As long-awaited patent-reform legislation nears passage in the Senate, critics say some provisions in the bill are custom-made for specific businesses.
In a letter to their colleagues on Wednesday, Sens. Jeff Sessions, R-Ala., and Tom Coburn, R-Okla., urged the Senate to strip out language that they say would act as a bailout for one influential law firm.
“This provision—dubbed the ‘Dog Ate My Homework’ act by Citizens Against Government Waste—first surfaced about a decade ago when the prestigious [firm] now known as WilmerHale missed a routine deadline for submitting to the Patent and Trademark Office a patent-term extension application on behalf of its client The Medicines Company for its drug Angiomax,” the senators wrote.
“The PTO denied the application, concluding it was not filed in a timely manner. Ever since then, both Medco and WilmerHale have spent millions lobbying Congress to change the rules and fix their mistake.”
WilmerHale may have to make a $214 million malpractice payment if a generic version of Angiomax comes on the market before 2015, and Medicines Company could lose most of its revenue if generic competitors are able to take advantage of the mistake.
In 2006, Citizens Against Government Waste testified against the original language, calling it “special-interest legislation at its worst.” Since 2005, Medicines Company has spent $17 million on lobbying efforts, The New York Times reported.
The language was reinserted by Rep. John Conyers, D-Mich., who said it would eliminate confusion over patent deadlines. Conyers’s amendment narrowly passed in the House despite opposition from House Judiciary Chairman Lamar Smith, R-Texas, who authored the House version.
The provision also drew a rebuke from the Wall Street Journal editorial board, which said Medicines Company and WilmerHale should have known better than to miss a deadline.
“There are few things as unbecoming as a law firm and drug company seeking special favors from Congress that would weaken patent law for their own self interest,” the board wrote in an editorial on Thursday. “Asking Congress to break the rules as a special favor corrupts the law.”
Sessions has proposed an amendment that would once again remove the provision from the patent-reform bill, officially known as the America Invents Act.
Just hours before the Senate was scheduled to vote on Session’s amendment and the final bill, the legislation’s sponsor, Judiciary Chairman Patrick Leahy, D-Vt., said courts have resolved the issue and it’s not worth delaying the whole bill.
“This provision is simply about how to calculate filing dates for patent-term extensions, although its critics have inaccurately labeled it as something more,” Leahy said in a floor speech. “This issue has been around for several years now and, in fairness, it was a controversial issue when it would have overturned the PTO’s decision legislatively. Now that the court has ruled, however, and the PTO has agreed to accept the court’s decision, the provision is simply a codification of current law.”
Sen. Maria Cantwell, D-Wash., also sought to strip language in Section 18 that she says is a bailout for banks. Banks say the provision will help them save millions defending themselves in unnecessary lawsuits.
Section 18 will help big banks infringe on other companies’ “business-method patents,” including things like one-click payments or electronic filing of documents, said Paul Michel, former chief judge of the Court of Appeals for the Federal Circuit, which hears many patent cases.
In an op-ed in Patently-O, a patent-law blog, Michel argues that Section 18 would allow patents to be overturned even if they were properly awarded.
“No other industry is so protected, no other type of patent so degraded,” Michel wrote. “That is not equal justice under law, but special interest legislation at its worst. Favoritism for financial firms will encourage other industries likewise to seek legislative exemption from normal rules and equal justice.”
Sen. Chuck Schumer, D-N.Y., who pushed for the business-method patent provision, said the law would only affect improper patent cases. He noted that 56 percent of business-method patent lawsuits are handled by one court in Texas because it is seen as likely to rule against banks and other financial institutions. “It’s time for the scam to stop,” Schumer said in a floor speech.
With a final vote on the bill scheduled for Thursday evening, Leahy repeated his call for the Senate to reject all amendments and send the legislation to President Obama.
“Does everybody get everything they want? Of course not.” Leahy said.
This article appears in the September 8, 2011 edition of National Journal Daily PM Update.