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Patent quality Against a backdrop of a rising generics market and increasing patent expiries, the ‘quality’ of patents has become an ever more significant topic of debate. Pharmaceutical Patent Analyst has brought together a group of leading attorneys and IP specialists to disentangle the issue of patent quality, including its definition and importance to the field of pharmaceutical and medical science, and what steps could be taken to improve understanding of this important yet fluid concept. Interviews conducted by Alexandra Sklan, Commissioning Editor
Q
How would you define the concept of patent quality?
A high-quality patent is an application with a well researched, and detailed specification that provides examples of each of the embodiments of the invention. Based on a reasonable prior art search, the claims reflect the appropriate depth and breadth of the invention and are supported by the specification. Understanding claim boundaries based on knowledge of the prior art and based on the potential of the invention is key. Anthony Trippe Patinformatics, LLC; [email protected]
Q How important is a patent’s scope in defining its quality?
For the sake of this discussion, let’s say that scope is measured by looking at the family size, number of claims and citations associated with the patent of interest. Looking at these measures, number of citations is likely more a measure of popularity than it is quality. Just like the idea that the most popular student on campus might not be the highest quality individual. In a similar fashion, number of claims, and family size are indicators of investment, and interest, but don’t necessarily reflect a high-quality patent. Ultimately, quality should probably be based on the likelihood of standing up in litigation, and that is about claim scope, based on prior art, and how well the claims are supported by the specification.
Q
Is the term ‘patent quality’ too subjective as to be meaningful?
Q
Does a patent’s quality define its economic value?
Absolutely. By most measures a small percentage of patents are represented in commercial products, and a small percentage of that small percentage are ever challenged in court. If examiners are provided with sufficient time and resources to conduct a reasonable examination, and post-grant review proceedings are taken advantage of, than the issues will sort themselves out accordingly. Under these conditions only the patents that deserve special attention, based on their economic potential, will receive extra consideration.
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Yes, but it is only one component of the total valuation picture. It is possible to have a very high-quality patent with no economic impact since the corresponding invention cannot be applied to a commercial product. At the same time, a poorly written patent, reading on a large market opportunity is not worth very much in the long run, especially as businesses become accustomed to dealing with these documents. The combination of high quality, and high economic impact form the basis of a high patent valuation.
10.4155/PPA.13.74 © 2014 Future Science Ltd
Pharm. Pat. Anal. (2014) 3(1), 17–24
ISSN 2046-8954
17
Q
Why is it important to measure patent quality?
The criteria of novelty and inventive step, both of which are related to an assessment of a patent against prior art that may be unknown at the time of the application, can destroy the validity and hence the commercial value of any patent, and may also reduce the value of the product or process disclosed to the pharmaceutical and medical communities. Jeremy Philips Queen Mary Intellectual Property Research Institute; [email protected]
Q
Does patent quality vary from jurisdiction to jurisdiction?
Much less than it used to, at least to the extent that quality is a function of the search and examination process leading to a grant. The internet has proved to be a great equalizer where access to relevant prior art is concerned, so even those granting offices that do not co-operate with others at any level are more likely to achieve similar outcomes. A bigger issue is the real or imagined vulnerability of granting authorities and courts to political and economic pressures: Gleevec® in India is a case in point.
Q
Does a patent’s quality define its economic value?
Absolutely not. Bad patents, however you
Q
Warren Woessner Schwegman, Lundberg & Woessner; [email protected]
Ask the Experts
Q
What role can IP professionals have on maintaining patent quality?
Any steps should be taken to increase a patent’s simplicity, clarity and lack of ambiguity in the drafting of its claims. Though it may seem trivial, giving enough time for whoever is writing the patent to do so in an unpressured manner and with the full and unstinting cooperation of the inventor(s) is probably more important than anything else.
How would you deconstruct the concept of patent quality?
Patent quality is a result of a synergistic relationship between the inventors, the patent attorney and the Patent Office. The reward is the grant of a right to exclude copying the claimed invention or an equivalent for a set period of time. The claims of the patent define the right to exclude, and need to be the result of a balancing act between the inventor and the Patent Office Examiner. While the patent attorney is an advocate for the inventor/applicant, the attorney must often be a moderator between inventors who want to ‘claim the world’ and examiners who feel it is in their job description to block the issuance of any patents.
Q
What are the responsibilities of the patent attorney when filing a patent claim?
The main responsibility is to ‘protect the invention’, even if that means obtaining relatively focused claims. The attorney must also become sufficiently familiar with the technology to be able to assess whether or not the invention is in a ‘crowded’ area of research in which broad claims are unlikely to be valid, or in a new or emerging area of technology in which broad claims can be both obtained and defended. I have been fortunate to have worked on some frontier technologies, such as genetically modified
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define them, are not challenged unless someone wants to use the products or processes that they purport to cover, and even the apparently best and highest quality patents will be challenged where they block a competitor’s or generic manufacturer’s business plans.
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crops, stem cells and nanotechnology. In extremely early stage technologies, it can be possible to assemble all of the prior art patents and publications in one place. These situations don’t last as a field matures, but they can be extremely valuable to a company seeking to commercialize early stage technology.
Q What considerations need to considered when defining a patent’s scope?
