A Lobby Shop’s ‘Inequitable Conduct’?

Posted October 12, 2007 at 6:29pm

Generic pharmaceutical makers have one key goal when it comes to patent reform legislation: making sure any new law does not take away one of their signature defenses in patent court cases.

Generic makers use the defense, which goes by the moniker “inequitable conduct,” when they allege that a name-brand nemesis withheld information from the Patent and Trademark Office or lied on a patent application. It can result in a name-brand company no longer being able to enforce their patent.

But a handful of lobbyists in the generics camp have complained privately that a lobbying firm working for their industry’s trade group, the Generic Pharmaceutical Association, might not share that precise goal.

Fierce, Isakowitz & Blalock represents GPhA as well as the tech-dominated Coalition for Patent Fairness, which doesn’t take a position on inequitable conduct and wants to see passage of patent reform — even if changes to the inequitable conduct doctrine are needed to get the bill through Congress.

Kathleen Jaeger, president and CEO of the Generic Pharmaceutical Association, said her industry is “upset” with the House-passed patent reform bill and is working with the Senate to keep similar provisions on inequitable conduct out of that bill. But she said there are no problems with Fierce, Isakowitz & Blalock working for both sides.

“Each client has known about the other from the beginning,” she said. “We’ve known at some point we could diverge.”

As a result, Fierce, Isakowitz & Blalock’s work for GPhA has not included much activity on the inequitable conduct matter, she said. “I think everybody knows the positions of all the parties,” she added. “I don’t think there’s anything earth-shattering there.”

But sources for some generics interests said they see more potential problems on the horizon.

Some in the generics industry said privately that they are worried that Members, in an effort to compromise to get the bill over the finish line, might try to woo name-brand drug makers’ support by taking up the inequitable conduct issue. At which point, the tech community would support it, and generics would be set against it.

The inequitable content matter currently pits typical foes generics against name-brand firms, but some lobbyists have even speculated that the two groups could potentially come together to sink the bill, which name-brand pharmaceuticals long have been complaining about.

But for now, both tech and generic pharmaceutical companies are backing the Senate version of the patent reform bill.

That bill, whose champion is Senate Judiciary Chairman Patrick Leahy (D-Vt.), was voted out of the committee in July without substantial changes to the existing inequitable conduct doctrine.

“Both camps support the Senate bill and are actively seeking co-sponsors,” said Rich Tarplin, a lobbyist with Timmons and Co., who represents a generic company, Teva USA. “Conflicts exist where two parties are seeking mutually exclusive goals — that is not the case here.”

The Pharmaceutical Research and Manufacturers of America, the name-brand’s lobbying group, referred comment to the Coalition for 21st Century Patent Reform, which is lobbying against the current patent bills. PhRMA is not a member of the coalition, but some of PhRMA’s members belong to it.

Steve Miller, vice president and general counsel for Procter & Gamble and a member of the 21st Century coalition, said it’s not just name-brand pharmaceutical companies that want to see the inequitable conduct defense taken off the table.

“Our position is we’d like to see the defense either eliminated or substantially modified based on the National Academies of Sciences recommendation,” Miller said.

Miller added that his side of the debate is not altogether happy with the House-passed bill, saying it doesn’t go far enough. But the House bill would make it easier for patent-holders to continue to enforce their patent even in some cases of inequitable conduct.

“We’re happy with that piece of it,” he said.

Miller said the inequitable conduct defense has become a “plague on the system.”

Jaeger couldn’t disagree more.

“The whole patent bill is to infuse integrity into the system,” she said. But doing away with the inequitable conduct defense, she added, would be a step backward.

“Under current standards, you can’t mislead the [Patent and Trademark Office], you can’t lie, you can’t bring false information,” Jaeger said. “If we’re going to ensure that companies act honestly, you need to maintain the current standard.”

Jaeger declined to say GPhA’s strategy for keeping the House-passed inequitable conduct provisions out of a final bill. “We’re exploring all options,” she said. “I think for the most part we are very supportive of Sen. Leahy’s bill and I think that we believe that they’ve got it right and we’re certainly going to be working with that office and others.”

Some generics industry lobbyists also said they question whether groups like PhRMA and the Biotechnology Industry Organization would ever support a patent reform bill, even one that scraps the inequitable conduct defense.

“For both [PhRMA and BIO], this is a must-have part of the bill,” said one person who supports patent reform. “For the generics, it’s a must-not-have part of the bill.”

When Fierce, Isakowitz & Blalock partner Mark Isakowitz was offered the contract with the Coalition for Patent Fairness, dominated by the tech sector, he said he went to both and discussed any potential conflicts. Both sides gave him approval to manage the two clients.

“In fact, when the patent bill was introduced in the last Congress, this issue was even more pronounced,” Isakowitz said. “This was a unique situation where, when I was offered the project manager role for the tech community … I took it to each side. That’s how, as a managing partner of a firm, that’s how we handle conflicts or potential conflicts.”

In one such case, Isakowitz hosted a meeting at his firm’s Watergate building offices between representatives from generics makers including Barr and Teva and high-tech companies such as Cisco and Hewlett-Packard, according to generics industry sources.

These sources said people in the industry came away from the meeting feeling frustrated.

Yet they do see advantages in the Fierce, Isakowitz & Blalock relationship as providing an ongoing point of contact, a way to get their message heard in the tech community.

“We don’t want to blow up the relationship” with Fierce, Isakowitz & Blalock, said one lobbyist for a generics company. “But you certainly have to be aware of it. On this issue we’re not completely in lock step.”