Foley & Lardner article on the history of the Chinese Bayh-Dole Act

China Bayh-Dole Act: A Framework Fundamental to Achieving the Economic Potential of China’s National Patent Development Strategy (2011 – 2020)

By Max Lin, Foley & Lardner LLP

This article is part of our Spring 2011 edition of Legal News: China Quarterly Newsletter, Eye on China.

China’s National Patent Development Strategy (2011 – 2020) (Plan) was announced in November 2010. The proposed measures focus on enhancing China’s IP system and encouraging local individuals, institutions, and companies to pursue IP protection domestically and abroad. By the end of 2015, the number of Chinese patent applications are projected to double. Chinese authorities clearly view patents as vital commercial assets central to the country’s development.

Fully achieving the Plan’s potential economic value depends upon establishing an effective framework for the commercialization of government-sponsored technology through licensing and transfer. Those seeking to buy or license cutting-edge technologies from Chinese universities or scientific research institutes should be familiar with China’s regulation governing such technology transfers or licenses — the so-called “China Bayh-Dole Act.”

Before 2002, China’s regulatory system did not address regulating the intellectual property ownership of technology developments sponsored by government funding. As a result of China’s booming economy, there was increased demand for advanced technologies by private individuals or companies, who then sought the commercial development of technologies that remained in universities or research institutes. As a result, technology licensing or transfer activities began to emerge from universities or research institutes. The primary challenge for those activities was the intellectual property ownership of the technologies. Most Chinese universities or research institutes are state-owned, and the cost of research is sponsored by government funding. As such, it was unclear and undefined under the law who owned the involved technology.

In March 2002, the Ministry of Finance and the Ministry of Science and Technology co-issued Several Regulations Concerning Intellectual Property Management of State Scientific and Research Program Result (Regulations) to improve the process of technology licensing or transfer. The Regulations first emulated the core spirit of the U.S. Bayh-Dole Act and set forth the ownership of intellectual property. Except in cases where national security, national interests, or significant public interests are involved, the state granted the intellectual property developed in scientific research programs sponsored by government funding to the performing organization so that it can implement, license, or transfer the intellectual property independently. The state retained the right to use the intellectual property freely. If the performing organization — as the intellectual property owner — does not implement the intellectual property or obstructs the public from utilizing the intellectual property, the state can intervene by licensing a designated party to implement it freely or by paying royalties to the performing organization, depending on the specific circumstances. The Regulations do not detail the circumstances, leaving the decision up to government discretion.

In December 2007, China passed the Scientific and Technological Progress Law, which upgrades the provisions of the Regulations with respect to intellectual property ownership to the level of national law. The law sub-divides intellectual property rights into four items, namely, invention patents, computer software copyrights, exclusive rights to layout-design of integrated circuits, and new variety right of plant. Utility model patents and design patents as well as other intellectual property are excluded from the scope of intellectual property defined in the law. In addition, the law uses the name “project undertaker” to refer to units undertaking a project, such as scientific institutions, universities, enterprises, and so forth, but it does not exclude individuals.

The law grants the intellectual property ownership that is formed though a project sponsored by treasury money to the project undertaker, which encourages the project undertaker to continue being innovative. With intellectual property ownership in hand, the project undertaker has more motivation for the highly efficient commercial development of the intellectual property. Besides implementation by the project undertaker himself, the project undertaker can transfer or license the intellectual property. However, there is restriction on such transfer or license: Because the state has paid for the formation of the intellectual property, the state encourages such intellectual property to be utilized domestically. It is noted that such encouragement does not forbid transfer or license outside of China. However, the transfer of intellectual property rights to overseas organizations or individuals, or the licensing of exclusive use rights to overseas organizations or individuals, is subject to governmental approval. No approval is required for the licensing of non-exclusive use rights.

It is important for companies to secure key positions in their intellectual property. The acceleration of IP creation and protection for Chinese innovation under the Plan creates increased commercial opportunity for licensing and technology transfer. For companies seeking to acquire government-funded technology through license or technology transfer in China, it is important to become familiar with the regulations governing such transactions.

Scientists oppose European stem cell patent ban

 Great article about leading stem cell scientists stating that the ECJ Advocate’s recommendation to ban stem cell patents will block development of stem cell-based therapeutics in Europe.  Here are the highlights from the article:

Scientists oppose European stem cell patent ban

By Kate Kelland, Health and Science Correspondent

LONDON | Wed Apr 27, 2011 1:05pm EDT

LONDON (Reuters) – Research scientists hit out on Wednesday at a European Court of Justice (ECJ) case they say could block development of embryonic stem cell-based therapies in Europe.

The ECJ’s advocate general has said all patents on embryonic stem cell-related technologies should be banned on moral grounds, but in a letter in the journal Nature and during a briefing in London, leading stem cell scientists said that could spell disaster for drug firms seeking treatments for conditions such as blindness and spinal chord injuries.

“If the ECJ was to follow this opinion, the reality is that all patents in Europe that relate to human embryonic stem cells will be eliminated,” said Austin Smith of the Center for Stem Cell Research in Cambridge, one of letter’s 13 signatories.

