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Pharma's IP Legal Challenge

As major customers of RFID technology, pharma companies risk getting caught in a squeeze play between competing RFID vendors in a battle over RFID-related intellectual property.
By Marilyn Neiman
Aug 13, 2006With the number of RFID-related patents and litigations on the rise, the pharma industry should give more consideration to evaluating RFID patent portfolios when selecting RFID vendors to implement RFID drug pedigree programs.

Over the past two years, RFID-related technology and patents in the United States have blossomed, and the volume of patents issued annually in RFID technology reflects this technology growth. Tracking the number of patents with the term "RFID" in their titles and issued by the U.S. Patent and Trademark Office (USPTO) between 1994 and 2007, provides a quick and easily accessible index of the growth in the issuance of patents related to RFID technology (see Table 1, "Patent Index," below left).

The U.S. Patent and Trademark Office estimates that approximately 6,000 patents related to RFID technology have been issued in the United States. A corresponding increase in pending patent applications often accompanies an increase in issued patents, and USPTO estimates there are also approximately 6,000 RFID-related pending patent applications as well.

With this burgeoning of RFID technology and patents, has come increased litigation in the United States in this field, with a significant portion of the federal cases in this area related to patent issues. Tracking the number of reported decisions using the search term "RFID" in a LEXIS search of reported federal court decisions provides a ready index of the growth of RFID-related patent litigation.

The total RFID-related federal decisions from this search (T) is reported under "Decisions" in Table 2, "RFID Litigation Index" (below right), followed by the number of decisions involving patents (P). Seven of the 16 reported RFID-related federal court decisions in the past 13 years have involved patent litigation.

A patent holder may sue any infringer of its patent, including the customer of a competing manufacturer. Thus, as major customers of RFID technology, pharma companies have an exposure to patent-infringement litigation and can be caught in a squeeze play between competing RFID vendors.

Concomitant with the increase in RFID patent filings and RFID-related litigation has been a demand in the pharma industry for reliable electronic track-and-trace technology to help secure the integrity of the pharmaceutical supply chain by providing an accurate drug pedigree.

On June 8, 2006, the U.S. Food and Drug Administration (FDA) issued its most recent statement, the "FDA Counterfeit Drug Task Force Report: 2006 Update" (see FDA Issues New 'Counterfeit Drug Task Force' Report).

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