STLR Link Roundup – February 15, 2019

Eligibility of Medical Diagnostics Method to be Patented

On February 6, 2019, the U.S. Court of Appeals for the Federal Circuit ruled that the medical diagnostics method at hand were patent ineligible under 35 U.S.C. § 101. Plaintiff, Athena Diagnostics, Inc., was the exclusive licensee of the patent that covered “methods for diagnosing neurological disorders by detecting antibodies to a protein.” After Defendant, Mayo Collaborative Services, LLC, allegedly exercised the patent for developing other competing diagnostic methods, Plaintiff accused Defendant of infringing the patent. Defendant moved to dismiss with arguing that the patent was invalid under U.S.C. § 101, and the district court granted Defendant’s motion. The Federal Circuit affirmed the district court’s decision. The Court applied the two-part test adopted by the Supreme Court in Mayo v. Prometheus and Alice Corp. v. CLS Bank, examining: (1) “whether the claims of the patent are directed to a law of nature” and (2) “whether the limitations of the claim apart from the law of nature, considered individually and as an ordered combination, transform the nature of the claim into a patent-eligible application.” Regarding the first test, the Court provided that the patent is claiming a “natural cause of an ailment and well-known means of observing,” and therefore it is directed to a law of nature. Regarding the second test, the Court viewed that the patent only requires “standard techniques to be applied in a standard way,” therefore, it does not transform the nature of the claim into a patent-eligible application. This decision may affect companies that develop medical diagnostic methods and those that use these technologies, in relation to the patentability it medical diagnostic method.

GAO’s Recommendation for Comprehensive Privacy Legislation in the US

In January 2019, United States Government Accountability Office (GAO) published a report, “Internet Privacy: Additional Federal Authority Could Enhance Consumer Protection and Provide Flexibility” that recommended that Congress develop internet data privacy legislation for consumer protections, similar to the EU’s General Data Protection Regulation (GDPR). This report was prepared upon the request of the House Energy and Commerce Committee. In this report, GAO concluded that (i) recent developments in Internet privacy calls for Congressional action regarding comprehensive Internet privacy regulation, and (ii) this legislation would enhance the government’s capability to protect privacy of consumers and increase certainty in the industry based on such consumer data.

California’s Digital Dividend Plan

In his address on February 12, 2019, California Gov. Gavin Newsom proposed a data dividend that requires technology companies to share profits created from consumers with consumers. Governor Newsom said that “California’s consumers should also be able to share in the wealth that is created from their data,” and that he had “asked [his] team to develop a proposal for a new data dividend for Californians, because we recognize that data has value and it belongs to you.” Subject to the form this data dividend regulation would take, this would make a significant impact to technology companies that make a large amount of profit from this data business such as Google and Facebook.

Amazon’s Call for Rules on Facial Recognition

In its official blog posting on February 7, 2019, Amazon expressed its support for regulation to prevent misuse of facial recognition technology. In this positing, “Some Thoughts on Facial Recognition Legislation,” Amazon proposed five guidelines as follows: (i) “facial recognition should always be used in accordance with the law, including laws that protect civil rights”; (ii) “when facial recognition technology is used in law enforcement, human review is a necessary component to ensure that the use of a prediction to make a decision does not violate civil rights”; (iii) “when facial recognition technology is used by law enforcement for identification, or in a way that could threaten civil liberties, a 99% confidence score threshold is recommended”; (iv)” law enforcement agencies should be transparent in how they use facial recognition technology”; and (v) “there should be notice when video surveillance and facial recognition technology are used together in public or commercial settings.”

FDA’s Guideline for CGT Pathway

In a statement on February 15, 2019, the U.S. Food and Drug Administration (FDA) announced that it issued guidelines for Competitive Generic Therapies (CGT). The FDA has been working to allow for “more efficient generic development” and furtherance of “generic competition,” both of which substantially contribute to the reduction of drug prices. As part of such effort, the FDA introduced the CGT pathway based on the FDA’s new authorities in the FDA Reauthorization Act of 2017. When a certain medicine is designated as CGT upon the application by a company, many benefits, such as “product development meetings with the FDA to discuss specific scientific issues or questions they may have such as proposed study design or alternative approaches,” are provided for prompt developments. The FDA issued the guidelines to provide more clear guidance to the industry about this CGT.

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