Changes made to speed up European patents could harm biotech says survey

A survey of 381 executives across the pharmaceutical and biotechnology sector reveals growing concern with last month’s changes to the patent application process made by EPO, and over other regulatory trends in Europe, including the European Commission’s probe into anti-competitive practises within the sector.

The EPO rule changes affect the searches and divisional filings made for patent applications and were designed to increase the speed with patent applications are processed, reducing the backlog.

But while just over half of respondents support EPO’s prioritisation of speed in the application process, a significant minority of 45 per cent places greater priority on a slower and more thorough patent process, which would allow for greater flexibility. Marks & Clerk suggest this finding could mean the EPO may have misjudged the industry’s needs.

In all, 82 per cent of respondents agree the measures, which will force companies to make more concrete decisions about the future direction of their R&D and patenting strategies at an earlier date, are likely to place a particular burden on smaller companies with more limited resources. Marks & Clerk say this is particularly worrying given that the blockbusters of the future are likely to hail from smaller biotechs, the very organisations hit hardest by these reforms.

There is also concern is also for the industry at large, with 86 per cent of respondents saying that it is essential that Europe’s patent application process does not become more labour-intensive.

Meanwhile 78 per cent believe that making patent protection as relevant and water-tight as possible is the most important consideration for the industry to safeguard its investment in R&D. However, Marks & Clerk believe EPO’s reforms will inevitably precipitate less thoroughly considered applications.

There is also criticism of Europe’s drug patent term extension system, or supplementary protection certificates (SPCs). Seventy nine per cent of respondents said they are in favour of SPCs being widened to protect the underlying invention and thus afford exactly the same scope and protections as that given by a patent. The US system provides this level of patent term extension, replicating patent protection, whereas Europe’s SPCs carry a much narrower scope, protecting only the specific active ingredient covered by the underlying patent.

Overall, the 381 executives surveyed, who are based in the Asia, Europe and the US, believe the US provides a more favourable environment for drug innovation than Europe, A clear majority of 62 per cent of respondents judge the US intellectual property system to have better managed to reward innovation and keep up with the changing needs of the industry.

The US has long been seen as having a more favourable intellectual property regime than Europe. Paul Chapman, Partner at Marks & Clerk, says what is most worrying is that recent developments could help accelerate that trend. “Our respondents straightforwardly state that the US intellectual property system has better managed to adapt to industry needs. Not only does the US provide greater scope for patent extensions, an issue of increasing importance to the industry, but further reform is soon to be enacted which will improve patent quality and limit damages.”

At the same time Chapman noted the recent changes to Europe’s patent application process look likely to place a disproportionate burden on the very same smaller players that the industry is desperately hoping will provide the next generation of medicines. “Again, Europe appears to be in danger of moving in the wrong direction. Its patent application process has always suffered from being seen to be more burdensome than its US counterpart, and the recent changes will only make things worse,” Chapman said. “There is a clear fear that the gap in securing and exploiting innovation between the US and Europe may grow.”