FTC, Justice Examine Patent Protection and Abuse

Washington DC-As part of its continuing investigation into competition and intellectual property rights, the US Federal Trade Commission and the Antitrust Division of the Department of Justice recently kicked off a series of hearings. Although concerns about innovator-??generic competition are the main focus, the hearings in Washington and on the West Coast aim to explore wider issues about whether a proliferation of over-broad patents threatens to limit competition in several high-tech industries.

FTC chairman Timothy Muris set the stage for the hearings in a speech last November, spelling out the key issues:

• The number of patents issued by the US Patent and Trademark Office increased from 66,000 in 1980 to 175,000 today. That increase could reflect a growth in innovation or mean that companies are using "blocking patents" to protect intellectual property.

• The emergence of overly broad patents could inhibit follow-on innovation, particularly in genetics and biotechnology.

• The 20-year-old Federal Circuit Court may have promoted uniform legal policies related to intellectual property protection or altered traditional policies in undesirable ways.

At the same time, a committee on intellectual property issues sponsored by the National Academies of Science is examining the relationship between patent protection and technological advance. The panel is investigating the broad economic impact of changes in patent law in recent decades and expects to issue its findings and recommendations in September 2002.

Executives from biotech companies will discuss "real-world" experiences with patents and competition at the last FTC??Justice hearing scheduled for March 19??20. Testimony from academics, lawyers, and researchers may push Congress to revisit the Waxman-Hatch Act to see if its patent provisions encourage or limit generic drug competition.