• The Coming Increased Transparency in Pharmaceutical Pricing in the United States?

    Pharmaceutical pricing has been viewed as a black box type of affair.  However, a recent Wall Street Journal article authored by Jonathan D. Rockoff titled “How Pfizer Set the Costof Its New Drug at $9,850 a Month” reveals some of the process for at least one drug.  The author essentially observes that the process was mostly influenced by the price of other comparable drugs, the reaction of prescribing doctors to the price, and the amount of paperwork a health insurer may require a prescribing doctor to prepare to justify the medical necessity for the drug.  The amount of work by Pfizer in assessing some of those concerns and others is impressive.  The author makes a fascinating observation about his research: it seems that the price was not tied to the research and development cost for the particular pharmaceutical, which the author notes is the primary justification made by pharmaceutical companies for high prices.  So, would this mean that if insurers increased the amount of paperwork for prescribing doctors for drugs that cost more than $5,000 that the price would drop?  Could the solution be that simple?  My guess is no.  But, I do wonder about the amount of money expended on the marketing of new drugs.  On the other hand, the claimed cost of developing new pharmaceuticals often includes the cost of failure as well as the cost to directly develop a successful drug.  Moreover, it is clear from the article that commercialization costs, such as concerns about costly Food and Drug Administration trials are a large factor in bringing a drug to market.  It also doesn’t seem to be much of a shock that the pricing of new drugs would include analyzing the price of similar drugs which possibly may be non-infringing substitutes. 


    The other interesting question is why the increased transparency now.  Well, for one, U.S. Democratic presidential candidate Hillary Clinton has set her sights on the pharmaceutical industry.  She has numerous proposals designed to lower the cost of prescription drugs, including reducing the exclusivity period for data for biologics.  Some proposals are similar to U.S. Democratic presidential candidate Bernie Sanders’ proposals described on this blog, here, and some take them another step.  For example, one proposal focuses on pharmaceutical companies that receive Federal funding for research and development:

    Clinton’s proposal would require pharmaceutical companies that benefit from federal support to invest a sufficient amount of their revenue in R&D, and if they do not meet targets, boost their investment or pay rebates to support basic research. If elected President, she will convene business leaders, experts on drug pricing, and consumer advocates to set new parameters for federal support in order to ensure this requirement. The basic principle is based on a provision of the Affordable Care Act that required insurance companies to pay rebates to consumers if their profits and administrative costs were an excessive share of benefits actually paid out to consumers.

    PhRMA has strongly opposed Clinton’s proposals, here, and so has the Republican Party, here.  The second reason for the transparency is the U.S. Senate’s recent hearings (started on Wednesday) on pharmaceutical pricing—which currently appear focused on generic pricing.  I expect that we’ll see more—rather than less—information released about how companies are pricing pharmaceuticals very soon. 

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  • Decision Instituting Inter Partes Review of All Challenged Claims IPR2015-01319

    Takeaway: Merely having an agreement that allows a non-party to deny approval of mergers of the petitioner, to have an observer at board of director meetings of the petitioner, and to require advance payment for overhead related to contractual software … Continue reading

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  • Best Buy patents focus on universal chargers, personalized gift cards

    Thus far in 2015, Best Buy has earned 20 patents from the USPTO. Although most of the company’s research and development is in disparate fields, as the text cluster from Innography shows us at least some R&D focus in the fields of electronic devices, audiovisual content and television monitors… We came across a couple of Best Buy patent applications describing technologies intended to encourage consumers to make purchases or provide gift card value, such as the innovation at the center…

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  • CAFC uses de novo review because claim interpretation based solely on intrinsic evidence

    On remand, the Federal Circuit used the de novo standard. Teva’s deferential “clear error” standard did not apply, because the district court did not make any factual findings based on extrinsic evidence in connection with its claim construction. Although extrinsic evidence may be used at trial, a district court must rely on subsidiary factual findings from that evidence to reach its claim construction, in order for any deference to arise on appeal. In this case, the Federal Circuit held that…

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  • Federal Trade Secret Legislation Would Strengthen U.S. Economy and Promote the Rule of Law

