Biotechnology Law ReportVol. 40, No. 4 News BriefsFree AccessSelected Developments in Biotechnology Law and the Biotechnology IndustryBy Steven J. ZweigBy Steven J. ZweigSearch for more papers by this authorPublished Online:2 Aug 2021https://doi.org/10.1089/blr.2021.29243.sjzAboutSectionsView articleView PDFView PDF Plus ToolsAdd to favoritesDownload CitationsTrack CitationsPermissions Back To Publication ShareShare onFacebookTwitterLinked InRedditEmail View articleCUREVAC TO APPLY FOR COVID-19 VACCINE USE AUTHORIZATION DESPITE DISAPPOINTING CLINICAL TRIAL RESULTSGerman company CureVac's mRNA COVID-19 vaccine had a surprisingly low efficacy in its clinical trials: only 47 percent. That is essentially half (or less) the efficacy of the Pfizer-BioNTech and Moderna vaccines, despite being created using engineered mRNA, the same as those vaccines. CureVac's chief executive, Franz-Werner Hass, said that trials will continue, looking for more data which (they hope) will improve the results: “We're going to full speed for the final readout,” Dr. Haas said. He also stated that “We are still planning for filing for approval,” initially to the European Medicines Agency. However, industry experts are not mincing words about the impact of these results on the likelihood of approval: “This is pretty devastating for them,” said vaccine-supply expert Jacob Kirkegaard of the Peterson Institute for International Economics, a Washington, D.C.-based think tank.Given that CureVac took a similar road to Pfizer-BioNTech and Moderna but came to a very different destination highlights the uncertainties and investment risks of biotechnology.PROMINENT U.S. DEMOCRATS PUSHING BACK AGAINST THE PHARMACEUTICAL INDUSTRY ON COVID-19 VACCINE PATENT PROTECTION WAIVERS AND DRUG PRICINGThe Biden administration has expressed support for waiving the World Trade Organization's Trade Related Intellectual Property Rights (TRIPS) agreement patent protections for COVID-19 vaccines to (in theory1) make it easier and more affordable for developing nations to acquire vaccine doses. The industry's trade association, Pharmaceutical Research and Manufacturers of America (PhRMA) has pushed back, arguing that waiving patent protection will disincentivize creation of valuable but expensive-to-develop drugs, reduce drug safety, weaken supply chains, and cause confusion and/or conflict between private entities and their public partners, and put its opposition in a recent letter to President Biden.Weakening patent protection is only one of the Biden administration initiatives being opposed by PhRMA: it also opposes the administration's proposal to allow Medicare to negotiate drug pricing with manufacturers, using its enormous buying leverage to lower prices. The industry's opposition is fundamentally based on the same principles as their opposition to weakening patent protection: that reducing drug companies' potential return on investment will reduce the incentive to create new drugs, as well as represent an unfair ex post facto changing of the “rules” under which existing drugs were developed.However, it's not “just” the Biden administration itself that the pharmaceutical industry is getting pushback from: some prominent congressional Democrats are also pushing back against what they characterize as industry greed. Senator Elizabeth Warren (D-MA) is strongly in favor of both waiving COVID-19 patent protection and allowing Medicare to negotiate drug prices. In response to PhRMA's opposition, Senator Warren stated that “While taking credit for the development of new COVID vaccines—which were developed with massive infusions of federal funds—the pharmaceutical industry has not backed off of its efforts to block drug pricing proposals and maintain the status quo,” casting the industry as all-too-willing to take public support—but unwilling to share the fruits of that support.While acknowledging that the industry has lawyers with vastly more experience on issues like these than myself and so my opinion needs to be taken with a grain of salt, I'd still opine that the industry might want to mute its opposition and work with the administration on policies it can live with—since, given the broad support for increasing access to vaccines and lowering drug prices, it's likely that one or both will happen. It may be better to collaborate and have a hand in shaping the outcome than resisting to the end and being denied input.USPTO AMENDING ITS RULES ABOUT THE CONDUCT OF REGISTERED PATENT ATTORNEYS AND AGENTSPatent practice is not like many other areas of the law. For example, non-attorney agents can represent inventors in patenting their inventions. Patent agents need a technical (e.g., engineering) degree and have to pass a “patent bar” exam, but don't need a law degree or admission to a state bar. This makes them generally less expensive than patent lawyers2 and so they are an attractive option for many cost-conscious clients. But there ain't no such thing as a free lunch: in exchange for getting the benefit of non-lawyer salaries or billing rates by using a patent agent instead of an attorney, clients also lose the protection of the ethical and professional rules binding on lawyers—including protection against conflicts of interest.3To address this issue, both for substantive reasons and to improve the “optics” and increase client confident, the U.S. Patent and Trademark Office (USPTO) has amended its rules (effective June 25, 2021) to incorporate provisions from the American Bar Association's (ABA) Rules of Professional Conduct. These changes strengthen protection against conflicts of interest while also increasing the clarity of ethical and professional obligations. Among other things, the change will require everyone practicing before the USPTO, including non-attorney patent agents, to disclose information that creates or at least may create a conflict of interest, such as potentially relevant information regarding the practitioner's employment or the ownership of the firm for which the practitioner works. At the same time that transparency regarding potential conflicts is enhanced, the changes