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The Patent Reform Act of 2011 and the Pharmaceutical Industry

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The Patent Reform Act of 2011 and the Pharmaceutical Industry
USTPO

The Leahy-Smith America Invents Act, also called the Patent Reform Act of 2011, passed the Senate on September 8, 2011, with little fanfare and was sent to President Obama for his signature.

The legislation is being touted by some as the first major overhaul of the U.S. patent system since 1952 and crucial for helping the US Patent and Trademark Office (USPTO) deal with its backlog of 1.2 million patents pending. It has been blasted by others for granting more power to big corporations while weakening the rights of smaller investors.

Will the law have any bearing on the gene patent debate? The debate hinges on several issues:

  • Clear intellectual property rights that inventors, companies and investors say they need in order to commercialize genetic technologies.
  • Work being done in taxpayer-supported basic genetic research labs where critics of gene patents say too rigid intellectual property laws cause delays and add to costs of the research.
  • The question of whether or not it is ethical to patent a human gene.

Curiously, Section 27 of the act, "Study on Genetic Testing," directs the USPTO to conduct a study on "effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist." The USPTO is to report back to the Senate and House Judiciary Committees on how patients are impacted by the lack of independent second opinion through additional genetic screening tests and how current exclusive licensing and patents on genetic testing activity impacts the practice of medicine. Further, the USTPO is to report on "the role that cost and insurance coverage have on access to and provision of genetic diagnostic tests." USTPO is tasked with providing this major report within 9 months of enactment.

The provision suggests that Congress is considering patients' rights to a second opinion when a screening test is patented, presumably brought about by Myriad Genetics' enforcement of its patented test for screening for the presence of BRCA1 and BRCA2 cancer genes. It is unclear how the study and resulting report fits with the Patent Office mission http://inventors.about.com/od/patentoffices/a/USPTO.htm of awarding patents, administering patent laws, maintaining records of patents and trademarks, and how the office will go about assessing its findings.

It may be that the law will have little or no impact on gene patents and that Congress is deferring to the Supreme Court to deal with two highly watched cases concerning gene patents, Association for Molecular Pathology v. U.S. Patent and Trademark Office, better known as the "Myriad Case," and Mayo Collaborative Services vs. Prometheus Laboratories, both of which could be before the high court within a year.

Below are what pharmaceutical industry groups had to say about the patent reform legislation.

Biotechnology Industry Organization (BIO): "The improvements made by the bill will benefit all sectors of the national economy by enhancing patent quality and the efficiency, objectivity, predictability and transparency of the U.S. patent system...Small biotechnology companies rely heavily on their patents to attract investment to fund the lengthy and expensive research and development process necessary to bring breakthrough medical therapies and other products to patients and consumers. Strong intellectual property protection is critical for these companies, and they will benefit from the improvements to our nation's patent system made by this legislation." -- BIO President and CEO Jim Greenwood

Generic Pharmaceutical Association (GPhA): "GPhA has strong concerns about Section 11 of the pending bill relating to the supplemental examination of patents. The proposed language would significantly weaken the inequitable conduct defense, compromise the integrity of the current patent process, add unnecessary workload to the U.S. Patent and Trademark Office (PTO), and impact the ability of generic manufacturers to bring lower-cost generic drugs to the market. While we strongly support measures to protect the integrity of the patent process, we also believe that Americans should have timely access to lower cost generic versions of brand medicines. "Unfortunately, proposed language in H.R. 1249 includes a provision on 'supplemental examinations' that would allow a patent holder to ask the PTO to reconsider or correct information that was not in existence when the original patent was granted. In other words, the bill as drafted would allow a patent holder to 'cleanse' its patent, even if the patentee engaged in deceptive or inequitable conduct to obtain the patent. It is clear to GPhA that this language could be interpreted as allowing patent applicants to use the cleansing procedure even if they previously withheld or misrepresented information with the intent to deceive the PTO during the patent application process." -- GPhA

The Pharmaceutical Research and Manufactures of America (PhRMA) issued a statement in support of the first-to-file provision and against the supplemental examination procedure, which the generic manufacturers' association opposed.

"We are pleased that the bill passed today by the House of Representatives transitions the U.S. from a first-to-invent to a first-inventor-to-file (FITF) system. This would bring us in line with the patent systems of other developed nations, creating efficiencies for inventors seeking patent protection in the U.S. and other markets. It would also provide a more-objective measure of determining patentability, thereby providing inventors with more certainty and potentially limiting costly and time-consuming litigation over who was the first to invent.

"In addition, we applaud the inclusion of a supplemental examination procedure. We believe that a supplemental examination that encourages patent holders to approach the PTO for confirmatory review of their patents would help provide for quality patents. It would allow affirmation of valid patents, establishing greater certainty for the research-based patent holders who rely on them, while allowing for clarification of potentially questionable patents. This procedure has the potential to greatly limit frivolous litigation, all while spurring the innovation that is stimulated by strong patent protection." - PhRMA Deputy Vice President Karl Uhlendorf

There is still much to learn about what is in the legislation and how it will impact various interest groups. In a nutshell, the act revises how patents are awarded and allows the USPTO to collect fees. Currently patents are awarded on a first-to-invent system but the legislation changes it to a first-to-file system. The act also creates a review process for challenging patents and changes the grace period between when an inventor files for a patent and when they disclose their patent. It also allow the USPTO to set and collect tiers of fees from new patent filers.

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