BIO recently submitted its Special 301 Submission highlighting intellectual property (IP) challenges around the world.  In particular, BIO informed the United States Trade Representative (USTR) of the persistent problems biotech companies face with issues including counterfeiting, large backlogs and patent office inefficiency, differing judicial standards for enforcement, compulsory licensing, inadequate data protection, lack of patentability of biotech inventions, overbearing genetic resources access and benefit regimes, technology transfer issues and a great need for international harmonization of patent standards and procedures.

During the Special 301 Submission process, USTR collects comments from the public which includes a variety of stakeholders such as the Semiconductor, Video Game, Agricultural, Pharmaceutical,  Apparel, Manufacturing and other major exporting U.S. industries.  Associations that focus on IP issues across industries also weigh in including the International Anti-Counterfeiting Coalition, the U.S. Chamber of Commerce, and the International Intellectual Property Alliance USTR will release its final report based on public feedback and its own investigations by embassy officials around the world “on or around April 30, 2012.”

By Robin L. Rasor, CLP, RTTP, AUTM President

As president of the Association of University Technology Managers (AUTM), I’m in a unique position of hearing from university technology managers who want more opportunity to interact with industry, and industry members who want to identify the latest breakthrough innovations. Industry investors and their academic licensing counterparts already come together for dealmaking at the AUTM Annual Meeting and at the BIO International Convention, but now we have a new resource to further augment in-person networking.

This month AUTM launched the AUTM Global Technology Portal (GTP)—a website which is a “one stop shop” for companies to search university technologies available for licensing and tell universities about their needs. The GTP will make it easier for universities and corporations to find each other and begin licensing and partnership discussions. If you’re not searching for anything specific, you can simply browse organizations, capabilities, or available technologies. You can also search by keyword and set up email alerts to learn about future related postings. If there is a particular university you’re interested in, you can even “follow” that university and get alerts when it posts new data.

You can also use the GTP to learn more about a university’s startup companies, providing a great opportunity for collaboration, investment, or an acquisition. No other database consolidates information about university startups. There is no cost to search the GTP. Should you find a technology, capability, or startup you are interested in, simply click to connect with the representative of that organization.

In addition to the information on universities, the GTP also has a “Needs” section to allow companies and government labs to tell the AUTM community about what research and technology needs they have to help find viable solutions.

In its first week the GTP already has nearly 6,500 available technologies listed. We expect even more information to be posted in the coming weeks by our 3,000+ members, representing over 150 global research institutions.

With the increased amount of networking and partnerships among our members at universities and in industry, we’re confident this new resource will result in more interactions and ultimately in further commercialization of academic technology, leading to products and processes that benefit everyone.

The USPTO recently announced the Patents for Humanity Challenge which awards patent owners and licensees for innovations that address humanitarian needs.  Judges will chose winners from four categories:

1. Medical technology – includes medicines, vaccines, diagnostic equipment, or assistive devices.
2. Food and nutrition – includes agricultural technology like drought-resistant crops, more nutritious crop strains, farming equipment, and technologies that improve food storage, preservation, or preparation.
3. Clean technology – includes technologies that improve public health by removing or reducing harmful contaminants in the environment, such as water filters, sterilization devices, and cleaner sources of energy for light, heat, cooking, or other basic needs.
4. Information Technology – encompasses both physical devices and software which markedly improve the lives of the poor, such as portable computers, cell phones, or internet access devices being used to foster literacy, education, or other knowledge which improves living standards.

The reward is of particular interest.  Award winners have the option to accelerate either:

1. Ex parte reexamination proceeding including one appeal to the BPAI from that proceeding
2. A patent application including one appeal to the BPAI from that application or
3. An appeal to the BPAI of a claim twice rejected in a patent application or reissue application or finally rejected in an ex parte reexamination.

For more specifics see the Federal Register Notice.

By Hans Sauer, Deputy General Counsel for Intellectual Property, Biotechnology Industry Organization

Question from a Reader:

Heather: Whether Jonas Salk believed in patenting research or not isn’t important, at least not to me. What I do find important, and hadn’t realized until reading this article, is that the polio vaccine was extremely successful despite the fact that it wasn’t patented. That sounds like an interesting story because it goes against the current dogma of ‘we won’t invest in it if it’s not patent protected’. I’m curious to know if there have been other vaccines/drugs that have bucked the patent system but remain successful.

Response:

Heather, thank you for your interest in this important issue.

Unfortunately, it’s not so much a question of bucking the patent system as it is a question of who steps up to the plate if there are no incentives to invest. Usually, nobody does. There are literally hundreds (if not thousands) of examples of promising drug molecules which are not being developed because they are owned by no one. The polio vaccine is actually a good, and unusual, example of a tremendously important product that, for various reasons, lacked commercial incentives for it to be developed by private companies – maybe the absence of patent protection had something to do with that. Ultimately, developing the polio vaccine required such a big societal effort, requiring field trials on millions of children, that it would have been impossible for a single company to handle (and so expensive that it would have amounted to corporate suicide). Instead, the development of the vaccine required an unusual, coordinated effort by charitable foundations, the U.S. government, and many other entities.

