Technology Transfer Tactics recently interviewed me on the issue of whether poster presentations jeopardize a tech transfer office’s commercialization efforts.

I wanted to share the interview because the article raised some interesting questions.  Of course, universities have long been dealing with the challenges of having to reconcile the competing interests of the educational/research institution’s desire to publish and provide educational opportunities to students vs. the intellectual property protection/commercialization goals of a tech transfer office.  However, this article addressed a unique aspect of that conflict, which I think will be of interest to blog readers.

Title: What Small Businesses Need to Know to Protect their Companies\’ Intellectual Property Assets
Location: Webinar
Link out: Click here
Description: Are you a small business owner who believes that your business has no intellectual property to protect? While it is true that there may be some small businesses which do not have intellectual property, the reality is that most small businesses do in fact have intellectual property, which is not being properly protected. This program is designed to educate small businesses on what they need to know to identify and protect the intellectual property assets in their companies.

The speaker for this event is Kristie Prinz, the Managing Principal of the intellectual property and e-commerce boutique law firm, The Prinz Law Office, located in Silicon Valley, CA. Ms. Prinz is a frequent speaker and media contributor on intellectual property-related issues. Her media interviews and appearances include Dow Jones, CNN Radio, American Public Radio’s “Marketplace,” IP360, California Lawyer, Genetic Engineering & Biotechnology News, and Sky Radio. She also authors the California Biotech Law Blog and the Silicon Valley IP Licensing Law Blog, and has been a regular contributor to the “Ask the Lawyer” column on intellectual property law for Lawyers.com.
Start Time: 10:00
Date: 2009-10-14
End Time: 11:00

The Washington Post ran a column today by Jon Leibowitz of the Federal Trade Commission, which addresses a suit recently filed by the agency against Cephalon, Inc., which will test the legality of the practice of entering into “pay for delay” settlements.

Liebowitz describes the  “pay for delay” settlement controversy at the root of this case as follows:

When these troubling deals first came to light in the late 1990s, the FTC fought them — and stopped them cold. Between 2000 and 2004, no brand and generic companies entered pay-for-delay deals; in other words, companies resolved patent disputes without anticompetitive payoffs.

Unfortunately, that success is under siege. Two federal appeals courts — in rulings that conflict with the analysis of a third appellate court — have found that a brand-name drug company facing a patent challenge is free to pay any amount to keep a generic producer from entering the market until the patent expires. These rulings depart from the spirit of Hatch-Waxman and our nation’s antitrust laws, and they harm consumers by subverting the competition at the heart of our free-market system.

Courts that have sided with pharmaceutical companies believe, in essence, that even an infirm patent gives its owner the right to pay competitors not to compete. . . .Not surprisingly, after two courts blessed such payoffs, the frequency of these settlements has increased sharply. In fiscal 2006, fully half of all pharmaceutical patent settlements (14 of 28) contained such payments. Brand-name manufacturers, seeing the potential to continue reaping monopoly profits, have taken advantage of this apparent judicial leniency. . . .

This dispute clearly puts Hatch-Waxman to the test: should a patent owner have the right to pay to keep a competitor out of the market until the patent expires?

Clearly, insurers and the public would say yes.  According to Liebowitz, Cephalon made an additional $4 billion dollars as a direct result form entering into this “pay for delay” settlement–this is money that came directly out of the pockets of insurers and patients.  As a member of the public who lost my health insurance following the collapse of my former law firm just over four years ago, when my former employer terminated COBRA at the six month mark, leaving me in the position of having to pay full price for prescription medications, I know all too well how expensive it can get to pay for prescription medications, when no generic is available.   There is definitely an impact on the public at large, insurers, and individuals when they have to foot the bill for a more expensive medication.

On the other hand, as an IP lawyer, I can’t help but scratch my head a bit over this case: the FTC is effectively taking issue over a patent owner trying to protect its exclusivity until the patent expires.  Isn’t that the patent owner’s right?

Not according to the FTC.  The FTC’s position is that patent owners do not have the right to enter into these types of settlements–that such deals violate the spirit of Hatch-Waxman and antitrust law.

It makes perfect sense to me why certain courts have sided against the FTC on this particular issue, and also why the FTC anticipates this case going to the Supreme Court.   According to Liebowitz, however, a bill is also making its way through Congress that would prohibit such agreements.  The FTC, of course, supports this legislation.

The California Biotech Law Blog will keep you posted as this battle unfolds.

The National Law Journal ran an article yesterday, which examined the strategy that patent holders are using to delay the entrance of generics on the market.

The article focuses on the controversial use of  “citizen petitions” brought before the Food and Drug Administration (“FDA”) to temporarily delay the approval of a generic drug as a patent is about to expire while the FDA investigates safety challenges raised in the petitions.

The National Law Journal reports:

“For a relatively small amount of money, a company can inflict substantial harm on a competitor,” said David Balto, a Washington attorney and former assistant director in the Federal Trade Commission’s Bureau of Competition.

“It becomes attractive to keep rivals off the market and there is no better example than the citizen-petition process,” Balto said. . . .

It is clear the objective of many petitions is delay for financial advantage. The petitions arrive for FDA review as the brand-company drug expires, and they are based on information available much earlier, according to Balto.

While the new legislation proposed last week specifically addresses the issue of curbing these delaying tactics, The National Law Journal suggests that this will not necessarily provide a real solution to the issue, and may in fact just generate litigation, which could have the effect of generating even more delays than what are currently being caused by the petitions.

The National Law Journal explains as follows:

The U.S. Senate last week inserted petition reforms in a major FDA overhaul bill. The measure would not allow a petition to delay FDA approval of a generic unless delay is necessary to protect public health. As a check on competitors, petitioners must verify who is making the challenge and whether they expect to be paid for filing the petition. Congress must get annual reports on delays to generics based on the petitions.

[Scott Lassman, senior assistant general counsel for Pharmaceutical Research and Manufacturers of America (“PhRMA”)] said  PhRMA opposes the citizen-petition reforms and predicted that, if the measure becomes law, it may produce even more litigation. “These new requirements are so onerous, companies may decide to go to court to seek whatever they are seeking currently in petitions,” he said.

As I have indicated in prior blogposts, there are no easy answers to the tug of war between generics and brand-name drugs.  While there certainly is a push by the insurance industry and certain members of the left to make generics more available faster, there is very real tension on the part of biotech and pharmaceutical companies to prevent this from happening, so that they have an opportunity to fully realize the value in their investment.   The National Law Journal article highlights one specific aspect of this generics-brand name controversy, particularly with respect to how both sides are using  legal maneuvering to promote their cause.

However, what I think we should take away from this article, is the idea that the new legislation, which purports to end the legal maneuvering may actually result in only creating more problems for both sides of the dispute.   Is that really what is intended?  It is ironic to think that at a time when Congress is busy debating patent reform, which is in part intended to curb patent litigation, the same legislative body is simultaneously considering legislation that could have the effect of generating even more patent-related litigation.  What is wrong with this picture?