The US patent system is about to undergo a major change under the proposed Patent Reform Act of 2007. The implications could be considerable for the pharmaceutical and biotech industry. Some of the proposed changes should be welcomed – such as adopting the clearer international first-to-file system to determine priority. However, other parts of the proposed Act are of concern and could potentially impact the operational environment for the discovery of life-saving drugs.
Patents are essential to the industry. On average, 80% of drugs entering clinical trials fail to make it to market, and significant amounts of money are required to take these drugs on this route. What is important is that those companies who take risk should be rewarded for taking that risk. This is not just a philosophical point, appropriate reward is essential if we want the powerhouse of R&D to continue to generate safe and effective drugs. Development costs are increasing, and will continue to do so as the rigours of the various regulatory bodies increase. So, in order to maintain the desire of companies to discover and develop drugs against this backdrop of increasing risk, there needs to be clarity and protection around validity. Patents are key to all drugs, and are an essential component of ensuring reward to innovative companies.
“The US patent system is about to undergo a major change under the proposed Patent Reform Act of 2007. The implications could be considerable for the pharmaceutical and biotech industry. Some of the proposed changes should be welcomed … . However, other parts of the proposed Act are of concern and could potentially impact the operational environment for the discovery of life-saving drugs.”
Unfortunately, the proposed Patent Reform Act of 2007 would create a new post-grant opposition system, under which a patent is given no presumption of validity, and could be broadly challenged administratively throughout its term. Thus, granted patents could be challenged even years after pharmaceutical and biotech companies have invested hundreds of millions of dollars to bring the patented invention through clinical trials and regulatory approval. Under such a scheme, patents will be at risk and will have less value, and investment in those companies that rely on them will potentially decline.
As the Biotechnology Industry Organization (BIO) has pointed out, the bill would also change the way that damages against patent infringers are calculated in a way that would devalue the contribution of many biotechnology patents. The right to fair compensation for infringement, and the right to fairly stop infringers from future infringing acts, are of paramount importance to the biotechnology industry. Innovative drugs are essential to overcoming life-threatening and debilitating disease, so a fair and robust patent system is essential. The bill before the Senate does not achieve that goal.
Fintan Walton Chief Executive Officer PharmaVentures Ltd