Penicillin is another example. It was discovered in the 1920s and languished for many years in the public domain. The molecule wasn’t owned by anyone, and there was no commercial incentive to invest in its development. It was only during World War II that penicillin became strategically important to the U.S. and British governments. It was developed through a process of compulsory government contracting, as part of the wartime effort. Notably, while penicillin itself was not patentable because it had already been known for a long time, the government contract lab did obtain a patent on the method for mass-producing it.

These two success stories are neither typical nor a realistic model for the development of new medicines. It is true that sometimes a government and charitable foundations must step up and support the development of exceptionally important drugs for which there is no other commercial incentive. The drug molecule may be long-known and unpatented. Or it may be useful only for a medical condition that is so rare that a drug company could not recoup its investment. When the government or charitable foundations fund the development of such drugs, they often do so in partnership with drug companies – think of it as the public sector “splitting the risk” with private companies. But it is rare indeed for a drug to be developed by a government alone, absent a commercial incentive for private investment. For one, governments are not particularly good at developing drugs. We know this from experience with former socialist countries, which produced Nobel Prize-winning chemists and physiologists but no drugs. Even our own government-funded researchers prefer to do what they do best: studying the molecular basis of diseases and understanding the biological mechanisms and interactions that keep us healthy or make us sick. Biotech companies, on the other hand, are good at the tedious and lengthy task of developing medicines. Think of it as two sides of an equation, where public research often provides the “science” and the private sector contributes the “engineering.” So the typical situation today in the U.S. is that generous public funding is used to support basic biological research at government laboratories and research universities, and that private companies shoulder the task, at staggering cost, of translating these basic discoveries into real-world solutions for disease.

According to the Tufts Center for the Study of Drug Development, the total capitalized cost of developing the average biopharmaceutical requires nearly a decade of work and an investment of $ 1.2 billion. Patents can provide some assurance to the investors who are considering whether to invest in a biotech company to help it fund the lengthy and expensive drug development process necessary to produce a new life-enhancing, and in some cases life-saving, medical therapy. Without a patent, there is limited opportunity for a return on that significant investment.

It is important to remember that patents are granted for a fixed period of time.  During that time, the patent owner has exclusive rights to the patented invention (that he or she has the option to license to others). After the patent expires, the invention is in the public domain and everyone can access it. In the biopharmaceutical world, this is often when generic drugs become available.

A guest writer in a recent article in the Wall Street Journal repeated the oft quoted Jonas Salk statement about his Polio vaccine: “There is no patent.  Could you patent the sun?”  Many use this statement as the moral impetus for refusing patents on medically important innovations (see Michael Moore’s Capitalism: A Love Story).  Unfortunately, Jonas Salk created a myth that day by leaving out several crucial details.

As pointed out by Robert Cook-Deegan at Duke University, “When Jonas Salk asked rhetorically “Would you patent the sun?” during his famous television interview with Edward R. Murrow, he did not mention that the lawyers from the National Foundation for Infantile Paralysis had looked into patenting the Salk Vaccine and concluded that it could not be patented because of prior art – that it would not be considered a patentable invention by standards of the day. Salk implied that the decision was a moral one, but Jane Smith, in her history of the Salk Vaccine, Patenting the Sun, notes that whether or not Salk himself believed what he said to Murrow, the idea of patenting the vaccine had been directly analyzed and the decision was made not to apply for a patent mainly because it would not result in one. We will never know whether the National Foundation on Infantile Paralysis or the University of Pittsburgh would have patented the vaccine if they could, but the simple moral interpretation often applied to this case is simply wrong.”

While the debate on whether patents are the best way to incentivize medical innovation and commercialization continues, that debate should proceed without reliance on this myth regarding the history of the Polio vaccine.

The story of Acheflan highlights the role of patents in homegrown innovation in developing countries.  Professor Michael Ryan of Georgetown reviewed several case studies (including Acheflan) in Brazil that highlight the differences in biomedical innovation both pre- and post-intellectual property reforms.

In the early 1980’s, Ache Laboratorios Farmaceuticos (a Brazilian generics manufacturer) became aware of a plant that grew near coastal cities that local fishermen would mash into an oil rub to serve as an anti-inflammatory and anti-scarring medicine.  Ache wanted to develop the plant into a product they could bring to the Brazilian and worldwide markets.  Ache realized that to develop the product they would need to isolate the active ingredient and then take it through toxicology studies, animal testing, and human clinical trials to demonstrate the safety and efficacy of the product.  However, Brazilian patent law at the time prohibited patenting of pharmaceutical patents.  While Brazilian patent law allowed for process patents, Ache quickly realized that competitors could easily reverse engineer the product and make their own version.  Ache did not pursue the project.

