Posts Tagged: "R&D"

Perhaps the report on China’s strategy for eclipsing the U.S. lead in biopharma from the Information Technology & Innovation Foundation (ITIF) resonated so strongly with me because of several articles in The Wall Street Journal. Taken together, they present a sobering picture of what we’re up against. The first was a book review of “Leadership and the Rise of Great Powers” by Yan Xuetong, a prominent Chinese professor. Characterized as “a window into Chinese elite thinking about the world; it is as much a political manual as an international-relations text book.”  The thesis is the inevitable rise of China as the world’s dominant power at the expense of the United States.

A just-released study co-sponsored by the Biotechnology Innovation Organization (BIO) and AUTM provides new evidence of the significant contribution academic patent licensing makes to the U.S. economy. The report is the most recent in a series, and the numbers are astounding. This couldn’t come at a better time. Renewed efforts are underway to subvert Bayh-Dole from an engine driving innovation into a weapon for government price controls. Even though the Bush, Obama and Trump Administrations wisely rejected their theories, the critics keep banging the drum, and some in Congress are dancing to their tune.

If a judge ever botched an antitrust case involving patents, the prize may go to federal district Judge Lucy Koh for her ruling in favor of the Federal Trade Commission (FTC) in its antitrust action against Qualcomm. The intersection of intellectual property and antitrust is riddled with land mines and booby traps. The danger of getting an IP issue in this vicinity wrong becomes all the more likely after the Koh ruling and, thus, all the more dangerous and far-reaching. Judge Koh managed to step on several trip wires in her decision for the FTC in a case that should never have been brought, never tried, and should have been withdrawn or dropped. The damage from this ruling will reverberate far beyond the global leader in wireless connectivity technology the FTC unfairly hammered in this case. “Patents are a form of property,” Assistant Attorney General for Antitrust Makan Delrahim has said, “and the right to exclude is one of the most fundamental bargaining rights a property owner possesses. Rules that deprive a patent holder from exercising this right . . . undermine the incentive to innovate.” Basic principles like property rights, exclusivity, dynamic competition and the incentive to innovate escaped Judge Koh’s grasp.

Is Congress really going to do anything useful with respect to lowering drug prices? When the question is presented that way the answer almost seems painfully obvious. Of course not. The question is just how bad they will mess things up, and will they destroy the incentive to innovate as they attempt to seek a very worthwhile solution for the problem of growing costs for healthcare. Unfortunately, the political climate in the United States has increasingly become more circus and circumspect than bold and visionary. It is better to do something entertaining and memorable that plays to the crowd than to go about the business of governing the country, not just for the moment, but for the future. And the political structures in place create outright gerrymandering that practically ensure the overwhelming percentage of Representatives have more to fear from a primary challenge than from a contender in the general election. It is no wonder nothing truly useful can get accomplished in Washington, DC.

In the sixth installment of our 13-part patent-trends study (performed in collaboration with GreyB) providing high-level data across industries, we will examine trends in the medical-device industry. The United States has been the largest target medical-device market, at nearly 50% of the global market. These devices are highly variable in purpose, design and complexity. Thus, developing an effective patent strategy can be highly valuable yet complicated. Our study not only identified a set of applications that pertained to this industry, but also—for each application in this set—it was determined whether the application pertained to one or more of the categories shown in the topology below. If so, the application was appropriately tagged, such that it could be included in one or more category-specific data subsets for subsequent analysis.

Apple made headlines with its recent decision to close its stores in Frisco and my home town of Plano, Texas. The rumor is that Apple was afraid of the dreaded “patent troll.” However, Apple is not afraid of patent trolls. They are afraid of inventors. Whenever you hear the term patent troll, think of inventors. Inventors like my friend Bob Short, who solved an important technical problem in 1998 with his invention—a protocol that encrypts real-time audio and video transmissions. Apple wanted his technology for their FaceTime app, so they took it. Bob’s company, VirnetX, has spent six years trying to stop them and make them pay. Meanwhile Apple, Google, and other tech titans have spread propaganda and paid lawyers, academics, lobbyists, and politicians to destroy the U.S. patent system.

n an age with instantaneous commentary on social media, the wheels of justice in courts seem to move at a glacial pace, especially in patent infringement lawsuits in the fast-paced smartphone industry. Yet, courts have been methodically receiving and meticulously reviewing the evidence in Qualcomm’s lawsuits against Apple Computer for infringing its patents. And, like the tortoise who eventually wins over the speedy hare, the judgments are just now coming out against Apple. This past December, a Chinese court issued a preliminary injunction against Apple selling iPhones that infringed Qualcomm’s patents. A week later, A German court issued an injunction against Apple selling iPhones in that country that infringed Qualcomm’s patents. Last week, a jury in the United States found Apple liable for infringing Qualcomm’s patents and awarded Qualcomm $31 million in damages.

