On the Horizon: Congress to Take up Patent Reform

It has been reported that the U.S. Congress will take up patent reform in the near future, despite an ambitious patent reform failing in the Senate last year.  A spokesman for Senator Patrick Leahy confirmed the Senator’s plans to bring up patent reform in the current session.  The statement was echoed by Taraneh Maghame, chief patent counsel for Tessera Inc, “I believe we’ll see something out of Leahy’s office shortly after the inauguration because he wants to move things along.”

As reported on the EETimes, many large technology companies are seeking patent reform, given the rise of companies asserting general, questionable patents against them.  According to RPX Corp., which is a patent licensing service, as many as 16% of patent suits in 2008 were filed by non-practicing entities, otherwise known as “patent trolls.”  At the same time, smaller tech firms claim that patent reform could actually weaken the patent system.

Statistically speaking, roughly 3,000 patent infringement suits are filed every year in the U.S., but that figure has remained constant during the past decade.  Of those lawsuits, only 10% actually go to trial, and as few as 50 patents a year are invalidated by court action.

Yet, the big debate is whether Congress should pass patent reform, or if it is an issue that should be left for the courts.  Chief Judge Paul R. Michel recently suggested in a FTC hearing that the courts should handle patent reform.  He also challenged that the rising amount of patent lawsuits are impeding innovation. 

Of course, others state that the courts are only part of the problem.  An unfortunate characteristic of issues such as patent reform, is that there really is no right or clear-cut answer to the problem.  Perhaps the best course of action, as suggested by some, is to take a “wait and see” approach.

“We need to let the dust settle on the effectiveness of the recent cases because they went a long way to address the needs people had raised,” said Maghame of Tessera.  “Putting a whole layer of patent reform on top of that could have ramifications for the economy.”

FTC Challenges Deal on Testosterone Gel

The Federal Trade Commission has filed suit against four drug companies, which have agreed to delay generic competition to Solvay’s AndroGel, a form of testosterone replacement.  As reported on The Wall Street Journal’s Health Blog, Watson Pharmaceuticals and Par Pharmaceutical Companies would have received payments from Solvay Pharmaceuticals, who created the testosterone gel.  In exchange for the payments, the two companies agreed to drop their challenges to the validity of the drug’s patent and wait until 2015 to bring generic versions to the market.

All sides contend that the deal is perfectly legal, and that a federal court approved the settlement that the FTC is challenging.  Watson’s CEO said, “the agreement fully complies with both the spirit and letter of the antitrust and consumer protection laws, as interpreted by numerous appellate courts throughout the U.S.”  In a statement, Solvay said:

These settlements were completely lawful, facilitated both wider distribution of AndroGel and earlier generic competition for AndroGel than if the company had enforced its patent rights fully, and brought an end to expensive and burdensome patent litigation.

Recently, the FTC has become move involved in antitrust and other litigation.  For instance, last year the FTC filed a similar suit against Cephalon over delays for generic Provigil.