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The Supreme Court heard a major patent case today. Photo: J. Scott Applewhite/AP

The Supreme Court was closely divided this morning as it debated whether the federal patent office should be able to cancel patents it has previously granted — a dispute that could put billions of dollars on the line for pharmaceutical companies.

Why it matters: The case before the court on Monday involves patents for a piece of fracking equipment. But drug makers could profit handsomely if the court puts an end to these patent cancellations.

The details: The Patent and Trademark Office can invalidate a company's patents when those patents are challenged by a competitor — and that process is a lot cheaper and easier than challenging a patent in court. The Supreme Court's conservative justices questioned today whether the process is too easy, Reuters reports, while its more liberal bloc said the patent office should be able to correct its own mistakes.

Threat level: Pharmaceutical Research and Manufacturers of America, the drug industry's leading trade group, urged the high court to put a stop to patent cancellations.

  • "The pharmaceutical industry invests hundreds of billions of dollars in researching and developing new treatments to improve the health and welfare of the public across the globe. Those investments make sense only because the resulting intellectual property is respected as property," PhRMA said in a brief.

Some of the industry's leading critics, including AARP, weighed in on the other side. They feared that a more onerous system of patent challenges would help drug makers stave off competition from cheaper generic versions of their products.

Go deeper

Biden signs racial equity executive orders

Joe Biden prays at Grace Lutheran Church in Kenosha, Wisconsin, on September 3, 2020, in the aftermath of the police shooting of Jacob Blake. PHOTO: Jim Watson/AFP via Getty Images

President Joe Biden on Tuesday signed executive orders on housing and ending the Justice Department's use of private prisons as part of what the White House is calling his “racial equity agenda.”

The big picture: Biden needs the support of Congress to push through police reform or new voting rights legislation. The executive orders serve as his down payment to immediately address systemic racism while he focuses on the pandemic.

Senate confirms Antony Blinken as secretary of state

Antony Blinken. Photo: Alex Edelman/Pool/AFP via Getty Images

The Senate voted 78-22 on Tuesday to confirm Antony Blinken as secretary of state.

Why it matters: Blinken, a longtime adviser to President Biden, will lead the administration's diplomatic efforts to re-engage with the world after four years of former President Trump's "America first" policy.

2 hours ago - World

Former Google CEO and others call for U.S.-China tech "bifurcation"

Illustration: Aïda Amer/Axios

A new set of proposals by a group of influential D.C. insiders and tech industry practitioners calling for a degree of "bifurcation" in the U.S. and Chinese tech sectors is circulating in the Biden administration. Axios has obtained a copy.

Why it matters: The idea of "decoupling" certain sectors of the U.S. and Chinese economies felt radical three years ago, when Trump's trade war brought the term into common parlance. But now the strategy has growing bipartisan and even industry support.