The most sweeping effort to reform the U.S. patent system in 50 years will have to wait a little longer.
Senate Majority Leader Harry Reid, D-Nev., withdrew a vote on the bill from the calendar May 2, essentially postponing it until 2009, analysts said.
Local patent attorneys and leaders in the biotechnology, high-tech, pharmaceutical and medical device industries have monitored the legislation’s progress, known as the Patent Reform Act of 2007, since first introduced last April.
Put simply, the patent reform bill would make patents harder to obtain, easier to challenge and more difficult for patent holders to collect damages in infringement lawsuits.
It would award patents to individuals who file first, instead of those who invent first, aligning practices in the United States with the rest of the world.
The bill has stalled since it passed the House in September, mostly due to conflicting interests and pressures on lawmakers to come up with language that satisfies both sides, particularly big pharma and biotech firms that favor strict patent protection and high-tech firms that favor more rapid speed-to-market. Similar legislation failed to pass in the previous session of Congress.
Although forecasts for the bill’s passage have dimmed, observers said it’s not yet dead.
“Because we’re coming up on an election, I would guess there’s going to be a patent reform act of 2009 perhaps,” said John Phillips, managing principal of the San Diego office of Fish & Richardson who represents clients in the high-tech and medical device industries.
Before then, analysts said a few key provisions will likely be revised.
Sen. Sheldon Whitehouse, D-R.I., said May 6 that the bill is unlikely to return to the calendar unless the Senate Judiciary Committee agrees on language concerning how damages are awarded.
The ability to collect damages is one of the biggest sources of contention in the debate, according to Gregory Frykman, a pharmaceutical analyst for the Stanford Group Co.
“If, all of a sudden, the patents become easier to challenge, and infringement is less of a penalty, and if patents are harder to get, that, at a minimum, increases uncertainty about future value streams of molecules in development,” he said.
Secondly, Frykman said, it would cost more for life sciences firms to get the same intellectual property protection they have now.
The topic of patent reform has stirred reaction from big drug makers worried that the changes would weaken the rights of patent holders.
The Biotechnology Industry Organization has voiced support for some of the bill’s provisions, such as the first-to-file system, but opposes weakening the ability for companies to pursue infringement damages.
Call For Reform
A call for patent reform comes mostly from high-tech companies that have been subject to a significant number of patent infringement lawsuits.
The Coalition for Patent Fairness, which represents a group of high-tech companies in favor of reform, points to a 30 percent increase in patent litigation cases last year compared with the prior year.
The legislative debate over patent reform follows on the heels of a Supreme Court ruling last month in a dispute over whether obvious inventions are patentable.
In KSR v. Teleflex, the high court made it more difficult to obtain new patents and to defend existing ones.
The ruling was a victory for proponents of patent reform since it concluded that obvious inventions are not patentable.