NAME: PAUL C. FLATTERY, CHIEF PATENT COUNSEL COMPANY: BAXTER INTERNATIONAL, INC. ADDR-1: ONE BAXTER PARKWAY CITY, STATE ZIP: DEERFIELD, IL 60015-4633 TELEPHONE: (708)948-2000 FAX: (708)948-3948 REPRESENT: UNCLEAR ------- 011-0001.TXT The following comments are directed to the proposed amendment to 37 CFR Sec. 1.785(C) and to the PTO's construction of 35 USC Sec. 156 that the amendment is based upon. ------- 011-0002.TXT In my opinion, the PTO's construction and proposed rule is contrary to the intent of the Patent Term Restoration Act. It penalizes universities, research centers, small businesses and individual inventors who do not ordinarily have the resources or are even eligible to apply for FDA approval for their inventions. It penalizes patent licensees who will have a shorter time in which to recover their investment before others can practice the invention freely. ------- 011-0003.TXT Under the Federal Food Drug and Cosmetic Act, an application for approval of a new drug or medical device must be filed by a party who intends to manufacture that drug or device. ------- 011-0004.TXT The PTO's construction of 35 USC Sec. 154 means that a patent owner, such as a university or other small entity, who exploits its inventions solely by granting licenses could never obtain a patent term extension because it would never be the party who obtained the FDA approval. ------- 011-0005.TXT The PTO's notice implies that term extension might be granted if the licensee were an "agent" of the licensor. However, in nearly every case the licensor - licensee relationship is not an agency relationship. The university licensor does not and cannot exercise control over the FDA application. The application is the sole responsibility of the drug company licensee who will manufacture the drug. Moreover, it is doubtful that licensors such as universities would be willing to accept a characterization of "principal" because of the impact it would have on the licensor's potential civil and criminal liability for product defects or for failure of the manufacturer to conform to FDA regulations. ------- 011-0006.TXT There is very little merit to the PTO's argument that patent term extension should be denied to a licensor applicant because "the patent owner has not lost any effective patent life since it never invested time and resources necessary to obtain approval for commercial marketing and use," 1169 OG 34. The purpose of patent term restoration is to give back to the patent owner a portion of the exclusionary rights that have been taken away by the time that is needed for FDA approval process. That process delays entry of the invention into the market place. Whether the patent owner is a manufacturer or a licensor, that delay shortens the term over which the patent's rights can be exploited, and the shorter term of exclusivity makes it more difficult for the patent owner to find licensees who have the resources to do the manufacturing and who are willinq to risk time and money on the clinical trials that are needed to obtain FDA approval. ------- 011-0007.TXT In reviewing patent term extension applications, the public policy issue for the PTO to resolve is to determine whether the regulatory process was diligently pursued by the party who was responsible for obtaining FDA approval. If a patent owner lacks the resources to become a manufacturer and arranges for commercialization through a third party, that should be immaterial to the PTO's determination, because it has no effect upon the time that elapses between when the FDA application is filed, and when approval is granted. ------- 011-0008.TXT Arguably there is an ambiguity in the statute which supports the PTO construction. However, that ambiguity can be resolved by construing the term "applicant" in the context that it is used in 35 USC Sec. 156(d)(I)(D) and 35 USC Sec. 156(d)(2)(B)(i) to mean the applicant for regulatory approval, and not solely the applicant for patent term extension. ------- 011-0009.TXT If the PTO persists in its view that, under the current statute, patent term extension can be granted only if the patent owner was also the applicant for regulatory approval, I strongly recommend that the Commissioner of Patents and Trademarks initiate action to bring this anomaly to the attention of Congress, with the recommendation that remedial legislation be enacted.
Last Modified: march 1995