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Highlights
from the bio-innovation conference
Maine Science and Technology Foundation
July 15, 2002
DAY
TWO
Compulsory
Drug Licenses and Prior Art: Is the Patent System Broken?
Dr.
David Martin, Ph.D., M-CAM Inc., Charlottesville, VA
Prof.
Craig Jepson, Franklin Pierce Law Center, Concord, NH
Moderator:
Prof. Tom Ward, University of Maine Law School, Portland,
ME
"In
the United States alone," said David Martin, "32 percent
of U.S. patents actually are plagiarized. Not plagiarized
very creatively either."
Martin,
for one, believes the U.S. patent system is "broken
beyond immediate repair."
"If
any of you in this audience think for one split second
that you can get a legitimately issued patent out of
the United States Patent Office right now, you are delusional,"
he stated.
Martin
criticized the U.S. Patent system for failing to adequately
examine patent applications. This lack of review occurs
because disputes can be settled with litigation.
Terabytes
of patent data make human review of applications impossible,
and Martin said patent examinations rarely turn up prior
art or investigate all foreign patent databases.
Martin
also outlined his prediction of a "Biotech Enron" within
the next decade. He anticipates patent disputes "when
we actually do figure out how to take that wonderful
cocktail we call a genomic sequence and turn it into
something. Remember: infringement has to have a damage,
so far all it is a bunch of rat holes being filled with
investors' money."
But
once companies earn revenue from genomics-generated
products, they can calculate damages, and Martin expects
rampant litigation thanks to "thousands of patents of
enabling technologies that have been trod upon in the
interest of sequencing the stuff and then in the interest
of figuring out how you use it."
Martin
said comparing biotech and Enron is not hyperbole because,
thanks to patent disputes, the biotech, pharmaceutical
and telecommunications sectors have lost market value
in the last year more than 10 times what Enron lost.
Although
Martin sees two actions – compulsory licensing or amnesty
– to help deflect a crisis, both are bad from a commercial
standpoint.
"Economics,
oddly enough, in most cases in human history, beats
morals. It just does," said Martin.
Craig
Jepson opposes compulsory licensing because he said
it would flood the system with hundreds of thousands
of applications to use technologies that are difficult
to value and define.
"The
United States has the best… biotechnology innovation
engine in the world. It would behoove us not to change
without real justification," Jepson said.
Developing
a single drug costs hundreds of millions of dollars
and a decade, so Jepson said unpatented technologies
would impose huge infringement risks on the life sciences
industry.
"Patent
protection is necessary to biotechnology. There doesn't
seem to be a lot of debate about that," he said.
Jepson
also believes "the exchange of exclusivity for innovation
works," and noted patent system exemptions that enable
companies to extend market exclusivity for developing
pediatric drugs and "orphan drugs" used by small population
groups. With the exemptions "the number of drugs made
for those markets dramatically increased," including
a tripling of drugs for pediatric markets.
Although
Jepson said the patent system has been under siege before,
"what is unique about this siege… is that in the past
the controversy was usually whether subject matter should
be patentable at all. Should living matter be patentable?
Should polymers be patentable? How about software or
algorithms? And what's different about this attack is
that this attack is at the margins."
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