Intellectual Property

Vitter Amendment To Ban Drug Patent Settlements Would Raise Pharmaceutical Prices

by Greg Conko on March 22, 2013

in Health and Illness, Intellectual Property, Legal, Regulation

With time running out for the Senate to act on a continuing budget resolution, members are trying to find some magic pot of money that would mask the fact that our government spends far more than it raises in revenue. Tonight, it looks like Sen. David Vitter has resurrected an old proposal to ban what are known as reverse payment patent settlements — agreements in which brand name drug manufacturers pay generic firms not to challenge patents on the innovators’ drugs.

Critics, including the Obama administration and the Federal Trade Commission, call these settlements “pay-for-delay,” and argue that successful patent challenges would get generics to market sooner. In turn, they claim, that could save federal health programs billions of dollars every year, which is why the proposal is so popular with both Democratic and Republican members of Congress. A CBO analysis scored a ban proposed in 2011 as saving federal health programs $2.68 billion over 10 years.

The problem is, any alleged savings from a ban on these patent settlements is illusory because reverse payment settlements actually have the effect of getting generic drugs on the market sooner, thereby lowering drug costs, not raising them.

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Science And Technology Policy And The Democratic Convention

by Wayne Crews on September 4, 2012

in Economy, Features, Intellectual Property, Privacy, Regulation, Tech & Telecom

Post image for Science And Technology Policy And The Democratic Convention

Now it’s the Democrats’ turn to gather for their convention in Charlotte and one element of the platform in common with basic Republican philosophy is the case for government funding of basic science.

The Democrats are much more ambitious, however, in calls for the funding of “investment” beyond basic science. The word “investment,” in fact, appears 40 times in the just-released 2012 Democratic National Platform.

Indeed most agree with the notion that such a basic science policy is “unimpeachable,” as Fareed Zakaria’s, “How Government Funding of Science Rewards U.S. Taxpayers,” put it in the The Washington Post.

But needless problems arise when an institution with the power to tax and compel gets overly involved in the very production of knowledge itself.

Problems include seducing industry with funds, inviting cronyism, and federal “steering” when Washington has no business doing so.

The alternative “Platform” is creating a tax and regulatory environment favorable for all, not the favored few, to engage in scientific knowledge and wealth creation, potentially on scales far beyond those of today.

Today, we see examples of artificially created conflicts rooted in governmental science and tech policy:

  • Over the fundamental merit of basic vs. applied research (a false split in many ways).
  • Over relative impacts of private vs. public funding on discovery, knowledge creation and well-being.
  • Over the alleged objectivity of government vs. “industry” science, and the improper disdain for industry science in the marketplace of ideas that public funding abets.
  • Over the right to not fund research programs with which one disagrees or is indifferent toward.

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Google, Antitrust Antagonism, Patent Trolling, and Joseph Schumpeter

by Luca Gattoni-Celli on July 5, 2012

in Features, Intellectual Property, Regulation, Tech & Telecom

Post image for Google, Antitrust Antagonism, Patent Trolling, and Joseph Schumpeter

Google has been in the news lately for all the right reasons, but also some wrong ones. The FTC is investigating its use of patents held by Motorola Mobility, recently acquired in a deal thought by many to be as much about intellectual property as hardware expertise. The European Union has also fined Google on antitrust grounds, claiming that it unfairly leverages its dominance of online search to serve its promote its own content.

This is not the first time the technology, advertising, and media giant has faced pressure from regulators. Google has fingers in lots of pies. Its name is synonymous with the dominant search engine that made its reputation, and with search itself. It arguably boasts the most popular and capable email platform, Gmail, integrated with a constellation of cloud services and social networks including Docs, Play, YouTube, Maps, Picasa, and Drive. Indeed, the same integration that draws competitors’ ire and regulators’ scrutiny is a crucial element of the firm’s UVP. It has turned Android into a mobile operating system that rivals and in some cases surpasses Apple’s iOS. And its Chrome web browser recently overtook Internet Explorer as the most popular in the world, commanding almost a third of global market share barely four years after its release. The question is, does Google constitute a monopoly?

