BIO 2017: Industry at a crossroads over section 101
The biotechnology industry is at a crossroads over 35 USC section 101, which covers patent subject matter eligibility.
This is according to Robert Stoll, partner at Drinker Biddle & Reath, who spoke on a panel at the 2017 BIO International Convention on Tuesday, June 20.
The panel, “The state of biotechnology patenting in the US and future directions”, was moderated by Kevin Noonan, partner at McDonnell Boehen Hulbert & Berghoff.
Stoll outlined three legislative proposals for amending section 101—by the IP law section of the American Bar Association, the American Intellectual Property Law Association, and the Intellectual Property Owners Association.
“They’re telling you that they think they can’t live with the way the US Supreme Court is going and what the US Patent and Trademark Office is able to do within the Supreme Court guidance,” he said.
The proposals are a “very significant move”, according to Stoll, who said he understands that BIO and the Pharmaceutical Research and Manufacturers of America “definitely agree” with the concept of legislation being needed to change the current interpretation of section 101.
“Any time you go the Hill with anything, you need unity to get it passed,” said Stoll, explaining that the associations are cooperating to try to come up with one proposal.
The session also looked at other patent decisions made by the Supreme Court in recent years.
Jeffrey Lamken, partner at Mololamken, outlined findings from data he had compiled showing that since 2015, the US Court of Appeals for the Federal Circuit has been reversed 90% of the time in patent cases, although he added the caveat of selection bias (because the Supreme Court is more likely to take on cases that will be reversed).
The decisions are “70 to 80% negative for patentees”, and qualitatively it looks even worse, he said, outlining the losses for patentees in terms of cases, for example in patent-eligible subject matter, and exhaustion rules under Impression Products v Lexmark.
Hans Sauer, vice president of IP at BIO, explained that given the long drug development times (for example, ten years from inception to bringing to market) faced by companies in the industry, they are “very sensitive” to changing rules along the way.
“It’s pretty bad for us to change patent law rules. In fact, there’s very little that could be worse for us in investment and innovation in our space,” he said.
Another area of concern for BIO members is changes in “instruments” that can be used against patents, in particular the patent invalidation trials at the Patent Trial and Appeal Board (PTAB).
“The protections didn't materialise,” said Sauer, adding that the industry was told there would be a choice between challenging a patentin either a court or at the PTAB, but that was wrong too.
Lori Pressman, an independent consultant, and co-author of “The economic contribution of university/nonprofit inventions in the United States: 1996-2015” report, added that it was important to watch these trends as patent law evolves, and also “provide data to the people who talk to the Supreme Court”.
“Realistically, we need to be mindful of the trade-offs between public but expiring monopolies (which are what patents are), and private but perpetual monopolies like trade secrets,” she said.
The 2017 BIO International Convention is taking place in San Diego from June 19 to 22.
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