A modest NIH grants program might be appropriate!

An article in the current issue of The Economist indicates that the appropriate substitution of deuterium for normal hydrogen in drug molecules extends the time that the drug remains in the body. (Deuterium is a form of hydrogen with an extra neutron. The change in the nucleus changes the chemistry of the atom and of molecules in which it is substituted for normal hydrogen.) This reduction of the frequency with which a medication has to be taken can be quite useful in some therapeutic applications. The article suggests, however, that

examination of the patent literature found that the American patent office has started rejecting applications for deuterated versions of existing drugs. Deuterating, too, has become an obvious practice.

Without patent protection, I wonder if the holders of the original patents on the drugs (assuming that they are still under patent protection) will find it economically desirable to produce deuterated versions of their products. Will generic companies find it profitable to produce the deuterated versions of drugs?

There ought to be some means to assure the public that useful products within the reach of our technology are brought to market, especially if they are pharmaceutical, and thus of direct benefit to patients. Perhaps the government should set up a grants program to encourage such product development.

Another Oldie but Goodie!

Lawrence Lessig, the Net’s most celebrated lawyer, cites John Philip Sousa, celestial copyrights and the "ASCAP cartel" in his argument for reviving our creative culture.

Media Piracy May Be With Us for the Foreseeable Future

These are the major findings from a study of media piracy published earlier this year:

• Prices are too high. High prices for media goods, low incomes, and cheap digital technologies are the main ingredients of global media piracy. Relative to local incomes in Brazil, Russia, or South Africa, the retail price of a CD, DVD, or copy of MS Office is five to ten times higher than in the US or Europe. Legal media markets are correspondingly tiny and underdeveloped.
• Competition is good. The chief predictor of low prices in legal media markets is the presence of strong domestic companies that compete for local audiences and consumers. In the developing world, where global film, music, and software companies dominate the market, such conditions are largely absent.
• Antipiracy education has failed. The authors find no significant stigma attached to piracy in any of the countries examined. Rather, piracy is part of the daily media practices of large and growing portions of the population.
• Changing the law is easy. Changing the practice is hard. Industry lobbies have been very successful at changing laws to criminalize these practices, but largely unsuccessful at getting governments to apply them. There is, the authors argue, no realistic way to reconcile mass enforcement and due process, especially in countries with severely overburdened legal systems.
• Criminals can’t compete with free. The study finds no systematic links between media piracy and organized crime or terrorism in any of the countries examined. Today, commercial pirates and transnational smugglers face the same dilemma as the legal industry: how to compete with free.
• Enforcement hasn’t worked. After a decade of ramped up enforcement, the authors can find no impact on the overall supply of pirated goods.

Not a good set of conclusions for those who would see greater returns from media.

Read:

• An article in The Economist citing this study
• The blog following this study

Trends in Patent Applications

Source: The Economist

It is perhaps interesting to look at this history of patenting. The obvious feature of the chart is that the total patenting activity in these places has expanded greatly in the six decades covered.

In 1950, the United States was dominant. Since that time, while the United has greatly increased its patenting, other countries have also increased rapidly. In fact there was a period of three decades in which Japan out-patented the United States.

The European Patent Office opened in 1978. Before that time individual European nations must have been patenting, but the decimated economies left from World War II would have limited the frequency of inventions in Europe in the period prior to the founding of the European Patent Office.

In the more recent decades one can see the rapid increase of patenting in China, South Korea and more recently India. Even though the rate of patenting in Japan has dropped in recent years, it appears that East Asia is innovating more rapidly than North America of Europe. That may be partly due to the emphasis on manufacturing in East Asian economies as compared to the emphasis on services in North America and Europe.

The Architecture of Access to Scientific Knowledge

The Architecture of Access to Scientific Knowledge from lessig on Vimeo.

Lawrence Lessig Lecture at CERN, Geneva, Switzerland, 18 April 2011: A new talk about open access to academic or scientific information, with a bit of commentary about YouTube Copyright School.

The Patent Office has been working hard.

Source: Innovation Daily

One wonders whether the patent office maintained high quality of examinations in the face of a major expansion in the number of patents granted. I suppose most patents don't result in commercial products, and thus are never litigated. However, unmerited patents that are litigated cost a lot.

Should new medical tests from biotech be patent protected?

Source: "Lawsuit attacks patent giving company control over genetic test for cancer risk," Kari Lydersen, The Washington Post, March 2, 2010

A lawsuit has been filed claiming that Myriad's exclusive right to conduct tests for a specific mutation (which increases risks for breast and ovarian cancer) is unconstitutional.

