Not in all cases you wouldn't. Ideally we'd like the prices to go way up for these kinds of extortionists while remaining low for individuals who were actually wronged by a large corporation.
Average joe doesn't have the same privileges as large corporations now.
In a corp vs average joe case, there's a huge inequality, where one of them faces bankruptcy and has to pay a way larger share of his income to sustain litigation, while corporations basically face no punishment (even large fines don't deter them).
Edit: in this case, over ONE MILLION dollars in costs for the lawsuit (and it doesn't sound like a big lawsuit). That's ridiculous.
Civil law / inquisitorial lawsuits are significantly cheaper, and legal costs are way cheaper outside the U.S.
The U.S. has the most lawyers in the world (it used to have more lawyers than the rest of the world COMBINED), the most expensive legal system, and the most lawsuits in the world. There are significant movements (including the U.S. Chamber of Commerce) for legal reform, and several studies stating those facts:
The average cost per lawsuit in the European Union (in legal fees, etc) is 3.000 euros (Madrid Mediators Association figure). A "standard" lawsuit costs about 10.000 euros (an example for suing a doctor for malpractice).
For comparison, in the U.S., "Ongoing expenses to prepare and mount a medical malpractice case average around $20,000 -$50,000, but in complicated situations it can be $50,000 -$100,000 "
Well you're a telling me that is very very expensive in the US and it's very expensive in europe.
Who can afford to potentially lost 10.000euros in a lawsuit ?
And in this thread we are talking about average Joe fighting against expert/rich companies.
Even if average Joe win the first time, the rich company can do another lawsuit right after and do it again and again until average Joe give up.
It's actually what happened to a friend. They don't care they just put you personal bankrupt.
And even if it's not the money, it's a lot of stress and shit like this.
Yes, it's as you say, just a degree between "very very" expensive and "very" expensive - though at least there's the option of some free help in Spain and other countries.
I agree that big companies can do another lawsuit, and the stress and related complications is a huge factor as well :( .
I want legal reform for my country for different reasons (here lawsuits are a lot cheaper but stretch for a lifetime), but the U.S. seems to need a lot of reform as well.
Can we find some term that does cover all of the things that don't need patents. It's somewhere between software patents, and all patents except medical/drug patents. Much of what is inbetween those two should (or could if the abuse is lesser there and we want to move it over) be covered by copyright, trademarks, etc. Reasons not to include new loopholes, probably deliberately written, new international treaties to at least make it sensibly easy to cover all markets, many more.
And then what? We'll have nothing at all? I'm certainly not in favour of these patent trolls but you have to have a more nuanced approach to intellectual property than 'Burn down the House'
It's a balance between encouraging innovation by protecting intellectual property, and discouraging it because of patent abuse (etc).
Destroying the patent system completely would most certainly have a negative effect.
> Destroying the patent system completely would most certainly have a negative effect
Why are you so sure of this? Government granted monopoly is not the only incentive to create something, but there are definitely countless examples of how patents have been used to squash innovation and disruption.
I grant that patents have had some positive effects, but I would not assume they are net-positive. Also, they were primarily designed in a time when there were fewer ideas and getting things into production was much more expensive (this applies to physical things, let along software with zero marginal cost), and it was much easier for an incumbent to steal an idea and crush a startup simply by the barriers to entry to manufacturing and distribution. Since then lobbying efforts have only pushed intellectual property rights in one direction. Even medical research patents which are often held up as necessary create perverse incentives that tie up R&D dollars in unproven new drugs, and making arbitrary tweaks to existing newish medicines in order to secure patent protection, making research into natural or public domain compounds come to a standstill regardless of efficacy.
Obviously I'm biased since I work in software, but I think we'd be fine without patents. Trademark and copyright address much more important issues in my opinion.
Medical treatments, vaccines, and drugs cost enormous amounts of money to bring to market due to all the regulations and requirements we've created ensuring a pill is not fatal. Why would any company in their right mind develop any sort of drug if it cost $100m and anyone after them could take the idea free of cost?
Patents are good/needed to promote the quality of medicine. There they're good.
That is exactly what the drug companies say. That's funny at is as if you are just reciting back their propaganda.
It turns out a lot more money is spent on marketing and lobbying that is spent on research. Also a lot of cutting edge research is actually performed by public universities by professors on that state's (or NIH's) dime.