Narrow patent claims do not necessarily label a patent as ‘low quality’, if it protects the appropriate scope of the invention in a
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crowded field. Of course, patent quality is diminished if either the examiner, patent attorney or agent does not have adequate training (e.g., both in the technical area of the application or regarding the legal standards that should be applied in a given factual framework). I have been critical of the Patent Office in the past, because I believe that examiners are not sufficiently trained in basic legal concepts such as burden-ofproof and evidence. Overwork can also be a problem both in the private sector and in the Patent Office. If an examiner does not
Q
have time to do a thorough search of the available literature, and issues overly broad claims, litigation can ensue. On the other hand, an overly cautious examiner can fail to issue claims that may permit a start-up from raising capital to conduct further research. The backlog of applications at the Patent Office is a serious matter, since ‘justice delayed is justice denied’. Small companies have to wait, sometimes for years, to get a full and fair review of their patent applications, particularly from an agency that is entirely funded by user fees.
Is it possible to quantify patent quality?
Patent citations are among the most reliable metrics for assessing patent quality, at least for the underlying invention. Each citation between two patents shows that: the owners of both patents thought that the invention area was valuable enough to invest in patent protection; and a specialist such as a patent examiner or patent owner thought that the two patents were similar. Sophisticated software is able to compile these data to provide metrics on what may be the highest quality patents and patent areas, in effect drawing upon the ‘collective wisdom’ of the applicants and examiners in the field. Invention quality can be objectively assessed by suitable metrics such as citation analysis. Furthermore, a competent patent attorney should be able to make a competent and professional assessment of the legal quality (i.e., claim scope, claim quality, enablement, etc.) of a patent. When such legal quality assessment is combined with the competent assessment of the quality of the invention, total quality can be determined in a meaningful way.
Q
In 2012, China’s State IPO granted more patents than any other patent office. What impact does this have globally on patent quality?
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Griffith Hack; [email protected]
Q
What factors lead to patent quality being diminished?
It can diminish when examiners accept claims in patents that travel beyond the scope of the underlying invention, and/or have not fully considered the prior art base. Weak inventions in low value areas, and bad drafting (e.g., unsupported claims or unnecessarily limited claims) can also affect patent quality.
Q Looking to the future, what steps could be taken to maintain patent quality?
Invention quality will depend on the ingenuity of medical and pharmaceutical scientists, and hopefully will continue or grow from the current high levels. Patent attorneys will continue to do their best to maximise the interests of their clients, attempting to secure the broadest possible protection for the invention that the prior art base allows. There is also an ongoing role for patent examiners to ensure that the granted patent claims do the following: define the
Pharm. Pat. Anal. (2014) 3(1)
Ask the Experts
Many of the patents ‘granted’ in China are utility model patents and, like utility patents in other jurisdictions, are not formally examined before grant. The Chinese Patent Office has a reputation for being very rigorous when examining standard patent applications, and Chinese patents filed outside of China will be examined to the same standard as patents originating from other countries. However, this large quantity of applications is creating a rapidly growing source of patent literature (prior art base) that will form prior art for later patents filed internationally. As Western access to this wealth of prior art improves, we can expect that Chinese patents will increasingly appear in search reports worldwide – just as Japanese patents are often found in non-Japanese search reports.
Mike Lloyd
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underlying invention; are fully supported by the disclosure in the patent; and are novel and inventive over the prior art base (i.e. less likely to be invalidated after grant because of relevant prior art missed during an imperfect prior art search).
Q
How would you define patent quality?
By how well a patent meets basic statutory
requirements for internal validity; that is, whether it pertains to patentable subject matter that is novel, inventive and has real and present industrial applicability; and by how well a patent meets the statutory requirements for external validity; that is, sufficiency, support and clarity – leading to certainty of the scope of claims, which are unlikely to be invalidated if opposed.
Financial & competing interests disclosure M Lloyd is an employee of Griffith Hack, which has invested in Ambercite, which has developed tools for citation analysis. The interviewee has no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed. No writing assistance was utilized in the production of this manuscript.
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Amanda Odell-West The University of Manchester; amanda.odell-west@ manchester.ac.uk
Why does patent quality matter?
Increasingly complex biotech/pharmaceutical patent applications require more time to assess properly, yet pressures on overburdened examiners mean that patents of dubious quality are more likely to be granted. Boiler-plate drafting (the practice of filing a patent with long lists of conditions and activities and subsequently relying on the few that are confirmed or demonstrated) and otherwise poor quality patents impose deadweight losses on industry by deterring areas of valid research and increasing the need to engage in costly litigation to knock out (what are frequently) invalid patents. The right to health is enshrined by Article 25 of the Universal Declaration of Human Rights and Article 12 of the International Covenant on Economic, Social and Cultural Rights. There is concomitant, overwhelming public interest in a flourishing research and development environment for all fields relating to health care. As these sectors are usually heavily dependent on patent protection, it is necessary to monitor and contain the problem of poor patent quality, with a view to its eradication.
Q
What comments can be made about global patenting trends?
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In a recent economic study (‘Economic Study on patent backlogs and a system of mutual recognition, London Economics, January 2012), it was reported that the SIPO, the IIPO and the KIPO have experienced extremely high rates of growth in patent applications. Resulting backlogs lead to declines in patent quality as patent offices’ resources are increasingly stretched (London Economics). Backlogs at the trilateral and many other national patent offices and the granting of poor-quality patents are phenomena actively being investigated in a number of jurisdictions. An open letter from a coalition of the professional patent associations have urged the heads of
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the US, European, German, Canadian and Australian patent offices to remove any bias with respect to patent grant through reporting, rating or incentive systems. With respect to China it has recently been reported that the IPO of Hebei Province (China) has issued plans to restrict and punish ‘abnormal and bad-faith’ patent applications. Applicants deemed to have made an ‘abnormal’ application by SIPO will be required to pay back any subsidies or financial aids issued by local governments in Hebei and be disqualified from receiving patent subsidies, or monetary support for 2 years. Patent agencies in Hebei Province are also requested to ‘work in an ethical manner and resist bad faith patent applications’ (China IP Newsletter Issue 7, 2013).
