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September 16, 2005

Patent Reform Under Attack

The Patent Reform Act of 2005 took flak in Congressional hearings on Thursday.

The limiting of injunctive relief, a major provision of the draft legislation, was assailed by the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Industry Organization (BIO), lobbying groups for the nation's drug and biotech companies, which rely upon patent enforcement to protect their patented innovations, which can cost tens of millions to research and develop. Nektar Therapeutics chairman Robert B. Chess asserted that this provision, which was dropped after outcry, would have "severely weakened the ability to innovate. Investors will only invest in ideas if they are adequately protected by strong patents".

On the other side, as Emery Simon, an attorney representing the Business Software Alliance, coyly put it, "The support of our industry for this legislation should not be taken for granted."

Comparing the different vested interests of the computer and life sciences industries, Rep. Lamar Smith, R-Texas, the chairman of the subcommittee shepherding the bill observed, "Biotech and brand drug companies ... operate under very different business models that rely on a legal system that vigorously protects patent rights. Their concerns about profit margins, lawsuits and productivity are no less sincere than those of the high-tech community." The legislative structure for damage modeling for patent infringement, whether applied to all or just a portion of an infringing product, is still hotly contested between these two industries.

Rep. Howard Berman, D-California said, "We have a bill which to my way of thinking has stripped out very significant reforms."

The odds of passage this Congressional session appear lengthening, as the Senate has done practically nothing on this issue. "Notwithstanding our progress to date, the legislation is at a crossroads," Rep. Smith said in his opening remarks on Thursday, but he still expressed optimism that a compromise can still be reached.

Posted by Patent Hawk at September 16, 2005 12:07 AM | The Patent System