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Going to Jail for Linking? What Sen. Amy Klobuchar’s S. 978 Could Mean for You

by Luke Pelican on June 30, 2011 · 24 comments

in Features, Intellectual Property, Tech & Telecom

Post image for Going to Jail for Linking? What Sen. Amy Klobuchar’s S. 978 Could Mean for You

Earlier this month, the U.S. Senate Judiciary Committee unanimously approved S. 978, a bill that would expand the scope of felony criminal copyright infringement under federal law. While the legislation enjoys broad congressional support, a number of bloggers have slammed the bill on the grounds that it would allegedly impose criminal liability on lots of innocent U.S. Internet users.

In this essay, I’ll answer a few “Frequently Asked Questions” about the legislation — and explain why you should care.

Here are some links to get you up to speed:

  • Text of S. 978 as reported by the Senate Judiciary Committee on June 16
  • TechDirt’s latest commentary on S. 978
  • Electronic Frontier Foundation’s analysis of S. 978

If I embed on my website a YouTube video that turns out to be infringing and ten people watch it, in what circumstances could I be charged with a felony under S. 978?

Mike Masnick at TechDirt recently posed this question. To begin, federal law defines “public performance” in two ways:

  1. performing or displaying the protected material in a place open to the public or  in which it can be viewed by a “substantial number of persons” (not a small family or friends setting); or
  2. to transmit or communicate to such a place by using “any device or process,” regardless of whether the people viewing the material are in different locations and viewing it at different times, or in the same location viewing it at the same time

Streaming appears to fall under the second prong, as a recent White House Intellectual Property White Paper argued. This also comports with a 2010 case from the Second Circuit, in which the court observed that “[a] stream… like a television or radio broadcast, is a performance because there is a playing of the song that is perceived simultaneously.”  Thus, each stream of a copyrighted video could well constitute a public performance for the purposes of 18 USC 2319(b). As Masnick points out, under S. 978, you may be open to criminal liability in such a situation.

However, that only answers part of the question.  Embedding a video is linking to content which is potentially hosted elsewhere, so the act of embedding would not likely be direct infringement through reproduction or distribution of that protected content, though this is far from certain.  If you post copyrighted works and host them yourself for streaming, you could be charged provided you meet the other statutory criteria.

Terry Hart of Copyhype has a more nuanced view, arguing that even if the law would technically make criminals out of individuals who post infringing videos online, the chances of prosecution would be slim, especially given the limited resources of federal prosecutors and other considerations. Hart further notes that the higher standard of proof in criminal cases compared to civil infringement cases will serve as a check on rampant prosecutions.  But this sounds an awful lot like, “just because they can doesn’t mean they will.” Hart’s arguments, therefore, are unlikely to alleviate the concerns raised by skeptics of S. 978.

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PROTECT IP Act: The Good, the Bad, and the Ugly

by Ryan Radia on May 13, 2011

in Intellectual Property, Legal, Regulation, Tech & Telecom

Combating “rogue websites” is a top priority for many in Congress this year. Lawmakers have held several hearings over the past few months to explore ways to address these rogue sites, which are typically foreign-based websites that are dedicated to trafficking in counterfeit goods and/or facilitating unlawful copyright infringement. Most recently, on May 12, several U.S. Senators introduced the PROTECT IP Act (bill text). The bill would establish new legal mechanisms designed to enable the government and rights holders to combat Internet sites that are “dedicated to infringing activities.”

Congress deserves praise for incorporating several of the ideas we proposed last year in the context of COICA, a similar bill that was introduced — but not enacted — in the last session of Congress. As several dozen law professors warned last year, COICA lacked procedural safeguards, was overly broad in its scope, and risked hindering free expression by triggering “false positives” rendering lawful websites inaccessible. Compared to COICA, PROTECT IP represents a more balanced approach to fighting online copyright and trademark infringement while recognizing fundamental civil liberties.

However, in spite of these improvements, the PROTECT IP Act contains some troubling provisions that should concern lawmakers who believe in balanced, thoughtful intellectual property laws that “promote the Progress of Science and useful Arts.”