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Q How will patent quality be maintained in the future?
In short, effort will be required on the part of both users and examiners. Users should avoid bad faith strategies that seek, for example, to delay examination for as long as possible (e.g., by drafting poor-quality applications with obfuscated claims). Arguably the most effective way to maintain consistent patent quality lies in large
part with the granting offices. The coalition of patent examiner representatives in their 2007 open letter forcibly make the point that quality examination requires skilled, well-trained and motivated examiners, powerful and efficient search and examination tools – and the time to do the job properly; all arguments that remain crucially relevant, but pivotal on supportive government policy.
Q What defines patent quality & how is it measured?
In any jurisdiction, patent quality is inexorably linked to the claimed subject matter. The value attributed to a patent is based on the continued protection of that monopoly. The most legally watertight patent has no quality (in terms of value) if it has no commercial value to the patent proprietor/licensee because it doesn’t cover the relevant commercial product or stop third parties producing a competing product in the relevant jurisdiction. Different proprietors often have different quality measures, including: extent to which claims are supported by experimental data or claims that have survived robust search and examination by thorough offices. Ultimately a patent is a commercial tool and its quality should be measured as such.
Q
Is the notion of ‘patent quality’ too subjective?
Yes, because ‘quality’ is subject to mis interpretation without clear communication about what ‘quality’ means for any particular patent. One proprietor could view a narrow US patent as high quality because they exclusively make and sell the patented product, and their in-house expertise makes it impossible for others to make that product at viable cost. Another proprietor may view a broad patent with claims that are not well supported as high quality, because until those claims are challenged and narrowed, the patent has high deterrent-value. Hence, the perceived quality is inextricably linked with the commercial ambitions of the patentee and its competitors. Why is it important to measure patent quality within the context of pharmaceutical & medical sciences?
Patents protecting commercial pharma ceutical products have tremendous impact on share prices in this sector because of the high values of the associated products. This impact is evidenced by the ‘patent-cliff ’. Effective measures for
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Harrison Goddard Foote LLP; [email protected]
‘quality’ of any particular patent application enable IP and commercial managers to build reasonable and robust product lifecycle financial projections. These projections are based on, and risk assessments, inter alia, influenced by the quality of the patent. These projections are needed to support sales and marketing teams and dictate the timing and spread of product launches.
Q What are your thoughts on the variance in the quality of patents globally?
While patents granted after search and examination by any office must be given a notional ‘quality’ value, patents issued following a basic registration process will have a lower notional quality value than those being issued following a rigorous examination process. Larger applicants know this and factor it into their commercial strategies and valuations. However, as more patent offices are communicating and sharing information with each other during the examination process, there is an overall raising of the bar for subject matter to qualify for patent protection. A particular example of this is the cooperation between the EPO, USPTO and JPO.
Pharm. Pat. Anal. (2014) 3(1)
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Q
Jonathan Atkinson
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Thus, we can perhaps cautiously look forward to a more level playing field and more inter-jurisdictional consistency in the major territories in the future. The only complicating factor is that in an ever-changing economic environment there will always be political pressures that may cause one state to alter patent provisions.
Q
What is the relationship between quality & value?
Quality alone cannot exclusively define the economic value of any particular
patent. This is because the market value of the monopoly will be dependent upon factors independent of the IP. For example, factors such as: market size and anticipated market-share; legal (FTO) or regulatory (MA) barriers to market entry; or whether the anticipated lifecycle of the proposed product is long enough to justify the patent costs (FMCG), all contribute to the economic value. Similarly, the existence or otherwise of competitor products and/or patents will have a bearing on the value of a company’s own patent.
Q In the context of medical & pharmaceutical sciences, what are the key measures of patent quality?
Tahir Amin I-MAK; [email protected]
It depends on the area. In terms of patents relating to small molecules, many of the techniques used would be considered the obvious thing to try. Another aspect is that techniques for screening compounds or coming up with new formulations are often based on other technologies that are patented in their own right and that are the actual inventive aspect to a pharmaceutical product. From that perspective, one measurement would be to look at how pharmaceutical sciences have developed both in terms of how external technologies make drug discovery/formulations much easier than before and to separate that from the actual common general techniques that are obvious to try and that are usually claimed in a patent for most pharmaceutical inventions. Very often patent examiners are not able to separate the two and this is where reform is needed in order to identify what is really the inventive aspect of something versus something that is done over and over again but for the same or a slightly different version of a compound.
Q What impact do scope and number of citations have?
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The scope of the claims in a patent is very important for determining patent quality. Failure to address such an issue can lead to granting the patent holder a far wider exclusivity than he/she deserves, which can have the knock-on effect of deterring others in the field from conducting research on the patented subject matter or creating legal uncertainty for those who wish to enter the field. Citations in a patent document are often misleading as patent applicants often cite patents or non-patent literature, which are often not the most relevant. Because patent examiners don’t have the time to check all the citations for relevance, their worth is nominal. Therefore, citations should not be used
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as an indicator of patent quality for the purpose of patent examination.
Q Looking across numerous jurisdictions what trends can you see?
Even though most western developed countries have similar patent laws in terms of the criteria for assessing patentability, there are variances in terms of the patent examination standards. In the USA for example, it is virtually impossible for the USPTO to reject a patent outright as an applicant can continue to file a modified version of an application after it is refused (known as continuation and divisional applications) until at least he/she obtains some level of protection. Similar systems exist in Europe, but can be more rigorous against such practices than the USA.
