Patent rules would impede innovation

Infotech and the law | Legal insights for today's market

The U.S. patent system has been vital to the American economy and the U.S. role in
the world economy. Patents have taken
center stage in fostering innovation and
serving as the catalyst for innovation in
numerous areas.

Despite the innovation fueled
by our patent system, some people
have recently come to question
whether innovation could
be significantly stifled by new
U.S. Patent and Trademark
Office (USPTO) rules that
would place restrictions on the
number of continuation applications
and patent claims an
inventor can file. GlaxoSmith-
Kline, for example, expressed a
similar concern in a recent
action it brought in federal
court in the Eastern District of
Virginia.

GSK is seeking a preliminary
injunction against implementation of
the new rules. The company argued,
among other things, that these rules,
titled "Changes To Practice for
Continued Examination Filings,
Patent Applications Containing
Patentably Indistinct Claims, and
Examination of Claims in Patent
Applications," would add uncertainty
about the ability of pharmaceutical
and biotechnology companies to
obtain adequate patent protection for
new inventions and discoveries along
with subsequent improvements and
refinements to those discoveries.

The practice of continuing applications
is well-settled in U.S. patent
law. The patent statute and case law
interpreting the statute make it clear
that patent applicants are permitted
to file an unlimited number of continuation
applications that relate to
the filing date of the original application.
Filing unlimited applications is
important because patent applicants
can, in a nonthreatening competitive
environment, continue research and
development efforts to improve on
their discoveries and refine their
technologies for commercialization.

This is particularly important for
pharmaceutical and biotechnology
companies, which typically file broad
initial patent applications on a class
of new drug products. These initial
patent applications are filed well
before clinical trials with broad disclosures
and claims with the intent
that the applicant will pursue additional
patent claims in continuation
applications.

The final rules generally restrict an
applicant to two continuation applications
and place limits and additional
requirements on the number of
claims an applicant may submit. The
restrictions in the final rules raise the
question whether pharmaceutical and
biotechnology companies will have
sufficient incentive and motivation to
continue innovating lifesaving drugs.

In its preliminary injunction
motion, GSK argued that USPTO did
not have the legal authority to issue
the final rules and that the implementation
of the rules would result in
inadequate patent protection for
pharmaceutical and biotechnology
companies. Such inadequate patent
protection, GSK argued, would
impact innovation by those companies
engaged in drug discovery and
development, and the public health
and public interest would ultimately
suffer. GSK's arguments on the merits
of the case ? along with the court's
concern that innovation would be stifled
and patent protection would be
lost ? were enough for the court to
grant a preliminary injunction
against USPTO.

The battle isn't over on the issue of
continuation applications. GSK and
USPTO will meet again to argue over
USPTO's summary judgment motion
which, in all likelihood, will be filed
this month. The biotechnology and
pharmaceutical industries should
closely monitor this case as the adverse
impact on innovation as a result of
implementing the final rules is likely
to be enormous. The proximate effect
and the public interest concern associated
with the implementation of these
rules is that life-saving drugs will
become unavailable, unobtainable and
unaffordable to consumers.

As indicated in a letter by Sen.
Charles Schumer (D-N.Y.) to USPTO,
the final rules, if implemented, will
serve "to undermine core principles
of the patenting process," including
the principle of innovation.

Vincent J. Napoleon is counsel in the Life
Sciences, Corporate and Securities-
Technology and the Government Contracts
practices at Pillsbury Winthrop Shaw Pittman
LLP. He can be reached at
vincent.napoleon@pillsburylaw.com.

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