The rules of patent reform: First, do no harm

05 Sep The rules of patent reform: First, do no harm

Biotechnology innovations provide hope to millions by extending the lives of patients around the world suffering from debilitating diseases like cancer, heart disease, Alzheimer’s, Parkinson’s, HIV/AIDS, Multiple Sclerosis, and numerous rare diseases.
Biotechnology researchers also are developing revolutionary new sources of renewable energy, finding remarkable new ways to make our environment cleaner and safer for generations to come, and developing food crops that provide higher yields and resistance to drought and disease in order to feed a growing and hungry world.
Such innovation is fueled by the strength of America’s patent system. Strong and predictable patent protection provides investors with the confidence and security they need to fund biotech research that often takes hundreds of millions of dollars and more than a decade to go from a mere idea to a product available to patients and other consumers.
Patent “reform”
Congress is currently considering the most significant reforms to the patent system in more than five decades. Most, if not all stakeholders agree there is room for improvement in our nation’s patent system. Removing the more subjective elements of our patent system would increase the clarity and objectivity of the system.
Allowing third parties to submit “prior art” references to the invention in published materials would increase public participation and increase patent quality. Ensuring that the U.S. Patent and Trademark Office (PTO) has adequate funding to review the increasingly complex workload is also critical.
Unfortunately, the legislation currently pending in the U.S. Senate and House of Representatives, the Patent Reform Act of 2007, would do more harm than good to the current patent system. The legislation contains several provisions that would devalue patent rights, which could undermine the very foundation upon which biotechnology innovation, and the hopeful future it promises, is built.
Provisions in the legislation that would create a broad new administrative challenge system would create patent uncertainty and reduce investment interest in biotechnology innovation. Other provisions would change how damages against patent infringers are calculated, in a way that would often make infringement cheaper and easier.
The legislation would require that courts peel away from the patented and infringed invention all previously known elements and ascribe value only to the remaining elements. The legislation ignores the fact that virtually all inventions are, to some degree, premised on previously known elements. Take, for example, inhalable insulin – a product that is under development and will, once approved, provide a much-needed alternative treatment to routine injections for diabetes sufferers. Yet both the inhaler technology and insulin separately exist already.
The proposal before Congress, by forcing courts to subtract these known elements from the infringer’s damages, could seriously undermine the incentive to develop this new form of delivering insulin and other novel therapies.
Strong voices
The Wisconsin Alumni Research Foundation has been a strong voice in the patent reform debate. As the first research institution to isolate and proliferate human embryonic stem cells, the University of Wisconsin-Madison clearly has a strong interest in protecting and holding patents that will lead to further development of scientific breakthroughs and discoveries.
The Wisconsin Biotechnology and Medical Device Association also understands the critical role that patents play in biotechnology research and development. In June, the association was among more than 200 organizations to send a letter to Congress to outline concerns that the pending patent reform legislation would seriously undermine the value of patents.
The organizations’ recommended changes to the legislation include the removal of the proposed new way to calculate damages against patent infringers, elimination of the broad opportunity to challenge a patent in the newly proposed post-grant review system, a limit on the PTO’s rulemaking authority, and adequate grace periods for patent holders to adjust to changes in patent laws and rules.
Other groups to raise concerns with the pending legislation include labor unions such as the AFL-CIO and the United Steel Workers, patient groups such as the National Multiple Sclerosis Society and Genetic Alliance, the U.S. Department of Commerce (which oversees the PTO), and the academic community including the Big Ten Universities and WARF. This varied group of stakeholders recognizes that undermining the value of patents will threaten our nation’s continued innovation, job creation, and competitiveness in a global economy.
Most biotechnology companies in the Midwest and throughout the country aren’t big Fortune 500 corporations. They are predominantly small businesses with little revenue and no products on the market. These companies can survive only if their research and development activities can continue to attract huge amounts of private and public investment.
But those funds won’t come without strong patent protections. Weaken patent protection, as the current legislation would do, and biotech innovation is stifled. Stifle innovation and the world may be deprived of the next biotechnology breakthrough to help save lives, reduce our nation’s dependence on foreign oil, feed the hungry, or provide a cleaner environment.
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