The world suffers no shortage of hyperbole, and sometimes those in the U.S. government get in on the act, too. Following are two stories of goverment agencies taking action in the month of May, with one agency easing up on a purportedly lethal administrative mechanism while the other asserts that its regulatory proposal would be quite the opposite of lethal.
PTO Revisits ‘Broadest Reasonable’ Standard
Those who saw the inter partes review process as an illegitimate shortcut to destruction of legitimate patents may have been cheered to see the U.S. Patent and Trademark Office declare that it would revisit its standard for interpreting claims that are the subject of an IPR, a welcome piece of news for patent holders.
Much of the criticism of the IPR process revolves around the notion that the process is a highly efficient patent-killing machine, and the use of broadest reasonable standard for interpreting the claims contested in an IPR was part of the problem. The difficulty for litigants was that matters appearing in an IPR or other PTO procedures might also be at play in the courts, thus setting up the prospect for differential outcomes due to PTO’s use of the broadest reasonable interpretation (BRI) standard.
Andrei Iancu, director of the PTO, said in remarks to a patent policy conference in April that the agency was taking a close look at various patent-related proceedings and the standards employed throughout those proceedings. The overall objective would be to increase the predictability of “appropriately scoped claims,” Iancu said, explaining that one of the agency’s tasks will be to close the gap between the prior art uncovered during the original patent examination and the prior art unearthed in litigation.
The PTO notice acknowledges that the BRI standard differs from the standards used in federal district courts and the International Trade Commission, and that nearly 87 percent of the patents caught up in proceedings instituted by the America Invents Act were also in play in the courts. This high rate of overlap, the agency said, suggests a need to use the same standard for claims interpretation. PTO also pointed to the outcome in the 2005 en banc hearing at the Federal Circuit for Phillips v. AWH Corp. as a stimulus to take a closer look at the viability of the BRI standard.
The agency said its views of the matter have also been shaped by a rethinking of the relative merits of extrinsic and intrinsic evidence. This portion of the PTO’s notice of proposed rulemaking states that the need to comport with Phillips means that the verbiage found in a claim will be interpreted by the “ordinary and customary meaning” of the words found in those claims. The PTO states that extrinsic evidence, such as expert testimony, may be useful, but not moreso than intrinsic evidence, and that the proposed rule would apply not only to IPR proceedings, but also to post-grant reviews and to proceedings for covered business method patents.
FDA Floats Life-Saving Combo Appeal process
The FDA has proposed to revise the process for appealing a determination regarding a combination product application, but the net effect of the proposed rule is anything but certain. One of the provisions of the proposed rule would eliminate what the agency characterized as a redundancy from the appeals process, but there are other feature of the proposed rule that invite closer scrutiny, such as the argument that one of the values of the rule is that it may save lives.
Up to now, the Part 3 appeals process for combination products has allowed a sponsor to appeal to the Office of Combination Products when the sponsor is unhappy with the OCP’s initial determination as to whether the product is primarily a drug, a device or a biologic. The FDA said it would delete section 3.8 from Part 3 altogether simply because appeals to the OCP cannot include information that was not part of the initial filing, and thus the outcome is likely to be unchanged. The notice also says that this part of the process led to some confusion regarding whether the sponsor can take the matter over the OCP’s head in the event of an adverse determination.
While the draft rule makes several claims on the subject of a net savings to industry after the first year, one of the more interesting observations on the part of the FDA is that if adopted, the rule would provide a public health benefit in the form of “illnesses and deaths avoided as a result of finalizing the proposed rule,” a curious observation to say the least. Conversely, one clear-cut benefit of the proposed rule is that it makes explicit that a sponsor need not contact the OCP if the product’s primary mode of action is clear.
One of the interesting parts of the rule in procedural terms is that only a sponsor would be allowed to file a request for designation for a particular combination of drug and device products. This would seem to foreclose any prospect of an industry collaboration, but another question in this context is whether the confidentiality of premarket submissions would disallow the disclosure of the status of a particular combination upon approval of that application.
Another proposed change to the regulation, yet another response to Section 3038 of the 21st Century Cures Act, is that the FDA would review a combination product under a single application when appropriate, although the Cures Act did not foreclose the possibility of a component-by-component review. As currently written, the regulation states that the agency can require that an application’s components be reviewed separately, but the FDA said it may simply delete this language from the regulation “to avoid confusion.”
The difficulty for regulated industries is that the FDA would only belatedly issue guidance or rulemaking as the agency’s staff gain experience implementing the changes imposed by the Cures Act. It might be assumed that the combination of legislatively imposed changes, and the proposal to excise language not directly required by that legislation, will in the near term engender more confusion rather than less.