COLUMN ONE : A Patently Serious Backlog : Biotech applications take an average 26 months to process. The delays threaten America’s position on one of its few cutting edge industries.
The U.S. Patent and Trademark Office received a record 8,000 new applications for biotechnology patents in 1989 and most of them have at least two things in common:
--Each represents a potentially important and lucrative advance in the fast-breaking field.
--Each will sit unopened for an average of 13.3 months because there are not enough qualified patent examiners.
“The applications literally sit around in stacks,” said Robert P. Merges, a Boston patent law expert.
And that’s only half of the story.
Even after an application is opened, another 13 months will elapse before it is granted or denied. Genentech Inc., a pioneering Northern California firm, waited 10 years before finally obtaining a patent in 1987 for a fundamental gene-splicing process called recombinant cloning.
Such delays, apart from representing a bureaucratic irritant to the industry, also threaten to seriously erode America’s status as world leader in translating biotechnology research into useful and marketable products.
“Right now, we are one of the few technical industries that’s really on the cutting edge,” said Mark Brand, a spokesman for Amgen, a Thousand Oaks, Calif., biotech firm.
If the backlog is not significantly and quickly reduced, “Our industry will go the way of the automobile industry and consumer electronics,” he said.
To its critics, the patent office has become a low-tech roadblock in the way of high-tech progress. And knowledgeable industry insiders say that certain patent office procedures and bookkeeping practices actually mask the severity of the delays, which, despite government claims to the contrary, may be growing worse instead of better.
Patent officials, pointing to a 13-point biotechnology “catch-up plan,” insist that the current 26.3 month “pendency period” is decidedly on the wane--even in the face of 12% to 15% annual increases in new applications.
They say that the longest pending case is now just 3 1/2 years old, and they further point optimistically to continuing efforts to hire more biotech examiners and to start an innovative, industry-government training program for new examiners.
“We were on top of a hill. Now we’re moving down,” said John E. Kittle, director of the patent office’s beleaguered biotech group.
Kittle believes that his group will reach the targeted 18-month “pendency period” by 1992.
“That date is too far off to give much comfort to the biotech industry,” responded Lisa Raines, a patent expert at the Washington-based Industrial Biotechnology Assn.
And few outside the patent office believe that goal will be met.
“It’s a real problem for a new technology like ours--especially when a firm spends so much money to develop something and then not know for so long whether it will have a patentable product,” said Steve Raines, Genentech’s vice president for intellectual properties who is unrelated to Lisa Raines.
“To the uninitiated, this might sound like the harmless disorganization of the bureaucratic backwater,” Rep. Ron Wyden (D-Ore.) said at a congressional hearing last year.
“But particularly for the small U.S. biotechnology companies--those that are staking their future on just one breakthrough--the current state of affairs at the patent office is a crippling hurdle.”
Ironically, the government’s new-found resolve to cut the backlog also is raising concern that the effort may result in patents of poor quality. That, in turn, could hamper the industry’s development.
Biotechnology is just entering an initial phase of litigation over patent disputes, explained Merges, a Boston University law professor.
“These early cases will lay the foundations of the legal doctrines that emerge to guide patent disputes in the industry as it matures,” he said. Misguided and confusing legal precedents may result from poorly drafted patents, he added.
History of Delays
Daunting backlogs at the patent office are nothing new. As early as 1848, Congress investigated the problem, which led to the hiring of new examiners.
But things got worse. By 1916, Patent No. 1,203,190 was granted--36 years and 9 months after its initial filing.
Today, the patent office each year receives more than 150,000 applications for patents, to be processed by some 1,500 examiners divided into 16 groups by subject matter.
Overall, the average wait for a decision is 18 months. The biotech group’s 26.3 months is the worst among the examining groups. And none of the other groups is experiencing a comparable growth rate in new applications.
The makings of the bottleneck can be traced largely to 1980, when the U.S. Supreme Court said in a landmark ruling that man-made microorganisms can be patented. In that case, a microbiologist had used gene-splicing techniques to transform a naturally occurring bacterium into one that had oil-degrading capabilities.
