8 ms·

Posner's right. It seems that there needs to be some new notion of what constitutes patentability. Drugs are an interesting case as they have these factors go

Posner's right. It seems that there needs to be some new notion of what constitutes patentability. Drugs are an interesting case as they have these factors going for it: 1) Expensive to bring IP to market. Lots of testing and clinical trials for drugs. For SW it is pretty cheap now. 2) Easy and cheap to copy. Generic versions can be reverse-engineered quickly. Probably just as easy to copy software, but I still feel like this is probably a useful pillar. 3) The IP by itself constitutes the majority of the value of the product. In medicine there isn't typically tons of other IP around that come together to form the product. In SW there is rarely a single piece of IP that is more than a small fraction of the value of the product. 4) The IP has longevity as a standalone product. Viagra can be sold for decades. Aspirin still probably does hundreds of millions in revenue. There is little SW IP that, by itself, has longevity. The nature of SW is to continuously improve it. 5) Time to market isn't a huge advantage. Since most medicine is just sold as effectively a commodity, being 6m ahead of your competition usually just means you have 6 extra months of revenue. Whereas in SW it also means that gives you 6 months to build on your current IP. In medicine you don't typically do Viagra 2.0, with a boatload of new IP that makes the original obsolete (and hence any competitors shipping the old version scrambling).

