Earlier this month the Brazilian House of Representative outlined proposed changes to Brazil’s patent law in a report by the Center for Strategic Studies and Debates, titled Brazil’s Patent Reform: Innovation Towards National Competitiveness. Current efforts to amend existing intellectual property legislation in a number of emerging markets, including India, Brazil and South Africa, are mistakenly heralded as steps toward “fixing” the patent system. Prominent in the discussions of proposed changes are arguments against protecting incremental or improvement innovation. Couched in the pejorative language of “evergreening”, the arguments fail to recognize that all innovation is valuable, both breakthrough discoveries as well as improvements to existing therapies.
The proposed changes are misguided from a legal perspective as well as from a public health standpoint. Two widely-propagated fallacies must be countered: the patents protecting incremental innovations are not legitimate patents and that improvement innovations delay generic competition. Legally, improvement innovations must meet all patentability standards. Patents for improvements to existing technologies are only granted if they meet all of the legal requirements for patentability, as determined by a trained patent examiner. All patents require advances that are novel, useful and non-obvious. Clearly these characteristics may describe both incremental innovations as well as groundbreaking advances. Patents protecting incremental innovations are not an abuse of the intellectual property rights system, rather they protect valuable discoveries.
Moreover, patents for innovative improvements do not delay or prevent generic competition. The patent system allows for the production of generic copies of the initial innovation, even while the improved innovation is protected. Importantly, incremental innovations are usually launched at a discount and the resulting competition across drugs in a therapeutic class results in lower prices. In a 2000 study, DiMasi examines twenty new drugs, accounting for half of U.S. sales, launched between 1995 and 1999. The study shows that all but one of the follow-on drugs were discounted and sold at prices up to 70% lower than the pioneer drug.  Incremental innovation does not stymie competition; instead it has the potential to enhance it. In that context, it is important to recognize that improvement innovations may emerge from the original innovator, competing firms, or generic producers.
Media research company Nielsen Holdings N.V. has agreed to settle Federal Trade Commission charges that its proposed acquisition of Arbitron Inc. may substantially lessen competition. Nielsen will divest and license assets and intellectual property needed to develop national syndicated cross-platform audience measurement services.
Nielsen and Arbitron are developing national syndicated cross-platform audience measurement services, which allow audiences to be measured accurately across multiple platforms, such as TV and online. According to the FTC’s complaint, the elimination of future competition between Nielsen and Arbitron would likely cause advertisers, ad agencies, and programmers to pay more for national syndicated cross-platform audience measurement services.
“Effective merger enforcement requires that we look carefully at likely competitive effects that may be just around the corner,” said FTC Chairwoman Edith Ramirez. “In this matter, the evidence provided us with a strong reason to believe that absent a remedy, the deal was likely to harm emerging competition in the area of cross-platform audience measurement.”
On July 18, 2013, at the US Chamber of Commerce, the Global Intellectual Property Center (GIPC) hosted an event, “India: International Outlier on IP.” The two-part event began with Congressmen John Larson (D – CT) and Erik Paulsen (R – MN) giving keynote speeches about the concerning status of IP law in India. A panel discussion followed consisting of David Torstensson, Senior Consultant, Pugatch Consilium; Manisha Desai, PhD, Assistant General Patent Counsel, Eli Lilly; and Michael Schelsinger, Counsel, International Intellectual Property Alliance.
The GIPC previously released its International IP index, Measuring Momentum, on December 11, 2012. Pugatch Consilium ranked nations based upon intellectual property rights (IPR) to provide a global overview. Various factors included patent enforcement, fairness of compulsory licensing, copyright term of protection, and membership to international treaties. Not surprisingly, Brazil, Russia, India, and China (BRIC) comprised the bottom of the list. While most would expect China to be ranked last, India was ranked last overall and in almost all individual categories, including Foreign Direct Investment (FDI), Research and Development Spending, and Membership and Ratification of International Treaties. David Torstensson of Pugatch Consilium noted that while IPR in China are lacking, some legislation does in fact exist, which helped its ranking. Notably, India is the only country in the study that is not a signatory for any international IP treaties, such as the Patent Law Treaty (PLT) and World Intellectual Property Organization (WIPO) Internet Treaties.
