Senator Ron Wyden (D- OR) is a man with an idea for lowering health care costs.  Unfortunately, it’s an idea which proved disastrous the last time it was forced on the National Institutes of Health. But that hasn’t dissuaded the Senator from trotting it out again.  He believes if a company commercializes a new drug whose development is in some way related to a cooperative R&D agreement (CRADA) it had at one time with NIH, that the government can then insure “a reasonable relationship between the pricing of a licensed product, the public investment in that product, and the health and safety needs of the public.”

Sen. Wyden seems sincere in his concern with the ever escalating costs of medicine.  Unfortunately, his proposed solution empowering the government bureaucracy to second guess industry drug pricing decisions simply because they worked with NIH would make things worse.  We could see fewer new drugs at any price.  We may see more research shifted to India and China as our public research institutions are viewed as unreliable partners. And we may throw away a key strategic advantage of the hard pressed U.S. life science industry—its ability to draw on the unparalleled resources and expertise in our federal laboratory and university research systems.

If this path is chosen, we have fair warning of the hazards.  We’ve been down it before.

UPDATE December 19, 2012

On December 18, 2012, the House of Representatives passed the AIA technical amendments bill by a vote of 308 to 89. Here is the link to the bill as passed.

* * * * * * * * * *

During the last six days of a session the Speaker of the House of Representatives is allowed to suspend Rules in order to expeditiously dispose of non-controversial matters quickly before the end of a session. See Suspension of the Rules.

This year there will be several intellectual property bills that will move under suspension of House Rules on Tuesday afternoon, December 18, 2012.  One is a substitute version of HR 6621, the America Invents Act (AIA) technical corrections bill.

Section 1(m) has been amended to include a PTO study in lieu of the original pre-GATT provision.

For a better part of the past year, there has been talk about the possibility of Congress moving a technical corrections bill to fix some “errors” within the America Invents Act (AIA).  The AIA was signed into law on September 16, 2011 and contains, as most major pieces of legislation do, some minor drafting errors.  On Friday, November, 30, 2012, a bill making technical changes to the AIA was introduced in the House of Representatives.  The bill number is HR 6621.  The proposed AIA package does NOT include a so-called “fix” to post-grant review that some considered to be substantive and not technical.

To rewind: Earlier this year, there had been some behind the scenes discussions on Capitol Hill about possibly modifying the AIA’s PGR estoppel provisions in a way that would have been problematic to patent owners.  The discussed change would have removed from the AIA the “could have raised” estoppel standard.  Concerns about weakening the PGR estoppels provisions as part of a ‘technical” package were communicated by members of the Innovation Alliance, university, inventor, and venture capital communities.

Fast forward to today:  The bill does not contain the troubling PGR “fix.” Key staff on the Hill believe the measure to be non-controversial. House passage of the measure could take place before year’s end.  What follows is the text of a draft section-by-section analysis of what was expected to be in the introduced AIA package of fixes.

Last week I published part 1 of my conversation with Manus Cooney, who is one of the preeminent intellectual property lobbyists in Washington, D.C. Cooney, a former Chief Counsel to the Senate Judiciary Committee, is currently a partner with American Continental Group and was intimately involved in lobbying Congress relative to the America Invents Act (AIA), primarily on behalf of his client Tessera Technologies, who aligned themselves with the Innovation Alliance.

In part 1 we discussed lobbying in general, shining some light on the process as a whole and explaining why it is unrealistic to expect you can enter the debate near the end and have any hope of affecting change. In part 2, which is reproduced below, we discuss the specifics of lobbying the AIA, as well as the fight against further erosion of patent rights. And you thought that patent reform was over. Sadly, the fight continues.

