AIDS, Cancer Patent Priority: Interview with Commissioner Bruce Lehman



On February 3 AIDS TREATMENT NEWS interviewed Bruce Lehman,
Assistant Secretary of Commerce and Commissioner of Patents
and Trademarks, in his office near Washington D.C. We had
requested the interview to discuss proposals for giving
priority to inventions for serious or life-threatening
illnesses -- a recommendation most recently made by the
National Task Force on AIDS Prevention, at its January 19
meeting. We did not know until the interview that the PTO had
already gone ahead and implemented the rule, though only for
AIDS and cancer.

The patent system, while exceedingly important for medical
research, has long been neglected by the AIDS community. But
the PTO on its own has made important changes. It made AIDS
patents available free through the Internet (see AIDS
TREATMENT NEWS #210). On December 21, 1994, it issued new
guidelines to prevent some patent examiners from requiring
clinical trials before a new drug could be patented, after
complaints from biotechnology companies (which usually need
the patent in order to raise money to run the trials). And
now it has made AIDS and cancer patent applications eligible
for priority review.

The following interview with Commissioner Lehman is important
for companies, for AIDS and cancer researchers, and for
treatment and policy activists alike.

ATN: The National Task Force on AIDS Drug Development
recently recommended that "drugs involved in the diagnosis
and treatment of serious or life-threatening disease should
undergo an expedited review process by the Patent and
Trademark Office." Do you have any plans for priority review
of these applications?

Lehman: We have already established a policy inside the
Patent and Trademark Office to allow applicants to apply for
expedited handling of inventions related to therapies for
AIDS-related illnesses, and for cancer.

We have also made all of the AIDS-related patents available
on the Internet. Eventually all of the patents will be
available in the same manner, probably in about six or seven
years.

ATN: On the rapid review, the FDA has special procedures for
"serious or life-threatening illnesses" -- including heart
disease, diabetes, Alzheimer's disease, and others. Could the
patent office allow special priority for all these illnesses,
instead of limiting it to AIDS and cancer?

Lehman: Keep in mind that there are many priorities in the
patent system, which is an engine of economic growth for the
country. So it is not easy to establish these priorities; it
is a serious matter. Frankly it is not something we hear a
huge clamor for, from the biotechnology and pharmaceutical
industries. There is a reason for that; speeding patent
applications is vastly different from speeding up regulatory
review. By and large biotech companies are quite happy with a
LONG pendency of the patent -- precisely because of its
linkage to regulatory review. We can get the patent out as
soon as six months after the application comes in, but then
the companies may have to undergo years of clinical testing
before they can sell the drug. Often companies do NOT want us
to issue the patent -- because under the old law, you had 17
years from the issuance of patent for a patent term. So your
term is running while you are going through regulatory
review, and companies would rather delay the patent [and
avoid losing time to sell their drug under patent
protection].

We have just gone to a new system -- 20 years from filing, as
opposed to 17 years from issuance. To some degree, that
advantage of delay has been eliminated. And we still have
patent term extension legislation, which permits you to
extend the patent to compensate for regulatory delay at the
FDA. The average patent is issued 19 months after it is
filed; and the average biotech patent is less than 21 months.
So without any expediting at all, the average patent is
issued less than two years after it has come into the office,
and it is the rare biotech or pharmaceutical invention which
would be anywhere near through the regulatory process in that
period of time. In that sense, the potential market, for
purchasers of the therapy, is not really prejudiced at all
[by delays in the patent office].

But often the patent applicant needs to have the patent in
hand in order to obtain financing for the extended clinical
testing that is necessary. Then they want to get the patent
out quickly. It is this category of patent applicants who I
think will use the expedited procedures that we now have, and
be most benefited by them.

Recently we made another change which also relates to
treatment development. Last September we had a hearing in San
Diego, a major center of the biotech industry, where we
invited comment on problems of the industry. Overwhelmingly
the number one criticism we heard was that patent examiners
were demanding results from clinical testing, as a
precondition to demonstrating that the patent had "utility,"
which is one of the requirements of the patent law. That
clearly was a problem that was causing a great deal of
dissatisfaction in industry; people thought we were being
unreasonable, that it was getting out of hand. So in December
I issued new rules where we vastly streamlined that
procedure, and made it clear that one did not have to have
the actual results of human testing in order to demonstrate
utility; instead, evidence such as affidavits of scientists
knowledgeable in the area, indicating that the treatment was
likely to be useful in human beings, would be enough. That
change has been favorably received in the biotech industry,
and hopefully it will have a positive impact on research and
development in this area, because it will enable people to
obtain capital to support the development process.

