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March 23, 2006
Patent infringement
For a different take on the patent issue, I would recommend this AEI short report: Your Blackberry Is Safe Now...but Is Your Medicine? which argues that the current patent system does not do enough to protect patent holders in the pharmaceutical industry. The specific issue concerns the use of the "inequitable conduct"
Patent applicants are required to pursue applications "with candor, good faith, and honesty." The violation of this duty, along with intent to mislead the U.S. Patent and Trademark Office (PTO), may constitute inequitable conduct and may render a granted patent unenforceable.
. . .
The ongoing litigation regarding the painkiller OxyContin® illustrates the dangers of a too-liberal application of inequitable conduct. Purdue Pharma L.P., the patent holder, sued generic manufacturer Endo Pharmaceuticals Inc. for patent infringement. The U.S. District Court of the Southern District of New York ruled that, although Endo infringed Purdue's patent, the patent was unenforceable on the grounds of inequitable conduct. The ongoing litigation regarding the painkiller OxyContin® illustrates the dangers of a too-liberal application of inequitable conduct. Purdue Pharma L.P., the patent holder, sued generic manufacturer Endo Pharmaceuticals Inc. for patent infringement. The U.S. District Court of the Southern District of New York ruled that, although Endo infringed Purdue's patent, the patent was unenforceable on the grounds of inequitable conduct.
The AEI authors feel that the court has gone too far in ruling a patent invalid:
Above all, the ruling dangerously threatens the patents of numerous medical inventions and drugs, and thereby future medical innovation. Whether an invention is based on insight or clinical data "does not by itself affect patentability." Therefore, a precedent of patent unenforceability based on the Purdue litigation casts inventions based on experience and judgment in an unfavorable light.
The certainty of patentability for an invention based on insight has been shaken, and future biomedical innovation will suffer. The case highlights a system that offers exploitable loopholes to patent infringers and shows just how badly reform is needed. A legal system that is hard to understand and whose interpretations are unpredictable hinders productive endeavors.
The Patent Reform Act 2005 introduced by Representative Lamar Smith (R-Tex.), which is currently on hold in Congress, should be revived. This legislation incorporates several recommendations made in a 2004 report published by the National Academies of Science: "A Patent System for the 21st Century." The report concluded that "in view of its cost and limited deterrent value," inequitable conduct doctrine should be eliminated or radically reformed.
While others involved in patent reform may or may not agree with the specific proposal to eliminate the inequitable conduct doctrine, it is important the even the "more protection is better" side feels that the current process is flawed. When all sides agree to the need for change, may something will happen.
Posted by Ken Jarboe at March 23, 2006 8:36 AM
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