exDM69 14y ago
The society needs to find a new way to give incentives for drug development. Patents may seem to solve the problem from the drug company's point of view, but it keeps the price of drugs prohibitively high for the less fortunate of us. So there are billions of people in the world who are left without medication or use wrong medication because of intellectual property licensing and pricing issues. This leads to unnecessary suffering and other bad things like antibiotics overuse (particularly in India) and drug-resistant strains of deceases.
Jach 14y ago
Drugs are typically presented as the crown jewel for patents, but an examination of the modern drug industry destroys that notion for me. Some decent arguments can be found here: http://www.dklevine.com/papers/imbookfinal09.pdf http://www.dklevine.com/papers/imbookfinal09.pdf
- wissler 14y ago
  Indeed. But one could have known as much by analyzing the moral case against patents: patents are unjust restraint of one human being from acting to think, create, and sell. There is no possible argument to say that you can bind another human down "because I thought of it first", really patents reflect the moral mentality of a two-year-old.
  - esrauch 14y ago
    How do you propose someone could demonstrate that they independently arrived at the same idea, rather than simply observing the existing idea. If you think "I thought of it and no on else did" is not worthy of being protected property then that is fine and you can make that argument and I wouldn't necessarily argue against you, but I don't think it is accurate to solely argue against patents by characterizing them solely as protection against random other people independently coming to the same idea without the original inventor affecting them at all.
  - dantheman 14y ago
    Exactly, patents and intellectual "property" always refer to arguments relating to physical property; when by their nature the explicitly limit the rights you have to use physical property that you own. It's outrageous.
  - rayiner 14y ago
    At least conception ally, patents aren't a restraint on creating, they're a restraint on copying.
    - ericingram 14y ago
      Not if they are used to prevent someone from creating a new version of something that implements some pattern which looks like a previously patented thing. Turns out this classifies most innovation ever.
    - nickpinkston 14y ago
      If by conception you mean looking at "you get a monopoly to make X related product" without looking past to "meaning someone else can't make Y related product"
ok_craig 14y ago
I don't disagree with these points, but my personal take is that the primary difference between software patents and other patents is that most things that end up getting patented in software are things that pretty much any programmer may implement in the course of trying to solve some problem. The patented algorithms often aren't novel or unique, but someone just stood up first and said "Look here what I did. I want a right to exclusivity on this." Even though someone trying to get to the same end goal at some point in the future probably would have easily developed the same method. In drugs, the end result gets patented. Some chemical formula that's just right, which (in most cases) was not simply stumbled upon in the pursuit of something else. And even if it was stumbled upon, it's still novel and was not likely to be created as a product or byproduct by another party very easily. The insight required to develop the drug was most likely unique. The equivalent to most software patents today in the drug field would be patenting methods of, say, mixing chemicals. Imagine if there was a patent on mixing two solutions by pouring one from a beaker into the other in a flask, twirling around twice and then shaking gently four times. What if someone had a license to that mixing method and everyone else had to pay to do it? It'd be ridiculous. It seems like that's basically what software patents are. The equivalent to drug patents in the software world would be, I guess, patenting an entire OS, or an app, or some fully integrated, significant piece of software. For example, no one should be able to make a counterfeit copy of iOS as a whole and sell it as their own. That I would support legally. I (think?) this is already covered by copyright law.
- nickpinkston 14y ago
  I'm betting that in many worlds your "pretty much any programmer may implement" goes for nearly all MechE patents too, civil maybe as well, and plenty of EE patents I'm sure. In reality, nearly all patents are just ::at best:: a year or two of an engineering team crunching on a problem using existing methods - usually far less. It's difficult to say which are which though - so maybe patents are really what we want at all for nearly all things?
  - Vivtek 14y ago
    Yeah, but I don't mind monopoly protection for something somebody worked a year on. Software patents are granted for many times the effective lifetime of a technology, for something you or I could do in a week based on ideas we've all had because they're natural solutions to their problems. Like patenting the use of a hinge for a door instead of patenting how to make a hinge, and the patent being granted for the entire time humanity uses doors at all.
Cushman 14y ago
> In medicine you don't typically do Viagra 2.0, with a boatload of new IP that makes the original obsolete (and hence any competitors shipping the old version scrambling). Actually, there is an entire class of drugs known in medicine as "patent extenders". Take your expiring patented drug, alter the formulation, or attach an unnecessary chemical group that doesn't affect the mechanism of action, et voila! Twenty more years of monopoly. As a result of this, there are drugs which were prescribed twenty years ago that are no longer available-- since the original developer has moved on to an "improved" version which may be less effective, while the generic version is not profitable enough to be widely available. What this means for intellectual property, I'm not sure. It's a tricky issue.
- eridius 14y ago
  How do the patent extenders work? I mean, what's to stop the generic from just continuing to make the original formula, if the alterations don't actually do anything?
  - josephcooney 14y ago
    Marketing, I think.
    - Scaevolus 14y ago
      Sometimes they'll severely limit the supplies of the predecessor before it becomes generic, to "encourage" people to switch over to the new drug.
  - MBCook 14y ago
    Nothing. But why prescribe the generic Lowpainex when the new Nopainatall is proven to be 0.5% more effective? Plus the Nopainatall guy gave you some pens and pads and toothbrushes, and there are ads on every night telling people to talk to their doctor about the newest breakthrough that leaves old drugs behind. Your patients don't want the old drug, do they? They don't want some pain, they want none. Of course, Nopainatall is just Lowpainex combined with Tylenol... but that's inconvenient to take separately.
kaffeinecoma 14y ago
John Siracusa recently covered patents on his Hypercritical podcast: http://5by5.tv/hypercritical/68 http://5by5.tv/hypercritical/68. Nice dissection of the idea of drug patents as being "special" (vs other kinds of patentable IP) in there as well.
tzs 14y ago
On the other hand, with drugs you have the problem that for the 20 years that the patent owner has a monopoly, the price to consumers is high compared to after the patent expires and the generic version becomes readily available. People can die during this time because they can't afford the drug. A possible solution: 1. Add to drug patents a compulsory license, allowing anyone to make the drug provided they pay a royalty determined by statute to the patent owner. 2. This royalty rate would be low enough that the generic drugs are cheap--maybe 5 to 10% more than they would be if there was no patent. 3. This would make it harder for the patent owner to recover their costs over the life of the patent. We want them to recover their costs (and make enough to finance developing more drugs) so need to do something to counter this. We can do this by making the patent term longer for drug patents. Instead of 20 years, make it something like 50 years or 75 years or even 100 years. We all win with this. The drug companies (as long as they are in it for the long haul) make money when they put in the effort to develop new drugs, but the patients get the drugs at an affordable price right away instead of waiting 20 years.
- refurb 14y ago
  I can't see this working at all. R&D is an incredibly risky proposition. The drug company I worked for had a success rate of 0.69%. That is, less than one drug that ever entered formal testing in animals, ever made it to market. Note, all the work done up to the point of testing it in animals is a tiny fraction of the overall cost of getting a drug approved. So combine those two issues. You have an investment that requires huge amounts of capital, typically in the several hundred million dollar range (to get a drug approved). You also have a very low chance of a positive result. What does this mean when you are trying to raise capital? A very large pay out. If you reduced the return on this investment by 80%+ (which is what you'd do if you added a 5 to 10% royalty to the current generic prices), you'd have all that capital moving to investments with much better risk/return profiles. I don't have the source available, but I remember reading that of the drug that are approved, only 1/3 of them actually ever make a profit for the company overall. It's the massive blockbusters like Lipitor that not only pay for all the R&D that failed, but also all those drugs that didn't fail, but didn't even break even.
  - 14y ago
btilly 14y ago
People love to cite drugs as being a case where patents work well. But patents are far from a perfect fit for this problem. Among other reasons, in an industry that is entirely dependent upon patent protection to defray the costs of getting FDA approval, it is impossible to get treatments through the approval process when they are not covered by patent. For example somewhere on the order of half a million people in North America have Crohn's disease. This is a rather nasty sickness that destroys quality of life, and requires lots of rounds of only marginally effective medication. Research indicates that hookworm infection is an effective treatment. The FDA has decided that this treatment requires their approval. But you can't patent hookworms, and therefore nobody will pay for the necessary tests to get FDA approval. And so a half-million people continue to suffer. If the rules were changed to grant a temporary monopoly to the company that got FDA approval for a treatment, this problem would vanish. A number of known treatments would go through trials and get approved.
- lloeki 14y ago
  > People love to cite drugs as being a case where patents work well. But patents are far from a perfect fit for this problem. Bringing drugs in the discussion has more of a relative role than any absolute metric though. We could subsume the reasoning as such though: - patents work better on drugs than on software by leaps and bounds - patents are far from a perfect fit for drugs - it follows that software patents are an atrocity of abysmal scale
- wccrawford 14y ago
  Is the cost of hookworm testing something that's in the range of crowdfunding?
  - ericb 14y ago
    This is a fascinating idea. I feel like the innovation that will have the most effect on the next 50 years is the kickstarter approach.
  - btilly 14y ago
    According to http://www.fastcompany.com/magazine/141/the-price-of-approval.html http://www.fastcompany.com/magazine/141/the-price-of-approva... the average cost of phase I-III trials is in the neighborhood of $150 million. So no, not really in the range of crowdfunding. And if you did get it approved, and managed to sell the treatment to everyone in the USA who has Crohn's disease, you'd need to make a profit of several hundred dollars/person just to pay for the cost of FDA approval. Realistically you'd want to charge more to recover up front risks, the cost of marketing, and uncertainty about what fraction of the target population you'd successfully sell to.
ZeroGravitas 14y ago
You missed "clear property boundaries" as a difference. It's very easy to tell if a chemical compound is being used by two different firms, it's the equivalent of the source code being identical. But for software patents, there's much more subjectivity involved, e.g. does your patent cover this type of swiping, even if it doesn't in reality could you possibly convince a jury of ordinary people of that fact?. This ambiguity is bad in itself. You might not like the chemical patent, but at least you'll know for certain whether you infringe it or not, which saves a lot of court battles.
b-man 14y ago
About patent in drugs, I found these couple of articles really pertinent: http://archive.mises.org/14949/patents-kill-compulsory-licenses-and-genzymes-life-saving-drug/ http://archive.mises.org/14949/patents-kill-compulsory-licen... http://archive.mises.org/15365/update-patents-kill-compulsory-licenses-and-genzymes-life-saving-drug/ http://archive.mises.org/15365/update-patents-kill-compulsor...

