As we enter the final days of the 114th Congress, it is regrettable that the unintended consequences of the PTO’s administrative patent challenge system known as Inter Partes Review, or IPR, continue to threaten innovative, intellectual property-reliant companies that are helping to drive this nation’s economic growth.
It is vital that patent reform legislative efforts crack down on abuses of the IPR system and impose greater checks on the unfettered discretion of the PTO’s administrative patent challenge judges, known as the Patent Trial and Appeal Board (PTAB). It is an under-reported fact that ‘reverse patent trolls’ are abusing this system to fundamentally undermine the ability of biotech companies to rely on their patents to raise and invest the hundreds of millions of dollars needed to develop and bring to market the next generation of cures – as well as innovations in sustainable agriculture, renewable energy, and a variety of other bio-based products. And the PTAB has repeatedly refused to reign in such abuses, claiming it is not their responsibility to do so.
This is not an issue faced by biotechs alone – there is clear documentation that emerging high-tech companies are being targeted, too. Take, for example, the case of Power Integrations, a small manufacturer of electronic components. While couched in legalese, this demand letter from a shell company known as Silver Star Capital LLC to Power Integrations is nothing more than reverse patent trolling – trying to extract a financial payment for not challenging a patent.
While Silver Star made its pure profit motive clear, other entities engaged in the same shady practice, such as Argentum and Frontier, present themselves as generic manufacturers, despite a glaring lack of any evidence that they engage in any sort of pharmaceutical operations.
This overt abuse of our current patent system’s flaws must be addressed within any serious patent reform legislation.
BIO stands ready to work with Congress as it continues to reform the patent system, to ensure that these reforms better support the inventors, the investors, and the people waiting for new biotech innovations treatments to improve their lives and their environment.