Comments on Incentivizing Humanitarian Technologies and Licensing Through the Intellectual Property System

On September 20, 2010, the PTO published "Request for Comments on Incentivizing Humanitarian Technologies and Licensing Through the Intellectual Property System" in the Federal Register (75 Fed. Reg. 57261, available here):

The United States Patent and Trademark Office (USPTO) is considering pro-business strategies for incentivizing the development and widespread distribution of technologies that address humanitarian needs. One proposal being considered is a fast-track ex parte reexamination voucher pilot program to create incentives for technologies and licensing behavior that address humanitarian needs. Because patents under reexamination are often the most commercially significant patents, a fast-track reexamination proceeding would allow patent owners to more readily and less expensively affirm the validity of their patents. Therefore, the opportunity to utilize a voucher for a fast-track reexamination proceeding could provide a valuable incentive for entities to pursue humanitarian technologies or licensing. The USPTO is requesting comments from the public regarding this proposal as well as other incentive

Twelve specific questions were posed in the Request, and tentative definitions of "humanitarian use" and "humanitarian research" were also offered for comments. Between Sept 20, 2010 and Nov 22, 2010, twenty three comments were received by the USPTO from various non-profits, aid organizations, industry representatives, academic and research institutions, law firms and legal associations, and individuals (these submissions are available here). With few exceptions, the comments expressed support for the PTO's goals and proposal, albeit with some reservations and concerns. Only five comments (by industry group AdvaMed, legal associations Intellectual Property Owners Association (IPO) and the American Intellectual Property Law Association (AIPLA), and two individuals) recommended against the program.

  • Fear of Abuse (Need for Transparency): Though most submissions supported the program, many clearly emphasized the need for the PTO to design it carefully so as to avoid unintentional negative consequences of the program, as well as to ensure it could not be "gamed" by actors seeking rewards for only minimally or negligibly humanitarian contributions. To address this issue, comments overwhelming called for ongoing consultation and transparency in the administration of the program, including in the decision-making process for awarding vouchers and in the process for updating requirements for earning a voucher. Incentives for Global Health (IGH) suggested that "randomized end-user and distributor surveys" could be employed "to confirm actual humanitarian distribution of the product." A joint submission by KEI, Doctors Without Borders (MSF), Oxfam, and Public Citizen (PC) also stressed the need for transparency, asking additionally that the PTO ensure that patent holders cannot apply for the voucher with merely past acts without additional and important humanitarian benefits, and that the PTO not permit the donation of a low-value patent to be leveraged merely for a voucher accelerating the reexamination of a high-value patent. The statement by Universities Allied for Essential Medicines (UAEM) advised the PTO to ensure that simply having registered a "humanitarian license" or other such past action not qualify, nor should participation in certain less effective initiatives, such as the EcoPatent Commons and GSK patent pool.

  • Transferability of Vouchers: Nearly all comments which addressed the issue recommended that the vouchers be freely transferable on the open market to enhance their value and thus their strength as incentives. Industry group BIO Ventures for Global Health (BVGH) wrote that free transferability would allow vouchers to reach those who can derive the most social or financial value from them, would help commoditize the vouchers and develop a secondary market and would therefore reduce speculation as to the real-world value of the vouchers by providing examples of real-world price points.

    Some reservations to free transferability, however, included a concern expressed in a joint statement by the Association of American Universities (AAU) and the Council on Governmental Relations (COGR) that "auctioning the vouchers on the open market could lead to negative public perceptions and questions about public vs. private benefit." AVAC, an HIV prevention organization, also expressed similar "ethical concerns," stating that "trading or swapping between rights for different potential disease uses means one particular patient population may bear higher costs from delayed availability of generics, for example, than it otherwise would even if another patient group benefits from the trade. Patients should not be seen to be placed in competition with each other." Finally, the Medicines Patent Pool submission suggested that the PTO consider limiting the vouchers' applicability to the field of technology in which they have been granted.


