Yesterday, the U.S. House Judiciary committee unanimously passed the The Patent Reform Act of 2007 which has been billed as “the most significant patent reform legislation in over 50 years.”  The technology sector has been generally in favor of the bill and for an ars technica article reporting on this news see “Massive patent reform bill passes House committee.”   The biotechnology and pharmaceutical industries has been largely opposed; to see a examples of their views, see: “PhRMA Statement on House Passage of PDUFA Bill” and “BIO Expresses Concern with Patent Reform Legislation as Reported Out of House Judiciary Committee.”

The patent reform controversy has been brewing for some time now and this blog has, indeed, previously commented on the issue specifically with respect to the rather significant implications such reform has for convergent medical technologies.  In a letter to the Wall Street Journal from last April “Innovators Have Rights Too” I wrote:

“The rise of drug-device combinations, smart devices that combine software, diagnostics and drugs, and multi-component medical nanotechnology are already creating tricky patent situations such as with the RIM/NTP/BlackBerry situation. … Drug-eluting stents (currently a $5.1 billion market) is a perfect example.  In this case, we have multiple parties laying claim to either the underlying stent, to the sticky polymer that harbors the drug or to the drug itself. Each of these components has many variants so that with many such convergent (or combination) medical technologies the idea of "one-invention-one-product" does not hold. Now imagine a situation whereby a court injunction -- empowered by a claim on just one of these components -- prevents a life-saving technology from reaching the market. This is why this patent issue is so important. We need to put aside the polemics and develop a system that fosters both invention and innovation. Lives, and not just fingers tapping on BlackBerrys, are at stake.”

Here we will look at the issue in more detail with an ear towards understanding why it is so important.

One patent – One product paradigm

The current patent system was largely developed during a time when a single patent often correlated with a single invention and thus, upon commercialization, to a single product.  This one patent – one product paradigm is particularly prevalent in the pharmaceutical industry in which generally just one patent applies to a given drug.

One of the major goals of the new patent reform bill has been to “improve patent quality, deter abusive practices by patent holders, provide meaningful, low-cost alternatives to litigation for challenging the patent validity” as stated by Rep. Howard Berman (D-CA), one of the sponsors of the reform bill.   The pharmaceutical industry, with its largely single patent/single product business model, has been well known to be opposed to several of these reform provisions.  According to the International Herald Tribune, they contend that the new bill “would weaken the protection afforded by those patents, making it riskier to spend hundreds of millions to develop the drugs.”

Multiple patents - convergent products

For convergent or combination products, however, current patent law can be problematic.  The RIM/NTP controversy that nearly shut down Blackberry service last year and was only settled after billion dollar brinksmanship is a perfect case in point.   To summarize: NTP, Inc. -  a private patent-holding company – held certain (but not all) of the patents in Research in Motion’s (RIM) Blackberry device. Under current patent law, NTP was on the verge, through court injunction, of shutting down the entire product and service even though their particular patents covered only a portion of the total innovation resident in the Blackberry.  As with many technology products, the Blackberry is a conglomerate of dozens of separate patents and, indeed, the technology sector is largely in support of the patent reform bill because of the greater support it offers to convergent / combination technologies.  Under current patent law, moreover, NTP could have sued for damages based on the value of the Blackberry’s entire market.  With this battle as a flashpoint, the new patent legislation calls for “for limiting infringement damages to the economic value of the patent's contribution to an overall product [instead of] damages [being] based on the entire market value of the product”

The thrust of last April’s Wall Street Journal letter, then, was to point out that the RIM/NTP controversy impacts not just tech products but also potentially life-saving devices which – with the rise of convergent medical technologies – likewise increasingly incorporate multiple inventions and multiple patents in their design.  Hence the concluding line to that letter: “Lives, and not just [happy] fingers tapping on BlackBerrys, are at stake.”

Stifling an Innovation Renaissance?

In the press release announcing the House Judiciary committee decision, Rep. Berman was quoted:

“The patent system should encourage and enable inventors to push the boundaries of knowledge and possibility.  If the [current] system allows questionable patents to issue and does not provide adequate safeguards against … abuses, the system ends up stifling innovation and interfering with competitive market forces.”

In this morning’s posting “Convergent Medical Technology: Part II - Why is it important” it was certainly no accident that I chose a Bach two-part invention as metaphor connecting convergent technology innovation with the novel polyphonic, contrapuntal techniques that drove innovation in music during the early Renaissance.  Polyphony has in large part created the rich and subtle universe of music that we all – from classical to country to rap – enjoy today.  Indeed, do you think iPods would sell as well if they were limited to monophonic medieval chants?

