Senate Moves to Strip PTAB Sovereign Immunity Defenses

Preserving Access to Cost Effective Drugs (PACED) Act

Senator Tom Cotton (R-Arkansas) and Senator Claire McCaskill (D-Missouri) along with Senators Pat Toomey (R-Pennsylvania), Joni Ernst (R-Iowa), David Perdue (R-Georgia) introduced the Preserving Access to Cost Effective Drugs (PACED) Act (S .2514), to “restore the power of the Patent and Trademark Office and federal courts, and the International Trade Commission to review patents regardless of sovereign immunity claims made as part of sham transactions.”

Introduced this past Wednesday, S .2514 is backed by a host of health care entities, including America’s Health Insurance Plans (AHIP), Association for Accessible Medicines, Patients for Affordable Drugs Now, BlueCross BlueShield Association, and Blue Shield of California.

The bill would prevent any patent owner from advancing a sovereign immunity defense, including the sovereign immunity accorded to Indian tribes in any USPTO derivation proceeding, reexamination, Inter Partes Review (IPR) or Post Grant Review (PGR) proceeding.

The background accompanying the bill explains:

• By avoiding review, pharmaceutical firms can prevent generics from coming to market and raise the cost of drugs.
• Similarly, if non-practicing entities, often referred to as “patent trolls,” can skirt a review or use a tribe as a straw plaintiff, it becomes harder for businesses to defend themselves against dubious patent claims.
• This legislation would do nothing to prevent pharmaceutical firms from partnering with Indian tribes for research, development, and licensing of drugs.

Given the bipartisan support, and interest of states in controlling health care costs, this bill may make quick progress. So much for that bit of excitement.

Scott A. McKeown is an author of the Patents Post Grant.