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YouTube Introduces “Copyright School” to Educate Infringing Users

by Ryan Radia on April 17, 2011 · 1 comment

in Intellectual Property, Regulation, Tech & Telecom

In the ongoing copyright debates, areas of common ground are seemingly few and far between. It’s easy to forget that not all approaches to combating copyright infringement are mired in controversy. One belief that unites many stakeholders across the spectrum is that more efforts are needed to educate Internet users about copyright. The Internet has spawned legions of amateur content creators, but not all of the content that’s being created is original. Indeed, a great deal of online copyright infringement owes to widespread ignorance of copyright law and its penalties.

For its part, Google yesterday unveiled “Copyright School” for YouTube users. As Justin Green explains on the official YouTube blog, users whose accounts have been suspended for allegedly uploading infringing content will be required to watch this video and then correctly answer questions about it before their account will be reinstated:

Of course, boiling down the basics of copyright into a four and a half minute video is not an easy task, to put it mildly. (The authoritative treatment of copyright law, Nimmer on Copyright, fills an 11-volume treatise.) Copyright geeks and fans of “remix culture” will appreciate that Google’s video touches on fair use and includes links to in-depth resources for users to learn more about copyright. It will be interesting to see how Google’s effort influences the behavior of YouTube users and the incidence of repeat infringement.

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Six Ways Congress Can Fix COICA Copyright Bill

by Ryan Radia on November 22, 2010

in Intellectual Property, Legal

Over at the Technology Liberation Front, I discuss the “Combating Online Infringements and Counterfeits Act” (COICA), which the Senate Judiciary Committee unanimously approved last week. The bill would enable the U.S. Attorney General to obtain a court order disabling access to web domains that are “dedicated to infringing activities.”

These “rogue websites” are a real problem, as the website Fight Online Theft explains, so it’s a good thing that Congress is working to address them. However, some of COICA’s provisions raise profound constitutional concerns, and the bill lacks adequate safeguards to protect against the unwarranted suspension of Internet domain names, as the website Don’t Censor the Net argues. The bill also doesn’t provide a mechanism for website operators targeted by the Attorney General to defend their site in an adversary judicial proceeding. This week, a group of over 40 law professors submitted a letter to the U.S. Senate arguing that COICA, in its current form, suffers from “egregious Constitutional infirmities.”

To address these concerns, CEI is urging Congress to amend COICA to provide for more robust safeguards, including:

  • Providing a meaningful opportunity for Internet site operators to challenge before a federal court an Attorney General’s assertion that their site is “dedicated to infringing activities” prior to the suspension of their domain name;
  • Requiring that the Attorney General, upon commencing an in rem action against a domain name, make a reasonable and good faith effort to promptly notify the site’s actual operator of the action;
  • Clarifying the definition of an Internet site “dedicated to infringing activities” to ensure that websites with nontrivial lawful uses that facilitate infringing acts by third parties will not face domain name suspension if their operators:
    • Comply with legitimate takedown requests from rightsholders;
    • Do not receive a financial benefit directly attributable to infringing activities;
    • Do not design their site primarily for the purpose of facilitating infringing activities; and
    • Do not induce infringing activities.
  • Instructing the Department of Justice and federal prosecutors not to request that domain name registrars, registries, or service providers suspend domain names that have not been deemed to be “dedicated to infringing activities,” or otherwise unlawful, by a federal court; and
  • Requiring the Department of Justice to compensate domain name registrars, registries, and service providers for any reasonable costs they incur in the course of disabling access to infringing domain names.
  • Eliminating the provisions requiring the Department of Justice to publish a public listing of Internet Sites “alleged to be … dedicated to infringing activities” but that have not been the target of a successful in rem action by the Attorney General to disable access to their domain name.

Image credit: minkj’s flickr photostream.

