WASHINGTON The biotech industry isn't so sure about the spin the House is putting on the America Invents Act, which aims to reform the U.S. patent system by placing it on a first-to-file basis like the rest of the world.
Rather than go with the bill (S. 23) that passed the Senate 95-5, Rep. Lamar Smith (R-Texas) introduced a draft of a House version last week that tweaks the first-to-file provision by allowing prior-user rights as a defense against infringement. (See BioWorld Today, March 10, 2011.)
Testifying before a House Judiciary subcommittee hearing Wednesday, David Kappos, director of the U.S. Patent and Trademark Office, said he sees an expansion of the prior-user defense as "pro-manufacturer, pro-small business" and "good policy."
But the proposed revision drew some fire from Rep. Jim Sensebrenner (R-Wis.), who said prior-user rights "will give China a get-out-of-jail-free card" for its habitual practice of intellectual property piracy. Including the prior-user provision "very well could be a poison pill" for H.R. 1249, he added.
The Biotechnology Industry Organization (BIO) also criticized the inclusion of broader prior-user rights in a bill that it calls an improvement over previous House attempts at patent reform.
The issue "could set back efforts to pass meaningful patent reform this year by undermining the broad coalition of American innovators currently supporting patent reform," BIO President and CEO Jim Greenwood said in a statement released Thursday.
Another House revision that has BIO concerned involves the inter partes process. The House bill offers a 12-month window for inter partes review compared with the nine months included in S. 23, but the Senate bill requires a higher standard for initiating the process.
"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," Greenwood said.
"These changes negatively alter the carefully crafted balance between patent owners and accused infringers that was achieved in the Senate bill," he added.
Even the sponsors of the House bill recognize it could use some tweaking. In opening the hearing Wednesday, Rep. Bob Goodlatte (R-Va.), chairman of the Judiciary Committee's subcommittee for intellectual property and a co-sponsor of H.R. 1249, noted that while patent reform "will spur innovation, economic growth and jobs . . . some work still needs to be done on this bill."
For instance, the inter partes process could be improved to strike the right balance, he added.
While Smith is open to fine-tuning the inter partes provision, he said he didn't think the process included in the Senate bill was as user friendly as it could be.
Sen. Patrick Leahy (D-Vt.), sponsor of the Senate bill, said last week that he and Smith want to have a bill "on the president's desk before the end of the year." H.R. 1249 has been referred to both the House Judiciary and Budget committees.
Postmarketing Failure May Come at a High Cost
Not following through on FDA postmarketing requirements could prove to be a costly proposition.
The agency outlines the penalties for noncompliance in a new guidance on postmarketing studies and clinical trials.
If biotech companies fail to meet their postmarketing timetables or submit periodic reports, they could have their products deemed misbranded or face penalties in the millions of dollars.
The guidance, which discusses the FDA's implementation of Section 505(o) of the Federal Food, Drug and Cosmetic Act, stated that initial penalties would be $250,000 per violation with a $1 million cap for a single proceeding. However, those penalties can double in each subsequent 30-day period, topping off at $1 million per violation with a $10 million proceeding cap.
Section 505(o) gives the FDA the authority to require postmarketing studies or clinical trials at the time of approval or when it becomes aware of new safety information.
The law defines new safety information as data about a serious risk or an unexpected serious risk associated with use of the drug or biologic.
ACRO to Supremes: Let the Data in
Concerned about increasing restrictions on the use of medical data, the Association of Clinical Research Organizations (ACRO) filed a brief with the U.S. Supreme Court in the case of Sorrell v. IMS Health Inc., urging the justices to let the data flow.
The case involves a Vermont law that prohibits health care analytics companies and biopharmaceutical firms from using prescriber-identifiable data to facilitate marketing or promotion of brand prescription drugs.
The law provides an exception for research purposes. However, without a broader market for the data, ACRO said there would not be much of an economic incentive to gather the data for research.
ACRO's brief noted that without the data, drug companies would find it more difficult to design clinical trials, identify doctors to participate in the trials, recruit subjects and compare the efficacy of new medicines to those already on the market.
Those difficulties could increase the cost and time involved in drug development.
The court will hear oral arguments in Sorrell v. IMS Health on April 26, and a decision is likely by the end of June.
Editor's note: Mark McCarty, Washington editor for Medical Device Daily (www.medicaldevicedaily.com), contributed to this article. MDD is BioWorld Today's sister publication covering medical technology news.