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India has taken a different route, taking into account the behaviours of companies in their attempts to extend patent protection over existing substances using common scientific techniques. As such, India’s patent law sets out which substances are considered the same substance and would be deemed not inventive unless the new form of the substance can show some improved therapeutic efficacy over the existing form. However, human examination error exists within all patent office examination procedures and often the letter of the law is not applied, meaning poorer quality patents, which the legislation was intended to curb, get granted. Argentina has guidelines to examiners that set out the list of pharmaceutical subject matters often found in patent application that should be considered prima facie not inventive. This list is based on the common general science techniques that companies use to extend patent life. At the other extreme, countries like South Africa do not even have an examination system, so patents are granted
without any review. There are, however, efforts underway to change this practice in South Africa.
Q
Do you think that a patent’s quality defines its economic value?
Absolutely. A patent that is examined more rigorously (including being open to third party assessment other than patent examiners) before grant is less likely to be litigated and, therefore, be valued more highly economically, including from an investors perspective. Unfortunately, current patent frameworks in many countries that don’t allow for such rigorous examination mean many patents on the book would be invalidated if challenged. What this means is that proprietors can then get away with making significant profits on something that might not have been valid, which has the knock-on effect of passing the costs to consumers as patented products often attract higher prices. This ultimately leads to a kind of false economy from which only a few gain and the consumers lose out.
Q What influence has the drafting & examination process had on the resultant quality of the patent?
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Pharm. Pat. Anal. (2014) 3(1)
Kirsteen Gordon Marks & Clerk LLP; [email protected]
Ask the Experts
The drafting of the patent is critical to its quality since it is during drafting that the novel and inventive concept is defined. Additionally, if a patent is challenged pre- or post-grant, the drafting determines what amendments can be made to the definition of the concept setting out the monopoly right. The quality of the drafting is reflected in a number of ways including: clear main claims that define the new and inventive concept (i.e., they are neither too broad, nor too narrow); the provision of a wide range of different, and at least to some extent tiered, fall back positions (sometimes referred to as intermediate positions); for many pharmaceutical patents, the provision of appropriate Markush formulae; specific disclosure of the core invention (e.g., most active compounds); and the inclusion of claims of all possible claim categories and in most cases a reasonable number of dependent claims covering key preferred features. Most high-quality pharmaceutical patents will also contain a detailed examples section including, for instance, data demonstrating the claimed technical effect, data representative of the claim scope and comparisons against prior art. The quality of examination is perhaps best measured by comparing the claim scope granted in equivalent patents in a number of different jurisdictions (i.e., benchmarking). If claims of similar scope are granted in a number of jurisdictions, this increases the likelihood that the claims are valid, especially if the family encompasses countries having different official languages. A review of the examination file wrapper also provides a qualitative measure of the thoroughness of examination. It can, for example, reveal whether an examiner has properly understood an invention and applied the prior art appropriately. Assessing the outcome of third-party challenges against patents may also be
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informative of the thoroughness of examination before any given patent office since third parties often have the ability to invest considerably more time and expense in searching for prior art. Few patents are, however, challenged and hence measured in this way.
Q
What contributions do scope, family size, number of claims & citations make?
The claim scope per se is not a measure of quality. Patents covering incremental inventions inevitably have narrower scope than patents covering ground-breaking inventions, but both could be high- or low-quality patents. However, the claim scope, as measured against the novel and inventive contribution made to the art by the inventors, is critical in defining patent quality. The number of claims may provide a loose measure of the drafting quality since patents covering all possible claim categories and including a wide range of useful fall-back positions usually have a reasonable number of claims, but care needs to be taken here since many useful fall backs may simply be incorporated into the description and not claimed, particularly as many jurisdictions now impose significant excess claims fees. Similarly, the number of citations identified during examination may provide a loose measure of the quality of examination, but again care needs to be taken since the relevance of the citations is much more critical. The number of forward citations (i.e., those citing the patent in question) is mainly a measure of the quality of the invention per se and is skewed by, for example, large filers who have a policy of citing their own prior art. A larger family size means that more equivalent patents undergo examination before patent offices, but family size is more a measure of how important a patent is to its owner and its likely quality is only one of a number of factors determining its importance.
Q What other factors impact quality?
In my view, the largest challenge facing examiners is conducting patent searches to identify relevant prior art. Prior art may be in any language, but few, if any, databases include full-text translations of a number of languages in which vast numbers of publications occur (e.g., Japanese, Chinese, Korean and Russian to name a few). Examiners also tend to have a limited amount of time to complete examination of any given case and, therefore, are under time pressure to complete the search and then apply the art identified. This pressure increases as backlogs grow. The recruitment of enough technically proficient examiners also seems to be challenging, particularly when language requirements are also imposed. Typical factors that impact on the quality of patent drafting include a lack of data at the time of the drafting process, often because the application is filed very early in development. This can impact on the ultimate patent quality because, for example, suitable fall backs might be absent in the application as filed so during examination the claims have to be restricted unnecessarily. A lack of wide-ranging data can sometimes lead to otherwise unnecessary restriction of the claims because of lack of evidence across the claim scope for the effect alleged to confer the inventive step. Lack of time and a proper budget to prepare patent applications can also adversely affect the drafting quality.
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Disclaimer The opinions expressed in this article are those of the interviewees and do not necessarily reflect the views of Future Science Ltd.
Financial & competing interests disclosure Other than the financial & competing interests disclosure for M Lloyd, the interviewees have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed. No writing assistance was utilized in the production of this manuscript.