We’ve got to have a fall guy… I’m in this up to my neck. I’ve got to find somebody, a victim when the time comes. If I don’t, I’ll be it. Let’s give them the gunsel… Wilmer! There’s our fall guy. ~ Sam Spade
Well, Wilmer, I’m sorry indeed to lose you, but I want you to know I couldn’t be fonder of you if you were my own son. Well, if you lose a son, it’s possible to get another. There’s only one Maltese falcon. When you’re young, you simply don’t understand these things. ~ Kasper Gutman
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Prominent officials in the World Health Organization and Saudi government point at surprising villains allegedly standing in the way of international efforts to combat the spread of Middle East Respiratory Syndrome Coronavirus (MERS-COV): (1) The doctor who first recognized the deadly new disease; and (2) The medical center which quickly identified the virus.
Critics argue that pharmaceutical patents are a barrier to wide-reaching access to medicines, especially for vulnerable populations in the developing world. They cast their argument in the phrase, “Patents Kill” and advocate against intellectual property (IP) protection for medical innovation and the trade agreements that incorporate them. Their position, however, begs the question of what truly influences a population’s access to medicines. This week, as the United States and a dozen other nations continue the Trans-Pacific Partnership (TPP) Agreement negotiations, the answer is more important than ever. Despite the critics’ position, recent students cast doubt on their argument, providing evidence that access is critically linked to a country’s level of economic development which is enhanced by strong intellectual property rights protection.
Access is defined as “having medicines continuously available and affordable at public or private health facilities or medicine outlets that are within one hour’s walk from the homes of the population” (United Nations Development Group, 2003). Fundamentally, access is largely continent upon the nation’s level of economic development and available infrastructure. Given this, there are two important reasons to believe that the TPP will not inhibit access to medicine. First, most would-be signatory nations are well developed. Second, trade and IP protection enhance growth and growth furthers access.
The House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet on March 14, 2013, heard from six witnesses that the business of “patent assertion entities” (PAEs) is inflicting severe harm on a broad range of technology users.
That business involves the enforcement of weak or invalid patent claims against initial and downstream users of devices that are remotely related to the patent claims for the sole purpose of extracting settlements in amounts much lower than the cost of litigating the rights. The witnesses at the hearing agreed that, when confronted PAE demand letters on frivolous claims, settlements by and large are economically unavoidable.
Committee Members Are Cautious
The Subcommittee had before it a particular bill (H.R. 845; the Shield Act) to create a limited loser-pays system. It would award full costs to the prevailing party unless the plaintiff is (1) the inventor, (2) the original assignee, (3) one who produced or sold items covered by the patent, or (4) a university or technology transfer organization.
Patent and technology firm, Intellectual Ventures (IV), recently brought a new complaint against computer security company, Symantec, claiming that the company infringed on three of its patents. To be specific, the complaint alleges that three of Symantec’s products (Replicator, Veritas Volume Replicator, and ApplicationHA) “actively, knowingly and intentionally” infringed on three separate IV patents. Symantec was also sued as part of a different complaint by IV back in 2010, along with Trend Micro, McAfee, and Point Software Technologies.
The First Round
In 2010, former Microsoft exec. and IV founder, Nathan Myhrvold, brought three separate lawsuits against the three above-mentioned companies and six others, claiming that they would not sign licensing agreements, yet they continued to use IV’s patents. Apparently IV had held out on filing the lawsuits against the companies for as long as possible, and according to the company attorney, several attempts were made to negotiate with the companies; however, the negotiations were either unsuccessful or the companies refused to talk about the situation altogether.
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