“This will put Europe at a huge disadvantage.”

Smith and his fellow signatories — who include leading stem cell researchers from all over Europe — argued that patenting is a key step in the development of new medical treatments.

Without the protection of patents, they said, drug companies will not invest in the research or in the cell manufacturing technologies needed to develop stem cell therapies.

“Innovative companies must have patent protection as an incentive to become active in Europe,” they wrote.

The International Society for Stem Cell Research (ISSCR) said a move to ban patents “will preclude investment in potentially life-saving treatments.”

Media Coverage of BIO’s Intellectual Property Conference in Seattle

Stanford v. Roche: An Academic/Industry Collaboration Gone Wrong

A Landmark Case: The Aftermath of Myriad Genetics

Ethical Issues: Staying in the Frying Pan and out of the Fire

House Judiciary Committee’s Patent Reform Bill is in Need of Reform, Says BIO

PRESS RELEASE

WASHINGTON, D.C. (Friday, April 15, 2011) – Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood released the following statement regarding the America Invents Act, H.R. 1249, which passed the House Committee on the Judiciary yesterday:
 
“BIO has consistently praised House Judiciary Committee Chairman Lamar Smith (R-TX) for his introduction of a comprehensive patent reform bill similar to the bill adopted by the U.S. Senate earlier this month by a nearly unanimous vote.  Unfortunately, given the addition of the Goodlatte supplemental examination amendment, added to the bill during Committee consideration, we have no choice but to oppose floor consideration of the bill until this issue is repaired.

“The supplemental examination provision as passed by the Senate and originally included in the House bill would allow patent holders to seek a review of their issued patents at their own risk.  The Goodlatte amendment undercuts this provision by creating disincentives for patent owners to use the new procedure by having the U.S. Patent and Trademark Office (PTO) act as quasi-investigative body.

“We commend Chairman Smith for all the work he has done to craft a bill, the America Invents Act, which is a clear improvement over prior House versions of patent reform legislation.  BIO was very supportive of Chairman Smith’s Manager’s Amendment.  We are pleased that the legislation will end, once and for all, the diversion of fees collected by the PTO, allowing the agency to use all of its fees to hire more examiners, reduce the backlog of pending applications, and make other improvements to its operations.  We also commend the inclusion in the bill of many other reforms that will improve the patent system and enhance patent quality, including transition to a “first-to-file” system, the creation of an inter partes review system, and the elimination of other subjective elements of patent law.
 
“Nonetheless, given the importance of adopting a supplemental examination provision much like that which passed the Senate on a bipartisan, 95-5 vote, BIO notes our objection to this bill being considered on the House floor.  We commit to work with Chairman Smith and others to rectify this issue, so that a patent reform bill with broad support can be brought to the floor of the House.”

Fabry Patient Law Suit and Request to NIH for March-in Petition Rehearing

An article out of the Genomics Law Report discussing the recent law suit citing violations of the Bayh Dole Act.

A second article from Patent Docs discusses the request for rehearing of the patients petition to the NIH for march-in.

USPTO Remains Open for Six Business Days if Government Shuts Down

Press Release, 11-26

USPTO Prepares for Possible Government Shutdown

In the event of a government shutdown on April 9, 2011, the United States Patent and Trademark Office will remain open and continue to operate as usual for a period of six business days – through Monday, April 18, 2011 — because the USPTO has enough available reserves, not linked to the current fiscal year, to remain in operation until then. Should a shutdown occur and continue longer than the six-day period, we anticipate that limited staff will be able to continue to work to accept new electronic applications and maintain IT infrastructure, among other functions.  More information will be posted on this website as it becomes available. Thank you.

Myriad Oral Argument Review and Analysis by Patent Docs

Great comprehensive review of oral arguments at the federal circuit in the Myriad case by Kevin Noonan of Patent Docs.

BIO Hosts U.S./China Biotechnology Examiner Workshop with U.S. Patent and Trademark Office and China’s State Intellectual Property Office

Press Release:

 
WASHINGTON, D.C. (Tuesday, April 05, 2011) – The Biotechnology Industry Organization (BIO) hosted a U.S./China Biotechnology Examiner Workshop with U.S. Patent and Trademark Office (PTO) and China’s State Intellectual Property Office (SIPO) on March 28, 2011 in Beijing, China. The workshop which was organized by BIO for SIPO examiners, focused on biotechnology patenting and encouraged bilateral cooperation between SIPO and the USPTO.“BIO recognizes the commitment on behalf of the Chinese Government and SIPO to spur innovation in the biotech industry and, together with the PTO, we pledge to partner with Chinese leaders to move the industry forward to benefit patients and other consumers worldwide,” said Jim Greenwood, CEO and President of BIO.The workshop was the first of a series of meetings intended to open communication and establish a relationship between the two groups. BIO will work with the SIPO to strengthen China’s regulatory system to encourage innovation and protect intellectual property within the country. The commitment of SIPO will be critical for sending a message to companies that want to do business in China.

