The America Invents Act of 2011 (AIA) created a robust administrative system—the Patent Trial and Appeal Board (PTAB)—that provides a route for challenging the validity of granted patents outside of district courts. Congress determined that administrative adjudication of the validity of initial patent grants could be cheaper and more scientifically accurate than district court adjudication of such validity.
For private economic value per patent, few areas of technology can match the biopharmaceutical industry. This is particularly true for small-molecule drugs. A billion-dollar drug monopoly may be protected from competition by a relatively small number of patents. Accordingly, the social cost of invalid patents—and, by extension, the potential benefit of PTAB review—is particularly acute for small molecule drugs. Conversely, if the PTAB is overly assertive and improperly targets high-quality patents, we may observe problematic reductions in innovation incentives. Thus, empirical research on how PTAB review is functioning in the area of drug patents is important.
To investigate PTAB review of drug patents empirically, this Article uses several novel datasets, which are made publicly available, to study the respective roles of the PTAB and the district courts. Our empirical findings indicate that the PTAB’s role in adjudicating small-molecule patents has been substantially more modest than for other types of patents. Moreover, there is little evidence that the PTAB targets categories of small-molecule patents hat are generally considered high quality. There is also no evidence that the PTAB targets small-molecule patents held by small entities. However, PTAB challenges may not differentiate as finely among different categories of patents as district court challenges. The Article concludes by discussing legal reforms policymakers could implement if they were interested in encouraging a more active role for the PTAB in policing the validity of small-molecule drug patents. The case for these reforms is bolstered by data showing that the PTAB is used more frequently for biologics patents, where litigation currently operates differently than for small molecule drugs. The Article also discusses how ex post determination of drug patent validity at the PTAB could be structured in comparison to more rigorous ex ante patent application examination.
Arti k. Rai et al., Post-Grant Adjudication of Drug Patents: Agency and/or Court?, 37 Berkeley Technology Law Journal 139-169 (2022)
Library of Congress Subject Headings
Patent laws and legislation, Patent practice, Patent suits, Drugs--Patents