> Patents are good/needed to promote the quality of medicine. There they're good.
Well that really is the crux of the argument. I would argue that patents make the medicine worse. Medicine I also consider to be the health and well-being of citizens not profitability of drug companies. I can be convinced that the current patent system help the profitability of drug companies I am not sure if it help the sick people.
It turns out a lot more money is spent on marketing and lobbying that is spent on research.
Don't confuse pharmaceutical companies with biotech companies.
Also a lot of cutting edge research is actually performed by public universities by professors on that state's (or NIH's) dime.
Often, the same researcher then spins out the company that tries to commercialize the research.
I can be convinced that the current patent system help the profitability of drug companies I am not sure if it help the sick people.
Without them you wouldn't have the medicine. Then that won't help the sick people. As it stands, there is a difference between the medicine that rich people can afford and that poor people can afford. That may be morally objectionable- and maybe we should fix it. But at least the medicine exists, and eventually it gets cheaper on average for everybody.
I am very much for patent reform, but we have to do it intelligently. Where patents help- keep them. Modify them maybe. Where they are despicable destroy them.
At least in some cases in medicine-- as in other high barrier-to-entry endeavors-- I am convinced they are useful. In other cases they are infuriating.
>Often, the same researcher then spins out the company that tries to commercialize the research.
It seems to me that you imply that there is some added value from the commercialization. But commercialization does not cause added value in itself. Sometimes, commercialization just mean marketing and profit center.
However the real question is, what does commercialization of an already founded and paid invention has to do with patents. Why should research which is paid with tax money (through NIH) be patentable, and how does that benefit society?
There is often substantial risk turning a research result (molecule X inhibits virus Y) into a safe medicine. You have to do significant, expensive testing. That is where the money is spent because that is where commercialization fails.
Also, pharmaceutical drugs don't just pop out of Wonka-like machines in a manner similar to the Everlasting Gobstopper. The production process has to be efficient. Efficiency is a function of the cost to research, design, construct and operate the production facilities and QA, and the expected returns.
Well, if you want efficiency, thats were all the factories with generics lives. They use capitalism, that is competition to produce the best product for the lowest price.
As for testing (the above comment), thats where FDA approved monopolies comes in. FDA want to incentivize testing and producing of products, even once they fall out of patent protection, so FDA themselves gives out limited timed monopolies after a drug gone through all the testing. Thats a monopoly on top of regular patents for most drugs. FDA don't assume patents to cover the cost beyond the initial research. They consider that more incentives are needed, targeted for testing and producing of products.
I wasn't disagreeing with the poster above, I was adding additional insight into what it takes to initially commercialize a product (assuming the initial research was publicly funded).
Before a decision to produce can begin, there is additional R&D into:
- scale production design and cost analysis
- analysis of potential market size
- risks and boundaries of treatment identified via clinical trials
If the potential market size and production costs work out to be marginally profitable (to be an attractive investment):
- initial outlay of prototype production facilities
- scale production and distribution processes (some drugs have limited shelf life or require special handling)
- market building (disseminating information about the treatment to health providers, and tracking market penetration) to make sure the market potential is fully used
Production of generics is "efficient" because by the time generic production gets underway (at patent expiration), they can sell as an alternative to a pre-built market with processes already proven by years of practice.
What prevents generics to do cost analysis, market research, prototype production facilities, scale production and distribution processes, and market building? Isn't those step normal procedures for any commercial venture.
To make the car an analogy, when producing a new car, a company need to do cost analysis to weighing materials, product facilities, prototype building. They also need to do market building to push their product in a market already buzzing with competition. They need to care about the distribution processes. They can't patent this, and even if they could, I doubt the car industry would be helped by it.
Generics, like any other form of commercial entities do prefer a pre-built market. This is same for everyone else too, as everyone is currently making the same pads, laptops, phones and mp3 players as last "hit product". This however doesn't mean that there aren't any new companies trying new things. Same goes for generics. The "putting a product into the market" is't someting patents are needed or even suggested to cover. Its the cost of the invention that is covered by the patents.
Patents cover the cost of inventing. The FDA granted monopoly covers the testing. Everything else rest onto the commercial entity to resolve. This is the order of things, through patents are so far not covering the cost of the invention, as that is taken care by tax dollars distributed to research by NIH.
