US House set to consider patent reform tomorrow

The US House of Representatives Judiciary Committee will hold a hearing on the Innovation Act tomorrow (April 14), during which testaments will be given by representatives from Eli Lilly and the Biotechnology Industry Organization (BIO).

The act, re-introduced by Bob Goodlatte, chairman of the committee, on February 5, would amend the America Invents Act (AIA) and make it more difficult to launch frivolous patent infringement suits by requiring plaintiffs to disclose which parties have a financial interest in the patent.

During the hearing two panels will testify in front of the full committee.

The US Patent and Trademark Office’s director Michelle Lee will testify on the first witness panel. The second will include Bob Armitage, former vice president and general counsel of pharmaceutical company Eli Lilly, and Hans Sauer, deputy general counsel for intellectual property at BIO.

The Innovation Act was originally introduced in 2013. It comfortably passed in the House with a vote of 325-91 and garnered the support of US President Barack Obama, but Senator Patrick Leahy scrapped the bill last May after he was concerned it might have “unintended consequences”.

While Leahy recognised the impact of non-practising entities, sometimes called ‘patent trolls’, on US innovation, he said the bill went “beyond the scope of addressing patent trolls, and would have severe unintended consequences on legitimate patent holders”.

The hearing comes as the AIA-introduced inter partes review (IPR) system is facing scrutiny after Dallas-based hedge fund manager Kyle Bass used the provision to challenge patents he said are not innovative, and exist simply to keep up drug prices. One of the companies targeted by Bass, Acorda Therapeutics told the Wall Street Journal newspaper that Congress, by introducing IPRs, had inadvertently created a “mirror image problem of ‘reverse patent trolls’”.