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Patent quality Against a backdrop of a rising generics market and increasing patent expiries, the ‘quality’ of patents has become an ever more significant topic of debate. Pharmaceutical Patent Analyst has brought together a group of leading attorneys and IP specialists to disentangle the issue of patent quality, including its definition and importance to the field of pharmaceutical and medical science, and what steps could be taken to improve understanding of this important yet fluid concept. Interviews conducted by Alexandra Sklan, Commissioning Editor
Q
How would you define the concept of patent quality?
A high-quality patent is an application with a well researched, and detailed specification that provides examples of each of the embodiments of the invention. Based on a reasonable prior art search, the claims reflect the appropriate depth and breadth of the invention and are supported by the specification. Understanding claim boundaries based on knowledge of the prior art and based on the potential of the invention is key. Anthony Trippe Patinformatics, LLC; [email protected]
Q How important is a patent’s scope in defining its quality?
For the sake of this discussion, let’s say that scope is measured by looking at the family size, number of claims and citations associated with the patent of interest. Looking at these measures, number of citations is likely more a measure of popularity than it is quality. Just like the idea that the most popular student on campus might not be the highest quality individual. In a similar fashion, number of claims, and family size are indicators of investment, and interest, but don’t necessarily reflect a high-quality patent. Ultimately, quality should probably be based on the likelihood of standing up in litigation, and that is about claim scope, based on prior art, and how well the claims are supported by the specification.
Q
Is the term ‘patent quality’ too subjective as to be meaningful?
Q
Does a patent’s quality define its economic value?
Absolutely. By most measures a small percentage of patents are represented in commercial products, and a small percentage of that small percentage are ever challenged in court. If examiners are provided with sufficient time and resources to conduct a reasonable examination, and post-grant review proceedings are taken advantage of, than the issues will sort themselves out accordingly. Under these conditions only the patents that deserve special attention, based on their economic potential, will receive extra consideration.
Ask the Experts
Yes, but it is only one component of the total valuation picture. It is possible to have a very high-quality patent with no economic impact since the corresponding invention cannot be applied to a commercial product. At the same time, a poorly written patent, reading on a large market opportunity is not worth very much in the long run, especially as businesses become accustomed to dealing with these documents. The combination of high quality, and high economic impact form the basis of a high patent valuation.
10.4155/PPA.13.74 © 2014 Future Science Ltd
Pharm. Pat. Anal. (2014) 3(1), 17–24
ISSN 2046-8954
17
Q
Why is it important to measure patent quality?
The criteria of novelty and inventive step, both of which are related to an assessment of a patent against prior art that may be unknown at the time of the application, can destroy the validity and hence the commercial value of any patent, and may also reduce the value of the product or process disclosed to the pharmaceutical and medical communities. Jeremy Philips Queen Mary Intellectual Property Research Institute; [email protected]
Q
Does patent quality vary from jurisdiction to jurisdiction?
Much less than it used to, at least to the extent that quality is a function of the search and examination process leading to a grant. The internet has proved to be a great equalizer where access to relevant prior art is concerned, so even those granting offices that do not co-operate with others at any level are more likely to achieve similar outcomes. A bigger issue is the real or imagined vulnerability of granting authorities and courts to political and economic pressures: Gleevec® in India is a case in point.
Q
Does a patent’s quality define its economic value?
Absolutely not. Bad patents, however you
Q
Warren Woessner Schwegman, Lundberg & Woessner; [email protected]
Ask the Experts
Q
What role can IP professionals have on maintaining patent quality?
Any steps should be taken to increase a patent’s simplicity, clarity and lack of ambiguity in the drafting of its claims. Though it may seem trivial, giving enough time for whoever is writing the patent to do so in an unpressured manner and with the full and unstinting cooperation of the inventor(s) is probably more important than anything else.
How would you deconstruct the concept of patent quality?
Patent quality is a result of a synergistic relationship between the inventors, the patent attorney and the Patent Office. The reward is the grant of a right to exclude copying the claimed invention or an equivalent for a set period of time. The claims of the patent define the right to exclude, and need to be the result of a balancing act between the inventor and the Patent Office Examiner. While the patent attorney is an advocate for the inventor/applicant, the attorney must often be a moderator between inventors who want to ‘claim the world’ and examiners who feel it is in their job description to block the issuance of any patents.
Q
What are the responsibilities of the patent attorney when filing a patent claim?
The main responsibility is to ‘protect the invention’, even if that means obtaining relatively focused claims. The attorney must also become sufficiently familiar with the technology to be able to assess whether or not the invention is in a ‘crowded’ area of research in which broad claims are unlikely to be valid, or in a new or emerging area of technology in which broad claims can be both obtained and defended. I have been fortunate to have worked on some frontier technologies, such as genetically modified
18
define them, are not challenged unless someone wants to use the products or processes that they purport to cover, and even the apparently best and highest quality patents will be challenged where they block a competitor’s or generic manufacturer’s business plans.
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crops, stem cells and nanotechnology. In extremely early stage technologies, it can be possible to assemble all of the prior art patents and publications in one place. These situations don’t last as a field matures, but they can be extremely valuable to a company seeking to commercialize early stage technology.
Q What considerations need to considered when defining a patent’s scope?
