“Danger!” — The Need for Active Watch of Patent Reform

4/13/09

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authority to determine how to assess damages. Unlike the original bill, the modified version included no mention of limiting or eliminating the “entire market value” rule or applying “prior art subtraction” before determining a royalty base. The bill, is now heading to a full Senate vote before the House takes up its version of the patent reform legislation.

The modified Senate bill is said to be good news for those who value patents as a means to encourage innovation, investment, and job creation. Indeed, the Biotechnology Industry Organization (BIO), which represents more than 1,200 biotechnology organizations worldwide, recently released a statement saying that “careful compromises on several key issues, including damages and post-grant review … [break] the logjam on the major issues that have held up patent reform for the past several Congresses and will clear the path for a bill to be completed without undue delay.”

If the news is so good, why the warning? It’s because proponents of more radical patent reform, like the supporters of the original bill are lurking, waiting to strike. The Coalition for Patent Fairness, a group representing those who want to weaken the patent system, including big IT and financial services, has been pushing patent reform for years, and it is not giving up. The Coalition is strongly advocating for the damages provision in the original version of the legislation, and it expects there will be a much stronger provision in the House version of the bill. If we could only hear the Robot now, its warning would be sounding for everyone in the Massachusetts life-sciences, cleantech, medical-device, university, and research-hospital communities. “Danger, Danger!” The Robot is right; trouble is ahead.

The danger is that of complacency. The danger is thinking the fight is over, and the fight is certainly not over. The House will be taking up its version of the patent reform bill, H.R. 1260, very soon. In a strange twist that can only happen in politics, Democrats, big banks, and IT giants like Microsoft and Google are on the side of “reform” or weakening the patent system, while opponents include Republicans and labor unions. Strange bedfellows, indeed!

This warning is something to be taken quite seriously. There are things that the Massachusetts innovation economy can and must do in order to see that H.R 1260 gets through the House in a form that helps, not hinders, the revitalization and growth of our economy. A first, and simple step, is contacting your representatives and business leaders. Recently, a contingent of Massachusetts biotech companies, along with MIT and the Massachusetts Biotech Council (MBC), met with Representative Bill Delahunt’s office to make their position clear. One of those in attendance, Donna T. Ward, vice president of , intellectual property at Alnylam Pharmaceuticals, told me afterwards via e-mail: “We were excited about the opportunity to discuss these very critical issues with Rep. Delahunt’s office and House staffers. It is a simple fact that without strong patents, the translation of fundamental knowledge toward innovative medicines will not occur. We hope that others who value strong patents will let their representatives know the importance of these issues.”

Donna is right. Such meetings are very important. As you can imagine, the patent system is typically not high on any congressman’s list, but community members can let their representatives know that it is of utmost importance to them. We need to let our representatives know that this is not an ideological issue between Democrats and Republicans, but rather a practical, business issue that transcends party lines.

In the past—recent years especially—a strong patent system has promoted the successful transfer of technology from our world class universities and hospitals to industries, leading to the treatment of diseases as well as the formation of new industries and jobs. This has been good news for research-rich Massachusetts, a state with many constituents who are employed in the biotech, cleantech, and medical device industries. We may not be as fortunate as Will Robinson to have our own Robot, but we can listen and pay attention to the early warning signs that are out there, and advocate for the right kind of patent reform. If the wrong kind of reform prevails, the strong patent system that is utilized for so much good in Cambridge, throughout Massachusetts, and elsewhere could be lost.

David Resnick is a partner and the co-team leader of the Biotechnology/Chemistry team at Nixon Peabody. David assists clients in obtaining and defending intellectual property protection in the life sciences, including stem cells, RNAi and personalized medicine. The views expressed in this column represent only those of the author and not of Nixon Peabody or its clients. Follow @

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