ATN: There is another problem in getting better AIDS
treatments developed. Often the patent applicant keeps
research findings secret while the application is pending.
Apparently they fear that if the application has to be re-
filed, somebody else could get in and have an earlier filing
date.

Lehman: We have addressed that problem. I'm very glad you
raised it, because right now our solution is under attack,
and people who see the value of our addressing the problem
need to let their views be known.

One of the differences between the U.S. patent system and all
others in the world is that we keep all patents secret until
they are issued, while others publish patent applications 18
months after they are filed. This, combined with the old 17-
year term from issuance, enabled some applicants to game the
system. They could file continuances, etc., to keep the
patent bottled up in the patent office for quite a period of
time before it issued -- and keep the whole thing secret. In
fact, in some cases, they did not market anything; they
waited until somebody else got into the marketplace with a
product, then they sued them; they let their patent be
granted, and then could show that they were in the patent
office first -- and we have a first-to-invent system. That is
totally counterproductive, because then the patent system has
provided no incentive to get to the marketplace with the
product, and it has provided a disincentive to the person who
did, because they have to pay royalties to the "submarine
patent" owner. [Note: The term "submarine patent" refers to a
patent application deliberately delayed and kept secret,
sometimes for many years, waiting to surface strategically at
some later time, with the weapon of its early filing date.
This abuse of the U.S. patent system has become a serious
problem.]

This is the fundamental reason for our shift to the
international standard of a 20-year term from filing and an
18-month publication. Also, conforming to the standard will
give us advantages in dealing with other countries. The 20-
year term is already passed, as part of the GATT legislation.
The 18-month publication was introduced but not passed in the
last Congress; we hope it will be passed in this one.

These changes can have a number of salutary effects. One of
them is to speed things up, not slow things down. You want
people to get into and out of the patent office with a good,
solid patent as quickly as possible, then use that to get to
the marketplace to finance the research and development, and
get out there with a product. That is the whole function of
the patent system. The function is not served when somebody
deliberately delays; it is not served when they keep their
patent secret indefinitely. The whole reason for the patent
system is that in return for getting exclusivity, the right
solely to make, use, and sell your invention, you have to
fully disclose everything about it, including how to make it,
to other people, so that they can go to work on something
else and get their own patent that will compete with it. By
that you get a leapfrogging effect, presumably accelerating
the pace of innovation. It not only stimulates economic
activity, in this case it stimulates the creation of new
therapies. I think that the patent system, in combination
with the best and biggest basic research enterprise in the
world, NIH and related government-funded enterprises, are the
reasons we have the world's most dynamic and far-reaching
medical research industry. But clearly the patent system has
had some flaws in it, and this in one that would be
addressed.

Now Congressman Dana Rohrabacher (Republican, Orange County)
is out there doing everything humanly possible to turn this
back. He is opposed to 18-month publication, he is opposed to
the 20-year term. He has legislation pending in Congress
which has 90 cosponsors to reverse our progress, and is
trying to work against us in many ways. Members of Congress
might be interested to know that there are people who would
like their patent to be published in 18 months, who would
like people to be incented (given incentive) to get in and
out of this patent office, and there are people perhaps whose
life may depend on it.

ATN: We have found that the procedure to "make special"
certain applications is not well known, even among people who
are knowledgeable about patents. No one I talked to has known
that AIDS and cancer were included.

Lehman: We just did it recently, a couple of months ago. One
of the things we are trying to do is to beef up our whole
public-affairs operation, because I think the whole patent
office has been a bit of a secret for quite a few years, and
I think we need to change that around. Probably that is not
widely known in the industry.

There is a whole suite of things we are working on, to make
the system work better. There are two sides to this. There
are people, like Congressman Rohrabacher, who want to permit
people to game the system to make money, as opposed to
incenting innovation. And other people are interested in
having the most dynamic patent system, where the sole
objective is to enable people to get in and out of this
office as quickly as possible with a dynamite patent that
they can take to the bank, and not to the courthouse, and
turn into a product or process that is going to help the
consuming public. And then, by disclosure of the invention,
encourage somebody else, a competitor, to get out there and
have full access to the technology so they can develop their
own patent, or at least, the moment that patent term expires,
be in there with a competing generic product.

ATN: What is Congressman Rohrabacher's argument for keeping
the current system?

Lehman: His argument is that a long patent term is good, and
we should not do anything to shorten patent term, and that
there is a possibility that someone will not get the patent
out of the patent office in three years, and therefore people
will lose patent term.

The question of how much patent term is appropriate to incent
research and development is a serious question. I think that
by and large the 17-year term from issuance in the United
States has generally been considered to equate to the
international norm of 20 years from filing, as it gives you
three years to get into and out of the patent office. Over
the years patent pendency in this office has depended on its
efficiency and resources available to it. We have just about
always been able to get most of the patents out within three
years. That is also true of many patent offices in the world.

