Here are the Facts about the IPR Kill Rate

Here are the Facts about the IPR Kill Rate

FiercePhrma recently ran an article repeating a dubious analysis of the crisis caused by the rapidly increasing number of biopharma related inter partes reviews (IPR) currently within the United States Patent and Trademark Office (PTO).

It is troubling that in a single breath Ronny Gal both dismissed the biopharmaceutical industry’s concerns with the PTO’s IPR process and acknowledged that limited data prevents any firm conclusions about the potential impact of IPR on biotech innovation.

If Mr. Gal drilled down further into the data, he would see that the PTO agrees to review about 60% of patents that are challenged – of those about 80% are wholly or partially invalidated. That is a very high kill rate, much higher than the district court’s rate and has created disturbing trends and abuses within the IPR.

As Mr. Gal noted, large hedge fund investor Kyle Bass has filed IPRs against more than a dozen biopharmaceutical companies, trying to take down their key patents while pursuing an investment strategy that includes short selling of those companies’ stocks. We also are seeing other efforts by IPR-filing entities attempting to extort very large payments from biotech companies in exchange for not filing the petitions on the key patents that protect their most valuable products, while generic companies are increasingly using IPR to skirt the well-established rules of the Hatch-Waxman system.

The biopharmaceutical industry is deeply concerned about these and other implications of the IPR procedures – both what that means for future investment in innovation and ultimately the ability of patients to have access to new therapies in the future. That is why more than 100 patient organizations recently wrote to Senate and House leaders calling for IPR reform.

Congress created the IPR system to provide a more efficient and less expensive patent dispute resolution process. Congress did not intend for the PTO system to function in a way that kills off many patents that otherwise would be deemed valid in district court, thus undermining the fundamental ability of investors to rely on patents to protect their investments in innovation.

Unless we balance the overall IPR system, these abuses will only continue to morph and grow.

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