Thus the logical thing to do is to either cut the budget of NIH and let "patents" take care of the inventing (as intended), or reconsider patents as funding for inventions.
Yes, in any normal commercial venture, those are the normal procedures for commercializing something, which are the investment. Re-reading back to the top of this thread, I see this spun out specifically from a one-liner about research by professors at public universities. The funding sources for professors at public universities is varied (depends on what funding they have managed to gather and what strings were attached, and what they were intended for), and the degree that the results of their research is clinically applicable also varies. A researcher may discover that a certain receptor on a cell's surface responds to a specific molecular structure, but this is far from being a treatment. Depending on who funded a particular research study, the results may be pre-assigned to a private entity, or may become public information. It all depends on how the research was commissioned. In any case, university researchers don't usually create new drugs, they discover relationships; they just don't typically have that mandate (as far as I am aware, which admittedly isn't that much).
Incidentally, patents are not to cover "invention" costs, they are so that inventors can get the rewards of invention while at the same time exposing their invention, rewards and costs are not the same thing. For drugs, public exposure is a necessity of the way we require FDA approval; since without such regulation, drug related litigation would ultimately end up in open court anyway to prove liability or negligence, it has been deemed a public good to do this public exposure prior to market introduction, and require a degree of pre-approval (that we assign directly to a government agency).
In the US of A, the FDA grants neither a monopoly, nor a patent. The FDA's purpose in new drug development is the declaratory judgment regarding the safety or applicability of a drug. It is perfectly possible to get a patent, but fail FDA approval. It is also possible that the process to produce a drug at scale is itself a novel application or invention and itself patentable (though that may also need FDA approval separately from the drug treatment).
It is perfectly possible to get a patent, but fail FDA approval.
I believe this happened to Eli Lilly yesterday.
EDIT: Not sure it was Lilly- I heard the news on the radio this morning and I can't find the source on the news sites. Annoying.
Not only would you not have the medicine, but you wouldn't have delivery vehicles (devices, forms) either. It's because USA and Europe require such substantial testing, at various stages, to prove (1) efficacy, and (2) safety. These are not binary-outcome experiments. They are expensive (gotta pay people to take your dope and you gotta pay - and train - docs to keep an eye on them. Remember- the outcomes are not binary).
Some percentage of your population aren't going to feel well while in the trial. Is is the fault of your medicine? You better be absolutely sure. Oh wait, you can't. Can you find anybody who might be able to help you decide?
So before VCs will give you $5M, they are going to be sure that Walmart can't knock off a copy once you have the proof. That's where the money goes, and why you won't get any unless you can arrange some exclusive sales.
And, like everything else, you have to make sure that there is a paying market (meaning docs will use it and insurers will pay for it).
Most of the money is spent on passing FDA approval and testing. Research is a small portion of the cost, you are correct there.
The real problem with patents is that they don't protect the idea, they put it in public and try to give a monopoly to a certain person or 'legal person'(corporation). The medical patents are designed to encourage disclosure so that the medicine can become widely available later. That is the real reason medical patents are beneficial to society. It's a deal that has to be made where both sides give a little and both sides gain a little. I know we haven't seen a lot of this in America lately, but it's compromise.
If you really want to keep something a secret, you don't patent it. I think the law should allow non-profits and things like universities and hospitals to violate patents and copyright for the public good. That would get rid of the "they aren't helping sick people" problem and still keep the profits for the drug companies.
Marketing + lobbying expenses are not mutually exclusive with research expenses. Companies maximize revenue, and to do that you need both marketing and research expenses. As it happens, throwing more money at research doesn't work (see Pfizer), and throwing more money at market often does.
> It turns out a lot more money is spent on marketing ...
The cost structure of marketing has diminishing returns with a very long tail. The first $100M might give $1B in revenue, the next $100M might give $400M, then $100M/$150M, then $100M/$105M, then $100M/$101M, and so forth.
The last $100M of the markeing budget only has a miniscule percentage profit, but a miniscule percentage is $1M. So it gets spent. So marketing budgets appear to be gigantic, but is is because most of the customers are marginal and barely need the product, not because R&D is being short-changed. In fact, this approach maximizes absolute R&D funding. Yes, R&D becomes a smaller slice of the pie, but this only matters to people who cannot do math.
I think you explain why it is smart to spend money on marketing. But really for medical use, I find that marketing can be dangerous. I mean creating a need for a drug? really?