COONEY: Going back to the AIA, when it comes to passing legislation, it’s important to know how each of the Congressional bodies work. It may be an oversimplification but it is usually the case that whatever the House Majority Leadership wants to pass, it usually gets done. In the Senate, however, it’s different because of its rules. There, whatever the Majority wants to pass has a shot at getting done. In other words, if the House Leadership, the Republicans in this case today, and the Chairman of the Committee want to see a particular measure passed, more often than not, particularly on an issue as esoteric and complex as patent law, the party members of the majority party are going to adhere or defer to the wishes of Leadership, And as a result, you’re trying to either create a situation in advance of the House measure coming to the floor where you have the support of the Leadership or you have created an environment where it’s less certain to the House Leadership and the Chairman that they will in fact be able to prevail, and thereby create an environment where they have to negotiate. Oftentimes in the House, your laying the foundation for a fight in the Senate where there is less deference to the Leadership. The rules are such that, in theory, any Senator can offer an amendment to any bill at any time, and you have a better shot at winning on the merits, so to speak. That has a way of forcing consensus. So realizing that those tend to be the ground rules, the landscape you’re dealing with, you develop a strategy for your clients.

Manus Cooney is a formidable figure.  He stands 6’3”, is the consummate professional, highly intelligent and very personable.  He is the type of person you notice when he walks into a room.

Who is Manus Cooney?  Those in Washington, DC, know the name well, but many practitioners in the intellectual property space are probably not well acquainted with Cooney, but Manus Cooney is a name you should know if you are at all involved in the world of intellectual property.

Cooney is a prominent behind the scenes player in Washington, DC.  He is a partner in the American Continental Group, a D.C. based consulting and lobbying firm that boasts one of the most prominent IP practice groups in town.  His partners include Marla Grossman, who was an IP counsel for Senate Judiciary Committee Chairman Senator Patrick Leahy (D-VT), and Chris Israel, who was the nation’s first U.S. Coordinator for International IP Enforcement — the first IP Czar.  Philosophically, ACG tends toward the pro-IP side, so it is not surprising that many of the clients they represent are interested in securing and promoting a strong IP regime both in the U.S. and abroad.  In short, Cooney and others at ACG fight the good fight, helping content creators and innovators convey their message in the halls of Congress.

Washington, D.C. (June 21, 2012) – BIO commends the House of Representatives for its unanimous approval of S. 3187, the Food and Drug Administration Safety and Innovation Act (FDASIA), which includes a reauthorization of the Prescription Drug User Fee Act (PDUFA).

We appreciate the leadership of Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-IA) and Ranking Member Mike Enzi (R-WY) as well as of House Energy and Commerce Committee Chair Fred Upton (R-MI) and Ranking Member Henry Waxman (D-CA) in reconciling the differences between the user fee packages adopted by the two Chambers and for securing unanimous approval in the House.

News broke several days ago that Senator Jon Kyl (R-AZ) has raised the issue of funding for the United States Patent and Trademark Office in his role as a member of the so-called Super Committee, which is charged with finding $1.2 trillion in budget cuts over the next 10 years. See Super Committee Considering an End to USPTO Fee Diversion.  This means the patent community has another chance to urge Congress to do the right thing and adequately fund the USPTO.  Everyone in the patent community can and should get involved and be heard — patent attorneys, patent agents, patent bar groups, patent bloggers, corporations, inventor groups, inventors and industry organizations such as the ABA IP Section, the AIPLA and IPO. It is time to get involved!

Many will recall that recently we came up to the doorstep of putting an end to fee diversion through the creation of a revolving fund for the USPTO.  The revolving fund proposed by Senator Tom Coburn (R-OK), would have tied a revolving fund together with taking the USPTO out of the appropriations process.  This would have meant that the USPTO would be guaranteed to keep 100% of the user fees collected without Congress being able to divert fees over and above what they specifically appropriated.  The revolving fund made it into the enacted America Invents Act, but not the part about taking the USPTO out of the regular appropriations process, which essentially just kept the status quo.

Today the U.S. patent community sits perilously in the path of an oncoming train. The Leahy-Smith America Invents Act (AIA) Act mandates – but fails to fund – a wholesale conversion of the USPTO from an expert examining agency to one that not only examines patents but also adjudicates patent disputes in ways that promise to be faster and cheaper than patent litigation in our courts.

