[Ip-health] New leaked TPPA paper: US on eliminating pre-grant opposition

Peter Maybarduk pmaybarduk at citizen.org
Fri Jul 1 10:27:13 PDT 2011

The leaked paper is available here: http://www.citizen.org/documents/Leaked-US-TPPA-paper-on-eliminating-pre-grant-opposition.pdf
From: ip-health-bounces at lists.keionline.org [ip-health-bounces at lists.keionline.org] On Behalf Of Peter Maybarduk [pmaybarduk at citizen.org]
Sent: Friday, July 01, 2011 12:06 PM
To: ip-health at lists.keionline.org
Subject: [Ip-health] New leaked TPPA paper: US on eliminating pre-grant opposition

Inside U.S. Trade - 07/01/2011
Leaked Paper Shows U.S. Fights Pre-Grant Patent Opposition In TPP

Posted: June 30, 2011
According to a leaked negotiating document, the Obama administration is arguing against the effectiveness of so-called pre-grant patent opposition systems in the context of the Trans-Pacific Partnership (TPP) negotiations. The paper was leaked to Public Citizen during the seventh round of TPP talks last week in Vietnam and obtained this week by Inside U.S. Trade.

In the paper, the United States warns that these systems for opposing patents places undue burdens on the patent applicants and creates additional costs for patent offices.

However, the paper does not clarify whether the United States wants to forbid TPP countries from maintaining pre-grant patent opposition systems as part of a final TPP deal, or whether it only wants to ensure that it is left up to each individual TAA country to decide whether to put such a system in place.

A pre-grant patent opposition system allows a third party to formally oppose a patent application once it is published. In some countries, it also allows for quasi-judicial proceedings among the third party, applicant and patent authority where oral arguments, research, documents and other evidence can be presented against a patent application.

Third parties oppose patent applications in this way if they lack novelty or an inventive step that would make the product deserving of a new patent, thus eliminating the potential for companies to extend monopolies over products such as pharmaceuticals by blocking these products from being produced in a cheaper, generic form.

However, the United States argues in its document that third parties can "exploit" pre-grant opposition systems "to harass the examiner and/or applicant and seek to delay or confuse the examination process."

Third parties can use this system to "overburden already strapped patent offices, decrease the efficiency of examination, and delay the grant of pending rights," according to the document.

Of the nine TPP countries, Australia and New Zealand have full fledged pre-grant patent opposition systems while Vietnam allows some limited pre-grant opposition, sources said.

If the United States looks to forbid the maintenance of such systems in the TPP talks, sources speculated that it could lead to a clash with Australia, which publicly stated at a May 27 public meeting between its trade negotiators and stakeholders that its trade policy would not cause any changes to its current intellectual property laws.

Australia retained its pre-grant opposition system under the U.S.-Australia free trade agreement.

The U.S. pharmaceutical industry is opposed to the pre-grant patent opposition system because it can shorten a patent's life, according to a U.S. industry source.

In most countries, a patent term begins once a patent application is published. Even if a pre-grant opposition proceeding fails, it can shave valuable time off the life of a patent by causing an unnecessary delay from the patent entering into force, this industry source said.

The industry source said the process of determining the validity of a patent should remain between the applicant and the country's patent authority. By inviting third parties to become directly involved, it opens the process to potentially harmful and unwarranted delays, this source said.

Peter Maybarduk, Public Citizen's access to medicines program director, said the U.S. position against systems of pre-grant opposition appears to be "not so much about preventing abuse as it is about letting pharmaceutical companies run the table."

He said a pre-grant opposition system is an efficient way to obtain analysis on a patent application before it is granted and boost the quality of patents rather than leaving opposition subject to costly court proceedings after the patent has been granted.

"Pre-grant opposition actually helps prevent abuse, improve the quality of patents and protect access to medicines in the future," Maybarduk said.

In its negotiating document, the United States offers two pre-grant features that are currently part of U.S. law as alternatives to a pre-grant opposition system. It argues that these alternatives are less susceptible to abuse.