  • Value of an Ex Parte Reexamination Voucher and Proposed Alternatives: AVAC and others also expressed skepticism that the voucher would have much value, or at least that it would have enough to incentivize much investment in humanitarian technologies. The Biotechnology Industry Organization (BIO) wrote that though the commercial value of the proposed voucher could be substantial under some situations, it felt this value would be difficult to express in monetary terms at this time; it felt the commercial value of the voucher would likely be less than its symbolic value. The Pharmaceutical Research and Manufacturers of America (PhRMA) also wrote that it did not believe the program was likely to have material impact on “the already substantial humanitarian programs undertaken by PhRMA members” or on their R&D decisions.

    Several comments (AAU/COGR, AVAC, WARF, Gilead Sciences, Novartis, the Universities of California and Mississippi, AIPLA) suggested that a voucher for an expedited initial examination would have greater value and serve as a stronger incentive. Several comments proposed alternative incentives the PTO could offer. The submission by Novartis included a list of alternatives which included RCE vouchers, waivers of maintenance and extension fees, and acceleration vouchers for reissue proceedings, interference proceedings, decisions on petitions, appeals, oppositions. (Novartis also stressed that any patent issued under a voucher must enjoy same presumption of validity as normal.) Sanofi-Aventis suggested that the value of the program would be increased if awardees were offered a choice between (1) expedited examination of any patent application of the voucher holder's choosing, (2) expedited ex parte reexamination of any patent of the patent holder's choosing, or (3) expedited appeal of an examination or reexamination decision within the PTO. The Institute for Intellectual Property and Social Justice (IIPSJ) of the Howard University School of Law also noted the potential usefulness a reduction of fees for patent applications in humanitarian technologies. In addition to a waiver or discount of prosecution or maintenance fees, the University of Mississippi suggested that the "availability of patent attorneys who work on humanitarian cases pro bono or at a discounted rate would be a tremendous incentive." Finally, AIPLA noted that vouchers to accelerate reissue applications might also be an appropriate incentive.


  • Number of Vouchers Limited? (Entitlement v. Competitive/Prize-Like): Most submissions which addressed the issue suggested that the number of vouchers issued by the PTO be somehow limited or capped to increase their value, allowing vouchers to function as more competitive, prize-like mechanism. KEI, MSF, Oxfam, PC, and the Medicines Patent Pool submission all supported this approach, with KEI's joint submission stressing also that the PTO maintain rigorous minimum standards for receipt of the voucher. The AAU and COGR also supported a "competitive review process" with the number of vouchers limited on an annual basis.

    In contrast, the submission by Emory University proposed a two-part system in which the vouchers would operate by entitlement: "We suggest that the voucher be used not only for ex parte reexamination but also for acceleration of any ex parte action in any pending or issues patent or patent application; there should be two components (1) an acceleration voucher which can be requested by any entity which makes a significant humanitarian contribution and (2) accelerated examination of any patent application for which the applicant agrees to be bound by humanitarian licensing provisions" (the later would be like the current USPTO “Green Technology Pilot Program"). Under this model, the voucher would given to any entity who can “prove that it has significantly affected a humanitarian problem,” though Emory's statement emphasized that standards for obtaining a voucher should be high.


  • Qualifying Criteria: Predictably, submissions included a wide variety of suggestions pertaining to how the PTO should assess applications for vouchers, addressing a number of aspects of how the program might be structured:

    • Need for Clear, Reliable, Meaningful Assessment: The submission by KEI/MSF/Oxfam/PC emphasized the need for the humanitarian value of the technology and its dissemination mechanisms to be meaningfully assessed. IGH suggested that the PTO use generally-accepted, reliable, and predictable measures in evaluating applicants, such as the Quality-Adjusted Life Year (QALY), in order to promote certainty and help applicants understand ex ante how their submissions would be assessed. BVGH also stressed the need to establish transparent, clearly-defined criteria, and recommended linking the PTO's pilot program to the U.S. FDA Priority Review Voucher (PRV) program. Going further, the IIPSJ suggested that recipients of the FDA PRV should automatically receive a humanitarian fast-track ex parte reexamination voucher from the PTO. Other submissions, however, specifically noted the PRV program was a model to be avoided; the submission by the Medicines Patent Pool, for example, noted that the FDA program does not require availability or affordability.