also increase protection for a client's information from disclosure. In addition, the changes will also make it easier for a client to terminate a patent agent's or patent attorney's representation due to misrepresentation by the practitioner or certain other proscribed conduct.FEDERAL CIRCUIT REJECTS A PATENT APPLICATION DUE TO PROSECUTION LACHESRecently (June 1, 2021), the Federal Circuit in Hyatt v. Hirshfeld4 upheld the USPTO's rejection of a patent application due to prosecution laches. Laches is an equitable defense: as Black's Law Dictionary Online defines it, it is negligence or unreasonable delay in enforcing a right, which—coupled with prejudice to another party—can lead to a court denying enforcement even if the party is still within an applicable statute of limitations or similar time limit.5 In Hyatt, the patentee's delay in prosecuting a patent claim against a claimed infringement led to the USPTO denying—and the Federal Circuit upholding that denial—enforcement of the patent against the alleged infringer.The court's decision referred (disapprovingly!) to so-called “submarine patents,” which are patents where the inventor delayed the issuance of the patent by years or even decades, until the market for the patented invention had developed or matured and there were many (or deep-pocketed) infringers to sue. It was the use of the patent system as a sword, not a shield. Submarine patents were a significant issue prior to 1995, when, under the then-in-effect rules, a patent was good for 17 years from the date of issuance—but that issuance could be delayed by filing “continuation applications” claiming priority to an earlier application.6 Gilbert Hyatt filed 381 applications shortly before the law changed on June 8, 1995. The Hyatt case involved four such just-before-the-law-changed patents. The applications were, by any reasonable measure, excessively long: rather than the typical 20 to 30 pages, his applications ran 278 to 641 pages and incorporated 115,000 claims (45,000 of them independent claims). There were a myriad of other complexities besides sheer length to Hyatt's applications. In addition, Hyatt was allegedly not forthcoming or responsive to the USPTO about several issues, interjecting further delays in already long, complex applications, and therefore ensuring that they would not issue until a future date, effectively making them disfavored submarine patents.The USPTO eventually denied Hyatt's applications and Hyatt appealed. He won at the trial court level even though the USPTO raised (among other things) prosecution laches, but then lost at the Federal Circuit. The Federal Circuit concluded that “Hyatt adopted an approach to prosecution that all but guaranteed indefinite prosecution delay. … All of the above patterns of prosecution conduct created a perfect storm that overwhelmed the PTO” causing delays in resolving the applications.However, delay by itself, no matter how egregious, is not enough to trigger laches: there must also be prejudice to some other party(ies). The Federal Court, however, clearly did not want Hyatt to be rewarded for his behavior, as it found that “where a patent applicant has committed a clear abuse of the PTO's patent examination system, the applicant's abuse and its effects meet the prejudice requirement of prosecution laches”—that is, abusive-enough delay becomes prima facie prejudice. While the case was remanded so that Hyatt could have the opportunity to try and show that the delays and other challenges were innocent, the Federal Circuit put its thumb on the side of the scale denying Hyatt's application, further stating that “We can divine no reason in the record currently before the court that would suffice . … ”The facts in Hyatt are fairly sui generis and unlikely to be replicated, especially given they would only potentially apply to other applications still pending from 1995 or earlier—an entire generation ago. But that said, Hyatt more broadly can be read as standing for the proposition that playing games with the system or delaying prosecution for strategic reasons can result in an ostensibly within-time matter being dismissed or denied on equitable grounds.1 “In theory” because biotech-derived vaccines are very complex to manufacture: it's not enough having the right to produce them and the specifications from the patent; significant scientific and technical expertise and expensive facilities are also required. This means that the gains from waiving patent protection, in terms of increasing the supply of and access to vaccines, may be significantly less than hoped. To analogize: if you gave the author Bobby Flay's recipes, he still would not be able to duplicate Flay's results without Flay's training, years of experience, sous chef assistants, top-notch ingredients, and access to a professional-grade kitchen.2 Patent lawyers, in contrast, need all of the following: a law degree; admission to at least one state bar; technical credentials; and to also pass the patent bar exam. Thus, they have more, and more specialized, credentials than most attorneys, and so tend to be more expensive than even run-of-the-mill lawyers.3 The U.S. Patent and Trademark Office (USPTO) has its own set of Rules of Professional Conduct, found at 37 C.F.R. § 11, but they are not as comprehensive as attorney (e.g., state bar) rules against conflicts of interest.4 No. 18-2390 (Fed Cir. June 1, 2021), http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/18-2390.OPINION.6-1-2021_1784662.pdf5 What Is Laches?, The Law Dictionary, https://thelawdictionary.org/laches/6 Post 1995, the law was changed so that U.S. patents are good for 20 years from the date of the initial priority filing, effectively preventing applicants from continuing to punt issuance of their patent down the road.FiguresReferencesRelatedDetails Volume 40Issue 4Aug 2021 InformationCopyright 2021, Mary Ann Liebert, Inc., publishersTo cite this article:By Steven J. Zweig.Biotechnology Law Report.Aug 2021.219-221.http://doi.org/10.1089/blr.2021.29243.sjzPublished in Volume: 40 Issue 4: August 2, 2021Online Ahead of Print:July 9, 2021