Friday, June 20, 2008

Biotechnology Goes Underground


Although advocates of comprehensive reform to the United States Patent Act have so far failed to shepherd any of their bills into statute, the next Congress is sure to take up the baton again. After all, the 2007 proposals actually passed the House before dying in the Senate. New regulations proposed by the United States Patent and Trademark Office ("USPTO") and decisions by U.S. Supreme Court have both added to a sense that patent protection is weakening.

There seems to be a near-consensus at the 2008 Biotechnology Industry Organization ("BIO") International Conference that erosion of patent protection will disproportionately affect the biotechnological innovation. As BIO President and CEO, James Greenwood, declared during a lunchtime plenary speech, BIO and others in the biotechnology and pharmaceutical industries have decided to dedicate themselves to sustaining strong patent rights in the U.S. and elsewhere.

Regardless of the outcome of this patent battle, the perception of risk to patent rights may already be changing intellectual property strategy in biotechnology. As patent rights lose some of their lustre, there may be increased reliance on trade secret protection. Generally, trade secret law is ill suited to protect drugs and other molecules because the structures of such compositions of matter are readily discernible once the composition itself has become available in the marketplace. Trade secret protection does not extend to reverse engineering if the product to be reverse engineered is itself public. However, inventive methods and best practices whose secrecy can be maintained are susceptible of protection.

The quid pro quo of the monopoly exclusions rights that patents confer is the requirement that patent applicants disclose detailed information enabling others to make and use the invention into the so-called "public storehouse" of knowledge. Without the prospect of patent protection, patent applicants may shift their efforts to protect their inventions towards secrecy, depriving the public storehouse of vital knowledge. In addition, such a decline in public disclosure may worry those who monitor biotechnologies for their potential dangers to society. Obviously, since products themselves are difficult to keep secret, such a change in protective strategy has limits. However, the sense among the biotechology community here at BIO 2008 is that current patent reform efforts are forcing them to become more guarded in what information to share with the public, and that this may harm future innovation. The consequences of a more cloak-and-pipette biotechnology industry could be significant, perhaps even profound.

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