The Most Anti-Tech Organizations in America

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2. The Pharmaceutical/Biotech Industry

Represented by Pharmaceutical Research and Manufacturers Association (PhRMA) and Patent Attorneys

Issue: Patent Reform

Over the last ten years it's become increasingly obvious that the system we have for patenting new tech ideas is broken. The number of tech patents granted by the U.S. Patent Office has gone way up over the past decade, while the quality of those patents has gone way down, most analysts agree.

A bad patent can mean one that covers too broad a swath of technology, preventing others from innovating in that area. It can also mean patents granted for ideas that are obvious--ideas that aren't really innovative, but just take the next logical step in the development cycle. When such bad patents are granted in a certain tech area, it can take away the incentive for other technologists to innovate and invest in that area. That's bad news for those of us who expect new and better tech toys every year.

Problem is, tech is not the only industry that uses the patent system to protect intellectual property. Every other industry uses it too, and some of them feel strongly that it's working just fine. Enter the pharmaceutical industry, tech's unlikely adversary in the battle over patent reform. The pharmaceutical industry (and its attorneys) might end up directly affecting the state of personal technology for you and me.

"Basically, two constituencies oppose patent reform: The biomedical industry--pharmaceutical and biotech companies--who rely on patents and want them to be as strong as possible, and patent lawyers, who are both resistant to change in general and likely fearful of how reform will affect their practices," explains Stanford Law Professor Mark Lemley.

Big Pharma in Washington

The big pharmacy companies--think Johnson & Johnson, Pfizer, and Merck--have megabucks not only to pay attorneys for patent work, but also for lobbying lawmakers to keep the system the same. Pfizer, for instance, reported $12.2 million in lobbying expenses for 2006 alone.

Much of the pharmaceutical and biotech industries' lobbying work is done by or through the Pharmaceutical Research and Manufacturers Association (PhRMA), whose members include practically all of the big pharmaceutical companies with interests in the U.S. market. PhRMA reported spending $18.1 million in lobbying expenses in 2006 (ranking it the 7th biggest lobbying organization in the U.S. for the year), most of which was used to hire the services of 42 external firms to help influence regulatory bodies and lawmakers. PhRMA has spent more than $115 million on lobbying since 1998.

Big Pharma also exerts its influence by donating to federal candidates and political parties, although the biggest money comes directly from the large pharmaceutical companies themselves, not their industry organization, according to data from the Center for Responsive Politics. For instance, Pfizer has donated $11.6 million to various candidates from 1989 through 2006, and Bristol-Myers Squibb gave $6.8 million to various candidates during the same period.

But, as Stanford's Lemley points out, Big Pharma isn't the only dog in the fight. Thousands of patent attorneys represented by the American Intellectual Property Law Association (AIPLA) also are fighting patent reform. With the sheer number of patent grants soaring in recent years, being a patent attorney has never been more lucrative. Not only do inventors need legal help to file for patents, but there are far more legal squabbles between companies over patents than ever before; this also keeps patent attorneys' phones ringing.

Battling the Bill

This year both PhRMA and the AIPLA have been out lobbying against a new bill called The Patent Reform Act of 2007, which would change the patent rules in favor of tech interests. The bill was passed by the House in September. A Senate version of the bill was passed in committee but awaits a hearing and possibly a vote by the full Senate.

Unlike some other tech policy issues, the players involved with patent reform are not playing rhetorical games on the issue, at least not right now, says one House staffer. "You have a difference in philosophy between pharma/biotech and tech," the aide says. "Both sides are being totally forthright about what they want, but both sides have such different philosophies and they're so different in the way they use patents that it's almost irreconcilable."

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