Looking Beyond the Patent Cliff - Pharmaceutical Executive


Looking Beyond the Patent Cliff

Pharmaceutical Executive

Pharm Exec: Can we learn anything from other industries on promoting the merits of IP?

Waldron: Experience with IP practitioners in other sectors shows that we need to spur fundamental changes in attitude and approach. IBM was one of the first big companies to embrace the collaborative model because it faced the collapse of its business built around selling mainframes and desktops to cheaper competitors. In realigning its strategy around services to users, it had to adjust its stance on IP as well. The same for Microsoft, which had to face down regulators determined to close the most profitable segment of its business. Big Pharma has not yet gone so far as to embrace an open innovation model. But we are clearly in consensus that productivity on the research side has to improve. Hence our approach to patenting must allow us to cast the net wider to obtain the most promising new leads, whatever the source.

Pharm Exec: A string of recent US court cases appears to be showing more ambiguity around basic elements of the IP system, including the criteria for patenting new technologies.

Waldron: There is a perception that case law is changing the ground rules. Some decisions in the US appeared to have raised the threshold in requiring a patent applicant to demonstrate evidence of utility. Conversely, the Supreme Court Bilski case on business method patents seems to open the door to a slightly broader definition on what kind of technologies will be patentable in the future. The overall trend seems in line with the notion that innovation stems from many sources, and it evolves, and that more flexibility in the operating rules for patents is good for society. In other cases there seems to be less of an appreciation for, or acknowledgement of, the importance of follow-on or improvement inventions—an area where there is a deeply felt need for development and where value for patents is very great. Nonetheless, I don't see any of these cases as real "game changers" at present. They represent unfortunate trends that have been coming for a while. However, we continue to observe the situation for the impact on other stakeholders—especially the academic community—in their willingness to commit to investments in basic, early stage research.

Pharm Exec: Is there anything on the horizon that could change that calculation and create a serious challenge to the patent landscape?

Waldron: The industry is looking closely at a case—Therasense v. Becton, Dickinson—now pending on rehearing at the Federal Circuit. The case may generate a clearer set of rules for defining what is "inequitable conduct"—alleged fraudulent behavior in obtaining a patent at the US Patent Office. Many practitioners feel there is confusion over the standards of materiality and intent inherent in a fraud analysis and simply want to know when they are in compliance. The penalty for a finding of inequitable conduct is draconian; it prevents the patent owner from enforcing a patent—so clarity is very much needed. Any guidance from the courts that creates a more predictable and clear environment is desirable.

Pharm Exec: Moving to the global arena, what is Pfizer and the industry doing to address the widespread view that patents are a barrier to medicines access, especially for neglected populations in developing countries?

Waldron: This issue has long been a reputational drain on the industry. The only way to shift the balance in our favor is by showing that patent protection will increase the number of options—from medicines to service platforms and new delivery technologies—required to treat and cure neglected diseases. It's not the solution; its just part of the fabric of confidence that clothes the response. A good example is how developing countries—in fact, most countries outside the US—are unwilling to grant "use patents" to facilitate the commercialization of second uses for existing drug compounds. The position contradicts what developing countries and the multilaterals like WHO say they want: finding that an existing anti-infective might carry a therapeutic benefit in treating schistosomiasis. Use patents take away some of the risk of conducting that research.

We also have to squarely address the opposition to data exclusivity, which is behind some opposition to key bilateral trade agreements. The industry is working on evidence that data exclusivity does not raise drug prices but is, in a larger sense, a driver of balanced industrial development.

Pharm Exec: Brazil and India are leaders in the effort to limit the scope of internationally accepted standards for patent protection, such as the TRIPS Agreement of the World Trade Organization. How do you account for their positioning?

Waldron: I'd point out a number of developing countries present us with a puzzle of contradictions. Many advocate internationally for what they do not follow in the domestic arena, where innovation is embraced and the number of patents filed each year is soaring. A number of them have adopted strong patent regimes on the books, but what we are looking for is proof that patents are actually worth the paper they are written on. Does the judiciary in these countries have the will to enforce patents? Some interesting upcoming decisions might shed more light on that.


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