Turn- Automatic injunctions ensure research and development from small biotech companies that result in crucial medical technology

Pharmaceutical Research and Manufacturing of America and Biotechnology Industry Organization The Pharmaceutical Research and Manufacturers of America ("PhRMA") is a nonprofit association representing the nation's leading research-based pharmaceutical and biotechnology companies.' The PhRMA brief focused on the critical importance of the protection of patent rights; given the time and financial expenditures of the drug development process, which can last up to fifteen years,22 it is imperative that companies be able to protect their patents. The brief also pointed to the amici's strong interest in the protection of the right to exclude through permanent injunctions, in order to ensure "future innovation and the timely development of new medicines." 2 3 This strong patent protection would help patentees recoup their particularly costly investments.24 With a market perspective similar to PhRMA's, the Biotechnology Industry Organization ("BIO") is a trade association representing more than 1,100 companies, academic institutions, and biotechnology centers.2 Members are involved in the research and development of healthcare, agricultural, and environmental products. 26 The BIO brief asserted that the "promise of exclusionary rights in validly patented subject matter provides the investment incentive for research and development of innovative products."2 1 Lack of this incentive, BIO argued, would "negatively impact the amount of research and development resources available to membercompanies" and "negatively impact public health and welfare." 2 8PhRMA's theory rested on the assertion that barring injunctive relief as a remedy for infringement would "weaken the patent system dramatically," profoundly impacting "all industries that rely upon strong patent protection."9 Their position demonstrates the essential difference between the pharmaceutical/biotechnology industry's support for a stronger patent system and the software/IT industry's desire for a more fluid system that promotes licensing and provides trial courts with more discretion to decide whether injunctive relief is appropriate. PhRMA and BIO both argued that because biotechnology companies rely on private investors to fund development of risky and expensive new products, the industry's economic growth depends on the protection offered by a strong patent system.3 " As BIO articulated in its brief, the majority of biotechnology companies are small with little or no operating income, and so are in constant search of investors willing to risk "hundreds of millions of dollars on a very slim chance of the therapy reaching market and turning a profit.",3 It is through the patent's right to exclude that the incentive for expensive, high-risk research and development exists, thereby allowing members to attract requisite funds for the development of new products. PhRMA reiterated this point, arguing that the "high cost of research and development and the low probability of finding and marketing a successful product" merit the need for the pharmaceutical industry to have "strong assurances that any resulting intellectual property will be protected."3 The ease of reverse engineering pharmaceutical products, combined with the profits available in this endeavor, indicate the need for injunctive relief, which "offers in many circumstances the only effective protection."34 Focusing on the patent law's central purpose of incentivizing innovation and knowledge sharing, PhRMA asserted that a functioning patent system that enables inventors to profit must provide the "temporary right to exclude others from the fruits of their labors.", Alternatives to the right to exclude are "inadequate, imprecise, and ultimately inhibit the development of voluntary 29. See PhRMA, supra note 21 at 2. 30. See PhRMA, supra note 21 at 7; BIO, supra note 25 at 1-2. 31. See BIO, supra note 25 at 5. 32. See PhRMA, supra note 21 at 7. 33. Id. at 3. 34. Id. 35. Id. 7 - ELREFAIE - INJUNCTIVE RELIEF POST EBAY - 050610 CB.DOC (Do NO DELEIE) 5/14/2010 9:32:42 AM SUMMER 2010] INJUNCTIVE RELIEF POST-eBA Y 225 institutions that would otherwise reduce transaction costs by allowing parties to set prices."" With respect to the overall public interest, PhRMA concluded that the "short-term increases in competition" that would ensue from replacing automatic injunctive relief with a supposed "functioning and reliable" patent system would be of no benefit to the public or the inventor. 1 From PhRMA's perspective, the long-term effects of providing pharmaceutical companies with strong incentives for future research and development investment better serves the American public than the short-term effects of cheaper, but infringing, versions of the same drugs." One commonly noted difference between the biotechnology and software industries is the nature of their typical patents. As noted in the BIO brief, a biotechnology patent usually encompasses just a few patents in order to adequately protect an entire marketed product; a typical software/IT patent, on the other hand, covers a single component of a multi-component product . In response to the software industry's push for more trial court discretion with respect to enjoining the production of an infringing multi-component product, the BIO brief suggested that there is no need to alter the general right to injunctive relief because issuance of a permanent injunction is: (1) based on a presumptively valid patent being infringed; (2) rarely a surprise; (3) tailored to prevent the infringement of the "claimed invention"; and (4) granted in light of the fact that the infringer has the choices of removing the component, designing a component that does not infringe the valid patent, or waiting for the patent to expire to use the single element in the multi-component product.