The plaintiffs' attorneys, from the American Civil Liberties Union and a nonprofit called the Public Patent Foundation, hope the case will redefine how patent law is applied to genetic testing and research. They say that Myriad's patents on the isolated BRCA sequences impede research and women's access to their own genetic information through testing.

Comment: Clearly the BRCA sequence is a product of nature. The incrimination of the BRCA sequence as a risk factor for cancer would seem to be a scientific finding that should be in the public domain. On the other hand, the test for the BRCA sequence would seem to be sufficiently like other diagnostic tests to fall under patent protection laws, and indeed the epidemiological finding of BRCA implication in cancer risk might not have been possible without the diagnostic test.

The corporations maintain that without the incentive of high prices for the BRCA test ($3,120 in the example cited in the article), firms would not do the research and development to make such tests available. Experience indicates more willingness of corporations to fund R&D for commercial gain than of governments to fund R&D for the public good, so the corporate argument has some merit.

I guess I come down on strict application of term limits for patent protection and simplification of the processes which allow generic makers to market "me too" products after patent protection runs out. That policy works best if there is good health insurance available to all to assure that where public policy calls for tests to be applied, everyone can afford to have them done!

Europe Worries U.S. Bowing to ‘Industry’ in ACTA Talks

Source: David Kravets, Wired, November 30, 2009

"The European Union is alarmed the Obama administration is lobbying on behalf of the entertainment industry as part of the United States’ negotiations for an new international copyright accord, according to a leaked EU document.

The document, entitled European Union’s Comments to the US Proposal, suggests that the administration, in its closed-door negotiations over the Anti-Counterfeiting and Trade Agreement, might have forgotten that copyright interests extend beyond industry concerns.

The “most important provision” of the U.S.-proposed copyright section, according to the EU document, includes language noting that the United States’ “overarching objective” is to “facilitate the continued development of industry.” (.pdf)"

Comment: I suspect that the root of this controversy is the love of money, and different governments seeking an agreement that maximizes the income of their media industries. The situation is also complicated by fundamental differences in copyright philosophy:

• The European nations tend to emphasize natural rights as the basis for copyright -- that the author or creator of a work has a right to appropriate and enjoy part of the benefits that others accrue from his/her work.
• The United States tends to emphasize a utilitarian approach, seeking copyright protection that maximizes utility (within the United States) generated by the creative process.

Of course it is hard to measure the benefit that consumers realize from copyrighted products while the profits of media giants are quite visible. Of course, consumers are poorly organized to defend their interests, as indeed are the potential creators of new works that might be copyrighted, while the media giants are strongly organized to lobby legislative bodies.

So too, rights based approaches have difficulties balancing the natural rights of the creators with the rights of investors to profit from their investments, the rights of the consumers of creative products to free and affordable access to those products, and the rights of society as a whole to high levels of creativity.

I hope that the Nobel Prize given to Elinor Ostrom for her work on The Commons, and the work of others showing how common property approaches can increase creativity will be recognized.

Wired and the blogosphere are means of expression of opinion of a public that might be in opposition to those of industry.

Legislators take notice: my long-term representative to the Congress lost the last election in large part because he seemed to represent media interests rather than those of his constituency on Internet law! JAD

Copyright is being perverted to maximize commercial interests

From a review by Pamela Samuelson in Science:

In Moral Panics and the Copyright Wars, William Patry explains how copyright law has gone so far astray from its historical mission of promoting the progress of science (i.e., knowledge) by providing just enough protection to allow authors to obtain some reward for the artistic and literary works they contribute to our culture. Major copyright industries successfully convinced Congress that they have "property rights" in copyrighted works, such as sound recordings, and any music fan who downloads or shares her favorite music is a "thief" or a "pirate."

I suspect that Patry is right!

Copyright Laws are supposed to promote dissemination of information and opinion

The New York Times has an article which states:

Opposition is mounting in Europe to a proposed class-action settlement giving Google the right to commercialize digital copies of millions of books.

The settlement would permit Americans to buy online access to millions of books by European authors whose works were scanned by Google at American libraries......

The German government, supported by national collection societies in Germany, Austria, Switzerland and Spain, plans to argue against it and encourage writers to pull out of the agreement.

Comment: Surely governments should put the public benefits of free access to information ahead of the financial interests of a few publishing firms! JAD

"European companies are suffering from an ineffective patent system "

The Economist reports on the inefficiency of the European patent system, since patents authorized by the European Patent Office must be validated, translated and annually renewed in all" 27 members of the European Union and nine other European countries. Moreover, litigation of a patent dispute takes place in each affected country under the laws of that country.

