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December 19, 2011

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In my forthcoming article, "Patents vs. Statutory Exclusivities in Biological Pharmaceuticals - Do We Really Need Both?" (available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1874130) I consider this possibility, namely that the statutory exclusivities created under BPCIA could replace patents in the context of biologics. Although this would have been beneficial from a public policy perspective, for the reasons mentioned in the article, I believe that such replacement is unlikely to happen.

If not filing patents offers all the benefits described, why would pharma companies patent anything now? They could save themselves time and money not patenting now if there is no downside to being attacked by other innovators. What's the logic at play here from your point of view?

"If not filing patents offers all the benefits described, why would pharma companies patent anything now? They could save themselves time and money not patenting now if there is no downside to being attacked by other innovators"

What is missing from teh article is precisely the new mechanism in the AIA that affords this exact course of action: Prior User Rights.

Dear Big Red:

Pharma companies making small molecule drugs have advantages that make patenting make sense: Orange Book listing, the 30-month stay, etc. This is not the case with biologic drugs.

Dear Skeptical:

Except that PURs are directed to methods. I think the trade secret value with biologics will be with the cell lines.

PUR's are directed to far more than methods.

"with respect to subject matter consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process"

The New PUR opens up a whole new ball game.

Re: Big Red, and Kevin's response: another major impetus for small molecule patenting is that the molecules are readily reverse-engineered, and so trade secrets are of minimal value. Structure determination of a traditional drug is generally trivial, and they are usually (though not always!) readily made by known synthetic methods. Hence,composition-of-matter claims are essential for exclusivity beyond the NCE exclusivity period.

Dear Skeptical:

I think the focus is on methods, but you illustrate my point: a cell line would qualify under the extension of the business method patent defense under the AIA.

So I think you are right but the important thing will be trade secret protection for the cell line or method

Kevin,

As a practical matter, you're correct that the focus of the new PUR provision is on patented methods/processes as those are most likely to be practiced as "trade secrets." Even so, it's still unnerving that PURs have been extended beyond "business methods" (I didn't like 35 USC 273 when it was enacted and still don't like it, except that it prevented a majority of SCOTUS from ruling them patent-ineligible in Bilski). We now have the odd situation that, while we may no longer have "secret prior art" vis-a-vis 35 USC 102(g)(2) under the AIA, you may nonetheless have a personal "get out of patent infringement" card under this new PUR provision, even while flouting the premise of why the U.S. grant patents (i.e., limited in duration exclusive rights in return for disclosure of the invention). If you sense that PURs make me nauseous, you're correct.

Kevin,

Best of both worlds will be trade secret AND someone else later getting a patent and clearing the field for you.

This way, one of your "lucky" competitor's gets to spend the money obtaining and enforcing the patent while you and your customers get the free-rider benefits.

Devious, Skeptical, devious. It might just work out that way.

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