You're just reciting the standard line which I already acknowledged in my comment. My point was that some of the most promising avenues of research are ignored because of the lack of patentability. How do you address that point?
Or we could take the money those pills cost, give it directly to researchers, and open source the results. Lower costs, same results, money left over for plenty of other things. I mean you do know the US has the worst cost/lifespan ratio of the western world, right?
I take it by your flippancy that you disagree. Am I correct in assuming that you mean to insinuate that removing the profit incentive for Big Pharma executives (cancel patents) without reducing the salaries of researchers (use the saved cost on research) would render the US incapable of inventing any medicine at all? Because I disagree with that.
You wrote that because research costs money, nobody will fund it without patents, completely disregarding the argument that there are other ways to fund research.
I'm writing about what happens, not what I think should happen. I'm not going to try to defend the status quo. I'm for patent reform also. But I can see where some form of patents may be advantageous. But I'm trying to stay out of that discussion. There are people who know far more sides of the story than I do who are in a better position to suggest models of patent reform.
Yes, that's what I'm saying. I don't have time right now to compile the sources- but there have been exposèes on the subject of medicine invented in US sold to Canadian and European markets at gov't negotiated prices (and then black-market sold back to customers in the US at lower prices than available in the US).
As far as where the bulk of the research is done? Well, you can look that up yourself.
By going through all the regulations and requirements, drug companies already receive by the FDA a limited monopoly on top of patents.
It should also be said that, around 95% of all medical research around life threatening conditions, and base theory, is already being payed by the government (a total of 1/3 of all medical research across all areas (human and pets)). If patents are so good and needed for the promotion of quality of medicine, why is then the US government today paying for most of it in direct funding, some 26.4 billions?
I think what you're really saying, in so many words, is that research in important medical treatments, vaccines and drugs shouldn't be left in the hands of drug companies at all. Maybe all basic research should be funded by the public and made freely available to all companies that want to utilize it. Sure, companies won't be able monopolize the cure for cancer, but who thinks that's a good outcome anyway? Let them compete on price and marketing the way they already do with aspirin.
Actually many of these requirements were created so the cost of creating new drugs is sufficiently high to keep out new companies. The FDA is big pharmas moat.
I'm beginning to believe that reforms are not possible and "burn down the house" may be the only option to escape the current mess. There are too many vested interests, and the problems are too abstract/complex for normal people to care (and put pressure on representatives). Even if the general populous put pressure on Congress to do something, Congress would pass some law that at best did nothing, and at worst went in the opposite direction, all while politicians proclaimed 'victory' in reforming the system, and the general populous settles down because 'something' happened, and the technicalities of why it's bad are too hard to understand in a 10 second sound-bite.
No... and then we'll have legislators who are willing to improve the system.
> It's a balance between encouraging innovation by protecting intellectual property, and discouraging it because of patent abuse
I think that depends on what part of the patent system you are considering. In the world of medical devices, for instance, it is a balance between encouraging innovation and discouraging it. In the world of software patents I honestly do not think that there is anyone who is innovating because of patents (there ARE some who are making money off innovations they would create anyway), so there I do not feel that there is a balance: software patents only discourage innovation.
No, these trolls show that the entire basis for patents is absurd. The only difference between "patent trolling" and normal patent litigation is that they target individual users who are ignorant of the process. Big businesses have been doing this to each other for decades. Knowledge simply cannot and should not be owned.
From the sounds of it, and in reference to everyone using the term 'patent troll' here, I think this particular instance could be more appropriately labelled as 'patent scamming'.
And then we'll figure out what comes next. It's not obvious to me that a 15th-century approach is still the very best option in the coming age of the Internet. There's certainly an awful lot of innovation happening for which patents are irrelevant when they aren't inimical.
Whether or not the whole thing gets burned down, I think api is right that only a major crisis will get us the major changes we need.
The patent system is one of the two laws still in existence that since its creation during the 17th century, it still have not been updated to even 19th century government procedural style.
Around the 17th and early 18th century, laws was made to be simple. Process required to be made simple. If you stole a horse, you got the same jail time as every other horse thieves. Taxes was the exact same as for everyone (at least for the poor), and there was no books after books with exceptions, rules, and additional judgement calls needed to be made. Everything everyone needed to know about the government could be read in a rather tiny book, written almost like a novel.
