Robin Feldman, Hastings College of the Law (Jason Doiy / The Recorder)
A study released Friday by UC-Hastings professor Robin Feldman and Harvard Fellow Dr. Nicholson Price predicted that biopharmaceutical companies will become a growing target of patent monetizers.
Their paper, Patent Trolling: Why Bio & Pharmaceuticals Are at Risk, examined life sciences patents—ranging from methods of treatment to active drug ingredients and dosage forms—of five research universities to evaluate their potential for assertion, using practices already observed in the technology industry. The authors characterized their search as “nonintensive,” but said they found numerous examples of patents held by universities that could be used as the basis of infringement claims against existing biotechnology and pharmaceutical products, and suggested a more intensive search by a motivated party could dig up plenty more. In particular, they looked at patents covering active ingredients, methods of treatment, manufacturing methods, dosage forms and screening methods. They also spelled out specific patents within each category.
“Our suspicions were borne out—we found many patents that could potentially provide the basis for a suit by monetizers against the biopharmaceutical industry, or at least bargaining leverage,” the study said. “The ease with which we found potentially relevant patents inevitably raises the question: if these patents are around and threatening, why hasn’t the industry found and dealt with them?”
The study acknowledged that biotech and pharma have tended to face lower risks because the industry’s research results in fewer, narrower patents and therefore fewer targets. But the authors deemed this thinking fundamentally myopic. “It assumes a classical model of patent bargaining, rather than the strategic bargaining and suit filing adopted by modern monetizers,” they wrote, cautioning that “while high-tech may be low-hanging fruit, the proliferation and increasing sophistication of monetizers means that other industries are likely to be targeted.” Feldman and Price wrote that they “lost sleep” over whether to perform and publish this work, fearing that it “could do no more than provide a handy road map” for would-be trolls if efforts to change the patent system are unsuccessful or misdirected. But they noted that, so far, “life sciences trolling is predictable and in its infancy,” expressing optimism that such risk assessments might instead prompt legislators and regulators to curb the activity before it becomes commonplace. “Technology trolling seeped in silently under the radar, growing to extraordinary dimensions before lawmakers had time to react,” they wrote, saying that this does not have to be the case for biopharmaceuticals.
Already, though, the authors reported that patent brokers are hearing from pharmaceutical companies looking to divest their noncore patents, a move that the authors caution could escalate the industry’s risk, even as it largely bows out of the debates over legislative reforms. Meanwhile, universities find themselves under increasing pressure to monetize their portfolios.
Feldman and Price examined the patent portfolios of five university systems, including the University of California and other top recipients of patents in fiscal year 2011.
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