Patent Reform Bill Clears Hurdle In The Senate

The pharmaceutical and biotechnology industries can celebrate a measure of success in their work to ensure that their intellectual property rights are not undermined in the quest for patent reform in the U.S.

The Senate Judiciary Committee voted 16-4 on June 4 to approve S. 1137, a bill primarily designed to curb the number of court cases filed by so-called patent trolls. These are firms that buy out old patents with ambiguous claims and sue other businesses for alleged infringement in the hope of extracting a financial settlement. Technology companies and retailers—often the targets of patent trolls—have pushed hard in recent years for legislation that would discourage such practices.

But to win the support of pharma and bio industries, Sens. Charles Grassley (R-Iowa), chairman of the committee and the bill’s chief sponsor, and Patrick Leahy (D-Vt.), the ranking minority member, have also agreed to expand the scope of the patent reform legislation. Their changes address industry concerns that the process companies now use for challenging the validity of a patent before the U.S. Patent & Trademark Office (PTO) Patent Trial & Appeal Board is being abused.

PTO’s in-house proceedings are aimed at getting rid of weak patents that should not have been issued in the first place. But drugmakers and other critics of the “postgrant” review system say it is slanted too far against patent owners and too often results in revocation. The Grassley-Leahy changes would make it more difficult to invalidate patents by creating sanctions for filing a frivolous petition and by making it explicit that the patents being reviewed are presumed valid.

“These provisions are a promising beginning, and we look forward to continuing to discuss further refinements of this language in the weeks ahead,” says Robert Zirkelbach, senior vice president of Pharmaceutical Research & Manufacturers of America (PhRMA), a drug industry trade association.

PhRMA’s ultimate position on the legislation will be determined by “how well the bill preserves our ability to sustain investments in research and development, support millions of domestic jobs, and provide patients with access to innovative new therapies,” Zirkelbach tells C&EN.

Grassley says he is open to more revisions before the bill goes to the Senate floor.