Patent News

Mar. 24, 2015

Forbes: New Patent Law Would Trash Disease Cures, by Robert Nelsen and Hans Bishop

This post originally appeared in Forbes on March 24, 2015.

Robert Nelsen, Co-founder and Managing Director, ARCH Venture Partners, has helped to create over 30 biotech companies during the past three decades.  Hans Bishop is the CEO of Juno Therapeutics, Inc., a clinical-stage company developing novel cellular immunotherapies to treat cancer.

If you listen to large tech companies, they will tell you they are in dire need of another bailout from scary “patent trolls” who burden them with frivolous lawsuits. This tech bailout will come in the form of a bill that would weaken 225 years of U.S. patent law to help big companies always win, and guarantee that small innovators and inventors will always lose.

The United States’ patent law system is at the foundation of American global success, found in breakthrough discoveries from Edison to the computer chip to recombinant DNA. Do we really need to “fix” the legal system that has enabled America to become number one in the global biotech, software, hardware, medical devices, energy, genomics, and nanotechnology industries? Patent filings are down an astonishing 40% in 2014 as a result of the first patent troll “fix” a few years ago and recent court decisions that have given away our nation’s competitive edge.

Established giant tech companies, which are wildly profitable and whose market cap comprises most of NASDAQ, are not the source of American innovation. Study after study demonstrates that small university spinouts and venture capital-funded startups are the engine of innovation. Do Oracle, Intel, Google, Apple and Cisco–companies with a combined market cap of over $1.6 trillion–need a bailout to protect them from inventors? Absolutely not.

Why should we care if changes in arcane patent law help rich companies get richer? For one thing, your life could depend on it. If adopted, this insult to the basic property rights of inventors will cause toxic side effects for true innovators in biotechnology. Weakening patent laws will decimate long-term investment in cures for diseases such as Alzheimer’s, Parkinson’s, and Huntington’s, as well as funding for new therapies to treat autism and breast, colon, lymphoma and prostate cancers. If you have relatives awaiting cures or work for a foundation or university that funds medical research, you should be apoplectic.

Some of the most onerous provisions of the bill–paradoxically called the Innovation Act–would create a system in which startups would need to spend tens of millions of dollars on litigation expenses defending themselves from large companies, most likely going bankrupt if they lose to the “big guy”. That is money that could be going towards curing disease. Another provision would tax universities and other financial backers that support startups when big companies win litigation under this new, rigged system. Yet other provisions would allow big companies to repeatedly challenge and appeal patents in order to drive small companies and individual innovators into financial ruin.