Pharmaceutical News 2.0

By David E. Rogers, Squire, Sanders & Dempsey L.L.P. and Amy L. Hartzer, IsoPatent
Aug. 12, 2009

International competition is increasing daily. Competitors are nimble and quick to copy, and customers are demanding and looking for the best price. Brand name and personal relationships still carry some weight, but not as in years past. One way for U.S. manufacturers to compete effectively in today’s marketplace is by controlling innovation through intellectual property (”IP”). Given the international nature of business, IP protection should also be international and, to the extent cost effective, coextensive with a business’ current and future market presence.

We suggest a three-step approach to creating an international IP portfolio. First, regardless of location, always utilize contracts and trade secrets with employees and business partners, such as suppliers, distributors and contractors. Second, if practical, use patents to both (i) fortify the protection provided by contracts and trade secrets, and (ii) protect your technology from entities with which you have no contractual relationship. Third, select the countries in which you desire patent protection, which are usually those in which your products are sold or will be sold, and then implement your IP strategy.

Below we explain the IP protection mechanisms, how to select the countries in which patent protection should be obtained, and two case studies that apply these principles.

(1) The IP Protection Mechanisms: Contracts, Trade Secrets and Patents.

(a) Contracts: Whether or not your technology is protected by a patent, it may still be protected by contract. Contracts should always be used with employees and your direct business partners, such as suppliers, distributors and contractors. Contractual protection may even be suitable for customers (for example, if you already enter into contracts with customers to sell industrial machinery.)

Read the rest of this article on pharmaceutical patent and other intellectual property issues on IndustryWeek.com.

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Pharmaceuticals is an industry exposed to many unique risks. The capital intensive research and development (R&D), the uncertainty of Food and Drug Administration (FDA) approval, and a constant shroud of legislative risks may seem like a lot to deal with, but one of the fastest growing threats for pharmaceuticals are patent trolls.

The Pharmaceutical Process
FDA approval is already a long process, and even properly-approved drugs have left companies open for litigation. To take just one example from 2008/2009, there is an ongoing legal argument about whether federally approved warning labels pre-empt state law. The main problem was that if the Supreme Court ruled that warning labels didn’t pre-empt state law, or if Congress changed the rules to give state law equal importance, then drug companies could find themselves facing more lawsuits. In addition, the drug companies would have to go through FDA approval followed by state by state compliance checks - all of this adding to the already considerable costs of doing business.

Patent trolls, by either attacking existing patents or hoarding vague patents, hurt pharmaceutical companies more acutely by reducing returns on investment at a time when both the companies’ costs and risks are rising. Drug companies need large cash reserves/war chests at all times to pay for capital-intensive research, FDA approval and settling lawsuits. To maintain this war chest they need strong and, more importantly, stable profits from their products.

Risk and Return
These companies pay out the huge R&D costs in return for huge possible rewards on patented drugs. The rewards are more or less proportional to the risks, as many drugs never make it to market, meaning they never pay back their R&D costs. Drug companies want their patents, essentially their intellectual property rights, protected for as long as possible. They want an exclusive monopoly over their product in order pay back the costs of development along with a profit equal to the risks taken on by the company. Excess profits will either go to the shareholders or cover the costs of the many failed drugs that never make it out of developmental stages.

Trolls Provide Short-Term Benefit
Whether it is generic aspirin or generic Viagra, the patient receives an immediate benefit from patent trolls in the form of a lower price for medicines. This short-term benefit is no doubt much appreciated. The government also tends to think short-term - a cynic would say in four-year cycles - and generally in line with patients. They want cheap pills for voters and are more than willing to see corporate profits take a hit to meet that end. Governments have shown their support for patent trolls by creating legislative loopholes and eroding patent rights.

By attacking long-term patents, trolls are able to open up specific formulas for generic mass production and bring cheap generic drugs to market quicker. In the short-term, it’s hard to argue that cheap medicine doesn’t benefit the general population. In the long-term, however, the actions of patent trolls may actually hurt everyone.

Read more about pharmaceutical patent trolls.

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by Stephen Albainy-Jenei
June 30, 2009

The American Conference Institute’s Maximizing Pharmaceutical Patent Lifecycles, the 10th Anniversary Edition will be held at the Helmsley Park Lane Hotel, New York, New York, on Wednesday, October 7, 2009 to Thursday, October 8, 2009.

Overview

This 10th American Conference Institute event on Maximizing Pharmaceutical Patent Life Cycles will bring you the thoughtful and targeted commentary and in-depth analysis that you have come to expect from this industry leading conference. This year’s conference will help you prepare for the sweeping changes currently underway by providing you with:

* Focused panels on the pending Follow-On Biologics and Patent Reform legislation that will allow you to assess how both legislative proposals will impact pharmaceutical patent life cycle management
* Access to key officials from the FTC’s Bureau of Competition’s Health Care Division and the EC’s DG Competition’s Pharmaceuticals Task Force who will provide you with direct insights into the logic of these agencies on some of the most pressing antitrust matters currently affecting the industry
* An in-depth review of new FDA determinations regarding exclusivity, forfeitures, patent listing and delistings and strategies for incorporating these guidelines into your initial life cycle management plan
* Analyses of key cases that have affected patent life cycle strategies and tips for using these rulings to your advantage

Read more about this conference on pharmaceutical patent lifecycles.

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