A recent Supreme Court decision on patents — Oil States v. Greene’s Energy Group — marks an understated victory, with far-reaching consequences that will positively impact families and communities across America. This case has deep implications for basic economic fairness, with the judiciary recognizing the importance of keeping critical checks in systems that have become far too imbalanced.
In the national media, this case is being held up as a victory for Silicon Valley and the wealthy tech elites. Perhaps this makes sense: The decision handed down April 24 preserves a process for disputing and overturning unmerited patents, helping curb the glut of patent trolls polluting the industry. But this is not just a victory for the ensconced Palo Alto bubble — working families are silent winners of this week’s Supreme Court decision.
In 2011, Congress created within the U.S Patent Office a body called the Patent Trial and Appeal Board (PTAB). While the patent office examines and grants patents, which are akin to giving a monopoly power for a period of time for an invention, the PTAB serves as an appeal body when such rights are disputed. This week’s SCOTUS decision affirmed that the PTAB can continue its role in ensuring that monopoly rights given through a patent can be reversed.P
Why is this important for ordinary Americans? Abuse of the patent system is directly tied to skyrocketing drug prices.
Americans of all political stripes are united on one thing: Drug prices have spiraled out of control. One in 4 Americans cannot fill their prescriptions because they can’t afford them. Nineteen million Americans are forced to go overseas to buy their drugs because companies don’t price fairly. And pharmaceutical companies get away with their exorbitant pricing by abusing our patent system.
In order to maintain monopolies on life-saving treatments, pharmaceutical companies often file dozens of unmerited patents on their drugs, blocking the generic competition that lowers prices. For example, Celgene has applied for over 100 patents on just one cancer drug, Revlimid. As a result, Celgene will likely make an extra $45 billion while Americans should have been able to access cheaper alternative generic options years ago.
The PTAB can curb that abuse and help restore integrity to our patent system, stopping drug companies from holding a wrongly issued monopoly for years or even decades more. In fact, roughly half of the pharmaceutical patents challenged through the new PTAB reviews are found to be unmerited. This includes patents on expensive drugs: The blockbuster multiple sclerosis drug Copaxone, for example, is one drug the PTAB found to have been wrongly granted patents, thus allowing cheaper versions of the medicine to enter the market.
But more broadly, this Supreme Court decision offers a bit of respite and a rare moment of bipartisan consensus in an increasingly fractured America. The decision strikes at the heart of basic economic unfairness and the ways in which power has become concentrated in the hands of industries — like the pharmaceutical industry which works hard to lobby and advocate and influence to ensure that no checks and balances exist to curb their unfettered power. The Supreme Court upheld a basic mechanism to curb that power.
There is more work to be done. Congress must continue to improve upon the system it built in 2011. We must work to ensure our patent system rewards true invention and allows healthy competition, rather than encouraging frivolous patenting that rewards corporations at the expense of everyday Americans.
But the Oil States decision offers a glimmer of hope for patients and communities who are struggling to get medical treatment. This week’s Supreme Court decision makes it possible to believe that those families may have a shot at affording the medicines they so desperately need.