By Donald Zuhn --
As part of its ongoing "Conversations With" series, the Washington Legal Foundation (WLF) recently made available its latest question-and-answer offering, which examines the ongoing evolution of intellectual property rights in the United States and internationally. In the paper, entitled "The Changing Legal Landscape For Intellectual Property," former Attorney General and Pennsylvania Governor Dick Thornburgh (Of Counsel at K&L Gates LLP), moderates a discussion on the role that intellectual property protection plays in commerce and innovation with Robert Armitage, Senior Vice President and General Counsel of Eli Lilly and Company; Michael Fricklas, Executive Vice President, General Counsel, and Secretary of Viacom Inc.; and Brad Smith, Senior Vice President, General Counsel, Corporate Secretary, Legal & Corporate Affairs for Microsoft. While the 18-page paper contains some interesting discussion by Mr. Fricklas and Mr. Smith on a number of copyright issues, we focus on the portion of the discussion (mostly by Mr. Armitage) that concerns patent issues.
With respect to whether U.S. patent law was in need of reform, Mr. Armitage (at left) stated that the 110th Congress had debated a number of "legislative proposals that could diminish our patent system in profound ways." While noting that "it is undeniable that the U.S. patent system does need major reforms," Mr. Armitage argued that the needed reforms failed to address the "root-causes of well-understood problems." Instead of a providing "more efficient ways in which to enforce valid patents and challenge questionable ones," Mr. Armitage contended that needed patent reform was being held hostage by "an anti-patent agenda."
Mr. Armitage also addressed the efforts by countries such as Brazil and Thailand to circumvent patent protection on therapeutics, stating that disrespecting patent rights on medicines available today "destroys any possible incentive" for addressing a country's need for new medicines in the future. He added that the pharmaceutical industry "has been painted as the chief impediment to access to needed medicines," but that "making a solution-provider the problem-maker is morally and intellectually dishonest, not to mention unproductive."
When asked about "reverse payment" agreements, Mr. Armitage turned the discussion to the need to update the Hatch-Waxman regulatory scheme. Noting that a nearly $1 billion investment was required to develop a new drug, and further, that the number of new drugs being approved by the FDA was "alarmingly low" (less than 30 in 2007), Mr. Armitage said that "it becomes clear that an industry that invests over $90 billion dollars in research and development cannot be sustained if the intellectual property protecting the few medicines that are discovered and approved are attacked after four years," (i.e., the amount of time Mr. Armitage says it generally takes for a generic company to challenge a brand company's patent). Because the Hatch-Waxman scheme "no longer provides the right balance of exclusivity protection for innovators," he noted that "Lilly and others in the industry have opened the dialog to extend data package protection to 14 years."
On the topic of follow-on biologics, Mr. Armitage pointed out that "Lilly has been adamant that a period of data exclusivity of 15-20 years for innovative products would represent the best policy choice for overall patient welfare." To those demanding shorter periods, he argued that a 5-year or 10-year period of data exclusivity did not "make sense" in view of the safety hurdles and small number of new medicines coming to market.
In closing, Mr. Armitage stated that the most important task for the Patent Office and the courts was to "apply all requirements for patent validity rigorously." While he concedes that "[t]he problems with the patent system -- such as the backlog of patent applications and the rising cost of procuring and enforcing a patent -- are real," he also acknowledges that the increase in application filings and patent issuances "is a sign of success not failure of the system."
Patent Docs thanks WLF Chief Counsel Glenn Lammi for alerting us to the WLF's paper on IP issues.
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