Without predictable funding, the Congressionally mandated reforms of the AIA will likely turn out like the agency’s “fast track” and Detroit office initiatives: announced, planned, but then delayed by the lack of one essential element – money. Indeed, without predictable funding, the reforms mandated by the AIA will likely result in a greater patent backlog, significant additional delay in finalizing the value of disputed patents, and a confused and discouraged agency workforce, all of which will significantly delay the recovery of our national innovation-based economy.

The coming train wreck would have been avoided if the 95 Senators who voted for ending fee diversion (with the support of every significant stakeholder in the otherwise-divided patent community) had had their way. It can still be avoided at no cost to taxpayers. And it can be avoided quickly, before Thanksgiving’s leftovers are gone, via the Super Committee. Let me explain.

The United States Senate voted 93 to 5 earlier this evening to end debate on patent reform, which should set up a vote on H.R. 1249 in the coming days.

The United States Senate first passed its own version of patent reform, dubbed the America Invents Act – S. 23, in February 2011. The House of Representatives took up patent reform in the Spring, ultimately passing H.R. 1249, also dubbed the America Invents Act. Because the House version of patent reform was not identical to the Senate version of patent reform the legislation pinged back to the Senate. Immediately before the Senate went out on its annual August recess Senate Majority Leader Harry Reid (D-NV) filed for cloture on H.R. 1249, scheduling the Senate’s first day back after the August recess as the day for the cloture vote. That cloture vote is what passed by a vote of 93-5.

Once upon a time I used to not get worked up at all about proposals for patent reform, because after all they almost always didn’t seem to go through, or even if they did what was passed was hardly what was suggested.  Then, my good friend John White told me about six years ago that this time patent reform was going to happen, it was just a matter of time.  Since then I have written numerous articles on proposed patent legislation, followed the issue, reviewed transcripts from Congressional hearings and have watched multiple Congressional hearings streaming online, even while on vacation one year.  The end result is that not much has changed… at least not yet.

We have heard this all before, and to some extent it does sound a little like a “chicken little mentality” has captured the imagination of policy wonks and patent attorneys alike, but it is hard to deny the fact that there is growing momentum for real reform at the United States Patent Office.  Sadly, what the United States Senate will vote on Tuesday, September 6, 2011, does not represent that real reform that so many are hoping for.

It has now been several weeks since the U.S. House of Representatives passed H.R. 1249, dubbed the America Invents Act, which is commonly referred to as patent reform.  In February 2011, the U.S. Senate passed S. 23, their version of patent reform.  In their infinite wisdom, or lack thereof depending upon your perspective, the House did not pass a bill that was identical to S. 23, which means that before patent reform will become a reality it needs to once again be taken up by the Senate.  But what are the odds of that happening any time soon?

Even the most casual observer likely knows that the United States is in the middle of a debt crisis.  According to Treasury Secretary Timothy Geithner we have until August 2, 2011, within which to raise the debt limit and allow for more borrowing.  Apparently the failure to raise the debt ceiling will trigger calamitous events that will cascade into an economic catastrophe.  Yes, pretty big stuff seems to be at issue over the debt limit, which is consuming all of the oxygen in the room.

The U.S. Chamber of Commerce conducted two small business focus groups on April 1, 2011, in Philadelphia, as well as a national survey of small business owners through interviews with 900 businesses April 8 – 12, 2011. The findings from this study make up the inaugural quarterly “Small Business Outlook Survey,” and paint an unfortunately bleak picture of the collective outlook of small businesses moving forward.

Small businesses are the backbone of the nation’s economy and those that are most likely to engage in job creation.  Unfortunately, the small businesses surveyed tell a tale of little or no job creation over the next 1 to 3 years, and in fact suggest there will be more layoffs coming.  The respondents see too much uncertainty in Washington, DC, too many regulations and a number of other matters (i.e., the deficit, debt, health care and taxes) as significant impediments to job creation.  This on the heels of a disappointing jobs report for June 2010, downward revisions of the number of jobs created in April and May, and unemployment rising to 9.2%, this Chamber survey only piles on the continuing terrible news for the economy.  With Congress bickering over the obvious — namely that we simply cannot spend money we don’t have and need to start spending less than we bring in to cut the deficit — it doesn’t seem there is likely to be any good news on the horizon.