BIO Urges Senate Committee to Improve Patent Reform Legislation, Raises Concerns About Broader Economic Impact of Certain Provisions.

Organization Asks Congress to Ensure Reforms Support Future Innovation

WASHINGTON -- Today, in written testimony submitted to the Senate Judiciary Committee, the Biotechnology Industry Organization (BIO) reiterated its position that a strong patent system is integral to continued growth for the biotechnology industry and other innovative sectors of America's economy. BIO also expressed its support for strengthening the U.S. patent system through carefully constructed and consensus-based legislation.

"For the biotechnology industry, effective patent protection is a necessity, not simply a business advantage or a luxury," BIO noted in its testimony. BIO urged the Committee "to take great care to ensure that any reforms it enacts support future innovation in all sectors of American society."

BIO commended the Committee for its work on strengthening the foundation of American innovation - intellectual property - and asked the Committee to hold a series of hearings to evaluate the major legal and economic changes relevant to patent reform efforts. BIO reminded the Committee that, since its last hearing in 2007, there have been several landmark decisions by the US Supreme Court and the U.S. Court of Appeals for the Federal Circuit that have weakened the rights of patent owners, making it more difficult to obtain and enforce valid patents while making it easier to challenge patents.

Since the legislative action in the 110th Congress, BIO's concerns about the potential negative impact of some proposed reforms on U.S. economic growth and global competitiveness have taken on increased importance. BIO called on the Committee to undertake a careful and comprehensive evaluation of the continuing need for, and potentially negative impact of, some of the more controversial provisions in the patent reform debate, including changes to how damages are calculated after a finding of infringement and expanded administrative opportunities to challenge patents without the protections afforded to patents in courts of law.

The biotechnology industry has developed and commercialized more than 300 drugs and diagnostics that are helping more than 325 million people worldwide, and another 400 or so products are in the pipeline. The industry is also leading the way in developing advanced biofuels and other technologies that will help reduce our nation's dependence on foreign oil and fossil fuels.

"All this innovation is possible because of the strength and predictability provided by the US patent system," BIO explained in the submitted testimony. The wrong approach to patent reform could undermine, for example, the innovation that could answer President Obama's call for a cure for cancer in our lifetime, and could cause irreparable harm to U.S. competitiveness.

BIO agrees that some reforms to the patent system are necessary. In its testimony, the association detailed specific areas for reform including full funding for the U.S. Patent and Trademark Office, expanded opportunities for the public to submit prior art during patent examination and repeal of the Best Mode description requirement and the inequitable conduct doctrine, among others.

However, BIO expressed its concerns about other provisions within the bill that would "unintentionally promote uncertainty surrounding, and weaken the enforceability of, validly issued patents." These include the provision that would broaden the grounds upon which a patent can be administratively challenged at any time during the life of the patent and a provision that would dramatically expand the situations in which a court would be forced into an "apportionment" process to determine what damages a patent owner should be awarded when a patent is found to be valid and infringed.

BIO believes that without strong and predictable patent protections, investors will shy away from investing in biotech innovation, which would dramatically slow research and development of new life-saving therapies, as well as endanger the millions of jobs the U.S. patent system has helped create.

"BIO looks forward to ongoing dialogue with the Senate and House Judiciary Committees on the important issues of reforming the nation's patent system," said Jim Greenwood, President and CEO of BIO. "We hope today's hearing is the beginning of an open and fair process to get a good patent reform bill that benefits all sectors of the U.S. economy."

BIO's written testimony is available at http://www.bio.org/edocs/patent_reform_testimony_31009.pdf.

About BIO

BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world's largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.

Upcoming BIO Events

BIO-Europe Spring March 16-18, 2009 Milan, Italy

BIO IP Counsels' Committee Conference March 25-27, 2009 Phoenix, AZ

BIO National Venture Conference March 31-April 1, 2009 Boston, MA

BIO Windhover 2009 April 13-15, 2009 New York, NY

BIO-LES Business Development Basics Course May 15-17, 2009 Atlanta, GA

BIO-LES Advanced Business Development Course May 15-17, 2009 Atlanta, GA

BIO Executive Presentation Workshop May 17, 2009 Atlanta, GA

2009 BIO International Convention May 18-21, 2009 Atlanta, Ga.

BioEquity Europe June 9-10, 2009 Munich, Germany

World Congress on Industrial Biotechnology & Bioprocessing July 19-22, 2009 Montreal, Quebec, Canada