Modern pharmaceutical and biotechnology products typically require lengthy, costly, and resource-intensive development periods before they reach the marketplace. BIO members devote many years and millions of dollars in direct investment and sweat equity to develop innovative new products that cure diseases, improve food security and/or create alternative energy sources, among other things. The ability to maintain and enforce strong patents covering these innovations provides critical incentive to justify this investment. Increasingly, BIO members, large and small, engage third party contract resources to perform research and manufacturing services to reduce development costs, streamline resources, and enhance efficiency. BIO members therefore are especially vulnerable to the misapplication and inconsistent application of standards that lead to the invalidation of patents.
The Panel Decision needlessly expands the on-sale bar to discriminate against pharmaceutical manufacturers who choose to take advantage of the economic efficiencies of outsourcing clinical manufacturing or other aspects of the drug development process. Applying the on-sale bar to a contract between a patent holder and a contract manufacturer who confidentially provides manufacturing services conflicts with established precedent and Congressional intent. The decision has wide-ranging economic implications for the pharmaceutical and biotechnology industry as a whole and risks chilling investment in research, development, and commercialization of new products that heal, feed, and fuel the world. BIO and its members have a substantial interest in the Court’s resolution of the questions raised by the Panel Decision.