Patent Reform Moving Ahead, Industry Impact Expected
The United States House of Representatives passed its version of the Patent Reform Act of 2007 (H.R. 1908) in September in a 220-175 vote. Although the bill aims to fix current flaws in the US patent system and to bring it in line with those of other countries' systems, the biopharmaceutical industry is largely unhappy with the news, arguing that it will reduce patent protection."BIO appreciates the continued efforts by the House to improve the Patent Reform Act, but unfortunately cannot support the legislation passed today as it threatens continued biotechnological innovation," said Jim Greenwood, president and CEO of the Biotechnology Industry Organization (BIO), in a Sept. 7 statement. "We welcome improvements to the US patent system, particularly those that increase patent quality, increase public participation, and provide additional resources to the Patent and Trademark Office. However, the legislation that passed and the legislation currently pending in the Senate [S. 1145] do far more harm than good to our nation's patent system."
Some companies claim the legislation may impose some of the most significant changes to the US patent system in 50 years. Specifically, the Patent Reform Act of 2007 would grant patents to the first to file, rather than the first to invent. Currently, the US is the only country that grants patents to the first to invent.
The bill would also change how damages are calculated—including no longer considering the full value of a product. The biopharmaceutical industry is concerned that this change, along with the bill's post-grant review policy—which allows only one opportunity to challenge a patent, will make it more difficult for inventors to prove willful infringement on patent claims, according to a Sept. 7 Associated Press article.
This change would open the door to "an endless loop of legal challenges after patents are awarded," according to United Steelworkers, a union that includes 15,000 US workers in the pharmaceutical industry. The AFL-CIO union federation is also opposed to the legislation and sent a letter to Congressional representatives, arguing that the reforms, as they were written, would damage the industry.
Additional patent changes announced by the US Patent and Trademark Office (USPTO) on Aug. 21 will go into effect Nov. 1. The new rules limit the number of continuation applications and the number of claims an applicant can file in a single application. They also state that certain multiple applications may be treated as a single application. According to USPTO, the changes will provide for "better and more thorough and reliable examination of patent applications."
Both the USPTO changes and the Patent Reform Act changes are nothing to brush under the table. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), pharmaceutical member companies invested $43 billion to research and develop new medicines last year. And it's no secret that Big Pharma depends on full patent periods (17 to 20 years) to make a profit on their drugs, considering that discovery and development can easily take 10 to 15 years and cost an average of $1 billion, according to PhRMA. In fact, according to an August report by World Growth, a nonprofit nongovernmental organization, two-thirds of the value of America's large businesses reside in intellectual property, especially patents and trademarks.
Part of the reason for the proposed changes is to reduce the burden on USPTO, which reviews 450,000 national patent applications each year. The office hired an additional 1,000 examiners during the past two years, according to a Sept. 3 Reuters article, but patents can still take as long as six years to be processed.
At press time, the Patent Reform Act of 2007 was heading to the Senate for review, with revisions expected. –Angie Drakulich
The US Food and Drug Administration approved updated labeling for "Coumadin," a common blood-thinning drug, that explains that patients' genetic composition may influence their response to the drug. On Aug. 16, the agency directed manufacturers of warfarin, the active ingredient in Coumadin, to add similar information to their products' labeling.