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House Passes Contentious Patent Reform Act; BIO, CHI Call for Senate to Address Concerns

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The Patent Reform Act of 2007, which proposes sweeping and controversial changes to current US patent law and has drawn heavy criticism from the biotech and university communities, narrowly passed through the US House of Representatives late last week, according to the House website.
 
The final vote tally included 220 (D-160, R-60) in favor of the bill and 175 (D-58, R-117) opposed, with 37 abstaining, according to the website.
 
Several sources indicated to BTW that the Senate is expected to vote on the bill in the coming weeks, though an exact timeline is not yet known.
 
Since its inception earlier this year, various concerned parties from the university tech-transfer community, the biotech industry, and the information technology industry have been heavily lobbying for their interests in the bill.
 
Immediately following news of the House vote last week, the Biotechnology Industry Organization and the California Healthcare Institute released separate statements voicing disappointment about the passage of the bill and calling for the Senate to address the concerns of the life science industry before voting on its version of the bill.
 
Many members of the biotech and university technology transfer community have bemoaned specific elements of the proposed bill, such as the possible establishment of a “first-to-file,” as opposed to a “first-to-invent” system; an open-ended, post-grant opposition system; and provisions dealing with apportionment of damages in IP-infringement lawsuits.
 
Many of those opposed to the bill have expressed concerns that the legislation is tailored to meet the needs of the software, IT, high-tech, and financial service industries, and may stifle innovation within the life sciences industry.
 
One day prior to the House vote, President Bush issued a statement supporting most aspects of the patent reform bill, but opposing a key provision that would limit damage awards in patent infringement suits.
 
As BTW reported recently, identical versions of the bill passed the markup stage in both the House and Senate in July (see BTW, 7/23/07). Though some amendments to the bills were made in response to criticisms – including a broadening of the first-to-file grace period and the elimination of a second window for post-grant patent opposition – many opposed to the bill remained dissatisfied with several of the bill’s provisions.
 
The House bill, HR 1908, was primarily sponsored by Congressman Howard Berman (D-Calif.), with 23 co-sponsors. The Senate bill, S.1145, also called the Leahy-Hatch Patent Reform Act of 2007, was sponsored by Patrick Leahy (D-Vt.), chairman of the Senate judiciary committee.
 
Early Reaction
 
The Biotechnology Industry Organization, which has been one of the most vocal opponents of the bill, last week issued a statement expressing “disappointment” with the result.
 
“BIO appreciates the continued efforts by the House to improve the Patent Reform Act, but unfortunately cannot support the legislation passed today as it threatens continued biotechnological innovation,” Jim Greenwood, president and CEO of BIO, said in the statement.
 
“We welcome improvements to the US patent system, particularly those that increase patent quality, increase public participation, and provide additional resources to the Patent and Trademark Office,” Greenwood continued. “However, the legislation that passed the House today and the legislation currently pending in the Senate do far more harm than good to our nation’s patent system.”
 

“We look forward to working with the Senate to improve upon this legislation, particularly with respect to provisions relating to damages, inequitable conduct reform, post-grant review proceedings, and PTO rulemaking authority.”

Greenwood added that BIO was “heartened” that the bill only narrowly passed and that there was strong bipartisan opposition to the legislation.
 
“This opposition demonstrates the serious concern of varied stakeholders – across many industries, research institutions, and other interests – with the bill and the need for a more consensus-oriented approach to patent law reform,” Greenwood said. “We look forward to working with the Senate to improve upon this legislation, particularly with respect to provisions relating to damages, inequitable conduct reform, post-grant review proceedings, and PTO rulemaking authority.”
 
The California Healthcare Institute, which in June issued white papers along with BIO outlining the potential negative impact of current patent reform initiatives, also released a statement late last week expressing its disappointment with the vote.
 
“Today’s narrow passage by a vote of 220 to 175 – just two over the 218 bare majority – in the House of Representatives illustrates growing concern with elements of the Patent Reform Act, which we believe threatens to undermine biomedical innovation, while weakening patent protections and making infringement easier and less expensive,” CHI president and CEO David Gollaher said in the statement.
 
“For the life sciences industry, where the FDA regulatory framework already makes investment decisions extremely risky, this will discourage venture capitalists and life sciences companies from funding the research necessary to develop the therapies, treatments, and technologies of tomorrow.
 
Gollaher also said that CHI expects the US Senate to take a “more deliberative and thoughtful approach to ensure that the legislation lives up to its promise to strengthen patent law, protect patent rights, and promote innovation.”

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