    • Accessibility/Affordability: KEI/MSF/Oxfam/PC emphasized strongly the need to ensure that matters of accessibility and affordability of technologies were addressed, perhaps by requiring "a clear and effective accessibility and affordability strategy" or perhaps by an open licensing requirement and/or a market penetration test. Several other comments also stressed the need for some kind of metric or assessment to ensure access. In its analysis of various access mechanisms the PTO could consider, the UAEM submission included a discussion of the Nine Points to Consider in Licensing University Technology and the Statement of Principles (the "Nine Points") and Strategies for the Equitable Dissemination of Medical Technologies (SPS), and also reviewed its various licensing frameworks (the Equitable Access License and Global Access Licensing Framework).

    • Broad Applicability: KEI/MSF/Oxfam/PC stressed the need to ensure that the PTO voucher mechanism address a wide range of diseases and health concerns, rather than focusing on a specific list. The AAU and COGR also wrote that the qualifying humanitarian criteria should not be narrowly defined or confined to a list, but should be flexible, with the burden placed on the voucher applicant to make the case for how their technology qualifies. AVAC's statement noted that, while some lists, such as the US neglected disease program list, may be useful, the USPTO should not limit itself to such criteria. The submission by the Medicines Patent Pool also cautioned against the use of a list, writing that "pre-defined lists often lag behind evolving on-the-ground conditions." Finally, the submission by Novartis advised the PTO to include orphan diseases, and should also include those diseases which are neither orphan nor neglected but which remain substantially untreated, using the example of hypertension, prevalent among impoverished Americans.

    • Who should benefit?: On a related note, KEI/MSF/Oxfam/PC recommended that the USPTO favor humanitarian open licensing and technology transfer practices with a wide geographical scope, including all developing countries. AAU and COGR stressed also that beneficiaries of the humanitarian technologies should not be limited to the developing world, but should include disadvantaged U.S. populations. AVAC noted that if the award were so limited, it may be "difficult to isolate humanitarian research which is predominately developing world." IGH also recommended the PTO operate its program in a "geographically-neutral" manner, not limiting it to impoverished populations in only developing countries, or to only some countries. The University of California made this point as well, writing that "humanitarian needs exist in developing and developed countries as many diseases are global in nature and impacted populations exist in every country."

    • Ex Ante or Post Hoc: IGH emphasized that vouchers should be awarded ex post, after the technology has been effectively used to to address humanitarian needs in a measurable way. The University of California wrote: "Administratively, the challenge the PTO faces is that documenting actual humanitarian use is difficult at patent filing since the data needed is available only after the product is on the market. On the other hand, providing a fast-track voucher only after product introduction acts as a reward rather than an incentive to invest in technologies that address humanitarian need. In addition, the PTO will need avoid rewarding patents that purport to address humanitarian needs but never result in actual humanitarian benefit." Most other comments appeared to presume the vouchers would be awarded post hoc.

    • Technology-Neutral: Several comments (AVAC, BIO, PhRMA) emphasized that the PTO program should be "technology-neutral," meaning that the USPTO should avoid limiting the program to specific technologies or end-uses, keeping it applicable to innovators from all sectors. The University of California also made this point, writing: "The University encourages the PTO to consider a broad view of humanitarian needs that can be met with technologies that extend beyond the pharmaceutical industry." IGH also advised "financial-neutrality," meaning that the reward should be available "regardless of whether the entities are otherwise benefiting from their humanitarian efforts."

    • Vouchers Available for Patented Technologies Only?: Several comments noted that the PTO would need to determine whether the voucher would be available only in relation to technologies that were patented or whether any technology would qualify. Emory University recommended that actors be entitled to vouchers regardless of whether their humanitarian effect is achieved with a patented technology.

    • Benefit to patent owners only?: IGH stressed that the benefit of the reward should ideally accrue not only to patent owners but also to commercializing entities as well, to help address the "last mile" problem.

