House Patent Bill Sees Staunch Opposition
 From Drug Industry

Members of Congress have worked for months to push through patent-reform legislation that would stem the rise of “patent trolls.” Yet the bill will have to overcome the large hurdle formed by the pharmaceutical and biotech industries in order to see floor votes.

The bill’s proponents are looking to strike a balance between the interests of the pharmaceutical industries and members of the tech world. Satisfying the former is proving difficult.

Chuck Clapton, senior vice president for federal advocacy at PhRMA, a major trade group representing pharmaceutical companies, said in an interview that both the House and Senate’s bills need more work. “What we’re looking to try to get is basically an exemption policy that would exempt biopharmaceutical patents from the ‘inter partes review’ process,” he said.

Inter partes review, or IPR, is the process where one party challenges the validity of a patent. The view from the drug industries is that they already have pharmaceutical patent rules in place from the 1984 Hatch-Waxman Act. Therefore, IPR changes in the broader patent bill should not pertain to them.

The patent bills in the House and the Senate each would target the increasing number of patent trolls, entities that file or purchase patents with the sole intent of later making money off of lucrative infringement lawsuits.

Clapton said the Senate’s bill looks to be moving faster than the House measure and “is generally more favorable to [their] provisions.” He attributed the Senate’s progress to the dedication of staff to the pharmaceutical issues in S. 1137.

“The Senate staff has been extremely engaged and been very willing to talk about these issues, and spent an enormous amount of time engaging with us so that they can understand these issues,” he said. “That’s been very appreciated.”

The Senate Judiciary Committee, which is  working on the measure, also received large amounts of money from the pharmaceutical and health product industries in 2014. Senate Majority Whip John Cornyn (R-Texas) received $207,050 from the health sector. Sen. Chuck Schumer (D-N.Y.), who sits with Cornyn on the Judiciary Committee, received $122,200, according to Open Secrets, a non-profit organization that tracks political spending. In total, pharmaceutical companies gave senators on the Judiciary Committee $964,459 last year.

By contrast, the pharmaceutical and health product industries gave House Judiciary Committee members a total of $590,109 during the same time period. The recipients who received the most were Rep. Scott Peters (D-Calif.) and Rep. Jason Chaffetz (R-Utah), with $113,100 and $58,364 respectively.

The House bill, H.R. 9, hasn’t won much support from pharmaceutical and biotech advocates. Multiple trade groups have filed letters opposing the bill in its current form. It’s an odd space for these groups to wade into. Pharmaceutical and biotech players have had little involvement with patent trolling as an general issue even though the legislation designed to curb the practice would impact them greatly.

The Coalition for 21st Century Patent Reform, a group of more than 40 companies including corporations from the medical device, pharmaceutical and bio-tech industries, issued a statement opposing the House measure for its handling of IPR. Yet the coalition wrote a separate letter supporting the bill in the Senate, praising its work on IPR rules, an appreciation shared by a letter from the Biotechnology Industry Organization.

Clapton said the changes the pharmaceutical industry wants would not affect the legislation’s efficiency in taking on patent trolls. “What we’re talking about would not have any impact on the ability of the tech industry to go after the problems it has, which we don’t dispute,” he said of patent trolls. “Our point all along has been we’re different.”

Despite the prolonged opposition from the pharmaceutical sector, the sponsor of the House’s effort believes the measure could see a vote relatively soon. House Judiciary Committee Chairman Bob Goodlatte (R-Va.) hinted last week that his patent reform bill could see floor action once the busy fall floor schedule clears up.

“I think there is a lot of support and momentum for bringing this legislation forward,” Goodlatte said. “There’s a lot going on, particularly right now, but there will be opportunities to bring this legislation forward, and I believe it will come to the floor soon.”

Morning Consult