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Press Release

Important Patent Law Reform Opportunity

June 24, 2009

Dear Senator,

I am writing to urge prompt enactment of an important reform to patent law that will promote innovation in critical medical research.  This reform is revenue neutral and would encourage the continued development of life-saving drugs that are beneficial to potentially millions of Americans.

More specifically, I am writing on the behalf of the hundreds of thousands of members of FreedomWorks nationwide to urge a change to current law that would grant the U.S. Patent Office the authority to consider an application for duly earned patent term restoration that unintentionally has been filed late, but within three business days of the expiration of the 60-day filing period established in the Hatch-Waxman Act (see 35 U.S.C. Section 156(d)(1)).  The U.S. Patent Office has the authority to accept late-filed submissions in a variety of patent and trademark proceedings, but unaccountably it lacks such authority in instances of patent term restoration filings.

FreedomWorks has a long history of advocating reforms to the drug approval process that eliminate unnecessary delays and increase consumer access to important new therapies.  In addition, FreedomWorks believes that at times the patent process may be abused to the detriment of generics, which provide an important source of competition that generates substantial consumer benefits.  Granting the U.S. Patent Office the authority to accept a submission for patent term restoration that has been unintentionally filed late, however, is not an abuse of the system; it is a correction to the process that will enable continued research and development.  This issue also highlights the burden imposed by the drug approval process and I would urge Congress to also consider reforms in this area as well to ensure Americans have the access to the best care possible.

Patent term restoration--which adds patent term to compensate the innovator for the time consumed during the FDA review process-- was included in the Hatch-Waxman Act as an inducement for innovators and firms to devote resources to the risky, time-consuming, and costly drug development process as well as the lengthy FDA approval process.  Without patent term restoration, incentives for drug innovation are diminished and consumers bear the costs as fewer resources are devoted to important life-saving drug therapies.

As an example, The Medicines Company failed to receive patent restoration because the PTO concluded that its application was unintentionally filed one day late.  The firm has consistently conducted important additional research on Angiomax, a drug initially approved as a blood thinning agent and used in angioplasties.  Over 30 of the nation’s leading doctors, familiar with the research, confirm that Angiomax also may be beneficial for use in the prevention and treatment of heart disease and stroke, which are the first and third leading causes of death and the leading cause of disability in the United States.  Unfortunately, without patent restoration, the ability to conduct the additional research required and commit to the costly approval process are eliminated, stifling further innovation and development while leaving consumers with fewer choices for critical health care decisions.

It should also be noted that the "no grace period" treatment of patent term restoration applications is an anomaly in patent law.  While no grace period is allowed for patent term restoration applications, there are over thirty provisions in various aspects of patent law that, in fact, do allow for a grace period.  The failure to extend a similar grace period to patent term restoration applications raises questions about “gross disproportionality,” a principle the courts have applied to evaluate excessive punishment or a fine that is grossly disproportionate to the underlying offense.  Importantly, the courts have noted that excessive penalties for a late filing, which is viewed as “an entirely passive, technical and harmless violation,” should be disallowed under the “gross disproportionality” principle, an admonition that Congress found particularly compelling when previously considering this issue.

Unlike other areas of patent law, the inflexible filing deadline is clearly draconian.  The Hatch-Waxman Act provides incentives to invest in the costly and time-consuming drug approval process, yet the inflexibility built into the current law can destroy those incentives and have a disproportionate impact on the process, reducing opportunities for innovation.  Bringing patent term restoration policies more in line with the broader process for patent and trademark proceedings would provide an important economic incentive without requiring additional federal funding.

It has been suggested inaccurately that the Senate rejected this remedial legislation.  The opposite is true.  The House has unanimously passed versions of such reform on two occasions under the leadership of Chairmen Sensenbrenner and Conyers.  The Senate Judiciary Committee has also favorably reported similar legislation on a broad bipartisan vote of  14-2.

The reform we propose does not impose any new costs or burdens on the government, nor do they require public expenditures.  Indeed, contrary to a suggestion that the reform would cost the private health system $1 billion, extensive clinical studies and real world experience consistently have demonstrated that the reform we propose will lower hospital costs and improve patient outcomes, and result in over $1 billion in savings for the private health system .

The only arguments that have been raised against the patent restoration provision we support were settled by Congress a quarter of a century ago when Congress enacted the Hatch-Waxman Act.  Patent restoration applicants like The Medicines Company, which have successfully completed the rigorous FDA approval process relying upon the inducements embodied in Hatch-Waxman, have earned patent term restoration.

Congress has endeavored for five years to enact this remedial provision, falling short every year for procedural reasons.  Now, time is of the essence.  Whether Congress enacts this remedial provision in an authorizing bill or an appropriations bill is a straw man argument—there is ample precedent for Congress enacting patent law reforms in appropriations measures (See, for example, P.L. 108-447).  Indeed Congress reenacts a series of patent law provisions, virtually identical to the one we propose, every year in appropriations bills.

It would be a mistake to underestimate the importance of this reform to innovation in healthcare.  Only a fraction of drugs submitted for the rigorous and costly FDA approval process actually achieve FDA approval.  Congress should not allow one-day filing errors to cut off duly earned patent term restoration.  Subjecting drug innovators to this disproportionate penalty makes no sense, and, as is demonstrated in the case of Angiomax, frustrates vital life-saving medical research.


Matt Kibbe,
President and CEO.