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04. 1.2008

Differing Estimates of Patent Litigation Costs

IAM Magazine reports on differing estimates of patent litigation costs-

All change at End Software Patents again. The organisation has now downgraded its claims of the total costs involved in software patent litigation in the US from $30.4 billion per annum to $11.2 billion per annum. This follows an email that both myself and Ben Klemens, the executive director of End Software Patents, received from Jim Bessen and Mike Meurer concerning the stats used by the organisation which, it stated, were based on the two men’s research.
...
Interestingly, while Bessen and Meurer (conservatively) estimate that the current total cost of software patent litigation in the US is $8 billion, No Software Patents has the figure at $11.2 billion. I make no comment, but merely point out the disparity.

However, the bigger picture is that on Friday End Software Patents was claiming that $11.4 billion is "wasted" each year “in litigation over software patents”. Now, after a brief flirtation with a sum in excess of $30 billion, the organisation is stating that $11.26 billion of costs are “incurred by software patent lawsuits”. This is something completely different and is probably a lot closer to the reality, although there is still no real explanation of what that extrapolated figure actually means.

Its important to point out that patent litigation costs are estimates (as well as piracy, industry expansion and economic growth projections). I look forward to following the discussion over patent litigation costs among the policy figures noted above.

posted by Noel Le @ 5:33 PM | Patents

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03.17.2008

Patents and R&D Spending

Joff Wild from Intellectual Asset Management comments on a recent criticism of patents and their role in R&D spending found in a new book by notable researchers Jim Bessen-Mark Meurer:

Bessen and Meurer take a look at the relationship between patenting and R&D investment, and come to the conclusion that: “Patents applied to small molecule drugs do seem to work like property; they deliver wealth to drug pioneers and encourage R&D. For most other technologies it's hard to find evidence that patents work as property. Similarly, over time and across countries and industries, patents sometimes deliver wealth and encourage R&D, but there's no evidence that this is generally true.” Essentially, they say, there is no evidence that patents lead to greater spending on R&D; in fact, the opposite could be true – that the existence of strong patent rights leads to less expenditure on R&D.

...when you think about it, it’s not really a huge surprise. Patents mark out territory and give companies the right to exclude competitors. But they also allow companies to know what their rivals are doing. If you know, for example, that one company has established a strong patent position in a particular area of technology, it makes little sense to spend a lot of money in that area. However, it does make sense to spend money in areas where there is a low concentration of patents. In this way, the existence of patents allows companies to hone their R&D and get more bang for their buck from what they do, meaning they do not have to spend as much on R&D to get effective returns...

Of course, there is no absolute proof that one thing follows on from the other; it could well be that there are reasons why what I am suggesting is wrong. But it would be good to know whether anyone has actually done some work on this. Maybe it is something that Bessen and Meurer look at in their book and will discuss in another PatentlyO article. If they haven’t and don’t, they should.

Wild's argument that patents may decrease duplicative innovating activity is well supported in the patent literature. I'd be interested to see a Bessen-Meurer reply based on their empirical research (admittedly, I haven't looked at their book, which may address the topic).

Granted, the issue of R&D spending and patents is often confusing. The Free Culture-Software Movements would argue that R&D spending is not necessary for innovation, thus there is no need to have patents help innovators recoup investments and deter free-riding. On the other hand, some economic research criticizes patents for not increasing R&D investment. Taking as a baseline the Free Culture-Software Movements' view that R&D spending is not essential for innovation, the economic argument that patents are not important because they do not encourage R&D spending becomes moot. I'd enjoy seeing a debate between the Free Culture-Software Movements and Bessen-Meurer on this subject.

posted by Noel Le @ 7:31 AM | Patents

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01.22.2008

Stockholm Network on Developing Nations & Pharma IP

A new paper from the Stockholm Network on developing countries and pharmaceutical patents. In a review of the empirical literature, the report finds, among other things:

Continue reading Stockholm Network on Developing Nations & Pharma IP . . .

posted by Solveig Singleton @ 1:11 PM | International , Patents , Pharma

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IPO Prediction on Patent Reform Legislation

The patent reform debate continues with commentary on Sen.

According to Hal Wegner, the Intellectual Property Owner's Association reports that

Sen. Patrick Leahy (D-VT) will attempt to pass a revised version of S. 1145 in the Senate in February. Major amendments likely will not be available more than a few days in advance of Senate consideration....If the Senate does pass a bill, it likely will be sent to the House for swift passage by the House without amendments, eliminating the need for a Senate-House conference.

Whether the votes are there is open to question.

posted by Solveig Singleton @ 12:57 PM | Patents

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11.28.2007

More WHO Antics--Roger Bate Reports

The American has an article by Roger Bate assessing current compulsory licensing trends at WHO:

The drug companies have tried voice: they have pointed out the need to make some profit from middle-income markets; they have complained to governments, activists, the media, and anyone that will listen; and they have tried litigation and threats of exit. Perhaps it is time to actually try exit.
The first to take action might be Novartis. According to several sources, the company has shelved plans to build a $500 million factory in Brazil that would manufacture an anti-meningitis vaccine.

posted by Solveig Singleton @ 8:12 AM | International , Patents , Pharma

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11.27.2007

Patents, Meds, and the Developing World: Clips & Links

Recently, there are reports of more compulsory licensing for 20 more drugs in Thailand; and a conference is announced to celebrate this strategy.

Hence this series of links and clips.

On April 11, http://www.africasia.com/services/news reported on a plan that seems to implicitly suggest that African states might set aside an array of patents (sorry, no present link):

"We need to produce (medicines) in Africa. We have the potential, why do we want to take them from outside when we can take it in Africa?" Mamadou Diallo, chief pharmacist in the AU commission's medical services directorate, told AFP.
"The main objective is to identify which kinds of medicines we are going to produce, essential drugs we need for Africa, and who is going to produce these drugs."

