The America Invents Act has shifted U.S. patent laws to a “first-to-file” system from a “first-to-invent” system, according to attorney Steven Auvil, chair of the intellectual property practice group at Benesch in Cleveland.
Auvil’s work focuses largely on litigation of intellectual property disputes.
In the interview below, he discusses changes to patent laws that pharmaceutical and medical device executives need to be aware of, and how U.S. medical technology companies can protect their intellectual properties when doing business in China.
In the America Invents Act, are there any big changes that pharma or medical device executives should know about?
Two of the most significant changes associated with the AIA are moving the U.S. from a first-to-invent system to a first-to-file system and expanding what is considered prior art. The first-to-file system under the AIA rewards a second-in-time inventor who files a patent application before the first-in-time inventor. The new law also expands the scope of prior art to include sales and uses outside the U.S. For these reasons, pharma and medical device companies will have to adapt their practices to these new realities.
Any advice for small biotechs when they’re negotiating licensing deals with Big Pharma companies?
In the end, it’s about creating win-win in a deal and memorializing the license in a way that reflects the intent of the parties. For example, licensors want the written agreement to reflect their goal of maximizing licensing revenue associated with the technology while foreclosing any incentive the licensee might have to shelve the technology in favor of a competing technology that it might have access to.
What’s the biggest mistake U.S. medical technology companies make related to the protection of their IP when doing business in China?
The pace of change of the legal system in China is quite dramatic. But it is still not reliable enough to many IP holders, and creativity is required to manage their risk of theft. When working with partners in China, it is best to rely on IP rights created by statute in combination with rights granted by contract law. This belt-and-suspenders approach reduces the risk that IP rights will be abused.
Are there any common missteps you see biotech or device startups make related to protecting their IP?
Some of the more common missteps are failing to secure the rights in the inventions on which the startups are based and failing to develop and execute a thoughtful IP strategy designed to increase the value of the company. The IP is normally the most valuable asset the company owns, and yet it is often given scant attention. Sadly, these problems are often discovered too late, such as when the company is looking for growth capital.
There’s been lots of talk about how the U.S. patent system is a mess. Do you agree with that?
I don’t agree that it’s a mess, but it could be improved. The USPTO was starved of resources for many years, which lead to a shortage of qualified patent examiners to handle ever-increasing growth in patent applications. The America Invents Act was passed in September, and that law brings about major changes in the patent system and new hope that the USPTO will get the resources it so sorely needs.
Auvil will contribute to a panel discussion at MedCity CONVERGE, of which Benesch will be a sponsor. Register now to join Auvil in Philadelphia on July 10. Early bird registration ends tomorrow!