Narrow patent claims do not necessarily label a patent as ‘low quality’, if it protects the appropriate scope of the invention in a
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crowded field. Of course, patent quality is diminished if either the examiner, patent attorney or agent does not have adequate training (e.g., both in the technical area of the application or regarding the legal standards that should be applied in a given factual framework). I have been critical of the Patent Office in the past, because I believe that examiners are not sufficiently trained in basic legal concepts such as burden-ofproof and evidence. Overwork can also be a problem both in the private sector and in the Patent Office. If an examiner does not
Q
have time to do a thorough search of the available literature, and issues overly broad claims, litigation can ensue. On the other hand, an overly cautious examiner can fail to issue claims that may permit a start-up from raising capital to conduct further research. The backlog of applications at the Patent Office is a serious matter, since ‘justice delayed is justice denied’. Small companies have to wait, sometimes for years, to get a full and fair review of their patent applications, particularly from an agency that is entirely funded by user fees.
Is it possible to quantify patent quality?
Patent citations are among the most reliable metrics for assessing patent quality, at least for the underlying invention. Each citation between two patents shows that: the owners of both patents thought that the invention area was valuable enough to invest in patent protection; and a specialist such as a patent examiner or patent owner thought that the two patents were similar. Sophisticated software is able to compile these data to provide metrics on what may be the highest quality patents and patent areas, in effect drawing upon the ‘collective wisdom’ of the applicants and examiners in the field. Invention quality can be objectively assessed by suitable metrics such as citation analysis. Furthermore, a competent patent attorney should be able to make a competent and professional assessment of the legal quality (i.e., claim scope, claim quality, enablement, etc.) of a patent. When such legal quality assessment is combined with the competent assessment of the quality of the invention, total quality can be determined in a meaningful way.
Q
In 2012, China’s State IPO granted more patents than any other patent office. What impact does this have globally on patent quality?
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Griffith Hack; [email protected]
Q
What factors lead to patent quality being diminished?
It can diminish when examiners accept claims in patents that travel beyond the scope of the underlying invention, and/or have not fully considered the prior art base. Weak inventions in low value areas, and bad drafting (e.g., unsupported claims or unnecessarily limited claims) can also affect patent quality.
Q Looking to the future, what steps could be taken to maintain patent quality?
Invention quality will depend on the ingenuity of medical and pharmaceutical scientists, and hopefully will continue or grow from the current high levels. Patent attorneys will continue to do their best to maximise the interests of their clients, attempting to secure the broadest possible protection for the invention that the prior art base allows. There is also an ongoing role for patent examiners to ensure that the granted patent claims do the following: define the
Pharm. Pat. Anal. (2014) 3(1)
Ask the Experts
Many of the patents ‘granted’ in China are utility model patents and, like utility patents in other jurisdictions, are not formally examined before grant. The Chinese Patent Office has a reputation for being very rigorous when examining standard patent applications, and Chinese patents filed outside of China will be examined to the same standard as patents originating from other countries. However, this large quantity of applications is creating a rapidly growing source of patent literature (prior art base) that will form prior art for later patents filed internationally. As Western access to this wealth of prior art improves, we can expect that Chinese patents will increasingly appear in search reports worldwide – just as Japanese patents are often found in non-Japanese search reports.
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underlying invention; are fully supported by the disclosure in the patent; and are novel and inventive over the prior art base (i.e. less likely to be invalidated after grant because of relevant prior art missed during an imperfect prior art search).
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How would you define patent quality?
By how well a patent meets basic statutory
requirements for internal validity; that is, whether it pertains to patentable subject matter that is novel, inventive and has real and present industrial applicability; and by how well a patent meets the statutory requirements for external validity; that is, sufficiency, support and clarity – leading to certainty of the scope of claims, which are unlikely to be invalidated if opposed.
Financial & competing interests disclosure M Lloyd is an employee of Griffith Hack, which has invested in Ambercite, which has developed tools for citation analysis. The interviewee has no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed. No writing assistance was utilized in the production of this manuscript.
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Amanda Odell-West The University of Manchester; amanda.odell-west@ manchester.ac.uk
Why does patent quality matter?
Increasingly complex biotech/pharmaceutical patent applications require more time to assess properly, yet pressures on overburdened examiners mean that patents of dubious quality are more likely to be granted. Boiler-plate drafting (the practice of filing a patent with long lists of conditions and activities and subsequently relying on the few that are confirmed or demonstrated) and otherwise poor quality patents impose deadweight losses on industry by deterring areas of valid research and increasing the need to engage in costly litigation to knock out (what are frequently) invalid patents. The right to health is enshrined by Article 25 of the Universal Declaration of Human Rights and Article 12 of the International Covenant on Economic, Social and Cultural Rights. There is concomitant, overwhelming public interest in a flourishing research and development environment for all fields relating to health care. As these sectors are usually heavily dependent on patent protection, it is necessary to monitor and contain the problem of poor patent quality, with a view to its eradication.
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What comments can be made about global patenting trends?
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In a recent economic study (‘Economic Study on patent backlogs and a system of mutual recognition, London Economics, January 2012), it was reported that the SIPO, the IIPO and the KIPO have experienced extremely high rates of growth in patent applications. Resulting backlogs lead to declines in patent quality as patent offices’ resources are increasingly stretched (London Economics). Backlogs at the trilateral and many other national patent offices and the granting of poor-quality patents are phenomena actively being investigated in a number of jurisdictions. An open letter from a coalition of the professional patent associations have urged the heads of
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the US, European, German, Canadian and Australian patent offices to remove any bias with respect to patent grant through reporting, rating or incentive systems. With respect to China it has recently been reported that the IPO of Hebei Province (China) has issued plans to restrict and punish ‘abnormal and bad-faith’ patent applications. Applicants deemed to have made an ‘abnormal’ application by SIPO will be required to pay back any subsidies or financial aids issued by local governments in Hebei and be disqualified from receiving patent subsidies, or monetary support for 2 years. Patent agencies in Hebei Province are also requested to ‘work in an ethical manner and resist bad faith patent applications’ (China IP Newsletter Issue 7, 2013).
