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A long-awaited struggle over patent reform appears to be upon us, the Washington Post reports today (hat tip to the WSJ’s Health Blog). It pits the tech industry against pharmaceutical/biotech companies over intellectual property protections that, depending on where you stand, are either largely a nuisance or an industry’s lifeblood.
Both the House and Senate are expected to introduce bills today that reflect the tech industry’s long-standing desire to weaken the protection patents offer their holders — over, of course, the vehement objections of pharma/biotech. The main issue separating the two pillars of U.S. high technology: Big tech companies tend to end up as defendants in patent-infringement suits, while big drug companies are more frequently plaintiffs. (The Washington Post’s Alan Sipress didn’t put it that simply, but that’s essentially what’s going on).
Generally speaking, tech companies want a greater ability to challenge the validity of existing patents and relief from what they consider exorbitant damages, such the $1.52 billion Microsoft was ordered to pay Alcatel-Lucent in February for infringing two patents on MP3 digital-music technology. Companies that pop up with such patent claims when a technology is already in widespread use are frequently derided as “patent trolls,” and the tech industry is anxious to limit their ability to block product development or to demand huge damages after the fact.
The pharmaceutical and biotech industries, by contrast, frequently spend years — and sometimes decades — developing drugs that are often protected by a limited number of patents. As a result, drugmakers are far more interested in protecting their investment by using those patents to ward off would-be competitors.
The possibility of patent changes is clearly a big deal for both sides, although I suspect that warding off changes is going to be an uphill battle for the drugmakers, who could even end up longing for a presidential veto. Not only has the drug industry leaned heavily Republican in recent years — hardly an auspicious sign now that Congress is held by Democrats — but criticism that overly strong patents stifle innovation has been growing steadily in recent years, and has even seemed to pique the interest of the Supreme Court. Plus, if things do get down and dirty on Capitol Hill, it probably won’t take long for stories about drug companies’ own abuses of the patent system to begin circulating again, potentially tipping the scales further toward reform.