The recent US Supreme Court ruling and the legislation Congress is mulling over seem to have caught little biotechs and their backers unaware. Concern and confusion are mounting, because these companies rely heavily on just a few products and lack the steady revenue stream of a big pharma, the San Diego Business Journal reports.

The legislation would create a first-to-file system, which is used by nearly every other country, in which the patent would go to the first entity or person to file the claim with the U.S. Patent and Trademark Office. The US uses the first-to-invent system, which many experts say has led to the enormous amount of patent litigation, the paper notes.

The Patent Reform Act of 2007 would create a panel of three judges who could mediate disputes before lawsuits are filed; limit the venue where a suit can be filed, and ban patent holders from getting royalties on elements of the invention they did not create, among other things.

Elliot Parks of Hamilton BioVentures believes the battle over the patent system has just begun. “It’s a huge battle that’s brewing right now,” Parks tells the paper. “It’s kind of a train headed down the wrong track. I don’t want to be Chicken Little and say, ‘The sky is falling,’ but it has caught a lot of people flat-footed.”