At least some of the developing regions of the world have tried to establish effective regional intellectual property rights systesm.

Re: "1984"

Source: "Amazon Erases Orwell Books From Kindle," BRAD STONE, The New York Times, July 17, 2009.

In George Orwell’s “1984,” government censors erase all traces of news articles embarrassing to Big Brother by sending them down an incineration chute called the “memory hole.”

On Friday, it was “1984” and another Orwell book, “Animal Farm,” that were dropped down the memory hole — by Amazon.com.

Amazon apparently is learning to check for ownership of copyright before selling digital copies.

We are all learning that what we regard as our property may not be our property, simply because we have paid for it. Apparently Amazon not only removed the book from the memories of Kindles owned by its customers, but did so without prior warning, and in the process removed their bookmarks and notes made on the books, which should clearly have been the intellectual property of the authors of those notes. Indeed, I would guess that sufficient annotation, bookmarking and other inputs might constitute a transformation of the original document, and if so might give the Kindle owner/user intellectual property rights to the materials taken from their property by Amazon.

The article also says:

While the copyright on “1984” will not expire until 2044 in the United States, it has already expired in other countries, including Canada, Australia and Russia. Web sites in those countries offer digital copies of the book free to all comers.

The controversy caught my attention in part because I have been involved in a discussion with copyright issues with respect for Zunia, the new portal for international development information which has replaced the Development Gateway "knowledge communities". This whole area of distribution of digital documents is hard to understand, and hard to get on top of.

Institutions that work in information rich environments

Peter Eckersley in "Finding a fair price for free knowledge" (New Scientist, 24 June 2009) argues that the abundance of information in cyberspace may require us to rethink our institutions. Copyright law has been created in an environment in which information was a scarce commodity, and it was (seemed) reasonable to adapt market mechanisms to information by creating property rights to it. Eckersley points out that increasingly information is not scarce. Unlike air, which is also necessary but in such abundant supply that everyone can use it, information must be created and there probably needs to be institutions to provide incentives to people to create information.

Of course we already have institutions related to different kinds of goods. We differentiate public goods that must be subsidized by government from goods we can leave to the marketplace. Moreover, we are accustomed as a society to invent new institutions to deal with new goods. Think of the extension of patent rights to biotechnology or of copyright to electronic media.

It will be interesting to see what evolves.

Economist Debate on Copyright

The Economist held a debate on the thesis that current copyright laws do more harm than good. A vote held had 79% agreeing with that position and 21% feeling that while copyright laws can and should be improved, they still do more good than harm.

I find myself in the minority position, in part on the theory that no new law is a good law. But we have a reasonably effective system for the creation of content in many media under current laws, and without any copyright laws I think chaos would result and make things worse. On the other hand, I can not but believe that current laws should be improved to extend fair use and to enable more digital mixing.

I am a big supporter of open source, but I am not a fanatic! Lots of open source efforts fail, and there is a real benefit to copyright laws that provide incentives to creativity.

One aspect that would seem important is protection for cultural products. I don't want to see cheap Asian knockoffs of traditional African, Asian and Latin American designs taking international markets away from traditional craftsmen!

Interesting publication from WIPO

"The Economics of Intellectual Property: Suggestions for Further Research in Developing Countries and Countries with Economies in Transition"

Description: "The series of papers in this publication were commissioned from renowned international economists from all regions. They review the existing empirical literature on six selected themes relating to the economics of intellectual property, identify the key research questions, point out research gaps and explore possible avenues for future research."

WIPO Publication Number: 1012
Number of Pages: 216
Published in January 2009.

Can A Company Patent the Medical Application of Decision Support Systems?

Science magazine had a story in the February 27, 2009 issue about a dispute relating to the HIV Drug Resistance Data Base.

At the center of the dispute are U.S. patents owned by Advanced Biological Laboratories (ABL) S.A. in Luxembourg that involve computer methods to guide treatment of patients with HIV infection and other diseases. In early 2007, ABL notified Stanford that its popular Internet-accessible HIV Drug Resistance Database (HIVdb) possibly infringed two of the company's patents.

This seems to be one of the patents.

And this seems to be another.

I thought patents were to be awarded to inventions based that were innovative, non-obvious, and reduced to practice. I checked on the Wayback Machine, and the HIV Drug Resistance Data Base was online a couple of years before the patents seem to have been submitted.

The patents linked above were awarded for the application of expert systems to HIV diagnosis, which seems an obvious application of an approach that had been around for decades.

What is meant be reduction to practice in this kind of an application? I would think it would take more than a mock-up, but a system that could really provide useful information. Was such a system ever provided to the examiner?

