Richard Epstein on the issue of patent scope:

This issue of patent scope is now before the Supreme Court in the important case of Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc. Metabolite had a patent for a particularl process for detecting two vitamin-B deficiencies, for cobalimin or folate, which depended on "correlating an elevated level of homcysteine in said body fluid with a deficiency in cobalmin [sic] or folate." No one doubted that its particular diagnostic tst was patentable. But the Supreme Court has taken the case to ask whether a patent extends to a discovery of the "correlation" without more. If the patent is valid, then no rival company can market any other diagnostic test that exploits this relationship without a license from Metabolite. . .

[T]he case looks dangerously like patenting some law of nature so as to exclude from the markt all competitors with superior tests. . . The proper result is to reject this and all other correlation claims.

More on patent scope and biotech:

The current strong protection of isolated and purified substances has lead to immense investment, which led between 1980 and 2001 to some 8,000 gene patents. It is doubtful this outpouring of research would have taken place without the exclusive rights offered by the patent system. Thus in March 2000, when President Bill Clinton doubted out loud the validity of genomic patents, 10 key firms lost $30 billion in market capitalization overnight. If the current law were defective, then the stock of other firms should have soared because of the new opportunities open to them. But that did not happen.

posted by Solveig Singleton @ 8:33 AM | Academia , Biotech , Liberty and IP , Markets: Business, Investment & Innovation , Patents , Supreme Court

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment (0)

Yesterday the Court heard oral arguments in the Ebay v. MercExchange case. The first round of assessments suggests that the Court was not particularly sympathetic to Ebay's attacks on injunctions, but is very aware of the issue of patent quality and the link between the two (i.e. improvements to patent quality will strengthen the legitimacy of injunctions).

Promote the Progress links to J. Matthew Buchanan's article in Law.com (you need a subscription--how come one has to pay for all the good stuff? Oh, wait, that's a good point. Doh!).

An article by Nathan Mhyrvold in the WSJ also addresses the Ebay case, and inventors' rights. Excerpt:

The telling point in the troll debate comes if you look where tech companies pay big money for patents. It's not trolls, but rather small and completely legitimate patent holders -- the same ones that would be hurt by the "reform" proposals or the eBay case. As one observer puts it, Goliath is crying "Unfair! Take David's sling away!"

Excerpts from observations on the Ebay oral arguments from Hal Wegner:

Continue reading Supreme Court Roundup: Ebay . . .

posted by Solveig Singleton @ 8:21 AM | Big Tent , Biotech , Patents , Pharma , Prices, Terms, and Licensing , Software

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment (0)

A study of biotech patents. A quote from the abstract:

This Article finds little evidence that the rise in biotechnology patenting is adversely affecting innovation. Counting patents, as it turns out, offers few insights on its own. One must also have a measure of the geographic scope of the scientific commons and the distribution of patents within it. These findings lead to a cautionary corollary for patent metrics generally - fundamental uncertainties associated with the statistics of innovative success cannot be overcome by sophisticated empirical methods. Ironically, the current enthusiasm for empirical work may have caused academics to reify abstract statistics over the obvious complexity of innovative processes.

Go figger.

posted by Solveig Singleton @ 8:55 AM | Biotech , Patents

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment (0)

Thanks to J. Matthew Buchanan of Promote the Progress for alerting me to this one. The Senate has issued a statement on patent reform, which includes the following "sense of" statement:

Finally, and perhaps most interesting, it suggests that "specific industries with specialized patent needs" should be treated differently by the patent laws.

Is this good policy? Or should patent law be technology neutral (as arguably required by treaty, but that I think is the least of the problems with this "sense of"). Is it really a good idea for the legislature to be crafting industry-specific patent rules? Isn't this a recipe for rent-seeking? Won't the rules always be backwards-looking, as economic conditions within industries are continuously changing? How would one accomodate new industries--before one knows even what their needs are? Is this just an excuse to avoid addressing the really thorny problems of how to improve the patent system overall?

posted by Solveig Singleton @ 2:07 PM | Academia , Big Tent , Biotech , Patents , Pharma , Software

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment (0)

The FTC testimony of Prof Stephen B. Maebius has been said to cast some light on the subject of why injunctive relief is vital to pharma and biotech, but not to software and electronic equipment. Very readable, with lots of business history and examples. Essentially, he explains that defensive patents came to be widespread in EE and software, and a few other fields (cars), but not in pharma and biotech. What I don't fully understand on reading this is why. Is it just that pharma and biotech patents require much more research (expensive) to obtain so their use has been restricted to offensive? (This has been part of the argument against allowing software patents at all; countered by the argument that development costs in tech fields are likely to be changeable over time and patent law needs to be tech neutral--one can't very well have biotech lose patent protection should development costs drop). Or is the spread of defensive patenting in certain sectors partly a cultural/historic thing--once one firm starts doing it, the others must follow suit? I welcome emails on this question.

posted by Solveig Singleton @ 12:32 PM | Big Tent , Biotech , Patents , Patents

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment (0)

The Institute for Policy Innovation has an oped on Europe and biotech patents. Its point is that Europe, not content with damaging the underdeveloped world through subsidizing its own agriculture, "also supports so-called trade reforms to require disclosure obligations for biotechnology patents which, if adopted, would deal a death-blow to nascent biotechnology in Africa, as well as in Asia and Latin America."

posted by James DeLong @ 5:20 PM | Biotech

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment (0)

Infatuation with the economic power of new knowledge can be a dangerous thing.

bizjournals notes that states and cities are salivating to attract biotch, on the theory that it is "next big thing." But one economist points out:

Unlike information technology, for example, biotech advances "are not systematically cheaper than the things they replace," he says. New drugs, for example, tend to be expensive. Biotech also won't produce economywide productivity improvements like computers have.

In addition, . . . controversies over stem cell research, therapeutic cloning and bioengineered foods could hamper biotech just like environmental concerns stymied nuclear power.

The article continues:

As of last year, there were only 1,444 biotech companies in the United States, according to Ernst & Young. These companies employed just 200,000 people. The 330 publicly traded biotech companies in America lost a net $4.3 billion last year. The number of profitable biotech companies can be counted "on a partially severed hand," says [Rob DeRocker, executive vice president of Development Counsellors International].

Link from Infectious Greed.

posted by James DeLong @ 2:19 PM | Biotech

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment (0)