Such biotechnology advances raged throughout the 1980s. They culminated with a 1988 patent, issued after four years of waiting, to Harvard University for “transgenic non-human mammals.” In layman’s terms, the advance used recombinant DNA techniques to produce lab mice especially vulnerable to carcinogens. The cancer-prone mice could help scientists seeking cancer cures and treatments.
Overnight, biotech patent-examiners became swamped. Just over 3,100 applications were filed in 1982. By 1987, the number nearly doubled.
As a result of pressure from both industry and Congress, the patent office issued a “catch-up plan” that included the formation of a separate group within the patent office to exclusively process biotech applications. And the number of biotech examiners was increased from 67 to 91, then to 112. Another 35 to 40 biotech examiners are to be hired next year, according to Kittle.
But most of the 112 examiners are so inexperienced that, for the next three years or more, they will not be able to work without direct supervision.
Nevertheless, Kittle believes that “Group 180,” as the biotech section is called, is capable now of processing 8,000 applications a year--about 1,500 more than before.
And with the various training programs taking shape, the examiners should be able not only to clear the logjam, but also to keep up with the unrelenting proliferation of new applications, he said.
The patent office also has issued an interim policy that allows biotech applicants to seek “special” status for expedited consideration under certain circumstances.
In addition, the office recently joined with industry to form the Biotechnology Institute, which will sponsor continuing-education and “cutting edge” seminars as well as training sessions for new examiners.
However, the patent office’s short-term goal of reducing the waiting period to 18 months by 1992 is an unreachable target, according to Lisa Raines of the Industrial Biotechnology Assn., who also is a board member of the new institute.
“That goal is based on the assumption of all the examiners working full tilt--including the maximum-allowable overtime. But it doesn’t take into account that many of the examiners are going to law school at night. And it’s based on the assumption of a low turnover rate,” she said. “That level of activity and employment are hard to achieve.”
Turnover within Group 180 indeed has been a problem. The average tenure of a biotech patent examiner is two to three years.
With base annual salaries that range from $26,000 to $63,000, even junior examiners can enter the private sector and likely earn far more than they can in government.
“Their salaries just are not competitive with industry,” said Genentech’s Steve Raines.
At the same time, the examiners’ jobs are extremely demanding. They must know not only patent law, but also learn and then keep up with the changes in biotechnology itself so they can decipher abstruse issues like DNA coding sequences.
“Just reading the applications alone takes a lot of time.” said Lisa Raines. “Then you must read the literature in the field prior to the claimed date of invention and compare. And you may need additional information from the applicant.”
“It’s all changing, and changing very rapidly,” Kittle said. “There’s no question that there is as much flux as in any area.” A recent Government Accounting Office study found that it takes about 15% more time to process a biotechnology patent than any other kind.
The examiner’s job is all the more difficult because many inventors tend to make unusually broad claims that exceed their actual achievement--in anticipation of rapid progress in the field. “It is difficult to determine the proper patent scope in such cases,” said one patent expert.
More than 70 of the biotech examiners hold advanced degrees, including 8 with law degrees. Another 19 are currently enrolled in law school.
Numbers Game?
According to some private patent lawyers and industry officials, the growing pressure to reduce the backlog has led some examiners to coerce companies, perhaps on seeming technicalities, to withdraw and then refile their applications. Doing that, they said, would make for better statistics because, once an application is withdrawn, it is considered disposed of, even if it is filed again immediately.
“The patent office may be playing with the numbers,” said Hal Wegner, a Washington patent lawyer and adjunct professor at George Washington University.
“Attorneys have told me they felt coerced to refile old cases because then the patent office can start the clock again. It’s a phony bookkeeping system,” Wegner said. “But that’s the only way that office is going to meet the 18-month pendency goal.”
Kittle hotly denied these charges. “That’s absolutely not the case,” he said. “We’re not making them refile. It’s their choice.”
Kittle said that matters will get better still when the patent office enters the computer age. Even today, some 23 million patent documents are filed away in wooden shoe box-like containers at the patent office’s headquarters in northern Virginia. A computer system is about three years behind schedule and running at twice the estimated cost.