    • Specific factors suggested:
      • Gilead Sciences: “In selecting recipients, the Department may look at the seriousness of the humanitarian issue that is sought to be addressed by the technology; the extent to which the patent holder's efforts alleviate or lessen the burden of the disease or other issue; the innovativeness of the approach taken; and other efforts by the patent holder in other countries to alleviate the same disease or issue. Finally, award recipients would ideally be those innovators that make strides in reducing the prevalence of a disease or reducing the impact of diseases.”
      • Medicines Patent Pool: This submission listed seven criteria for consideration: the scope of the problem addressed by the technology, the severity of the problem addressed by the technology, the vulnerability of the problem addressed, the significance of the contribution, the scope of the activities enabled by the technology's license, the absence of unduly restrictive provisions in the license that would undermine the overall objectives, and additional efforts made by patent-holders to ensure widespread access to the technology. The same submission also recommended a "yardstick" for evaluating pharmaceutical-related licensing specifically: the license should include a wide geographical scope, enable follow-on research and innovation, include quality-assurance provisions, be licensed on a non-exclusive and non-discriminatory basis, be licensed at reasonably royalty rates, be transparent on licensing conditions and patent rights, and facilitate technology transfer and the development of developing countries' innovative capacity.
      • IIPSJ (Howard University School of Law): This submission recommended the PTO consider the extent of government funding for drugs and vaccines, the extent of patent protection the developing country allocates to drugs and vaccines, and whether there is an effective plan to ensure patients get the drugs and that they are administered properly. It went on to note that relevant “issues can also include: (1) whether the country has a marginal budget; (2) the extent of government funding of developing countries with respect to R & D of drugs and vaccines for tropical diseases; (3) the extent of patent protection that the government in a developing country has allocated to patent protection of drugs and vaccines for tropical diseases; (4) the percentage of patients who can afford only low cost drugs or who cannot afford the drugs at all; and (5) whether the developing country has an effective plan to ensure that the patients get the drugs and that the drugs are administered in the proper manner.”


  • Use of a Panel/Committee: Several comments recommended the PTO set up some sort of panel or committee to help it assess applicants. KEI/MSF/Oxfam/PC stated that the PTO should allow an expert committee to award vouchers, given that assessment of humanitarian initiatives does not fall naturally within the mandate or area of expertise of the PTO. IGH proposed an "adjudication board" of persons "adequately equipped to understand the technologies being judged." The submission by the Medicines Patent Pool recommended the PTO set up a committee made up of a wide range of stakeholders (including affected populations), seeking to avoid conflicts of interest, and ensuring that the committee not only operates transparently regarding its criteria, evidence, and rationale used, but also takes input from general global public. This committee, it continued, should be given a wide degree of latitude within a set of broad guidelines set by the PTO.

  • Consultation/Consistency: The joint statement by KEI/MSF/Oxfam/PC stressed the importance of the PTO "ensur[ing] policy coherence with U.S. global commitments on public health, innovation, and intellectual property," including the WTO Doha Declaration on TRIPS and Public Health, the WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property, the WIPO Development Agenda, and the NIH's announcement to contribute intellectual property to the Medicines Patent Pool. Additionally, AVAC recommended the USPTO consider "agreement or discussion with international partners such as WIPO, WHO, patient groups, or other organizations to determine the ways in which incentives or other means will be applied or accepted in multiple jurisdictions." Noting that the PTO is "not ideally suited to review whether an entity meets the criteria of humanitarian use or research" as it is not its area of expertise, Emory University asked the PTO to both consider asking another governmental agency with expertise to provide guidelines and establishing a panel of experts in global health issues to review the requests for the voucher. Stressing that the PTO should remain the ultimate decision-maker, Gilead recommended the set up of a council “of federal government agencies that would provide counsel.”

  • Extent/Nature of Third Party Participation?: Nearly all submissions stressed that the PTO should consider statements from independent third-parties such as humanitarian organizations or researchers on the effectiveness or actual use of an invention to address humanitarian needs, though many agreed that such submissions should not be required to qualify for a voucher.

  • Strain on PTO Resources?: A common concern throughout the comments was that of the potential burden this program could place on already-taxed PTO resources and already-backlogged PTO dockets. For example, the Wisconsin Alumni Research Foundation (WARF) wrote that the "extensive administrative burden of trying to provide for and evaluate the requests from applicants seems to not be in accordance with the small late-stage benefit provided by such a fast-track reexamination process," and stressed that any fast-track process should seek to also simplify the administrative burdens and should be made less expensive. BIO admonished that the proposed program should not be permitted to consume resources "that would better be deployed on the USPTO's core missions." PhRMA also expressed concern that this program “could stretch the PTO's limited resources beyond its core mission, present significant implementation questions, and raise substantial public policy issues,” noting that "what constitutes 'humanitarian' requires discretion outside USPTO's core mandate." Like others, it stressed that the use of vouchers should not be permitted to delay the processing of other reexamination applications. Sanofi-Aventis cautioned also that time savings must come "through procedural modifications and not preferential treatment."