Given the premise that we may very well be on the verge of a veritable Renaissance as a result of the flourishing innovation around technology convergence, the stakes around this patent reform bill could not be higher.  Albeit simplified, essence of this debate distills into making a choice between maintaining a monophonic, medieval system sustaining the single-patent/single-product paradigm as compared to a reformed system that accommodates the unlimited diversity inherent in a polyphonic, Renaissance system.  In the latter case, innovation arises from multiple inventions (protected individually by their respective patents) being brought together in unique and highly valuable ways.

Again, when it comes to medical technology, this is not just a matter of creating music that is pleasing to the ear but very much a matter of life or death, comfort or pain, ability or disability.

An American Inventor

Last night I happened to watch an episode of the reality TV show American Inventor on ABC – a show in the genre of American Idol which brings everyday people on national television to showcase their inventions – some brilliant, some absurd – in the hopes of winning a $1 million grand prize.  Of course, such shows can be maddeningly unimaginative and formulaic.  [Must every reality TV competition have at least one judge with a British/Australian accent?]  Last night’s episode, however, was, in my opinion, positively profound.

In this episode, Christopher Khanoyan - a 20-year old deaf-mute young man - and his mother Linda presented his invention – the “Voice Inside” – which combines a portable voice recorder along with speech recognition software, a keypad and an LCD screen.  A hearing person (the vast majority of whom, including I am embarrassed to say myself, do not know sign language) can speak into the hand-held device by which their speech would be transformed into text for their non-hearing conversation partner to read.  Likewise, the non-hearing person could type their thoughts into the device which would then be displayed for others to read.

Chris’ presentation was simple as the concept is quite self-explanatory; there’s really not much to say.  The complexity of his presentation was with the quiet passion in which he expressed – through his mother’s simultaneous translation – the need for such a device. 

“My invention will help deaf people all over the world … the hearing person would be able to have a one-on-one conversation with me without the use of an interpreter or other people around to help” – he signed.

During the presentation, all four of the judges (including Peter Jones - the one with the British accent) sat it seemed, in a state of nearly uncomfortable awe.

Sara Blakely – one of the judges asked for clarification:

“At this point you know that the pieces are out there and you want to combine them to make this …” she asked.

“Yes!” signed Chris bringing his hands together in a wide gesture. At one point, Peter Jones with characteristic stiff upper lip pointedly asked Linda, not knowing that she was Chris’ mother, what her relationship was to Chris.  “I’m his mother” she replied and an uncharacteristically disarmed Peter Jones replied: “Yes, I felt that you were getting a bit emotional.”

Then the voting started.   Note that three out of four votes are required to win the $50,000 seed money and move to the semi-final stage.

Sara Blakely – who clearly articulated the convergent innovation involved – said “Yes.”

George Foreman – the boxer and grill entrepreneur – remarked that “the [device] would be the key to getting a date.  I’m gonna say yes!”

Pat Croce paused.  He noted that $50,000 would not be enough to get his invention past the seed stage and thus cast his vote as “No”

The outcome was now up to the fourth and last judge - Peter Jones. Those who are familiar with the show realize that Pat and Peter, with their similarly skeptical perspectives, would often vote in synchrony.  Hence, it seemed like it would be game over for Chris and his “Voice Inside” innovation.

Indeed Peter Jones began his judgment: “I don’t know whether $50,000 is going to get you anywhere near where you need to be …”  as the camera panned closing in on Chris.  He knew the crushing blow – silent as it may be - was imminent.

And then George Foreman – the man who I wrote about being outwitted by Muhammad Ali during the historic 1974 “Rumble in the Jungle” bout in Zaire – cut in.  Looking over at Jones, Foreman said: “You just don’t know.  $50,000 could be all or even too much.”  Foreman glanced over with a hint of his fighting glare of days past.  Jones paused and with a slightly defeated, yet defiant hesitation, he cast his verdict:  “I’m going to say yes.”

Quiet jubilation.  A camera shot of Sara Blakely crying.  “You have made me so proud, and I love you all” signed Chris.   George Foreman sat back with a side grin.  His keen realization that convergence, with its combination of off-the-shelf components, does not necessarily require a great deal of capital was pivotal to the successful vote.  Peter Jones gave his congratulations.

That’s the power of technology convergence.  You can watch the episode here (the Chris Khanoyan segment is at the end); it comes highly recommended.

While not an intellectual property lawyer nor a litigator, suffice to say with the evidence you have just heard, I rest my case.

(By the way, if I'm ever in a fight, I'd want George Foreman on my side and not just because of his boxing skills)
 

Ogan Gurel, MD MPhil
gurel@aesisgroup.com
http://blog.aesisgroup.com/

 Convergent Medical Technology Innovation Patent Reform Act Patent Reform Bill 2007 Intellectual Property Combination Medical Products Aesis Research Group Ogan GurelMD