First, the United States highlights a U.S. patent rule that allows third parties to submit "prior art documents" for consideration by a patent examiner. Prior art documents refer to material that publicly available prior to a patent application. It can take the form of research or documentation showing that aspects claimed in the patent application lack an inventive step because they have already been discovered.

These documents must be submitted within two months of the publication of a patent application or before the patent office sends a notice of allowance to the applicant, which entitles them to the patent. Critics argue that this system is advantageous to the applicant because a patent examiner may not have the time to review submissions within a two-month period or the scientific expertise to recognize the significance of a document.

In U.S. patent reform legislation, which passed the House on June 23, there is a provision that would extend the period for submitting documents from two months to six months after the application was first published.

Additionally, the U.S. patent rule is not an effective means of opposition because the third party cannot submit any narrative or written argument pointing out specific ways the prior art documents discredit a patent application, according to Tahir Amin, director of the Initiative for Medicines, Access and Knowledge.

"In the United States, you can't explain why that document is relevant," he said.

Despite this argument, the leaked U.S. document argues that "an examiner's access to the best prior art enhances both the quality and efficiency of the patent examination process."

The U.S. document also highlights another patent rule under U.S. law allowing for protest against a pending application that it argues is preferable to pre-grant opposition.

Under the law, the protest must be filed before the patent application is published and include a listing and copies of the patents, publications or other information used in the protest and a detailed explanation of the relevance of each document in the protest. The patent applicant must also be notified of the protest.

Critics question the effectiveness of this system of protest because it requires the third party to know about a patent application and its relevant details before it is filed and published, which amounts to knowing the details about something before it happens, Amin said.

The U.S. position paper lists a number of questions for TPP partners on a formal, pre-grant opposition system.

Specifically, the United States asks how those systems work, how often oppositions are filed, what safeguards exist to prevent misuse by third parties, if there is a time limit for proceedings, what documents are required, who is responsible for conducting the proceedings and if there is possibility for appeal.

Some TPP countries have pre-grant opposition procedures that are less formal than Australia's system but allow for more third party involvement than the U.S. provisions on patent application opposition.

For example, Vietnam allows a third party to submit an observation and a written argument or reasoning to the patent authorities along with prior art documents. This observation and written argument can state why a patent application should not be granted, but it does not allow for a formal proceeding to occur, sources said.

Critics of the U.S. position on pre-grant opposition said it is an indirect way to counteract a system of pre-grant opposition in India, which has long been an issue for U.S. pharmaceutical companies.

Although India is not a member of the TPP negotiations, civil society sources said the United States is pushing for provisions that would prevent countries in the region from adopting Indian-style policies on intellectual property, such as Indian laws on patents.

India has an extensive pre-grant opposition system that allows a third party to submit a statement of opposition, explain evidence and provide documents against a patent application. The applicant can respond to any arguments prior to a hearing, where Indian patent authorities make a determination.

More than one opposition can be filed against the same patent application in India, sources said.

Industry groups object to this system because objections to a patent application are often motivated by generic drug companies that want to produce generic versions of brand-name drugs. Non-governmental organizations are also able to directly oppose patents through the pre-grant opposition system.

The Office of the U.S. Trade Representative briefly touched on this in its 2011 Special 301 report on countries that have intellectual property policies it opposes. For India, USTR stated that it should "take additional steps to address its patent application backlog and to streamline its patent opposition proceedings."

Civil society groups also accuse the United States of pursuing other provisions in its leaked TPP proposed text on intellectual property rights to counteract Indian intellectual property policies it does not want to see spread to other countries the Asia Pacific region.

For example, the leaked U.S. text on intellectual property rights expands the scope of what is patentable compared to an Indian law that does not allow a new patent merely for a new form or use of a pharmaceutical unless the new "invention" results in the enhancement of the known efficacy of the product.

India is a threat for the U.S. pharmaceutical industry because of its growing generic industry that often does not recognize patents, source have said (Inside U.S. Trade, March 18).
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