment," issued January 28, 2014) and 9,144,547 ("Oral Dosage Form for Controlled Drug Release," issued September 29, 2015) based on Lotus' filing of an ANDA (and Paragraph IV certification) to manufacture a generic version of GSK's Lamictal XR® (lamotrigine, used as adjunctive therapy for primary generalized tonic-clonic seizures and partial-onset seizures with or without secondary generalization in patients aged 13 years and older and as conversion to monotherapy in patients aged 13 years and older with partial-onset seizures who are receiving treatment with a single AED). View the complaint here.
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June 2, 2016 – "Conflicts in Patent Prosecution: Avoiding the Ethical Pitfalls — Minimizing Risks of Malpractice Liability and Ethics Sanctions" (Strafford) – 1:00 to 2:30 pm (EDT)June 6-9, 2016 - BIO International Convention (Biotechnology Innovation Organization) – San Francisco, CA
June 8, 2016 – "What's the Trick? Making Effective Use of Objective Evidence in IPRs, Patent Prosecution, and Litigation" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)
June 15-17, 2016 - Fundamentals of Patent Prosecution 2016: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – New York, NY
July 6-8, 2016 - Fundamentals of Patent Prosecution 2016: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA
June 9, 2016 – "Overcoming §103 Rejections for Biotech and Chemical Patents: Leveraging Recent Decisions and USPTO Guidance" (Strafford) – 1:00 to 2:30 pm (EDT)
June 14, 2016 – "Patent Eligibility, Prior Art and Obviousness 2016: Current Trends in Sections 101, 102 and 103" (Practising Law Institute) – San Francisco, CA (also webcast)
***Patent Docs is a media partner of this conference or CLE
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The Question Worth Pondering: Innovation Provokers or Idea Thieves?
By Ralf Boscheck* —
In the past five years Cisco and J.C. Penney have spent close to $350 million fending off demands from patent trolls, which are more politely known as 'patent assertion entities,' or PAEs. In February, a court in Texas ordered Apple to pay $532 million to a PAE. These are just two of the more high-profile reasons why both the US and the European Union have recognized that the laws and regulations around intellectual property are in profound need of an overhaul.The question that remains is whether or not the necessary guidance would be most efficiently provided through competition law.
Exactly what approach is needed still needs careful consideration. Any guidance will need to take into account patent trends, actors, rights and obligations, and the nature of current regulatory concerns — and it will need to do so despite the scant empirical analyses and modeling that has been done on patent trolls.
The patent ecosystem
The US is a dominant force in this area, both by number of patents granted and the value of litigation associated with their assertion. By 2013 more than a quarter of the 9.45 million patents in force had been issued by the US Patent and Trademark Office. In that same year, two thirds of all US patent lawsuits were brought by PAEs — doubling their share compared to 2010.
This recent growth in global patenting activity, and the emergence of specialized assertion entities, has been accompanied by a shift in the strategic and commercial use of intellectual property assets, and increasing concerns about its impact on competition, innovation, and economic welfare.
PAEs' activities vary significantly yet they are, by and large, usually met with general suspicion and outright hostility. At one point, the White House's position was that "on balance, PAEs have had a negative impact on innovation and growth". Yet after more recent evaluations of the same data on which that conclusion was based, the White House itself, seems to have backed up and are not endorsing this view. There are other analyses which suggest that PAEs can promote rather than obstruct innovation.
What can regulators do about this?
Regulators face a twofold challenge: First, they need to balance the legitimate interests of patent holders and licensees in order to determine which activities and contracts the law will enforce, or otherwise recognize as creating legal rights. Second, they need to establish rules that minimize both the costs of assessing a given case, and the costs of taking wrong decisions.
One traditional approach has been to use antitrust law. However, the ultimate position is that PAE assertion efforts are not, generally, easily caught by US competition rules that require harm to competition and competitive process in order to assign antitrust liability. This is not to suggest that they are pro-competitive, either; it simply means that attacks on this front are unlikely to be successful. New reforms in the US have begun to take account of this by targeting drivers of the PAEs' business model, for instance by preventing them from suing disparate entities in a single lawsuit.
In Europe, the EU's position on PAEs has most recently been outlined by Alexander Italianer, the European Commission's Director General for Competition. The EU expects PAEs to be less active in Europe because damages tend to be lower. PAEs are treated as any other company, including having the same right to defend their intellectual property and the need to honor fair, reasonable, and non-discriminatory (FRAND) commitments whenever standard essential licenses are sold.
It is generally considered legitimate to seek an injunction if a patent is infringed, although it can be considered abusive if the patent holder has given a commitment to license on FRAND terms, and the licensee has been willing to enter into a license under these terms.
What is missing, here, however, is that neither the Commission nor current case law helps to define what FRAND actually means. Instead, national courts are being called upon to determine whether or not an injunction is appropriate — an approach known as regulatory delegation.
For instance, Germany's Court of Justice recently came back with a four-step negotiation process to sustain licensing in a FRAND manner. This is very much in line with the evolution of EU competition law, but has since been criticized because, in the absences of any benchmark to assess the "FRANDness" of licensing terms, a patent holder may follow the process and still be exposed to antitrust liability if his position is subsequently decided not to be FRAND.
Both US and EU regulators are struggling with the dilemma of devising standards that fit a variety of circumstances, yet can be easily applied. There is a need for more clear-cut regulatory direction on both sides of the Atlantic. As yet, however, it is not clear how that will be achieved.
* Ralf Boscheck is the Lundin Family Professor of Economics and Business Policy at IMD. He is program director of IMD's MBA program. With more than 20 years of teaching in a number of IMD's executive programs, Prof. Boscheck believes in using intensive and direct interaction to develop technical competencies, self-awareness and moral judgment.
For additional information regarding this topic, see Prof. Boscheck's paper "Patent Trolls: In Search of Efficient Regulatory Standards"
Patent Docs 