By Brian E. Clark
WisBusiness.com
MADISON – The overhaul of the patent system now working its way through Congress would hamper innovation, hurt inventors, crimp small biotech companies and cost the University of Wisconsin, the head of the Wisconsin Alumni Research Foundation (WARF) warned today.
“If this law passes, there will be every incentive for people to infringe on patents and not license,” said Carl Gulbrandsen, WARF’s managing director, speaking today at a Wisconsin Innovation Network luncheon.
Current patent law, though flawed, protects “the little guy” over corporations and, he said, provides incentive for opponents to come to agreements rather than go to court.
Moreover, it gives investors some assurance that they will get a return on their money, he said. With the changes in store, they may not be willing to take the considerable risk comes with backing life-science start-ups.
“Only now are people starting to wake up to the major changes coming to how intellectual property is managed,” said Gulbrandsen, who is also a veteran patent attorney.
“Unfortunately, we are losing the battle and we need help,” said Carl Gulrandsen, WARF’s managing director.
Laura Strong, president of the Madison start-up Quintessence Biosciences, said she fears the reform will make financial backing harder to get.
“The number one danger is that this will cut the value of our technology, hurt our ability to raise capital and open the door infringement,” she said.
But Grady Frenchick, another long-time patent attorney, said patent law changes are coming and WARF and others need to be ready to deal with it.
“It’s going to happen and there will be reform in some fashion,” said Frenchick, a partner with Whyte, Hirschboeck Dudek. He said he supports the changes because they will provide “administrative mechanisms” to correct patent problems before they reach court.
Both the House and Senate judiciary committees recently approved legislation aimed at reducing lawsuits over patent rights and expedite the patent review process.
WARF, which holds all patents for the university, is now in a battle over the validity of its stem cell patents. Since its inception in 1925, WARF has funneled $850 million back to the university from money earned by licensing patented discoveries.
The bills, which may reach the House and Senate floors as early as Wednesday, are viewed favorably by the high-tech sector, but generally opposed by biotechnology firms and universities.
Universities attract private financing for research projects based on the potential commercial value of the schools’ inventions. Professors and college researchers often don’t immediately seek to patent their findings, explained Tom Still, president of the Wisconsin Technology Council. Currently, patents are awarded to those who can prove they were the first inventor, a system unique to the United States.
The measures Congress will consider would move to the “first-to-file” system used in the rest of the world.
The Tech Council hasn’t taken a formal position on the pending legislation.
Both bills would give patent examiners access to more information to help them during the patent-granting process. Additionally, a system to re-examine a patent after it is filed would be created.
In the effort to cut down on patent-related lawsuits, which have swelled along with the growth in the biotechnology and high-technology industries, the bills would make it harder for a patent-holder to sue a corporation or individual for “willful” infringement. If plaintiffs can prove willful infringement they can collect triple the damages.
The House version also attempts to limit “forum shopping” — patent holders who choose where to file their lawsuit based on where they believe they have the best chance of winning.
The Biotech Industry Organization, a national trade group, issued a statement opposing the House bill on the grounds it “threatens continued biotech innovation.”
Rep. James Sensenbrenner, R-Menomonee Falls, the top Republican on the House Judiciary Committee, opposes the bill, which nonetheless passed easily. Madison Democrat Tammy Baldwin, who also sits on the committee, is also opposed to the bill.