    In a 2014 Heritage Foundation Legal Memorandum, I highlighted the growing problem of trade secret misappropriation faced by American business, and explained that an appropriately crafted federal law would help American victims recover damages for theft of their trade secrets, make it easier to stop thieves before they leave the country, and thereby strengthen the […]

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  • Final Written Decision Finding All Challenged Claims Unpatentable IPR2014-01165

    Takeaway: A showing of inherency has a high bar.  In its Final Written Decision, the Board determined that all challenged claims (8-12, 14, 15, 17, 25-29, 31, 32, 34, and 35) of the ’359 Patent are unpatentable.  The ’359 Patent … Continue reading

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  • Short Fiction for IP Attorneys

    I enjoyed SciFi author Kim Stanley Robinson’s new short essay Oral Arguments. Quoting precedent is not usually characterized as sarcasm, Your Honor. The patent law is broadly written, and your decisions concerning it haven’t helped to narrow or clarify it. Some people call that body of precedent kind of ad hoc-ish and confusing, not to […]

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  • Federal Circuit Reverses PTAB Claim Construction in IPR

    The Patent Trial and Appeal Board (Board) cancelled the claims of the patent, finding them anticipated or obvious over several references. The Board construed “is connected” to mean that the computer be “active and online at registration,” even if the connection server’s database record was inaccurate, and the computer was no longer online. The Court reversed this construction, holding that the plain and ordinary meaning of the term “is connected” requires that the computer be connected to the…

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  • Netlist, Diablo and ULLtraDIMM

    From a press release:


    “We are pleased that the Federal Circuit will now have the opportunity to take a careful look at what happened at trial and the events that led up to it, particularly with respect to the clear language of our contract with Diablo,” said Netlist’s Chief Executive Officer, C.K. Hong. “We remain confident that after analyzing the record the Federal Circuit will come to the correct conclusion, that Diablo violated our agreement when it used Netlist chips in the design of the ULLtraDIMM.”

    Netlist filed motions earlier this year asking the District Court to correct the erroneous findings by the jury with respect to Netlist’s breach of contract claims. Before trial, the District Court reviewed the contract and found based on the unambiguous language of the contract that Diablo had no right to use Netlist’s chips—which Diablo admitted to doing—and as a result granted Netlist’s request for a preliminary injunction. The jury, however, was not informed of the Court’s prior interpretation of the contract. Faced with the task of deciphering the contract without any guidance from the Court as to Diablo’s rights under the agreement, the jury found no breach. The District Court then refused to correct the jury’s findings and denied Netlist’s motions for Judgment as a Matter of Law in September, 2015.

    link: http://www.prnewswire.com/news-releases/netlist-files-appeal-in-trade-secret-case-against-diablo-technologies-300190282.html

    From an earlier post on Storage Review:


    The ongoing legal battle between Diablo Technologies and Netlist, concerning ULltraDIMM technology, seems to be coming to an end with the announcement that the United States District Court for the Northern District of California ruled to completely dissolve a preliminary injunction enacted in January 2015. Diablo indicates that this ruling definitively reaffirms their right to ship its their Memory Channel Storage chipset without restriction and believes that the last part of this back-and-forth legal process will have the court awarding Diablo the bond posted by Netlist, which also occurred in January of this year.

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  • District Court Must Make Factual Finding on Extrinsic Evidence to Trigger Clear Error Teva Deference

    Author: Laith M. Abu-Taleb Editor: Kevin D. Rodkey In CardSoft v. VeriFone Inc., No. 2014-1135 (Fed. Cir. Dec. 2, 2015), the Federal Circuit reversed the district court’s claim construction and granted VeriFone a finding of no infringement, finding that CardSoft waived any argument that VeriFone infringed under the proper construction. The Supreme Court remanded this […]

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  • Black Friday, Cyber Monday results prove that e-commerce continues to make gains

    As bleak as the picture looked for brick-and-mortar retail, it was much brighter for e-commerce and online retail, which saw their best day ever. According to global analytics firm comScore, 2015’s Cyber Monday saw $2.28 billion in online spending from desktop computer users, the heaviest day of online spending ever recorded and an increase of 12 percent over last year’s Cyber Monday results. When including sales from mobile device consumers, Cyber Monday sales surpassed $3.1 billion.

    The post…

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