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Biotechs see big danger in patent rules changes

Biotechs see big danger in patent rules changes
East Bay Business Times - September 15, 2006by Marie-Anne Hogarth

Neal Gutterson, president of Hayward-based Mendel Biotechnology Inc. is more than a little worked up about a U.S. Patent and Trademark Office proposal.

The proposal to limit a key portion of the patent application process, aimed at reducing the patent office's backlog of more than 700,000 cases by limiting continuations, could go into effect before the end of the year and has raised the ire of biotech and agri-technology companies.

Continuations allow companies to apply for protection of different aspects of the same invention without risking having old claims cited against them in a patent search.

Many biotech - and other tech companies - rely on continuations because they may not know for years what eventual form their products will take.

"The reason this is potentially negative is that the big breakthroughs are not how the tech economy runs," said attorney Gregory Scott Smith, who runs GSS Law Group, a patent prosecution firm in Newark. "The tech economy runs on constant incremental improvement and this would hinder that ability."

The patent office, which is reviewing public comment on the rules, says the continuation measure could improve productivity by 5 percent. It faces a growing backlog of cases, which is expected to increase by 100,000 this year.

"Some companies have had conversations about legal avenues for potentially an injunction," Gutterson said. "One of the questions is whether the U.S. PTO has full scope to make the changes, since the continuation practice is part of the patent law."

Industry groups, such as the Biotechnology Industry Organization and the Intellectual Property Owners Association, and companies, including Amgen Inc., Genentech Inc., GlaxoSmithKline and Mendel Biotechnology, have expressed their opposition through commentary on the patent office's Web site.

Groups including BIO, which, according to The Center for Responsive Politics, spent more than $2.8 million in 2005 on lobbying activities, are talking to White House and patent officials.

"It is quite possible it will be up for a court to decide if the patent office will limit continuation practice," said Kenneth Goldman, an attorney with Berkeley-based Dynavax Technologies Corp.

Although biotech companies have overwhelmingly opposed the rule change, that sentiment is not as strong in other industries.

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