Medical Device Daily Washington Editor

U.S. patent reform has been on Congress’s plate for the past couple of years, but a consensus has been tough to reach, partly because of the range of opinions expressed by the large number of stakeholders (Medical Device Daily, Sept. 11).

The Senate Judiciary Committee recently gave a thumbs-up to S. 1145, but a bevy of voices — including that of the Bush Administration — are less than impressed with several provisions, including one that deals with damages for patent infringement.

There is some question as to whether the bill will get out of the Senate in its current configuration – and also some question as to what would happen to the disputed provisions should the House and Senate be forced to reconcile the differences in their respective bills. The possibility of a White House veto also looms.

The broad strokes of the current generation of patent reform bills find a lot of support among the information technology giants of the day, many of whom make the case that they are subjected to spurious suits that are tantamount to legal blackmail. On the other hand, others argue that lack of patent reform might lead to the same kind of market concentration in IT that was exercised for many decades in automotive engineering by General Motors, Ford and Chrysler.

A large bone of contention arises in connection with Section 4 of S. 1145, which deals with compensation, once infringement is established. Some are of the opinion that damages for the infringed article, when part of a larger product, should be awarded based on the value that the infringed article brought to sales of the entire product.

S. 1145 would allow courts to conduct an analysis to ensure that a reasonable royalty is applied only to the portion of the economic value of the infringing product or process properly attributable to the claimed invention’s specific contribution over the prior art.

Much of the impetus behind patent reform, however, comes from cases seen as being on shaky ground to start with, such as that of Research In Motion (RIM; Waterloo, Ontario, Canada). The holding company that sued RIM, NTP, suffered a setback from the Patent and Trademark Office on the disputed patent shortly after RIM settled out of court, and NTP is seen in some quarters as a patent troll.

The Feb. 4 letter from Nathaniel Wienecke, addressed to Sen. Pat Leahy, the chair of the Senate Judiciary Committee, said that the administration “continues to oppose S. 1145 in its entirety” so long as section 4 of the bill remains as currently written. Wienecke is the assistant secretary for legislative and intergovernmental affairs of the U.S. Department of Commerce.

Section 4, the letter states “would likely lead to less than adequate compensation for many patent holders and could promote infringement.” The administration’s position is also that it is not advisable “to create a statutory directive to courts that requires them to rigidly apply, in all cases, only one of the several broadly accepted factors now evaluated by the courts.”

The letter said that the administration “backed the equitable conduct reform language,” but added the comment that the provisions dealing with post-grant review should be clarified regarding “the threshold standards for access to both the first- and second-window challenges.”

Mark Leahy, executive director of the Medical Device Manufacturers Association (MDMA; Washington), said in a statement that the association “continues to work with Congress and [other] stakeholders to make the necessary improvements to the Patent Reform Act of 2007.”

Leahy said the association believes that in its current form, “the bill will make it easier and cheaper to infringe negatively impacting innovation and investment in many sectors of the U.S. economy” and that MDMA hopes “that the necessary changes are made to strengthen the patent system, not weaken it.”

FDA publishes waiver guidance for IVDs

Home-brewed diagnostics are never brewed in an actual home, but FDA nonetheless has been grappling of late with waivers for these types of assays. The agency has attempted to make clear some of the waiver issues with the Jan. 30 publication of a final guidance.

According to the introduction, the changes include a “greater emphasis on scientifically-based flex studies and validation and/or verification studies linked to the risk assessment for each device.” FDA also acknowledged that in many cases, “reference methods may not be available for every device type,” but any such diagnostics “should be traceable to true reference methods of known accuracy when such methods are available.”

In return for the waivers, however, the agency is going to demand more use of quality control procedures, the document said, and will require more information on the intended users of such diagnostics (i.e., nurses, doctors) as well as the participation of those users during development.

As for the requirement that a device be “simple” in order to qualify for the waiver, FDA said that the process should involve the use of “a fully automated instrument or a unitized, self-contained test,” and should also “use direct, unprocessed specimens,” a list that includes blood from finger-sticks, nasal swabs and throat swabs.

A qualifying test should require “no operator intervention during the analysis steps,” the document noted, and should require no “calibration, interpretation or calculation” by the operator.