Just as the drug pricing debate on Capitol Hill is heating up, an important new study, “The Bayh-Dole Act’s Vital Importance to the U.S. Life-Sciences Innovation System,” published by the Information Technology & Innovation Foundation (ITIF), underscores the law’s contribution to the United States’ lead in the life sciences. The report warns that attempts to misuse the march-in rights provision of the law to control drug prices would have serious consequences to our competitiveness and our health. Predictably, the critics condemned the report as “A lot of myth and propaganda.” Despite being repeatedly rebuffed, they continue to argue the law authorizes the government to license competitors if a resulting product isn’t “reasonably priced.” That debate spilled over to the Capitol Hill unveiling of the study, in which I participated. What happened there sheds a lot of light on the nature of the argument.

5G, or 5th generation wireless communication, has reached the point of determining which core technologies will be used. Suddenly, decisions about which companies will be picked are upon us. And the stakes could hardly be higher — for the companies and for our national (and American citizens’) security. The two businesses in the ring, Qualcomm and Huawei, each find themselves in a tough fight to dominate the IP-based 5G technology on which countless devices—from automobiles to mobile phones to who-knows-what—will interoperate. The 5G platform will empower the Internet of Things, artificial intelligence writ large and more—a technological advance with tremendous potential as well as tremendous risk exposure to spies, hackers and such. Both companies face hurdles from the U.S. government. One makes sense. The other makes no sense.

Hopefully, you’ve been fortunate enough—at least once in your life—to work for someone you really admired. That happened to me as a Senate Judiciary Committee staffer for Senator Birch Bayh (D-IN), who gave me the opportunity that changed my life. He turns 91 today… Bayh-Dole not only cut through the bureaucratic red tape strangling the development of federally-funded R&D; it marked a turning point in how patents were viewed in Congress. When I first joined the Committee, patents were considered tools for big business to stifle competition. Intellectual property fell under the jurisdiction of the Subcommittee on Antitrust and Monopolies. The Senate Small Business Committee was a hot bed of anti-patent sentiment.

The Trump Administration’s Return on Investment (ROI) Initiative, which is geared toward increasing the American taxpayer’s benefits from federally-supported R&D, is potentially a big step forward. The draft recommendations were contained in a “Green Paper” open for public comment until January 9, 2019. The paper acknowledges the importance of a strong, dependable patent system and lauds the Bayh-Dole Act as the cornerstone of the U.S. technology transfer system, which leads the world in turning federally-funded inventions into new products, companies, jobs and even entirely new industries. Review of the 122-page paper confirms its overall value but also reveals some concerns.

Nokia Corporation announced it entered into a patent licensing agreement with Chinese mobile consumer electronics firm OPPO. Although terms of the deal weren’t disclosed by Nokia, the company did state that under the agreement, OPPO would make payments over a multi-year period… OPPO may not receive the same kind of attention that its domestic rivals Xiaomi and Huawei receive, but it has become a major competitor in the Chinese smartphone market in recent years. OPPO had the greatest market share of smartphone makers in terms of Chinese sales during 2016 when the company shipped 78.4 million units to achieve a 16.8 percent market share within the country.

Certain innovations—known as enabling technologies—provide the foundation for progress across a range of industries. Enabling technologies include mobile wireless, the laser, CT scanners, the microprocessor, artificial intelligence, and freight containerization. Such technologies drive wealth creation throughout the economy. However, the difficulties associated with monetizing this type of IP, which I explore in this article, mean that private enterprise tends to underinvest in new enabling technologies. Public policy needs to be more supportive, and firms need to be willing to support more blue-sky projects. As a nation, we are harvesting the fruits of old enabling technologies without investing sufficiently in new ones. We are eating our seed corn.

Three events boosted our economic turnaround in the 1980’s: the passage of Bayh-Dole, which injected the incentives of patent ownership into the federal R&D system; the enactment of the Court of Appeals for the Federal Circuit, which insured the courts would apply the patent law consistently; and the Supreme Court’s ruling in Diamond v Chakraberty that living organisms could be patented. That decision stated that patents could “include anything under the sun that is made by man.” Today that quote is only ironic.

Sen. Bernie Sanders (I-VT) introduced legislation requiring every agency and non-profit entity to include a “reasonable pricing” provision based on King’s formula for any life science invention made with government support. Apparently the colossal failure of a similar requirement forced on the National Institutes of Health (NIH) in the 1990’s which led to the collapse of industry partnerships without any reduction in drug prices is either unknown, or made no impression on Sen. Sanders. Or perhaps like his trust in socialism, he thinks that what failed in the past will somehow work by some weird magic if trotted out again.