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The Critical Importance of International Patent Protection for Small Businesses

November 4, 2011
As part of the implementation of the Leahy-Smith America Invents Act, the U.S. Patent and Trademark Office (PTO) recently held two public hearing on international patent protection.  Stanley C. Erck, President and CEO of Novavax, Inc., testified on behalf of BIO in support of an initiative to reduce filing and prosecution costs for international patent protection of biotech inventions.

[caption id="attachment_4943" align="alignright" width="115" caption="Stanley C. Erck, President and CEO of Novavax, Inc."]Stanley Erck[/caption]

In his testimony, Mr. Erck explained the important role patents play in the biotechnology industry. The vast majority of BIO members do not yet have a product on the market and must raise the funds necessary to finance the long and expensive process to bring a new vaccine or therapy to market (an average of $1.2 billion over ten years, according to the Tufts Center for the Study of Drug Development).   Intellectual property, in the form of U.S. and international patents, is often the main assets of these small biotech companies.

The importance of international intellectual property protection has increased as biotech companies seek to expand the markets for their products.   Small biotechnology companies face unique challenges in securing international IP protection as biotechnology patent prosecution in foreign jurisdictions can be more expensive and complicated and subject to greater non-uniformity of the law than many other technologies.  The scope of patent claims and what is allowed can differ significantly from country to country, which further complicates and increases the cost of international patent filing for biotech inventions.  Without procedural or substantive harmonization, these problems are likely to increase costs for small biotechnology companies.

“For our small biotechnology businesses, securing IP protection can be as important as obtaining laboratory equipment, leasing space, or hiring creative, dedicated employees.  There is no reason, therefore, to exclude efforts to secure patent rights from publicly funded small business assistance programs that are available for more tangible assets such as capital equipment, hiring, or leasing space,” Mr. Erck testified.  “Securing international patent rights, a necessary protection for even the smallest biotech companies, can be an expensive proposition, so permitting public assistance programs to defray such expenses would give these companies greater flexibility to focus resources on important development efforts.”

BIO has urged the U.S. PTO to consider ways it can help small biotechnology companies file and prosecute patents internationally more efficiently, so that these companies can dedicate more resources to research, job creation, and product commercialization for the benefit of patients, farmers and other consumers.

A webcast of the hearing is available on the PTO website.