The pharmaceutical and biotechnology industries are gearing up for another round of debates on patent reform as the US House of Representatives begins consideration of proposed legislation. Last month, the US Senate, overwhelming passed a bill, The America Invents Act (S. 23), a major piece of patent-reform legislation. The bill, which received bipartisan support, has divided business concerns, including the pharmaceutical industry.

According to a recent Wall Street Journal article, the Senate bill brings the US into line with other countries by establishing a system that grants patents to the inventor that is the “first to file” with the US Patent and Trademark Office (PTO) as opposed to the current US system that has a “first-to-invent system,” which some businesses say results in too much litigation.The bill also allows PTO to keep its fees from patent reviews and processing, a measure that is hoped will help reduce the backlog in patent applications at the PTO.

In a press release issued Mar. 31, 2011, Jim Greenwood, president and CEO of the Biotechnology Industry Organization, supported the introduction of a House bill, the America Invents Act  (H.R. 1249), which is similar to the patent-reform bill passed by the  Senate last month. “The America Invents Act is a clear improvement over prior House versions of patent-reform legislation,” said Greenwood in the release. “We are pleased that the legislation will end, once and for all, the diversion of fees collected by the US Patent and Trademark Office, allowing the agency to use all of its fees to hire more examiners, reduce the backlog of pending applications, and make other improvements to its operations. We also commend the inclusion in the bill of many other reforms that will improve the patent system and enhance patent quality, including transition to a ‘first-to-file’ system, the elimination of other subjective elements of patent law, and a new supplemental examination proceeding for use by patent owners.”

Although supportive of the bill, BIO had some misgivings. “BIO has serious concerns with several significant changes made in the House bill regarding the inter partes review system. Taken as a whole, these changes would make it easier to bring frivolous challenges to patents, harder for patent owners to enforce them, and more likely that patent owners will find themselves in duplicative and costly patent-related proceedings,” said BIO in its statement. “These changes negatively alter the carefully crafted balance between patent owners and accused infringers that was achieved in the Senate bill, a bill that won support not only from 95 Senators, but from a wide range of industries, universities, and small businesses across the spectrum of American innovation.” BIO also expressed concerned about the inclusion of broader prior user rights in the House bill and said that this issue, coupled with the inter partes review changes, “could set back efforts to pass meaningful patent reform this year by undermining the broad coalition of American innovators currently supporting patent reform.”

The Pharmaceutical Research and Manufactures of America (PhRMA) did not offer a specific statement on the House measure, but offered its support for the recently passed Senate bill. “As the bill moves forward, we hope that members of the House of Representatives will share in that commitment and approve a bill that mirrors the Senate’s commitment to innovation, “ said PhRMA President and CEO John Castellani in a Mar. 9, 2011, PhRMA press release.

Meanwhile, the Generic Pharmaceutical Association (GPhA), which had earlier criticized the Senate bill, offered its concern over the House bill for weakening measures relating to inequitable conduct defense. “GPhA has strong concerns about Section 11 of the pending bill relating to the supplemental examination of patents. The proposed language would significantly weaken the inequitable conduct defense, compromise the integrity of the current patent process, add unnecessary workload to the US Patent and Trademark Office, and impact the ability of generic manufacturers to bring lower-cost generic drugs to the market. While we strongly support measures to protect the integrity of the patent process, we also believe that Americans should have timely access to lower cost generic versions of brand medicines,” according to a Mar. 31, 2011, GPhA statement.

GPhA also voiced its opposition to the supplemental examination measure in the House bill. “Unfortunately, proposed language in H.R. 1249 includes a provision on ‘supplemental examinations’ that would allow a patent holder to ask the PTO to reconsider or correct information that was not in existence when the original patent was granted,” GPhA continued in its statement. “In other words, the bill as drafted would allow a patent holder to ‘cleanse’ its patent, even if the patentee engaged in deceptive or inequitable conduct to obtain the patent. It is clear to GPhA that this language could be interpreted as allowing patent applicants to use the cleansing procedure even if they previously withheld or misrepresented information with the intent to deceive the PTO during the patent application process.It is imperative that Congress enact good public policy that encourages patent applicants to be truthful and honest when prosecuting the original patent and that the proposed cleansing language would weaken the integrity of the patent process. For these reasons, we urge the Committee to modify the provision before the full bill moves forward.”

Patent reform has been long overdue in the US. The Senate bill represented a six-year journey in getting legislation passed. But reservations for specific measures within the proposed House legislation means that concrete patent reform is still in the making.