Patent Legislation Could Harm Healthcare Innovation

By Kyle Keeney

The biopharmaceutical firm AbbVie and the University of Kentucky just unveiled a new gel therapy targeting the devastating neurological disorder, Parkinson’s, which afflicts nearly a million Americans. Earlier this year, UK researchers obtained a patent for a Parkinson’s treatment method involving protein injections into the brain.

Unfortunately, Congress is on the verge of smothering vital research, such as this. Lawmakers are looking to pass legislation that would compromise intellectual property protections and choke off funding for new medical development. Our leaders must stop the misguided bill before it becomes law.

Patents play an essential role in medical innovation. In exchange for publicly disclosing the details of their inventions, innovators receive exclusive rights to their products for a set period of time. By penalizing copycats, patent laws help to ensure that inventors are fairly rewarded for their research efforts.

Patents are particularly critical to universities here in the Bluegrass State. The University of Kentucky brought in $3.3 million from licensing their patents last year. These funds help support the inventor’s department and commercialization of UK technologies and startups.

However, patent laws can be abused. “Patent trolls,” as they are often called, acquire patents not to develop valuable products but for the sole purpose of making money suing alleged infringers. By filing frivolous lawsuits, they burden businesses with legal fees, depriving them of R&D funds and undermining economic growth. In fact, a study from Harvard and University of Texas-Dallas found that firms sued by patent trolls cut their R&D spending on average by half.

Many in Congress want to pass the “Innovation Act” to crack down on patent trolling. While the law’s goal is admirable, its specific provisions go overboard and could stifle legitimate patent holders’ lawsuits filed against actual infringers.

For example, this bill overloads patent owners by requiring them to submit massive amounts of paperwork to file an infringement complaint. Innovators who want to defend their patents would need to go into painstaking detail about items of questionable importance, such as the entire history of complaints related to their patent.

These filing requirements are excessive. They strap businesses with huge new time-consuming expenses.

The bill also requires that infringement cases be suspended until the court completely interprets the patent in question — even when an exhaustive analysis isn’t necessary. This provision will drag out patent lawsuits, further increasing legal costs and uncertainty for patent owners.

Worse still, this legislation would make the loser of an infringement suit cover the winning party’s legal expenses. This provision will discourage institutions with fewer resources — such as universities and small businesses — from pursuing patent violators. If they lose, they could be liable for millions of dollars of additional expenses.

Already, inventors face significant obstacles when defending their intellectual property rights. The Patent Trial and Appeal Board, created by the 2011 America Invents Act, has been knocking down patents left and right. The panel has ruled at least one claim “unpatentable” in more than three quarters of the patents it has reviewed.

This bill would be particularly damaging to biopharmaceutical firms, which play a crucial role in the Kentucky economy. This industry generates $2.6 billion in economic output and supports more than 13,000 local jobs.

A new Tufts study pegs the cost of developing a new drug at a whopping $2.6 billion. Patents help ensure that developers can recoup such huge costs and invest in new therapies. But without any assurance that new products will receive sufficient intellectual property protections, drug research and development could come to a halt.

The University of Kentucky and University of Louisville have joined research institutions all across the country in calling for Congress to scrap this new patent legislation. In a commendable attempt to combat patent trolls, lawmakers have gone overboard. Their bill would undermine innovation by making it exceedingly difficult for legitimate patent holders to defend their property.

Our leaders must take a stand against this effort and work to protect Kentucky’s economy.