Yesterday, the Supreme Court handed down a patent decision (PDF) that makes it easier to deny or challenge a patent that seems “obvious” to a patent examiner or a court. This decision has already been hailed by the technology industry, which has lobbied hard for legal changes that would limit inventors’ rights somewhat in order to discourage “patent trolls.”
The biotech and pharma industries, by contrast, could find themselves in more of a pickle. Reinterpretation of the “obviousness” standard — in which the Supremes rejected a “narrow, rigid” definition adopted years ago by a lower court — may make it far more difficult to patent new generations of existing drugs, particularly if the newer products amount to little more than “extended release” forms that allows people to take pills or shots less frequently. For instance, last year the Court of Appeals for the Federal Circuit rejected a patent for an extended-release form of an Alza incontinence drug as obvious — and that was under the old, now-rejected, standard for “obviousness.”
Ultimately, though, it’s not clear to me that this decision presents a huge problem for biotech. (Pharma, which leans a lot more heavily on the extended-release dodge in order to effectively extend patent lifetimes, is another question entirely.) With only a few exceptions — the Amgen drugs Aranesp and Neulasta, for instance, or various forms of quick-acting or long-lasting insulin — biotech has relatively few “next generation” products, and in general has lot more leeway to produce “innovative” follow-on products that do much more than simply stick around longer in the bloodstream. (Such as, for instance, by boosting the affinity of an antibody so that it sticks to its target much more tightly, or altering its structure so that it is less likely to trigger an unwanted immune reaction.)
On the other hand, yesterday’s case is this third in recent months to limit the rights of patent holders. In those previous cases, the Supreme Court made it more difficult to obtain an injunction against an alleged infringer and easier to challenge a patent without first violating it. Taken together, the three cases could produce some unexpected fireworks in the industry, albeit ones that are likely to go off in slow motion in coming months and years.