Patent News

Feb. 20, 2015

San Jose Mercury News Opinion: David J. Kappos and David C. Hoffman: Patent legislation would slow biotechnology innovation, by David J. Kappos and David C. Hoffman

This post originally appeared in San Jose Mercury News on February 20, 2015.

Congress once again has introduced legislation aimed at curbing abusive patent litigation. While there is wide agreement on the desirability of curtailing frivolous threats and suits, there is another critical issue with our nation’s patent system that seems overlooked, perhaps even lost, in the debate: how to provide incentives for investment in biotechnology innovation in an era when research and development spending by both government and industry is falling.

The investment in a strong patent system as a means to provide incentives for R&D is one that Americans have made willingly for generations, driving innovations in biotechnology that have revolutionized the prevention and treatment of many life-threatening diseases. Unfortunately, our national mindset has shifted. Public funding for research in the life sciences is decreasing, and incentives for innovation are being degraded.

The patent system, the primary incentive that encourages investment in life sciences innovation, has been declared inapplicable to major sectors of life science by the U.S. Supreme Court. Meanwhile, the new legislation pending in Congress, however well-meaning, could further diminish the strength of our nation’s patent system. Indeed, these reforms could quickly make the United States a laggard in life sciences innovation.

The exclusivity provided by a patent enables those taking on enormous risks by investing in R&D the opportunity to recoup their investment. Studies have shown that an exclusivity period of at least 12.9 years is required just to recoup the development costs of the average biotech drug. Furthermore, the patent system provides a built-in mechanism for encouraging follow-on innovation — disclosure. A key feature of patents is that they are published; no inventor is granted exclusivity over his or her invention without first teaching the world how it works. This is particularly critical in biotechnology, where innovation occurs mainly by accretion, with each succeeding breakthrough building on the previous one.