Biopharma Industries, Others Urge Caution In US Patent Reform

A coalition of large and small companies and organisations – including the leading trade associations for the US pharmaceutical and biotechnology industries – has asked the US Congress to use caution in rewriting patent laws so as not to cause unintended harm to their ability to innovate.

Congress has become active in developing legislation to address problems of patent assertion entities (PAEs), also referred to as patent trolls. But the biopharma industry and others are concerned that legislation might be too ambitious and harm their use of the patent system to boost innovation, according to industry sources.

Yesterday, more than 150 businesses and organisations – including labour unions, entrepreneurs and universities – sent a letter to the Senate Judiciary Committee urging caution.

The 11 February letter sent under the Innovation Alliance is available here.

“[T]he Senate should exercise great caution before moving any legislation that could weaken the constitutional protections afforded to patent holders or make patent rights less valuable or more difficult to enforce,” the letter said. “Weakening the protections of the patent system would surely result in the loss of America’s creative, technological, and economic edge.”

“The America Invents Act was fully implemented less than a year ago, and its effect on our patent system has yet to be fully understood or appreciated,” they said. “Congress should therefore be cautious before making additional changes to our patent laws.”

“Any changes that are made should not undermine U.S. patents, their robust enforcement, or the existing economic incentives for companies of all sizes to invest in new jobs, research, and development,” the letter said. “We encourage you to focus in future hearings on the many different aspects of the legislation and the broad spectrum of stakeholders who would be affected by it.”

The House has passed a bill on this issue and the Senate has several related bills pending.

Legislation is typically aimed at protecting small businesses who may receive letters from patent trolls telling them they are using infringing technology and must pay up or else go through an expensive court proceeding, an industry source said.

But the way a bill is written raises the question of who gets filtered out in addition to patent trolls, the source said. An overly ambitious bill might, for instance, catch biotech companies under the definition, since they sometimes may buy one patent for commercialisation in order to finance innovation for the next.