“Robust development of the biotech industry in China depends on an advanced intellectual property and patent system,” said Scott Sindelar, Minister Counselor of Agricultural Affairs. “Today’s workshop is timely in sharing experience and regulations of patenting and IP both in the U.S. and China, and establishing greater understanding of each other.”

“Since most Chinese attendees are examiners of intellectual property, [the workshop] provides an opportunity to share experiences and ideas with our American counterparts,” said Yang Xiaowei, deputy Director General of International Cooperation Department of SIPO.

In each of three panels, USPTO and SIPO speakers discussed how each issue is handled by the pertinent provisions in their current patent law and rules. They also addressed office practice and shared practical experiences with the different technical arts in biotech.  Industry and academic speakers provided user perspectives in their interaction with the patent law and practice in each country.

The workshop featured the following panels:

·         The first panel focused on taking a balanced approach to written description and enablement requirements, which are necessary for preventing impediments to patenting activity. Panelists also discussed the type of information that is required for an invention to satisfy the written description and enablement requirements.

·         The second panel focused on issues arising from claims with sequence homology. Panelists discussed the scope of claims using homology or percent of sequence identity language and issues that often arise during examination.

·         The third panel addressed meeting discussed China’s new requirements for patent disclosure for genetic resources, stakeholders’ experiences with China’s new genetic disclosure requirement, and alternative ways to ensure appropriate access and benefit sharing.

The three groups (BIO, PTO and SIPO) are looking forward to future opportunities to work together on issues of common interest.  

Upcoming BIO Events 

BIO Intellectual Property Counsels Committee Spring Conference and Committee Meeting
April 13-15, 2011
Seattle, WA

World Congress on Industrial Biotechnology & Bioprocessing
May 8-11, 2011
Toronto, Ontario, Canada

Partnering for Global Health Forum 2011
June 27, 2011
Washington, DC

BIO International Convention
June 27-30, 2011
Washington, DC

2011 BIO Human Resources Conference
June 26-28, 2011
Washington, DC

The Business Forum at the BIO International Convention
June 28-30, 2011
Washington, DC

BIO India International Partnering Conference
September 21-22, 2011
Hyderabad, India

BIO China International Conference
October 12-13, 2011
Shanghai, China

About BIO

BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. BIO produces BIOtech Now, an online portal and monthly newsletter chronicling “innovations transforming our world.” Subscribe to BIOtech Now.

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BIO Commends Launch of House Patent Reform Process:Expresses concern with inter partes review changes

BIO Commends Launch of House Patent Reform Process

Expresses concern with inter partes review changes

 

Washington, D.C. (March 31, 2011) – Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood released the following statement on the introduction of the America Invents Act, H.R. 1249, in the U.S. House of Representatives:

“BIO praises House Judiciary Committee Chairman Lamar Smith (R-TX) for his introduction of a comprehensive patent reform bill similar to the bill adopted by the U.S. Senate earlier this month by a nearly unanimous vote.   

“The America Invents Act is a clear improvement over prior House versions of patent reform legislation.  We are pleased that the legislation will end, once and for all, the diversion of fees collected by the U.S. Patent and Trademark Office, allowing the agency to use all of its fees to hire more examiners, reduce the backlog of pending applications, and make other improvements to its operations.  We also commend the inclusion in the bill of many other reforms that will improve the patent system and enhance patent quality, including transition to a “first-to-file” system, the elimination of other subjective elements of patent law, and a new supplemental examination proceeding for use by patent owners.

“BIO has serious concerns with several significant changes made in the House bill regarding the inter partes review system.  Taken as a whole, these changes would make it easier to bring frivolous challenges to patents, harder for patent owners to enforce them, and more likely that patent owners will find themselves in duplicative and costly patent-related proceedings.   These changes negatively alter the carefully-crafted balance between patent owners and accused infringers that was achieved in the Senate bill – a bill that won support not only from 95 Senators, but from a wide range of industries, universities, and small businesses across the spectrum of American innovation.  

“BIO also is concerned about the inclusion of broader prior user rights in the House bill, and believes that this issue, coupled with the harmful inter partes review changes,  could set back efforts to pass meaningful patent reform this year by undermining the broad coalition of American innovators currently supporting patent reform.

“Small biotech companies rely on intellectual property to attract investors to fund the lengthy and expensive research and development process necessary to bring breakthrough new therapies and other biotech products to patients and consumers.  It is critical that patent reform legislation preserves and enhances the incentives necessary to sustain our nation’s global leadership in biotechnology innovation and to spur the creation of high-wage, high-value jobs throughout the country.  Improving our patent system can help America retain its global competitive advantage in biotechnology and other innovative industries, and will spur more investment and job creation at a time when both are sorely needed.

“BIO thanks Chairman Smith for beginning the patent reform process in the House, and we look forward to working with him and the other members of the House Committee on the Judiciary to ensure that patent reform legislation enhances patent quality and increases the efficiency, objectivity, predictability, and transparency of the patent system to benefit all sectors of our nation’s economy.”

About BIO

BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. BIO produces BIOtech Now, an online portal and monthly newsletter chronicling “innovations transforming our world.” Subscribe to BIOtech Now.