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Bill Sponsor Says Prospects 'Pretty Good' for Patent-Reform Legislation to Pass This Year

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This article was originally published on June 12.

WASHINGTON, DC – The prospects are "pretty good" for enactment of a US patent reform bill that has passed Senate and House review committees but for months has been heavily contested by the biotech, pharmaceutical, and university communities, Senator Arlen Specter, who is a co-sponsor of the bill, said today.

In addition, the pharmaceutical and biotech industries are now largely on board with the bill after Specter and others added "gatekeeper" language to the most controversial portion of the bill that dealt with how damages would be calculated in patent-infringement litigation, according to Specter and Billy Tauzin, head of the Pharmaceutical Research and Manufacturers of America.

The gatekeeper provision gives more power to Federal judges to calculate patent-infringement damages by taking into account the various IP components supporting the product at the heart of the case.

Specter (D-Pa.) and Tauzin commented on the bill during the Best and Brightest Forum on Medical Innovation, an event held here today co-sponsored by the Council on American Medical Innovation and the Aspen Institute.

The bill, which calls for sweeping changes to the US patent system, passed the Senate Judiciary Committee in April after being stalled there for almost two years (see BTW, 4/8/2009). A companion bill passed in the House in 2007. The legislation now awaits a full vote in the Senate.

"Will it be passed? I could give you greater assurances if I were still chairman, but I think the prospects are pretty good," Specter said following his keynote address at the forum. "The calendar is very crowded, but I think we'll get to it, and I think the prospects for passage are good."

The bill had in the past generally been opposed in biotech, pharmaceutical, and higher-education circles for various provisions that opponents said weaken patent protection. Supporters in industry and government, in particular the fast-moving IT industry, said the bill is needed because the US patent system in its current state is dated.

Biotech and pharma opponents now generally support the bill after Specter and Sen. Dianne Feinstein (D-Calif.) added language that addressed one of the bill's most controversial sections on apportionment of royalty damages in patent-infringement litigation.

"We had a couple of issues that tripped it up, but we got it passed [through the SJC], and the biotech industry is very pleased with it," said Specter. "I have a couple of witnesses I could swear in to testify to that."

Taubin told BTW following a panel discussion that PhRMA now views the legislation as "a good bill that I think will help patents.

"The biggest problem was with the apportionment of damages provision, which would have dramatically weakened patent protection for biopharmaceuticals," Tauzin said. "We operate on a business model where you might have one to five patents on a product. The high-tech community operates on a completely different business model – you might have 100 different patents [in a product].

"The damages apportionment might work in their world, but it would kill us. We finally got the gatekeeper concept adopted, which was a great suggestion that bridged the gap between us and allowed us to stop fighting over the bill," he added.

"We worked out a big battle between high tech and biotech, and the Senate bill has pretty well satisfied everybody," Specter said. "We've worked out a gatekeeper approach so that we could [deal] with the change in definition on damages, which would have produced a decade or more of expensive litigation [in infringement cases]."

Tauzin said that the biotech communities must now turn their attention to a bill currently being considered in Congress that addresses follow-on biologics.

"What's more important to us in the biotech community is whether or not we get a long enough data exclusivity provision in a follow-on biologics bill," Tauzin said. "If we don't get a long enough period of data exclusivity, you're going to see biologics research move to another country. It's that simple."

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