Washington D.C. - According to Michael Rosen of the American Enterprise Institute, "Like most of us, legislative patent reform spent the summer on the beach. But as the congressional session resumes next week, the vacation is coming to an end. Shortly before adjourning for its summer recess, the House of Representatives shelved – at least temporarily – the Innovation Act, its signature patent reform legislative package amidst strident opposition from the biotechnology industry, academic and research institutions, and venture capital investors."
Several members who previously supported the legislation announced a change of heart, and House leadership had no choice but to pull the bill. A companion measure in the Senate, known as the PATENT Act, also had an indolent summer, failing to advance since its passage by the chamber’s Judiciary Committee.
But now, as summer turns to fall, and as members return to the Capitol, the patent wars are again beginning to heat up among interest groups.
The National Retail Federation, which has long backed the various reform measures, has set September 10 as a “day of Capitol Hill meetings to demand that Congress try again to pass litigation reform.”
On the other end of the spectrum, the Conservative Action Program, an umbrella group comprising, among others, former Reagan Attorney General Ed Meese, former Ohio Secretary of State Ken Blackwell, and former Virginia Attorney General Ken Cuccinelli, urged Congress to “stand up for our constitutionally protected patent rights and reject another Washington ‘fix.’”
Meanwhile, the life sciences industry, which largely opposes both the Innovation Act and the PATENT Act, has instead pushed for relief from a number of new Patent Office proceedings inaugurated by the last round of patent legislation: 2011’s America Invents Act.
These proceedings were meant to be less costly and time consuming alternatives to the classic in-depth patent litigation. Most prominent among the new proceedings is a process called “inter partes review” (IPR), in which a patent’s validity can be challenged under a lower burden of proof, through a broader reading of the patent’s language, and via a cheaper, faster review.
As I explained earlier this year, the advent of these proceedings over the past several years – which have shown more than 200 percent growth year-over-year – has sharply reduced the number of patent cases brought in court. Pharmaceutical companies have increasingly bridled at IPR and its sister proceedings, especially as unlikely interlocutors like hedge funds have gotten in on the action.
Specifically, in April, the Wall Street Journal reported that hedge fund manager Kyle Bass had filed IPRs against patents held by Jazz Pharmaceuticals, Acorda Therapeutics, and Shire, soon thereafter supposedly shorting their stock and taking positions in rival generic drugmakers. Bass’s group has since added Celgene and Biogen to its target list. Other hedge funds have followed suit.
But the biotech industry has fought back on multiple fronts. The STRONG Patents Act, introduced in the Senate in March, would, among other things, raise the burden of proof and tighten the standard for interpreting claims in IPR and other proceedings in order to re-level the playing field. Some, but not all, of those provisions found their way into the Senate’s PATENT Act; none has yet been integrated into the Innovation Act.
And thus pharma companies have also turned to a second strategy: securing an exemption for biotech patents from IPR. Since the Patent Office proceedings were designed primarily to weed out bad software and business-method patents, they reckon pharma patents probably shouldn’t have been subjected to their rigors in the first place.
But in July, according to the Wall Street Journal, the Congressional Budget Office scored this proposal and preliminarily found it would increase federal spending by $1.3 billion over the course of 10 years since it would delay the emergence of cheaper generic drugs. Tom DiLenge, general counsel of the Biotechnology Industry Organization, responded that the CBO’s premises were flawed, as “IPR is not designed to speed generic entry,” and that, in any event, $130 million per year represents a fairly small impact.
So expect this debate over IPR, pharma, and the remainder of the legislative package to intensify as Congress returns to session next week.
And finally, a plug: as the patent reform debate resumes, AEI has you covered. If you find yourself in DC next week, join us at the Institute on Tuesday for a lunchtime panel discussion among distinguished experts, moderated by yours truly, on the various legislative proposals and their prospects for passage.
- See more at: http://www.techpolicydaily.com/technology/patent-reform-roaring-back/?utm_source=newsletter&utm_medium=paramount&utm_campaign=cict#sthash.nD8aYPhg.dpuf
But now, as summer turns to fall, and as members return to the Capitol, the patent wars are again beginning to heat up among interest groups.
The National Retail Federation, which has long backed the various reform measures, has set September 10 as a “day of Capitol Hill meetings to demand that Congress try again to pass litigation reform.”
On the other end of the spectrum, the Conservative Action Program, an umbrella group comprising, among others, former Reagan Attorney General Ed Meese, former Ohio Secretary of State Ken Blackwell, and former Virginia Attorney General Ken Cuccinelli, urged Congress to “stand up for our constitutionally protected patent rights and reject another Washington ‘fix.’”
Meanwhile, the life sciences industry, which largely opposes both the Innovation Act and the PATENT Act, has instead pushed for relief from a number of new Patent Office proceedings inaugurated by the last round of patent legislation: 2011’s America Invents Act.
These proceedings were meant to be less costly and time consuming alternatives to the classic in-depth patent litigation. Most prominent among the new proceedings is a process called “inter partes review” (IPR), in which a patent’s validity can be challenged under a lower burden of proof, through a broader reading of the patent’s language, and via a cheaper, faster review.
As I explained earlier this year, the advent of these proceedings over the past several years – which have shown more than 200 percent growth year-over-year – has sharply reduced the number of patent cases brought in court. Pharmaceutical companies have increasingly bridled at IPR and its sister proceedings, especially as unlikely interlocutors like hedge funds have gotten in on the action.
Specifically, in April, the Wall Street Journal reported that hedge fund manager Kyle Bass had filed IPRs against patents held by Jazz Pharmaceuticals, Acorda Therapeutics, and Shire, soon thereafter supposedly shorting their stock and taking positions in rival generic drugmakers. Bass’s group has since added Celgene and Biogen to its target list. Other hedge funds have followed suit.
But the biotech industry has fought back on multiple fronts. The STRONG Patents Act, introduced in the Senate in March, would, among other things, raise the burden of proof and tighten the standard for interpreting claims in IPR and other proceedings in order to re-level the playing field. Some, but not all, of those provisions found their way into the Senate’s PATENT Act; none has yet been integrated into the Innovation Act.
And thus pharma companies have also turned to a second strategy: securing an exemption for biotech patents from IPR. Since the Patent Office proceedings were designed primarily to weed out bad software and business-method patents, they reckon pharma patents probably shouldn’t have been subjected to their rigors in the first place.
But in July, according to the Wall Street Journal, the Congressional Budget Office scored this proposal and preliminarily found it would increase federal spending by $1.3 billion over the course of 10 years since it would delay the emergence of cheaper generic drugs. Tom DiLenge, general counsel of the Biotechnology Industry Organization, responded that the CBO’s premises were flawed, as “IPR is not designed to speed generic entry,” and that, in any event, $130 million per year represents a fairly small impact.
So expect this debate over IPR, pharma, and the remainder of the legislative package to intensify as Congress returns to session next week.
And finally, a plug: as the patent reform debate resumes, AEI has you covered. If you find yourself in DC next week, join us at the Institute on Tuesday for a lunchtime panel discussion among distinguished experts, moderated by yours truly, on the various legislative proposals and their prospects for passage.
- See more at: http://www.techpolicydaily.com/technology/patent-reform-roaring-back/?utm_source=newsletter&utm_medium=paramount&utm_campaign=cict#sthash.nD8aYPhg.dpuf
