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Wednesday, September 21, 2011

More Intellectual Property Legislative Scams

Even though the United States is supposedly in a dire financial crisis, and we apparently need another $400 billion stimulus to help get us going again, that doesn't mean Congress won't unite to give hundreds of millions of dollars away to special interests when it can.

The special interest this time was The Medicines Company, which missed a crucial deadline by one day a few years ago, with the result that they could not obtain a certain patent term extension.  The surest way to prevent the patent from expiring was to get Congress to pass a special "The Dog Ate My Homework" law to retroactively extend that deadline for the Medicines Company.  Congress did just that, last week, as a small part of its larger patent reform package.  It's always hard to calculate how much money consumers and taxpayers lose when a drug stays on patent (since there is a period of time when generic manufacturers and the brand manufacturer team up to keep prices relatively high -- i.e. much higher than the perfect competition that should (and in many cases eventually does) prevail.  But the reports are that the mistake, if not fixed, would have cost the Medicines Company "hundreds of millions" of dollars (or "$500 million to a billion" dollars, per Greta van Susteren), and there was already a settlement in which Wilmer Hale -- the law firm responsible for the screwup -- was to pay The Medicines Company $18 million up front, and an additional $214 million if a generic were to come on the market prior to June 15, 2015.  That's all much-needed money that had all but landed in the laps of consumers and taxpayers (much the way windfalls repeatedly land in the laps of the already-moneyed interests), but Congress passed a law to snatch it right back.  In doing so, Congress was taking consumer money (which after all, is what pays for health care, including drugs like those of The Medicine Company) just as surely as it would have in a tax increase.  And yet the Republicans and Democrats both loved it, because they didn't have to call it a "tax."

The NY Times reported that "several dozen" of Wilmer Hale's lawyers went to work for the Obama administration.  Seems like a lot, but there was a lot at stake, I suppose.

To be fair, I should mention that the Medicines won a case in district court about how the deadline should be calculated.  But the decision in that case is under appeal, so their patent extension, until this Act of Congress, remained very much in doubt.

Here is Greta van Susteren's take:

So the question is -- if Congress was so willing to rip off consumers and taxpayers in this aspect of the patent reform legislation, why should we believe anything else they tell us about it?  As I've already mentioned, the move toward international harmonization (with the first-to-file rule) would seem to be opening the door all the wider for foreign interests (like the Chinese, which has a plan to exponentially increase their patent filings in the coming years) to obtain patents in the US that may well have the effect of slowing innovation, rather than promoting it.  Yes, it will help our multinationals get patents in China, but does that really help Americans, given that the multinationals aren't necessarily paying taxes here anyway?

And for patent geeks, the virtual removal of the "best mode" requirement was another giveaway.  Yes the "requirement" still exists, but now it's practically unenforceable.  Q:  What do corporations do when laws can't be enforced?  A:  Whatever they want.

In this case, the public loses again.  One of the benefits of the patent system was that patents are supposed to disclose cutting edge technology as it is being developed, and in particular to disclose the inventor's own preferred way of implementing the invention (i.e. the "best mode").  That's not an enforceable requirement any more, which means that patent documents will become more generic and less helpful to anyone trying to learn from them.  I.e. to the public.

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