anne said in reply to anne...
October, 2018
Is Intellectual Property the Root of All Evil? Patents, Copyrights, and Inequality
By Dean Baker
By Dean Baker
The Logic of Creating Intellectual Property
Grants of intellectual property are explicitly designed as a mechanism by which the government provides incentives for certain types of activity. The wording in the Constitution could not be clearer on this point. In listing the powers of Congress in Article 1, the eighth item listed is:
“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
This is very clearly describing the monopolies granted by patents and copyrights as policy tools to promote innovation and creative work. Somehow this basic fact — that patent and copyright monopolies are tools of public policy — seems to have largely disappeared in public debate. The point matters because everything about these monopolies is determined by government policy, not facts of nature or the course of technology.
At the most basic level, the duration of the monopoly is the result of an explicit decision as to how much incentive to provide. The duration of both patents and copyrights have been lengthened in the last four decades. In the case of patents, the duration had varied by type but ranged from 14 to 17 years from the date of issuance. It is now 20 years from the date of application. There have been efforts to make it even longer. Copyright duration had been 55 years until the mid-1970s. Since then it has been raised three times and now stands at 105 years. It had been just 28 years from 1790 until 1831.
In addition to setting the length of patent and copyright protection, the government also decides what items are subject to these protections. In the last four decades, the realm of items potentially subject to patent protection has been expanded to include biological organisms, software, and business methods. This has vastly expanded the range of potential patents.
Beyond the question of whether an item should be subject to patent protection, there is also a question of how broadly a patent should be applied. Apple famously claimed a patent on its mouse/menu system of computer operation. It tried to block the introduction of Microsoft’s Windows system, claiming it had the same “touch and feel” as Apple’s system, although Apple ultimately lost the case. Amazon attempted to patent one-click shopping in the early days of the commercial Internet. It also lost its case.
While most people would probably agree that honoring these incredibly broad claims is unreasonable, both companies presumably thought they had a serious legal argument or they would not have bothered with the expense of pursuing their cases. This means it is possible that courts would have decided that any company using menu-based computing or one-click shopping had to pay royalties to Apple or Amazon for the privilege.
There is also a question of what inventions meet the novelty requirement for a patent. Under India’s patent system this requirement imposes a high standard, especially in the case of prescription drugs. Typically, to get a patent, India requires that a drug involve a new molecule. This has prevented many drugs that are patented elsewhere from getting patent protection in India. For example, the cancer drug Glivec, which sells for tens of thousands of dollars for a year’s treatment, was denied a patent in India because its courts ruled that it did not involve a novel innovation.
The US patent office is notoriously lax in the standards it applies to patents. It famously issued a patent on a peanut butter and jelly sandwich in 1997. Many companies, especially in the pharmaceutical industry, have taken advantage of this laxness to get frivolous patents. Even a patent of dubious validity may allow a company to extend the duration of its monopoly for several years.
This brings up another important aspect of policy, the rules on enforcement....
DeDude said in reply to anne...
Worth noting that NAFTA 2.0 includes increased copyright and medicine patent protections. Those lower drug prices promised by the Orange candidate will have a hard time materializing.
anne said in reply to DeDude...
Worth noting that NAFTA 2.0 includes increased copyright and medicine patent protections. Those lower drug prices promised by the Orange candidate will have a hard time materializing.
[ Especially important, we need to develop this further. ]
anne said in reply to DeDude...
Jared Bernstein @econjared
This drives me nuts: Trade boosters whine about higher car prices from better Mexican labor standards in USMCA but say not a peep about extended patents boosting drug prices. Apparently, some protectionism is OK.
Trump’s USMCA delivers big wins to drugmakers, oil companies and tech firms
5:13 AM - 3 Oct 2018
Tom aka Rusty said in reply to anne...
Auto prices are a lot easier to understand than the incredible complex and convolulted pharma system.
anne said in reply to Tom aka Rusty...
Auto prices are a lot easier to understand than the incredible complex and convoluted pharma system.
By Dean Baker