But by the late 18th century, governments changed in a radical way in how it worked. Laws got complex. procedures was created to have someone who made a judgement call on goverment actions on however something benefited society or if it did more harm than good. They started to do cost-benefit analysis. One by one, all but two areas (copyright and patent), was changed in how they was issues, and how to balance the public good vs desired benefits.
But giving people 20 years government enforced monopolies has so far evaded any form of cost-benefit evaluations. In contrast, it has just been expanded to cover more and more, for a longer time, and for less money.
Destroying the patent system completely would force a cost-benefit analysis on the whole system of patents and how to maximalistly create incentives for inventions, without costing society more than it gets. Given that its the government that pay's for and enforces said monopolies, one might consider a cost-benefit analysis on the whole system a something that it should do.
you have to have a more nuanced approach to intellectual property than 'Burn down the House'
(Shrug) The house will either burn down, or it will fall apart due to shoddy construction. Better to get it over with sooner than later, so the land it stands on can be put to better use.
The point isn't that patents are equivalent to genocide, it's that helping the USA become stronger doesn't automatically make something a good and moral thing that should be perpetuated.
> A more nuanced approach would be to stop software patents and lawsuits brought on by non-practicing entities.
ARM, MIPS, and many research universities would count as non-practicing entities. As they are, they only produce "intellectual property", and sell licenses to it to fund their operations. They would be forced to find an alternative business model. Universities have alternative funding sources, and they might not be affected too heavily.
Whether this is a good or a bad thing is open to debate, but it's clear to me that non-practicing entities that produce valuable results do exist.
Good point, and IANAL etc, but since we as humans can more or less clearly see the difference between patent trolls and such institutions, there has to be a way to encode those nuances in legalese.
But I guess the real problem isn't whether the patents usually involved will hold up in court, but the costs involved in setting up a defense and disproving the accusations.
The nuances are in the patents themselves. Are they non-trivial? Are they innovative? Did they require any significant amount of effort to come up with?
I'm of the opinion that two measures will help fix the patent system, and this applies to most fields.
First, the duration of patents needs to be cut. 5 or so years would probably suffice.
Second, there needs to be an incentivized prior art busting effort. Perhaps the party filing the patent could put $1000 or so into escrow for a 1 month waiting period, and if someone manages to find valid prior art, they get the money.
You know, escrow sounds like a great idea if it can reduce applications by the same amount it increases prior art submissions. It would make it harder for individuals, though.
From a lot of what I've read about different NPEs, it sounds like they're already on the cusp of being vulnerable to racketeering / fraud charges. It might not take that much to amend the existing laws to add some language about shell companies and patents that clarifies that this is illegal.
Another thing that could help a lot is minimizing the extent to which patents can be sold. One of the biggest problems with the patent system that I see is that someone can invent something that sounds worthless, sell the patent for $10,000, and then the company that buys the patent can rake in millions in royalties. In general no one should be making money hand over fist for things that they neither invented nor produce.
I agree with you on the first point, but completely disagree on the second. If the patent is valid to begin with, it doesn't really matter who owns it. It's true that a crap patent owned by a deep-pocketed litigant can be more dangerous than the same patent owned by a poor inventor. But the problem is the crap patent, not the deep pockets.
I really think it does matter who owns it. If most of the profit from patents is the result of speculation, I think the system is fundamentally failing to do the job of rewarding innovators. It doesn't matter if the patent is a good one - if it's primarily rewarding hedge fund managers with no interest in research, the incentives are screwed up.
> there has to be a way to encode those nuances in legalese.
How about: more than 50% of your employees are lawyers, or the lawyers in your organization make more than 50% of the money (to prevent a few lawyers from "hiring" a dozen or so highschoolers at minimum wage.
The patent system is not for encouraging innovation, it is for encouraging people to share the secrets of their innovation. Without a patent system we would go back to the guild system of the middle ages, in other words, the protection of trade secrets.
You're right of course, we're much better off with a working patent system than with the system that came before it. However I'm personally not convinced that the patent system in its current form (at least in the US thought possibly in some other places too) is either working, or better for innovation than no system at all.
I disagree.
Only inventions that need a lot of money to be"invented" need any form of legal protection.
You'd have to prove that without patents the incentive for R&D would be diminished to the point where it would no longer take place.