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Q How will patent quality be maintained in the future?
In short, effort will be required on the part of both users and examiners. Users should avoid bad faith strategies that seek, for example, to delay examination for as long as possible (e.g., by drafting poor-quality applications with obfuscated claims). Arguably the most effective way to maintain consistent patent quality lies in large
part with the granting offices. The coalition of patent examiner representatives in their 2007 open letter forcibly make the point that quality examination requires skilled, well-trained and motivated examiners, powerful and efficient search and examination tools – and the time to do the job properly; all arguments that remain crucially relevant, but pivotal on supportive government policy.
Q What defines patent quality & how is it measured?
In any jurisdiction, patent quality is inexorably linked to the claimed subject matter. The value attributed to a patent is based on the continued protection of that monopoly. The most legally watertight patent has no quality (in terms of value) if it has no commercial value to the patent proprietor/licensee because it doesn’t cover the relevant commercial product or stop third parties producing a competing product in the relevant jurisdiction. Different proprietors often have different quality measures, including: extent to which claims are supported by experimental data or claims that have survived robust search and examination by thorough offices. Ultimately a patent is a commercial tool and its quality should be measured as such.
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Is the notion of ‘patent quality’ too subjective?
Yes, because ‘quality’ is subject to mis interpretation without clear communication about what ‘quality’ means for any particular patent. One proprietor could view a narrow US patent as high quality because they exclusively make and sell the patented product, and their in-house expertise makes it impossible for others to make that product at viable cost. Another proprietor may view a broad patent with claims that are not well supported as high quality, because until those claims are challenged and narrowed, the patent has high deterrent-value. Hence, the perceived quality is inextricably linked with the commercial ambitions of the patentee and its competitors. Why is it important to measure patent quality within the context of pharmaceutical & medical sciences?
Patents protecting commercial pharma ceutical products have tremendous impact on share prices in this sector because of the high values of the associated products. This impact is evidenced by the ‘patent-cliff ’. Effective measures for
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Harrison Goddard Foote LLP; [email protected]
‘quality’ of any particular patent application enable IP and commercial managers to build reasonable and robust product lifecycle financial projections. These projections are based on, and risk assessments, inter alia, influenced by the quality of the patent. These projections are needed to support sales and marketing teams and dictate the timing and spread of product launches.
Q What are your thoughts on the variance in the quality of patents globally?
While patents granted after search and examination by any office must be given a notional ‘quality’ value, patents issued following a basic registration process will have a lower notional quality value than those being issued following a rigorous examination process. Larger applicants know this and factor it into their commercial strategies and valuations. However, as more patent offices are communicating and sharing information with each other during the examination process, there is an overall raising of the bar for subject matter to qualify for patent protection. A particular example of this is the cooperation between the EPO, USPTO and JPO.
Pharm. Pat. Anal. (2014) 3(1)
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Jonathan Atkinson
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Thus, we can perhaps cautiously look forward to a more level playing field and more inter-jurisdictional consistency in the major territories in the future. The only complicating factor is that in an ever-changing economic environment there will always be political pressures that may cause one state to alter patent provisions.
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What is the relationship between quality & value?
Quality alone cannot exclusively define the economic value of any particular
patent. This is because the market value of the monopoly will be dependent upon factors independent of the IP. For example, factors such as: market size and anticipated market-share; legal (FTO) or regulatory (MA) barriers to market entry; or whether the anticipated lifecycle of the proposed product is long enough to justify the patent costs (FMCG), all contribute to the economic value. Similarly, the existence or otherwise of competitor products and/or patents will have a bearing on the value of a company’s own patent.
Q In the context of medical & pharmaceutical sciences, what are the key measures of patent quality?
Tahir Amin I-MAK; [email protected]
It depends on the area. In terms of patents relating to small molecules, many of the techniques used would be considered the obvious thing to try. Another aspect is that techniques for screening compounds or coming up with new formulations are often based on other technologies that are patented in their own right and that are the actual inventive aspect to a pharmaceutical product. From that perspective, one measurement would be to look at how pharmaceutical sciences have developed both in terms of how external technologies make drug discovery/formulations much easier than before and to separate that from the actual common general techniques that are obvious to try and that are usually claimed in a patent for most pharmaceutical inventions. Very often patent examiners are not able to separate the two and this is where reform is needed in order to identify what is really the inventive aspect of something versus something that is done over and over again but for the same or a slightly different version of a compound.
Q What impact do scope and number of citations have?
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The scope of the claims in a patent is very important for determining patent quality. Failure to address such an issue can lead to granting the patent holder a far wider exclusivity than he/she deserves, which can have the knock-on effect of deterring others in the field from conducting research on the patented subject matter or creating legal uncertainty for those who wish to enter the field. Citations in a patent document are often misleading as patent applicants often cite patents or non-patent literature, which are often not the most relevant. Because patent examiners don’t have the time to check all the citations for relevance, their worth is nominal. Therefore, citations should not be used
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as an indicator of patent quality for the purpose of patent examination.
Q Looking across numerous jurisdictions what trends can you see?
Even though most western developed countries have similar patent laws in terms of the criteria for assessing patentability, there are variances in terms of the patent examination standards. In the USA for example, it is virtually impossible for the USPTO to reject a patent outright as an applicant can continue to file a modified version of an application after it is refused (known as continuation and divisional applications) until at least he/she obtains some level of protection. Similar systems exist in Europe, but can be more rigorous against such practices than the USA.
