Patent Reform Revitalized

While healthcare legislation has dominated the attention of congress, patent issues are still percolating. Patent reform has been a topic on Capital Hill for the past five years, in which most of the battles have pitted the industries of big pharma and biotech against computers and semiconductors. These industries find themselves on the opposite sides of many issues, such as how and whether patents should be opposed, a first-to-inventor versus a first-tofile system and the damages provisions of patent infringement. In general, the pharma/biotech industries desire strong, broad and enforceable patents in which there are no statutory limitations on damages. In contrast, the computer and semiconductor industries desire patents that are less enforceable and have limitations on damages. This arises because, in the pharmaceutical industry, large blockbuster drugs are covered by, on average five to 10 patents, while in the computer industry, the biggest products may be covered by up to 1,000 patents. Using an oversimplified approach to illustrate the point, for “equal” $1 billion products, each patent on the pharma/biotech side is “worth” $100-200 million, while each patent in the computer world is “worth” $1 million. One can readily see why the computer industry may place less value on any given piece of intellectual property, while in the pharma/biotech industry, each patent represents a large piece of the value pie.

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