    In a statement recommending against the fast-track reexamination initiative, AIPLA noted that it "would prefer that the current delays in PTO special dispatch reexamination processing be addressed, rather than create a 'fast-track' option that would further tax the resources of the current reexamination system.” Although it stressed that it "does not favor fast-track reexamination as an appropriate incentive for stimulating the development of humanitarian technologies," it did note that the reward of an accelerated patent application examination voucher to recipients of an FDA voucher would be an appropriate incentive that the PTO could offer."

    AdvaMed also did not support the PTO proposal, stating that it would "divert scarce resources within the PTO from handling the normal application work load," and that the proper role of the USPTO with regard to medical technologies was limited to determining the patentability of a medical device. As an alternative to the program, it suggested simply "adding humanitarian technologies to the list of categories qualifying for a petition to make special."


  • Use by Third-Parties Against Patent-Holders: AVAC and others noted that the USPTO notice did not clarify whether the voucher could be used offensively at the reexamination stage by a third party seeking to invalidate a patent. KEI/MSF/Oxfam/PC felt it was necessary that third parties be allowed to use vouchers so as to avoid incentivizing unnecessary patenting. AVAC also believed permitting this use might "be one way to mitigate the appearance of patient and disease competition." Industry organizations, however, cautioned against this approach; for example, BIO asked the PTO to clarify that the vouchers will not be able to be used by third parties without the patentees consent, and PhRMA also wrote that use of the vouchers should not be permitted for those challenging others' patents.

  • Other Non-Monetary Award Mechanisms?: The PTO's final question in its Request was: "Would non-monetary prizes or awards sponsored by the USPTO recognizing humanitarian efforts encourage greater investment in the field?" In response, AVAC suggested that prizes were most useful for "clear time-time achievable milestone discoveries or for inventions such as diagnostics or devices that may require relatively shorter time periods to develop." The IIPSJ noted that use of an awards ceremony, presentation of a plaque, or other recognition through internet publication or in USPTO newsletter or other media outlets could also be useful. Specifically, it suggested that "criteria used by the USPTO in selecting recipients of non-monetary prizes or awards ought to include but should not be limited to: (1) the impact of the invention on the health and well-being of people; (2) whether the prospective recipient has entered into low or no-cost licenses to manufacture the invention; (3) whether the prospective recipient has assigned its patent rights to an international aid organization; and (4) whether the prospective recipient has reduced the patent term through voluntary abandonment by dedicating the invention to the public domain.”

  • Other Critiques: Finally, two submissions expressed objections to the program based in statutory or treaty obligations. IPO wrote that it "does not believe this program incentivizes or efficiently collects information about these technologies. Instead, the proposed program raises significant concerns regarding access to and availability of reexaminations for all patent applicants and risks unintended consequences. [...] [W]e are concerned that the program overlooks the USPTO’s own obligations under domestic patent law and TRIPS. The program might be understood to conflict with the statutory mandate to conduct all reexamination proceedings with “special dispatch,” to the detriment of patent owners who do not demonstrate “humanitarian uses” of their patented technology and may not be able to obtain the necessary vouchers on the open market. We are equally concerned that the proposed voucher program may violate treaty obligations under TRIPS, providing that “patent rights [shall be] enjoyable without discrimination as to … the field of technology.” TRIPS Art. 27(1). [...] Determining whether a use of a patented technology is “humanitarian” may simply be too subjective to serve as the basis for a fair, predictable program. The focus on “access” as a determining factor for defining humanitarian research is also troubling." Similarly, attorney Mark Protsik wrote, "By statute, the USPTO is already required to conduct "all" reexamination proceedings "with special dispatch within the Office" (35 USC 305; cf. 35USC 314(c)). [...] [The] "fast-track" program fails to distinguish that program from the "special dispatch" handling that is mandated by law for all reexamination proceedings." He concluded that the proposal "should be abandoned"