California Healthcare Institute Submits Statement on Patent Reform Legislation.

LA JOLLA, Calif. -- The California Healthcare Institute (CHI) today submitted a statement on H.R. 1908, The Patent Reform Act of 2007, at a hearing of the U.S. House of Representatives Committee on the Judiciary Subcommittee on Court, the Internet, and Intellectual Property. CHI is a non-profit public policy research organization for California's biomedical industry.

CHI recognizes the significant IP challenges facing software, IT and other high-tech firms - many based in California. The organization supports improving the U.S. patent system to ensure patent certainty and quality, recognizes that H.R. 1908 has certain merits, and remains committed to engaging constructively as the measure works its way through the Committee process. However, owing to the particular complexities surrounding biotechnology patents, CHI believes that some provisions of H.R. 1908 threaten life sciences investment and innovation. Specific provisions of concern to California's life sciences innovators are: apportionment of damages for patent infringements, creating a new administrative mechanism for challenging patents throughout the life of a patent, and expanding the Patent and Trademark Office's (PTO) rulemaking authority to enact restrictions on continuation applications and the number of claims in patent applications.

California is the worldwide leader in biomedical research and development with over 2,700 biomedical companies and 100 public and private research institutions advancing scientific knowledge and developing new treatments for serious ailments such as cancer, diabetes, HIV/AIDS, as well as cardiovascular, respiratory and infectious diseases. To succeed, more than any other industry, biomedical companies face extraordinary financial challenges, requiring investments of up to $1 billion over 10 to 15 years before a product can progress from the lab, through the arduous Food and Drug Administration (FDA) approval process, to patients in need. Intellectual property (IP) is typically the most valuable - sometimes only - asset for California's promising biomedical firms.

Many of the proposed reforms in H.R. 1908 call attention to fundamental differences in business models between healthcare technology and other high-tech industries. Typically, biomedical inventions require many years of development, extensive clinical testing and regulatory approval before they can be marketed. In contrast, software, IT and other high-tech inventions are quickly developed and commercialized, with no regulatory delay. Profits from biotechnology inventions are realized late in the life of patents, once FDA approves the product for marketing after 8-12 years of research and development. By comparison, income streams from software, IT and other high-tech products are realized early in the product's life. In fact, many software, IT and related products become obsolete long before their patents expire.

CHI's full statement on The Patent Reform Act of 2007 is available at www.chi.org. CHI represents more than 250 leading medical device, biotechnology, diagnostics and pharmaceutical companies and public and private academic biomedical research organizations. CHI's mission is to advance responsible public policies that foster medical innovation and promote scientific discovery.