Some 50 years ago I worked on the demonstration device for a patent application for an automatic price reader for grocery stores. The machine would not have withstood the rigors of real clerks in real stores, but it did recognize the prices in sample price tags. It really demonstrated that such a device could be built. For an expert system, the demonstration that a useful device could be built would be quite hard.

Am I missing something?

In any case, it certainly seems that someone should help to defend a medically useful website such as the HIV Data Base, and make the firms claiming patent infringement prove their claim!

IPR for Biologicals -- the legislative battle

Source: "Biotech Campaigns for Easier Access to Generic Drug Market: Richmond Firm Wants Congress to Revamp FDA Approval Process." by Kendra Marr, The Washington Post, August 13, 2008.

Chemical drugs are relatively simple molecules manufactured by chemical processes; if they are identical by standard chemical tests they can be assumed to have identical biological action. Biological drugs are relatively complex molecules manufactured in cell cultures by biological processes; even if indistinguishable by standard chemical tests, biologicals produced in different cell lines and different culture conditions may have different biological activities.

Intellectual property rights protection is used by the pharmaceutical industry to generate high levels of profits from new drugs, which can be used to fund future research and to repay investors for the relatively risky investments they have made in pharmaceutical R&D. When that protection is exhausted, new firms can market generic drugs and the competition drives the price of drugs down from the value to the patient towards their manufacturing costs.

There are all sorts of intellectual property rights used, including patents on products and manufacturing processes and on cell lines, as well as trade secrets protecting aspects of the manufacturing process, and trade mark protection to protect established brand names. Perhaps less well understood is "test data exclusivity" used for protection of clinical test data required to be submitted to a regulatory agency to prove safety and efficacy of a new drug.

Two decades ago.....Congress passed the Hatch-Waxman Act, which opened the doors for generic competition after patent expiration. Once a company demonstrates that its generic is chemically identical to a brand-name drug, it can use the approval of the brand-name drug as evidence that its copycat works just as well without additional human trials.

When the Hatch-Waxman Act passed.....lawmakers didn't think to give the Food and Drug Administration an abbreviated review process to swiftly approve biosimilars. Now, escalating health-care expenditures have prompted Congress to consider one. Last year, two bills were introduced into the House and are still pending. Then, in March, representatives drafted yet another.

A recent Congressional Budget Office analysis of a Senate bill, which passed unanimously last year in committee, found that biosimilar competition would reduce expenditures on biologics by about $200 million by 2013 and about $25 billion by 2018. These savings would represent about 0.5 percent of national spending on prescription drugs, at wholesale prices, over the next decade.

The main point of contention among these bills: the length of an innovator company's "data exclusivity."

Generic manufacturers and consumer groups are lobbying for five years data exclusivity for biologicals, the same length as chemical drug data exclusivity.

Because biosimilars aren't exact duplicates of the original drugs, they don't violate the original drug's patent, enabling legal distribution before patent expiration. As a result, the Biotechnology Industry Organization, as well as the handful of biotechs that control most of the market, supports a 14-year period to allow companies to recoup their investment and conduct further clinical trials to improve the product.....

And because biosimilars aren't perfect copies, patients rights groups and biotechs are asserting that patients should not be forced to take them. It is up the discretion of individual physicians, not insurance companies or pharmacies, to substitute a branded biologic for a biosimilar, they said.....

Global prescription sales of biotech drugs increased 12.5 percent in 2007 -- nearly double the rate of the overall pharmaceutical market, which includes the biotech sector -- to more than $75 billion, according to a June report by IMS Health, a health-care information company.

Generic Biologicals

Ezra Klein has an interesting set of comments on his blog relating to the costs of biologicals and the possibility of creating generic biologicals to cut those costs. Representative Henry Waxman's website provides some interesting information on pending legislation.

As I understand the situation, the biotechnology revolution has allowed industry to develop and market a number of new products that differ substantially from earlier drugs. The earlier industry was based on the chemical synthesis of biologically active molecules. These tended to be small and comparatively simple. If two chemical processes produced the same molecule, the biological activity would be the same.

Biologicals, by contrast, are produced in cell culture. The molecules tend to be large and complex. Two processes which produce molecules which have the same sequence on the main chain may have differently associated sugars or other different properties, and as a result have different risks to the patient and different efficacy.

Because of the differences between traditional pharmaceuticals and biologicals, the approval process for generics has to be different. For the small simple molecules, the generic approval process depends primarily on showing that the active ingredients are chemically the same as the previously approved proprietary product. For biologicals, the process would involve not only showing similar chemical structure, but also showing that the generic was comparably safe and efficacious to the already approved proprietary product, a much more difficult and expensive process.