Many African countries currently rely on India and China for imports of affordable generic drugs, but both countries are subject to patent laws which threaten Africa's access to the medicines.

According to Diallo, Africa has all the resources and capacity at its disposal to manufacture essential medicines for the opportunistic infections like tuberculosis, malaria and HIV/AIDS which plague the continent.

It is sad that the plan to produce the drugs in Africa apparently does not extend to actually inventing and developing more such drugs in Africa--or then the patents would be important.

Contrast Alec Van Gelder's article on African medicines:

The UN Economic Commission for Africa endorses fears that “drastic trade liberalization, particularly substantial reductions in tariff, could entail, for instance, loss of tariff revenue hence fiscal difficulties.” The anti-globalisation group Oxfam issued a 128-page document in 2005 called “Why Developing Countries Need Tariffs”, as part of the Trade Justice Movement coalition.
All of this means that many religious, aid and international organisations think incomes for bureaucrats matter more than prices for citizens. They also believe that tariffs protect local industries and allow them to grow up into competitive industries.

Thus Tanzania imposed on 26 July a 10 per cent tariff on imported medicines, to protect what it called its “infant medicine industries.”

What about real infants? The immediate effect of this new tariff will be deadly. “Low income of the majority of the Tanzanian population hinders their accessibility to health services as medicines and other services are unaffordable,” according to the World Health Organisation. The average Tanzanian earns US$744 annually--a 10 % increase in the cost of medicines can make the difference between life and death for the 21.7% of the population that suffers from malnutrition.

While few of the world’s poorest--and least healthy--countries have any viable pharmaceutical sectors, a shocking number apply similar taxes and tariffs on medicines. A 2005 American Enterprise Institute study revealed that over 33 countries impose levies higher than the new Tanzanian rate.

Continue reading Patents, Meds, and the Developing World: Clips & Links . . .

posted by Solveig Singleton @ 10:02 AM | International , Patents

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11. 7.2007

Patent Post- KSR-Roundup... Guidelines, Cases and Commentary

From LegalTalk Network, a podcast featuring Matthew Buchanan and other patent experts going over the implications of KSR. This is an older podcast--it's instructive to review it to see if the trends are as expected.

Continue reading Patent Post- KSR-Roundup... Guidelines, Cases and Commentary . . .

posted by Solveig Singleton @ 12:41 PM | Patents , Supreme Court

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10.29.2007

Patent Reform 2007 Commentary

Some recent commentary on the patent reform legislation.

From Matt Buchanan's Promote the Progress; cheaper iPods, fewer cures?

Robert Armitage on how the courts have beaten Congress to the punch.

And a quote from Robert Cresanti, now with Ocean Tomo:

"[Ocean Tomo] will still proceed with the exchange (even if pending Congressional reforms pass), but many patents may be devalued.", he warned. "Our hope is the Senate will come around to the same conclusion we have - that there is no pressing need for reform in light of what the courts and USPTO have done.", he added.

posted by Solveig Singleton @ 8:44 AM | Legislation and Legislators , Patents

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10.21.2007

Patents, R&D, Innovation

A new paper on the relationship between patents, R&D and innovation- Denicolò, Vincenzo, Do Patents Over-Compensate Innovators? Economic Policy, Vol. 22, No. 52, pp. 679-729, October 2007.

Is the current level of patent protection too high or too low? To address this issue, this paper reformulates the theoretical analysis of the optimal level of patent protection to take into account the empirical findings of the innovation production function literature. This literature finds a strong relationship between R&D spending and inventions... The paper then assesses the current level of patent protection, exploiting estimates of the private and social returns to R&D taken from the empirical literature and other available sources. Although more research is needed for a more precise assessment, the evidence available suggests that patents do not over-compensate innovators.

A notable detail is that the paper addresses two issues- the public and private value of patents.

posted by Noel Le @ 12:09 PM | Academia , Patents

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Injunctive Relief and Non-Practising Patent Holders

Several scholars have released a paper on property and liability rules in patent infringement cases- Denicolò, Vincenzo, Geradin, Damien, Layne-Farrar, Anne and Padilla, A. Jorge, "Revisiting Injunctive Relief in High-Tech Industries with Non-Practicing Patent Holders (September 2007).

Injunctive relief is at the center of the intellectual property debate over market power abuse. Some scholars, with fears of patent holdup and royalty stacking in mind, have advocated limiting the right to obtain an injunction. In particular, some have called for categorical denials of injunctions for any “non-practicing” patent holder or whenever the patent in question is but one component of a larger, complex product incorporating multiple patented technologies.

...we examine the injunctive relief policy proposals using an error cost framework. We find the theory these proposals rest upon to be overly restrictive and therefore likely to result in substantial “false positives”, where patent holders with no designs of patent holdup are nonetheless denied injunctive relief. Moreover, the available empirical evidence does not support the position that patent holdup and royalty stacking are pervasive enough problems to warrant significant policy reform.

...we argue that the recent Supreme Court eBay decision can and should be read as a return to a balancing test, where costs and benefits are weighed carefully before granting or denying a patent injunction.

This is important and timely research.

posted by Noel Le @ 11:58 AM | Academia , Patents

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10. 4.2007

Mossoff on the History of Patent Policy

posted by Noel Le @ 1:16 PM | Academia , Patents

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09. 7.2007

House Patent Reform Debate

posted by Amy Smorodin @ 9:48 AM | Patents

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09. 5.2007