Supreme Court Dooms Chicago Gun Ban; Obama Judicial Nominees Oppose Gun Rights; Religious Clubs Lose First Amendment Case; Removal of High-Ranking Bureaucrats Made Easier

by Hans Bader on June 30, 2010

in Intellectual Property, International, Labor, Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

The Supreme Court doomed Chicago’s handgun ban Monday by ruling 5-to-4 that the Second Amendment applies to state and local governments like Chicago, not merely the federal government.  (Most guarantees in the Bill of Rights are deemed so fundamental that they apply to both state and federal governments, but a few rights deemed trivial, like the right to a jury trial in lawsuits seeking over $20, only are applied by the Courts to the federal government, not the states.)  In 2008, the Supreme Court ruled that the Second Amendment protects the individual right to possess a handgun in a federal enclave, in striking down a handgun ban in Washington, D.C., in District of Columbia v. Heller.  Chicago’s ban is quite similar to the one found unconstitutional in Washington, D.C., so the Supreme Court’s ruling Monday in McDonald v. City of Chicago dooms Chicago’s gun ban.

In 2009, President Obama’s first Supreme Court nominee, Sonia Sotomayor, claimed before her confirmation to accept the Supreme Court’s ruling in Heller as binding precedent.  But on Monday, she joined a dissent by the Supreme Court’s four liberal justices calling for the Heller decision to be overruled.  Second Amendment scholar David Kopel says that Sotomayor was not candid, noting that her opinion “contradicted” what she told the Senate before the Senate confirmed her to the Supreme Court.  It is likely that future liberal Supreme Court nominees will pretend to support gun rights until they are confirmed, then vote against such rights once on the Court.

Obama’s current Supreme Court nominee, Elena Kagan, lumped the NRA together with the KKK as “bad guy orgs” while serving in the Clinton administration, suggesting that she will consistently rule against gun owners if her nomination is approved by the Senate.  Kagan failed to defend federal laws protecting crime victims while serving as Solicitor General.

As a Harvard dean, Kagan blocked the military from recruiting, in defiance of a federal law requiring access for military recruiters.  Kagan claimed her opposition was based on the military’s exclusion of openly-gay soldiers, not hostility to the military in general, but this is hard to square with the fact that she had no problem letting the Saudis sponsor an Islamic studies program at Harvard Law School, even though the Saudis flog and execute gay people, and she had no problem serving in the Clinton administration, even though Clinton signed into law both the restrictions on gays in the military she claimed to object to (the Don’t Ask, Don’t Tell policy), and the ban on federal recognition of gay marriages contained in DOMA.

The Supreme Court Monday also ruled that religious clubs can be forced by colleges to admit atheists and others who disagree with the club’s religious perspective as members, as long as the college requires this as part of a general policy of banning clubs from discriminating based on any characteristic.  The Supreme Court’s four “conservative” justices dissented against this ruling limiting the First Amendment’s freedom of association, while moderate Anthony Kennedy joined the Supreme Court’s liberal bloc in ruling against the religious clubs in Christian Legal Society v. Martinez.

In Free Enterprise Fund v. PCAOB, the Supreme Court, in a 5-to-4 ruling, cut back on restrictions on the ability to remove high-ranking bureaucrats, ruling that provisions of the Sarbanes-Oxley law that kept anyone from removing members of the Public Company Accounting Oversight Board except for willful misconduct unconstitutionally infringed on the constitutional separation of powers, which requires that important government employees be subject to some degree of accountability to higher-ups in the executive branch.  However, the Supreme Court left intact the bulk of the Sarbanes-Oxley law.  The red tape adopted by bureaucrats under Sarbanes-Oxley has driven many IPOs and American jobs overseas.  The red tape costs the economy $35 billion a year, according to the American Electronics Association, and it did nothing to prevent the mortgage meltdown, Bernard Madoff’s $50 billion fraud, or the faulty valuation of sub-prime mortgage-backed securities that helped spawn the financial crisis.

The Supreme Court overturned a ruling that allowed business methods to be treated as exclusive property under the patent laws, but did not definitively rule out the patenting of business methods, in Bilski v. Kappos.