Drug pricing is a complex process. In the case of generics, competition tends to bring prices down to the cost of production plus a relatively modest profit. Of course, the generic producers are not amortizing investments in research, development and testing of new pharmaceutical products in their prices.

In the case of proprietary products, pricing is based on the cost of alternative treatments and the added benefits that the specific products provide over those alternatives. For biological products now on the market, these prices can be very high, since often there is no effective alternative and the health benefits can be very significant. The companies justify that pricing as needed to justify the high costs of research, development and testing of new biologicals, and the fact that only a very small portion of the research results actually lead to development of successful new products.

Pending legislation, which is controversial, would allow the FDA to set new rules for licensing generic biologicals. On the one hand, there is considerable interest that this be done quickly so as to see competition ariving quickly to drive down the prices of biologicals, which are already represent a significant portion of all drug expenditures. On the other hand, there is some controversy on how to create the legislation that allows and requires the FDA to create good rules.

I find the situation interesting in that the core is a knowledge process. A regulatory agency is to define rules which allow the determination that product A is equivalent to product B, and that the safety and efficacy information that was at great cost developed to justify the acceptance of product B can be taken to also justify the acceptance of product A.

From the point of view of the research intensive pharmaceutical industry producing new biologicals, the issue is one of intellectual property. The stricter the requirements imposed to demonstrate equivalence, the longer their monopoly control of the market created by their original products, the less incentive for generic producers to compete with those products, and the greater the price that the generic manufacturers will have to charge to justify their investment in the production of their generic products. Thus the producer of the original patented product is likely to have a longer stream of higher profits the more stringent the requirements to prove equivalence of the proposed generic alternative.

From the point of view of the patient, the complexity of the process for demonstrating equivalence has a different complexion. A less stringent process demonstrating equivalence should result in lower costs of biologicals but greater risks of lower efficacy or higher medical risks.

This will probably result in some very interesting international issues. Different countries will come to different decisions as to the right balance between cost to the patient and risks faced by the patient, due to factors such as differences in ability to pay, differences in attitude toward medical risks, and indeed differences in those actual risks. Different countries will also come to different decisions as to the degree to which they wish to favor the pharmaceutical industry producing new products versus the generic pharmaceutical industry. Then the trade representatives of the governments of these countries will go at each other in venues ranging from the World Health Organization to the World Trade Organization.

World Patent Filing

Source: "Patent filings," The Economist, February 28th 2008.

One should use care in interpreting these figures. The major element here is that the United States with about one-quarter of the World's GDP accounts for just over one-third of patent applications.

It seems to me that a fair comparison for Switzerland would not be the United States as a whole, but a relatively high technology area within the United States with a comparable size economy and a similar role in the American economy that Switzerland plays in the European economy. Thus Switzerland might be compared to New England or Washington state.

Companies do not go to the trouble and expense of obtaining patents unless they think they will make money by doing so. Unless a company has the ability to commercialize a technology, either through its own production or by licensing the rights, then it should not patent that technology. Many companies in the world don't have the ability to take advantage of patent protection in the large markets that would allow them to profit. Indeed, even if they could produce for the American or European market, they could not detect patent infringement or take the needed legal action to stop it if it occurred. So they do not seek patents.

Further, if a company knows in advance that it has little ability to take advantage of invention through intellectual property rights protection, it is very unlikely to spend its time and resources to invent.

Three Great Presentations from TED

TED is apparently a great show, packed with new ideas presented often brilliantly. In part this posting is one of my first experiments with posting streaming video, but the three presentations are all very relevant to the theme of this blog.

Larry Lessig says the law is strangling creativity

Lawrence Lessig provides a great talk recommending a revolution that changes copyright protection of digital content to allow remixing. He suggests that this could reverse the 20th century trend to turn most people into "read only" consumers of content, allowing most people to be "read and write" producers of content. Kids are already using the technology in this way, and we either change the law or have a generation of the most creative people deciding that it is ok to break the law on a regular basis. The talk was given in March 2007, and posted on the TED website in November 2007.

Hans Rosling: New insights on poverty and life around the world

The creator of the Trendalyzer software and website returns to TED with another great presentation on development and poverty. It was filmed in March and posted in June, 2007.

Blaise Aguera y Arcas: Jaw-dropping Photosynth demo

This Microsoft architect presents a great suite of software that creates hyperlinks among images by finding the same images in different frames. Doing so, the software offers not only the possibility of new surfing modalities especially interesting to the visually oriented, but also a way to associate websites with images with other websites with related images, thus expanding the linkages that are the World Wide Web. Filmed in March and posted in May 2007.