I do not think any case has been made that we need to
lengthen patent term beyond what we have right now.
Rohrabacher favors the ability to get the longest patent term
possible. There are serious consumer and public-interest
considerations in that. I am a total, 100 percent believer in
the patent system and in intellectual property; I am one of
the strongest advocates for the owners of intellectual
property rights in the world. But the genius of the
constitutional system that we have is that those rights are
limited. There comes a point at which the knowledge goes into
the public domain to be used by all, and that is the essence
of the generic industry, for example, and other industries.

Once you have provided the incentive -- and our system
provides that -- for getting a fair reward on your
investment, then we ought to open it up. Then you have two
things going at once: you encourage the development of the
generic industry with cheap, older therapies, but you are
constantly incenting the production of new innovative
therapies, which may cost more for the period that they are
under exclusivity, because you have to amortize the
investment -- that's the tradeoff. In many cases these new
therapies may cost more than a generic older therapy on a
per-pill basis, but many times they are much more cost
effective, because they are cheaper than hospitalization, the
use of medical devices, whatever -- not to mention cases
where there are no other therapies, and the alternative is
catastrophic for the patient.

I think we have a good basic fundamental approach, and I
think Congressman Rohrabacher is playing with it, and people
do not understand that. Rohrabacher is no more generous to
the AIDS community on other matters. He is now going around
on Capitol Hill collaring many members of Congress who do not
know anything about this issue. In the new environment, there
is some mob mentality that if it's a Clinton Administration
idea it must be bad. He is taking advantage of that.

ATN: On another issue, we are concerned about intellectual
property denying access to AIDS care in many parts of the
world. When a really effective treatment is found, what about
Africa, India, Thailand, Brazil, and other countries, where
few can pay U.S. drug prices? What can be done about this --
or is there nothing that can be done?

Lehman: Until the signing of the GATT treaty, there has been
no patent law in Brazil for example, and in much of the
developing world. Any drug invented here can be replicated
there for the cost of manufacture. The GATT treaty brought
that situation to an end. I think there is a very good
rationale for doing so -- lack of patent protection
ultimately helps nobody. First of all, it creates higher
pharmaceutical costs in the few markets where you do have
protection; it means that the cost of development of drugs is
borne entirely by the citizens of the advanced industrial
countries, particularly the United States. Their drugs cost
more so others pay less.

Also, lack of patent protection virtually rules out the
creation of indigenous, research-oriented pharmaceutical
industries in those countries. Some countries are not ready
for a research-intensive industry, but certainly Brazil is --
yet they have no research-intensive pharmaceutical industry.
They have many diseases that are unique to those kinds of
climates, which there is no particular incentive for
companies to research. I think it is short-sighted to assume
that no patent protection in these countries is even to their
benefit. And it disproportionately penalizes consumers in
countries like the United States, and reduces the resources
available to pharmaceutical innovators to spend money on
developing new treatments. The GATT treaty has changed all of
that; over a ten-year phase-in, all signatory countries to
the GATT treaty will have to start providing full protection
to pharmaceuticals the same way we do here in the United
States. Incidentally, the U.S. biotech industry thinks the
10-year phase-in is overgenerous; I think it will allow the
countries to adjust.

Ultimately there are always going to be poor countries in the
world that cannot afford anything. Many countries in Africa
cannot even afford generic drugs, much less research-
intensive ones. That is why we have the World Health
Organization, and various aid programs, because ultimately
the answer to universal access to any product or service is
not necessarily to make it free, so that you have no market,
and therefore no incentive. Instead, address the specific
problem; identify the group of people who need and should
have access, as a matter of public policy. Then provide the
funding, usually from a public funding source, to subsidize
them and see that they have access.

ATN: Often people do not think of the patent system when they
think of medical research.

Lehman: Some people's eyes glaze over when you start talking
about patents and intellectual property; they want to just
forget about it. Yet patent protection is fundamentally
important to the growth of technology and innovation. It is
absolutely at the core of commercialized medical research.
Pharmaceutical companies do not make pharmaceuticals, they
make patents. That is what they own (except for generic-drug
companies). Obviously there is a value to generic drugs,
because they are cheap. But if we just had a generic drug
system, we would not have a single new therapy; there would
not be anything other than what we have out there right now,
unless we had some socialized system.

We obviously have much government input in basic research,
but government does not get the pill into the customer's
medicine cabinet without the patent system, which is the
critical link. So if the patent system is not working right,
we have a problem every bit as fundamental as problems at the
FDA or anywhere else.