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India has taken a different route, taking into account the behaviours of companies in their attempts to extend patent protection over existing substances using common scientific techniques. As such, India’s patent law sets out which substances are considered the same substance and would be deemed not inventive unless the new form of the substance can show some improved therapeutic efficacy over the existing form. However, human examination error exists within all patent office examination procedures and often the letter of the law is not applied, meaning poorer quality patents, which the legislation was intended to curb, get granted. Argentina has guidelines to examiners that set out the list of pharmaceutical subject matters often found in patent application that should be considered prima facie not inventive. This list is based on the common general science techniques that companies use to extend patent life. At the other extreme, countries like South Africa do not even have an examination system, so patents are granted
without any review. There are, however, efforts underway to change this practice in South Africa.
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Do you think that a patent’s quality defines its economic value?
Absolutely. A patent that is examined more rigorously (including being open to third party assessment other than patent examiners) before grant is less likely to be litigated and, therefore, be valued more highly economically, including from an investors perspective. Unfortunately, current patent frameworks in many countries that don’t allow for such rigorous examination mean many patents on the book would be invalidated if challenged. What this means is that proprietors can then get away with making significant profits on something that might not have been valid, which has the knock-on effect of passing the costs to consumers as patented products often attract higher prices. This ultimately leads to a kind of false economy from which only a few gain and the consumers lose out.
Q What influence has the drafting & examination process had on the resultant quality of the patent?
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Pharm. Pat. Anal. (2014) 3(1)
Kirsteen Gordon Marks & Clerk LLP; [email protected]
Ask the Experts
The drafting of the patent is critical to its quality since it is during drafting that the novel and inventive concept is defined. Additionally, if a patent is challenged pre- or post-grant, the drafting determines what amendments can be made to the definition of the concept setting out the monopoly right. The quality of the drafting is reflected in a number of ways including: clear main claims that define the new and inventive concept (i.e., they are neither too broad, nor too narrow); the provision of a wide range of different, and at least to some extent tiered, fall back positions (sometimes referred to as intermediate positions); for many pharmaceutical patents, the provision of appropriate Markush formulae; specific disclosure of the core invention (e.g., most active compounds); and the inclusion of claims of all possible claim categories and in most cases a reasonable number of dependent claims covering key preferred features. Most high-quality pharmaceutical patents will also contain a detailed examples section including, for instance, data demonstrating the claimed technical effect, data representative of the claim scope and comparisons against prior art. The quality of examination is perhaps best measured by comparing the claim scope granted in equivalent patents in a number of different jurisdictions (i.e., benchmarking). If claims of similar scope are granted in a number of jurisdictions, this increases the likelihood that the claims are valid, especially if the family encompasses countries having different official languages. A review of the examination file wrapper also provides a qualitative measure of the thoroughness of examination. It can, for example, reveal whether an examiner has properly understood an invention and applied the prior art appropriately. Assessing the outcome of third-party challenges against patents may also be
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informative of the thoroughness of examination before any given patent office since third parties often have the ability to invest considerably more time and expense in searching for prior art. Few patents are, however, challenged and hence measured in this way.
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What contributions do scope, family size, number of claims & citations make?
The claim scope per se is not a measure of quality. Patents covering incremental inventions inevitably have narrower scope than patents covering ground-breaking inventions, but both could be high- or low-quality patents. However, the claim scope, as measured against the novel and inventive contribution made to the art by the inventors, is critical in defining patent quality. The number of claims may provide a loose measure of the drafting quality since patents covering all possible claim categories and including a wide range of useful fall-back positions usually have a reasonable number of claims, but care needs to be taken here since many useful fall backs may simply be incorporated into the description and not claimed, particularly as many jurisdictions now impose significant excess claims fees. Similarly, the number of citations identified during examination may provide a loose measure of the quality of examination, but again care needs to be taken since the relevance of the citations is much more critical. The number of forward citations (i.e., those citing the patent in question) is mainly a measure of the quality of the invention per se and is skewed by, for example, large filers who have a policy of citing their own prior art. A larger family size means that more equivalent patents undergo examination before patent offices, but family size is more a measure of how important a patent is to its owner and its likely quality is only one of a number of factors determining its importance.
Q What other factors impact quality?
In my view, the largest challenge facing examiners is conducting patent searches to identify relevant prior art. Prior art may be in any language, but few, if any, databases include full-text translations of a number of languages in which vast numbers of publications occur (e.g., Japanese, Chinese, Korean and Russian to name a few). Examiners also tend to have a limited amount of time to complete examination of any given case and, therefore, are under time pressure to complete the search and then apply the art identified. This pressure increases as backlogs grow. The recruitment of enough technically proficient examiners also seems to be challenging, particularly when language requirements are also imposed. Typical factors that impact on the quality of patent drafting include a lack of data at the time of the drafting process, often because the application is filed very early in development. This can impact on the ultimate patent quality because, for example, suitable fall backs might be absent in the application as filed so during examination the claims have to be restricted unnecessarily. A lack of wide-ranging data can sometimes lead to otherwise unnecessary restriction of the claims because of lack of evidence across the claim scope for the effect alleged to confer the inventive step. Lack of time and a proper budget to prepare patent applications can also adversely affect the drafting quality.
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Disclaimer The opinions expressed in this article are those of the interviewees and do not necessarily reflect the views of Future Science Ltd.
Financial & competing interests disclosure Other than the financial & competing interests disclosure for M Lloyd, the interviewees have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed. No writing assistance was utilized in the production of this manuscript.
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