U.S. Chamber Submits Comments to USPTO on Proposed Changes to Rules on the Use of Terminal Disclaimers

Dear Director Vidal:

The U.S. Chamber of Commerce ("Chamber") Global Innovation Policy Center ("GIPC") appreciates the opportunity to comment on the U.S. Patent and Trademark Office's ("USPTO") proposed changes to the rules on the use of terminal disclaimers.

The USPTO's examination of patent applications is critical to American innovation. The timely issuance of high quality rigorously examined patents provide the legal protection needed for new, innovative products to be brought to market faster and with the confidence that the massive investment that made those innovations possible can be recouped. However, as a threshold matter, the Chamber notes that while this proposal[1] is being broadly framed and, in theory, technologically neutral, the reality is the questions raised and agency actions contemplated by this proposal appear to be targeted primarily towards the use of continuation practice by the life sciences technology sectors.[2]

As the Chamber has consistently made clear[3], it is unwise as a matter of public policy to consider changes to examination practices, which will, under well-established US and international law, apply to all art units and technology sectors, simply to address a perceived problem in one technology sector.

With these threshold issues addressed, the Chamber's views on this proposal can be summarized in three main points:

I. This proposal is predicated on faulty evidence about life-science patenting activity, evidence that was discredited recently by USPTO itself, and therefore should be abandoned if that is in fact the motivation for the proposal.

II. In the context of life science innovation, continuations and terminal disclaimers are incredibly beneficial to society and enable the development of new, lifesaving, and life-altering medications.

III. To the extent that more robust patent examination practices are needed in other technology sectors, the Chamber supports providing increased resources for USPTO to carry out its missions as America's innovation agency.

The Chamber's concerns are outlined in more detail below.

I. The proposed changes to continuation and terminal disclaimer practices are based on debunked claims by anti-patent activists about the life science industry, claims that were thoroughly disproven and discredited by USPTO's own objective analysis.

All federal policy making should be evidence-based and premised on the best available data. Effective and empirical research is the best metric to decide if any policy should be undertaken. In contrast, the current proposals come in response to activists who have equated not only the number but also the mere existence of patents as indications of barriers to access to medicines. While advocates for weakened patent rights for life-saving treatments routinely cite studies that parrot false narratives regarding so-called "patent thickets" and "evergreening,"^[4] these studies have been rightly criticized for their inaccurate use of underlying data, lack of transparency, and flawed methodology.^[5]

Indeed, as recently as last month the USPTO itself released its own empirical study that thoroughly disproves and debunks the myths made by anti-patent activists.^[6] In that study, the agency noted multiple discrepancies between the claims made by certain anti-patent activists regarding the number of patents on specific products and the actual number of patents on those products.^[7] Moreover, the agency found that multiple patents associated with a single marketed product are not unique to life-sciences and instead are common in many innovative industries. Finally, and perhaps most interestingly, the agency also found that the expiration date of a patent has little to no impact on the actual launch timing of competing products.

Given the USPTO's own findings, the Chamber does not believe this proposal is supported in any way by independent, objective data or facts pertaining to the life sciences industry. Substantive rulemaking should not be predicated on faulty data. The USPTO should give great weight to this objective third party study. Accordingly, the proposed changes to terminal disclaimer practice should be abandoned until accurate data about life science industry practices is available to justify any modification to current practice.

II. Terminal disclaimers are used productively in the field of life sciences, and the changes contemplated by USPTO would hinder the development of new medications, vaccines, cures, and treatments for American patients.

The Chamber's broad and diverse membership includes many companies which have legitimate concerns around patent examination quality in their art areas. This is why, as will be discussed more fulsomely in section three, the Chamber has supported increased funding for USPTO to hire and train more patent examiners and facilitate information technology improvements at the Office. Nevertheless, the comments below reflect the Chamber's strong impression that current proposed changes to continuation and terminal disclaimer practice are politically and practically directed at the life sciences industry only[8], and the views expressed here reflect that context.

Read the full letter here

[1] These comments do not take a position on whether the agency possesses the authority to change terminal disclaimer and continuation practice.

[2]See Ltr. from Senators Patrick Leahy (D-VT), John Cornyn (R-TX), Richard Blumenthal (D-CT), Susan Collins (R-ME), Amy Klobuchar (D-MN) and Mike Braun (R-IL), to USPTO Director Kathi Vidal, June 2022.

[3]See US Chamber of Commerce Statement for the Record for a Senate Committee on the Judiciary Hearing entitled Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market, May 20, 2024.

[4]See Overpatented, Overpriced:How Excessive Pharmaceutical Patenting is Extending Monopolies and Driving up Drug Prices, The Initiative for Medicines, Access & Knowledge; See also Evergreen Drug Patent Search Database, University of California College of Law.

[5] Adam Mossoff, Unreliable Data Have Infected the Policy Debates Over Drug Patents, The Hudson Institute, January 2022; Erika Lietzan & Kristina M.L. Acri née Lybecker, Solutions Still Searching for a Problem: A Call for Relevant Data to Support "Evergreening" Allegations, Fordham Intellectual Property, Media & Entertainment Law Journal, Vol. 33, Sep. 26, 2022; Ltr. from Senator Thom Tillis, Ranking Member, Senate Judiciary Committee Subcommittee on Intellectual Property to Tahir Amin, January 31, 2022; Professor Kristen Osenga, Are "patent thickets" to blame for high drug prices, Richmond-Times Dispatch, Nov. 30, 2022.

[6]https://www.uspto.gov/sites/default/files/documents/USPTO_Drug_Patent_and_Exclusivity_Study_Report.pdf

[7] For example, despite claims to the contrary the agency found no drugs with 200 patents and 40-year monopolies, contrary to IMAK's claims. Additionally, the agency found only 3 patents for Eliquis, whereas IMAK counted 27. For Revlimid, the agency found only 27 patents and 16 years of exclusivity, not 96 patents and 40 years as claimed by IMAK. Finally, Lyrica was found to have only 3 patents and less than 15 years of monopoly, not 68 patents and 32 years as claimed by IMAK.

[8] It is not difficult to see the raw partisan politics behind this proposal. This is hardly the first time the Biden Administration has targeted the life sciences sector, and especially the patent rights of innovative companies that produce new treatments and cures. Perhaps most notably, the Administration has proposed a scheme to confiscate the patents of some of the most innovative American companies.

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