When Brazil reformed its patent law in 1996 to allow patents on pharmaceutical products, Ache resumed work on the shelved project.  Now they could finally invest in the project with a promise of a return guaranteed by a patent.  Not having the capacity to conduct research, Ache established research partnerships with Brazilian professors.  From 1998-2004, some 100 university agronomists, biochemists, pharmacologists, and medical doctors were involved in taking the product through isolation and toxicology studies.

The company launched the product, Acheflan, in 2005 and the years of hard work paid off.  Acheflan is the first medicine innovated and introduced in the marketplace by Brazilians and within a year the product received a 30 percent share of the anti-inflammatory market.  By the end of 2007, its market share exceeded 40 percent (beating out competitors among established global pharmaceutical companies).  The company is in the process of launching the product worldwide.

While Brazilian patent laws still require much improvement to lay the foundation for its future as a developed country, this case study is one of many suggesting that even incremental positive changes to the IP environment can catalyze commercialization of Brazilian innovation.

The National Institutes of Health (NIH) has developed a new short-term licensing arrangement they hope will encourage licensing of NIH and FDA inventions to start-up companies.  The NIH Start-Up Exclusive License Agreements targets start-up companies less than 5 years old, with less than $5M in raised capital, and fewer thans than 50 employees.  By offering an exclusive license, they hope to accelerate the technology transfer process.  However, this temporary pilot program runs only until September 30, 2012.

The most unique aspect of this program is the one-year exclusive license for $2000 with the option to amend to a permanent exclusive license.  Through the use of this mechanism, the NIH is creating a one year trial period where the parties can come back to the table and reevaluate where they stand before they enter a more standard license agreement that includes milestone payments, performance benchmarks, royalties, etc.

We will soon see whether this program garners enough interest in a tough economy to be effective.

A recent study presented at the Patent Statistics for Decision Makers Conference organized at the United States Patent Office questions the logic behind a nonexclusive license preference often found in U.S. government technology transfer policy.

In “The Role of Exclusive Licensing in Follow-on Research of Academic Patented Inventions” presentation the authors demonstrate that, contrary to the belief by some, exclusive licensing does not impede future research.

The authors ask two questions.  First, does exclusive licensing affect licensee follow-on research?  Second, does exclusive licensing affect non-licensee follow-on research?  The first question addresses the concern that a company will take a license of a university invention and not develop it.  The second question addresses the concern that follow-on research will not occur without the license thereby limiting the amount of knowledge available.  And the results…

With respect to the first question, the researchers find that exclusive licensee patent citations increase significantly after exclusive licensing.  In other words, the company or entity that receives the exclusive license continues to research and invent as evidenced by the numerous patents that follow based on the licensed technology.

With respect to the second question, the authors find that non-licensee citations increase significantly after exclusive licensing.  In other words, even the people/companies that have no license to the technology continue to research and invent as evidenced by their numerous patents that follow based on the licensed technology.

Maybe it is time to rethink the rationale behind a government lab preference for non-exclusive licenses.

BIO filed an amicus brief in the Prometheus v. Mayo Clinic case.  In this case the Supreme Court is being asked to decide whether diagnostic and personalized medicine claims that depend on a correlation of observed phenomena should be excluded from the patent system at the outset, as patent-ineligible abstract ideas or “laws of nature.”

BIO’s brief argues that these judicially-created exclusions from patent-eligibility have traditionally been used only under narrow circumstances, and that their expansion to biomarker-assisted therapeutic methods is unwarranted, legally unsound, and fraught with serious unforeseen consequences on investment and R&D incentives in the field of personalized medicine.

Read the full amicus brief

The BIO Intellectual Property Counsels Committee Fall Conference featured an update on the implementation of the Leahy-Smith America Invents Act by Janet Gongola, Associate Solicitor of the U.S. Patent and Trademark Office (PTO).

Some provisions of the Leahy-Smith America Invents Act took effect immediately when it was signed into law in September. Ms. Gongola reported that of the 20 provisions that must be implemented by the PTO, eight have been implemented and another ten are in final review and will be posted in the Federal Register in mid- to late-January for a 60-day notice and comment period.

The law required the PTO to undertake seven studies, two of which have begun. The PTO recently held public hearings on prior user rights and international patent protection and is accepting comments on both topics until mid-November. BIO provided testimony on the importance of international patent protection for small businesses.

Ms. Gongola encouraged the audience to submit comments throughout the process as the PTO is eager for feedback from the users of the patent system.

The PTO has an online guide to the Leahy-Smith America Invents Act where you can subscribe to alerts, listen to archived webcasts of public hearings, and view a timeline of implementation highlights.