Bio/Pharma's Favorite Target Serves a Critical Role

Both Houses of Congress now have bills moving to their respective floors on further patent reform thanks in large part to Kyle Bass. Of course Congress had been toying with the idea of further reform long before everyone's favorite boogeyman came along. But now, thanks to Mr. Bass, Congress has a story to sell otherwise mind numbing legislation to the masses. Keep in mind that America Invents Act (AIA) wasn't about patents, but job creation. Remember that? The new patent reform story, at least for the significant Bio/Pharma lobby, is this: Hedge funds are devaluing drug patents to the point that and there may not be any future, ground breaking medications —unless Congress comes to the rescue. Silly, yes, but effective for advancing otherwise stagnant legislative agendas?...you betcha.

The fact of the matter is Kyle Bass has been a boon to Bio/Pharma lobbyists. His stunts (and that's exactly what they are) allow the debate to turn away from patent quality to one of simple gamesmanship. Everyone can rally around a perceived abuse of legal process, especially when perpetrated by a vilified outsider. But the changes contemplated in the name of stopping Mr. Bass go well beyond that which is necessary. 

The changes seek to capitalize on the notoriety of hedge fund abuse to roll back laws enacted only 3 years ago as part of the AIA. These changes, impossible without Mr. Bass as a distracting firebrand, water down AIA trial proceedings for all patent challengers. The overwhelming majority of these proposals have nothing to do with stopping hedge fund abuse, but everything to do with making patent challenges at  the PTAB less effective. The inconvenient truth is Bio/Pharma has always been wary of opposition style proceedings at the PTO, and would rather not deal with them at all. And, without Mr. Bass, Bio/Pharma could never sell its pro-patent agenda in such a fervent, anti-troll environment.

At the same time, these very same bills are being sold as anti-troll to the public. Yet, as plaintiff attorneys and well-known NPEs lament the impact of AIA trial proceedings on their business model, Congress is looking to water these proceedings down??? Perhaps the greatest insult to Congress in this entire equation is that one of the more prominent NPEs (IP Nav) is partnered with Kyle Bass, another inconvenient truth ignored by legislators.  So, in the end, if these changes pass into law (which is far from certain), Kyle Bass will have made money, indirectly helped maintain drug prices (as opposed to his proclaimed intent), and, most offensively, IP Nav will have effectively undermined the system that has virtually destroyed its patent litigation business. 

Congress is being played like a fiddle.