Gene Patents Ruled Invalid

by Greg Conko on March 30, 2010

in Culture, Health and Illness, Healthcare, Intellectual Property, Legal, Nano & Biotech, Personal Liberty, Regulation, Zeitgeist

In a pretty remarkable move, the United States District Court for the Southern District of New York yesterday held that genes can not be patented merely because they have been isolated and purified out of their surrounding DNA.  Attorneys from the American Civil Liberties Union and the Cordozo Law School’s Public Patent Foundation, working on behalf of the Association for Molecular Pathology, challenged the validity of patents held by Myriad Genetics and the University of Utah on the BRCA1 and BRCA2 genes (particular mutations in which are associated with breast cancer).  District Court Judge Robert Sweet held that isolated “wild-type” DNA sequences are “naturally-occurring” things, and are therefore not patentable subject matter under the U.S. Patent Act [read the full decision in PDF format here].

The decision also invalidated Myriad Genetics’ patents on all methods of comparing the sequences of “normal” and “mutated” BRCA1 and 2 genes because they are “abstract mental processes,” which are also unpatentable subject matter.  Although the case addressed only the BRCA1 and 2 genes, the decision now calls into question the validity of some 2,000 other gene patents that have been granted by the Patent and Trademark Office since the National Institutes of Health applied for the very first gene patent back in 1991.

Natural phenomena have always been unpatentable under the U.S. Patent Act, so the existence of patents on wild-type genes has long posed a bit of a paradox.  However, as long ago as 1911, a federal court permitted the patenting of adrenaline, on the grounds that, once purified from the human body, the chemical existed in a substantially different form from that which was not extracted and purified.  Similarly, patents on isolated genes have been rationalized on the grounds that they do not appear in nature in a purified and isolated form.  Importantly, the scope of the patents on adrenaline or the BRCA1 gene extended only to those that were isolated from the human body.  That’s why, for example, my mom and sisters haven’t been infringing the BRCA1 patents merely by having those genes in their DNA.

This is also why it is not perfectly clear that this District Court decision will stand up on appeal.  Judge Sweet and the plaintiffs may be right that the isolation and purification doctrine is merely “a ‘lawyer’s trick’ that circumvents the prohibitions on the direct patenting of the DNA in our bodies but which, in practice, reaches the same result.”  But, it’s a lawyer’s trick with a very long pedigree, and which has repeatedly been upheld in analogous situations over the past hundred years.

Nevertheless, I’ve long felt uneasy about the patenting of wild-type genes.  This is quite different from, for example, intentionally changing the genetic structure of an organism to one that doesn’t exist in nature, which by all reasonable thinking amounts to a genuine invention.  Judge Sweet’s opinion will have no effect on, for example, the ability to patent a new plant variety developed by conventional breeding techniques or a microbe genetically-engineered with a novel gene that makes it helpful in cleaning up oil spills, both of which have been upheld by the U.S. Supreme Court.  These are, in fact, “new and useful process[es], machine[s], manufacture[s], or composition[s] of matter,” subject to patenting under the Patent Act.  An isolated gene (or an isolated chemical for that matter) that already exists in nature, and which has not been modified by human hands, just isn’t.

Spending the time and resources to identify, map, sequence, and characterize a gene is a very useful activity, and one that the beneficiaries of which ought to be willing to pay for.  If Judge Sweet’s decision does stand, and all gene patents become invalid, then I would expect to see an awful lot less of this very useful activity.  That’s appears to be something that those cheering loudest for this decision seem not to have acknowledged.  Still, I suspect that permitting the patenting of a product of nature is not the way to go about optimizing the level of such activity.

Regulation of the Day 110: Watching the Super Bowl

by Ryan Young on February 5, 2010

in Intellectual Property, Regulation, Regulation of the Day

Hosting a Super Bowl party this Sunday? You might be interested to know that it is technically illegal to watch the Super Bowl on a tv larger than 55 inches under certain conditions.

Ars Technica’s Nate Anderson was kind enough to look through 17 USC 1.110 and lay out what’s legal and what isn’t.

This is serious stuff. The NFL sued a church three years ago for holding a Superbowl party… and won.

(hat tip to my fiancée)

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