CRYSTAL CITY, Va. _ The U.S. Patent and Trademark Office(PTO) is grappling with highly technical issues involved inimplementing the Uruguay Round Agreements Act (URAA) of theGeneral Agreement on Tariffs and Trade (GATT).

At stake for the biotechnology industry is whether GATT willultimately help or hurt companies that seek to leverage theirintellectual property rights for capital formation and the creation ofprofits.

A hearing here on Thursday was crammed with patent attorneys _many of whom count pharmaceutical companies among their clients_ who argued over details of how the PTO and the FDA shouldcraft policies to deal with URAA-mandated changes in patent termsthat will take effect on June 8, 1995.

URAA, the enabling legislation for GATT that was signed into lawby President Clinton on Dec. 8, 1994, changes the rules of the gamefor inventors. Since 1861, U.S. patents have been valid for 17 yearsfrom the date of issue. But GATT seeks to harmonize intellectualproperty laws worldwide and thus imposes new terms, like thosecurrently used in Europe and Japan, whereby a patent is good for 20years from the date an application is filed, regardless of the date ofissue.

For inventors whose patents languish at PTO for more than threeyears, the change could decrease the effective life of a patent. Forthose whose patents are cleared swiftly, the new terms could addmonths or years to the life of a patent.

According to Lisa Raines, vice president of government relations atGenzyme Corp., biotechnology patents routinely take longer thanthree years to issue. As a result, the industry lobbied hard last year toinclude special provisions in URAA that would allow patent terms tobe extended for up to five years to account for certain delays beyondan inventor's control, like interference proceedings or successfulappeals for rejected patents.

Another roadblock to the effective life of biotechnology patents isthe requirement of regulatory review prior to marketing. That issuewas considered serious enough to warrant a legislative remedy in1984, nicknamed the Waxman-Hatch Act, that awarded patentextensions for FDA delays.

Despite these fixes, said Raines, the biotechnology industry still fearsthat the new 20-year GATT patent terms could be a problem. "Thebottom line is that, through no fault of the inventor, patent issuancecan get delayed for longer than three years," Raines told BioWorld."We want to make sure we don't lose out."

Questions Loom For Existing, Pending Patents

The URAA legislation won't just affect future patents _ it raises ahost of complex issues for existing and pending patents. Thelegislation includes transitional provisions to address these issues.Patents issued or filed before June 8, 1995, will be valid for 17 yearsfrom the date of issue or 20 years from the date of filing, whicheveris longer. For patent applications filed after June 8, 1995, patents willbe valid for 20 years from the date of filing.

Much of the debate at the hearing centered on how the commissionshould implement the new 20-years-from-filing terms. FDA policiesalso will play a role in this arcane drama as it is legally bound toconsider patent term expirations before granting marketing approvalto generic drug manufacturers, for example. The expiration dates ofup to 200 brand-name drugs may be extended as a result of URAA.

But Thursday's debate took on a surreal quality in light of the factthat legislation has been introduced in both the House and Senatethat could change the laws governing patent terms yet again. In theHouse, Rep. Dana Rohrabacher (R-Calif.) has introduced a bill thatwould make permanent the transitional rules. The bottom line: nopatent would be valid for less than 17 years from date of grant.

Rohrabacher's bill, as well as a companion bill introduced in theSenate by Robert Dole (R-Kan.), aims to protect inventors whosepatents take longer than three years to issue. Although the bills differfrom URAA, President Clinton has said he would "not oppose" suchlegislation should it reach his desk for signature.

Just last week, a majority of members of the Biotechnology IndustryOrganization's (BIO) intellectual property subcommittee voted tosupport the Rohrabacher-Dole legislation. However, BIO's board ofdirectors has elected to wait and see whether amendments to URAAand the Waxman-Hatch Act couldn't provide sufficient protectionagainst shortened patent terms, said Raines.

Such amendments might include the abolition of the five-year limiton patent extensions granted under special circumstances and moregenerous terms to account for FDA delays. BIO plans to offerspecific proposals on the matter within a few weeks.

Chuck Ludlam, BIO's vice president for government relations, toldBioWorld that his organization is focused on the here and now,rather than on potential future laws. Assuming URAA goes intoeffect, one of the most critical issues for the industry is how effectivethe PTO will be in evaluating patents. Clearly, any delays in thereview process will become critical for patents filed after June 8.

In comments that BIO plans to submit to PTO Commissioner BruceLehman today, the trade association will recommend "constructive"administrative changes that could speed evaluations. "We want to gobeyond the technical issues and address the larger issue of how PTOcan expedite the patent process for biotechnology products,"explained Ludlam. The ultimate net benefit or harm done by GATTand URAA could hinge on the outcome of that effort. n

-- Lisa Piercey Washington Editor

(c) 1997 American Health Consultants. All rights reserved.

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