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Executive Summary

REP. BOUCHER BILL TO AUTHORIZE ITC BAR OF INFRINGING BIOTECH PRODUCTS "UNNECESSARY," the Commerce Department maintained in a July 5 letter to Rep. Boucher (R-Va.). Commenting on a provision in the bill (HR 3957) to amend section 337 of the Tariff Act, the department's General Counsel Wendell Willkie maintained that section 337 already authorizes the International Trade Commission "to exclude products that were made abroad by using a process patented in the U.S." He added: "Given that authority, in our view, it is unnecessary to amend Section 337." Willkie added that "the Administration is engaged in a comprehensive review of Section 337 to determine what amendments, if any, may be appropriate in light of ongoing negotiations in the General Agreement on Tariff and Trade." The Boucher bill is designed to close what some biotech companies see as a loophole in current law that has allowed the importation of biotechnology products made by offshore companies through use of a U.S. patented component. If passed, the Boucher bill would effectively bar importation of Chugai-Upjohn's Marogen (erythropoietin) from entry into this country. The ITC recently dismissed a patent infringement claim by Amgen (currently the sole U.S. marketer of EPO) against Chugai for "lack of subject matter jurisdiction." Boucher and Rep. Moorhead(R-Calif.) jointly introduced HR 3957 on Feb. 6 ("The Pink Sheet" Feb. 12, T&G-2). The bill also would modify Patent & Trademark Office practice to ensure that a process would not be considered "obvious" if an 'essential' material used in that process were in itself patentable, or "novel and nonobvious." The letter states in addition that "the requirement that the material be 'essential' is not necessary. If a specific material used in the process is itself patentable, then that process should not be considered obvious, regardless of whether the material used is essential." Commerce noted that it supports an alternative to the provision, modeled after a suggestion made by Boucher in a March 2 letter to the PTO. The alternative involves an administrative declaration that "a process of making or using a machine, manufacture, or composition of matter shall not be considered obvious...if the machine, manufacture or composition is novel ...and nonobvious...." Commerce said it did not favor limiting the "relief" provided by the bill to the biotechnology industry. The department also had a problem with the effective date of the bill, which is prospective and would apply only to products imported or sold for importation after enactment of the legislation. "Care must be taken that judicial interpretation of process claims contained in patents granted before the effective date...not adversely affect the rights of persons who relied on the determination of validity of such process claims in accordance with present law," he said. On the other hand, he urged that the bill's provisions authorizing ITC to exclude imports of infringing products remain prospective.

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