Effort to stop 'trolls' could also hurt patents

Nearly 30,000 Illinois residents are helping develop new treatments for the nation's most serious diseases.

How? By volunteering for the 1,700 clinical trials under way in the Prairie State. These volunteers aren't lab researchers, but ordinary patients.

Clinical trials allow researchers to test the effectiveness of new drugs. Without this testing, medical innovation would grind to a halt. That'd be disastrous for Illinois' economy. Clinical trials currently add almost $680 million to the state's economic output.

Yet a new proposal from Washington threatens to undermine these trials, depriving sick patients of breakthrough treatments and Illinoisans of thousands of jobs. For the sake of these patients and our economy, Illinois' representatives in Congress must reject the proposal.

Illinois' pharmaceutical sector generates over $53 billion in economic activity every year. It directly supports nearly 38,000 jobs. These jobs pay workers an average salary of $139,000 - more than double the average Illinois salary of $57,000. And over $9 billion in vendor spending by biopharmaceutical companies supports another 162,000 local jobs.

Clinical trials are a key component of this economic activity. Illinois ranks eighth in the nation for number of trials hosted. Biopharmaceutical companies invest nearly a quarter of a billion dollars in Illinois clinical trials every year.

That investment has made the Prairie State a hotbed of medical innovation. As of 2012, Chicago was home to 130 clinical trials testing new drugs to combat the nation's six most common chronic diseases: cancer, diabetes, heart disease, mental illness, stroke, and asthma. Springfield hosted 34 trials for these conditions. And Peoria boasted 31.

This research wouldn't be possible without strong patent laws. Patents provide legal protection to inventors so they can sell their products without competition for a specified period of time. Patents are crucial to Illinois' economy because they incentivize companies to invest in research and development.

Unfortunately, Congress is considering a bill - misleadingly named the "Innovation Act" - that would make it more difficult to defend a patent in court.

The goal is to prevent patent trolls - those who patent obvious ideas to win money in court - from filing frivolous lawsuits. But the bill is so poorly written that it will also make it harder for legitimate patent holders to fend off violators looking to steal their ideas or designs. In particular, the law's provisions would increase the cost and time needed to file a patent infringement lawsuit. Many innovators, especially small businesses, won't be able to afford the added financial burden.

Illinois' innovative patent owners already fight hard enough to defend their intellectual property.

Since 2012, companies challenging patents have been able to petition an extrajudicial review board to review a patent's validity. This "Patent Trial and Appeal Board" uses different standards than a district court to assess whether a patent is valid. These standards favor challengers, meaning it's easy to overturn a patent.

So easy, in fact, that Wall Street is using the Patent Trial and Appeal Board to manipulate stock prices. Some investors now "bet" that a company's stock will plummet and then challenge the company's patents to scare off investors and drive the company's stock price down. Afte3

New York hedge fund Hayman Capital Management challenged Acorda Therapeutics' patent on a multiple sclerosis treatment earlier this year, the pharmaceutical firm's stock fell 10 percent.

Many analysts worry that this Wall Street strategy will discourage investment in biopharmaceutical companies, depriving them of the funding needed to create new treatments. To reassure researchers and prevent funding cutbacks, Congress should prevent the PTAB from hearing patent disputes that involve medicines the FDA has already approved.

Aggressive attacks against drug patents would only worsen under the "Innovation Act."

Creating a new medicine is risky; many new compounds never make it out of the lab. And it's costly. Tufts University researchers recently concluded that it takes about $2.6 billion to develop a drug and bring it to market. If biopharmaceutical firms can't defend their patents, they'll be less likely to invest in research and development. That means fewer clinical trials, fewer jobs, and fewer new treatments.

By weakening patent protections, the "Innovation Act" could also gut important education programs across Illinois.

Consider University of Illinois Urbana-Champaign's forthcoming, engineering-based medical college. Funded by corporate investments and the university's patent revenues, the hybrid school hopes to deliver high-tech health care solutions to Illinois patients. But if UIUC loses its patents - which have earned the school nearly $50 million over the past eight years - the university could be forced to scale back this revolutionary program.

Medical research offers hope to patients and opportunities to Prairie State workers. Illinois' representatives in Congress should protect this innovation by squashing the Innovation Act.

Warren Ribley is the president and CEO of the Illinois Biotechnology Industry Organization.