exDM69 14y ago

The society needs to find a new way to give incentives for drug development. Patents may seem to solve the problem from the drug company's point of view, but it keeps the price of drugs prohibitively high for the less fortunate of us. So there are billions of people in the world who are left without medication or use wrong medication because of intellectual property licensing and pricing issues. This leads to unnecessary suffering and other bad things like antibiotics overuse (particularly in India) and drug-resistant strains of deceases.

Jach 14y ago

Drugs are typically presented as the crown jewel for patents, but an examination of the modern drug industry destroys that notion for me. Some decent arguments can be found here: http://www.dklevine.com/papers/imbookfinal09.pdf http://www.dklevine.com/papers/imbookfinal09.pdf

wissler 14y ago
Indeed. But one could have known as much by analyzing the moral case against patents: patents are unjust restraint of one human being from acting to think, create, and sell. There is no possible argument to say that you can bind another human down "because I thought of it first", really patents reflect the moral mentality of a two-year-old.
- esrauch 14y ago
  How do you propose someone could demonstrate that they independently arrived at the same idea, rather than simply observing the existing idea. If you think "I thought of it and no on else did" is not worthy of being protected property then that is fine and you can make that argument and I wouldn't necessarily argue against you, but I don't think it is accurate to solely argue against patents by characterizing them solely as protection against random other people independently coming to the same idea without the original inventor affecting them at all.
- dantheman 14y ago
  Exactly, patents and intellectual "property" always refer to arguments relating to physical property; when by their nature the explicitly limit the rights you have to use physical property that you own. It's outrageous.
- rayiner 14y ago
  At least conception ally, patents aren't a restraint on creating, they're a restraint on copying.
  - ericingram 14y ago
    Not if they are used to prevent someone from creating a new version of something that implements some pattern which looks like a previously patented thing. Turns out this classifies most innovation ever.
  - nickpinkston 14y ago
    If by conception you mean looking at "you get a monopoly to make X related product" without looking past to "meaning someone else can't make Y related product"

ok_craig 14y ago

I don't disagree with these points, but my personal take is that the primary difference between software patents and other patents is that most things that end up getting patented in software are things that pretty much any programmer may implement in the course of trying to solve some problem. The patented algorithms often aren't novel or unique, but someone just stood up first and said "Look here what I did. I want a right to exclusivity on this." Even though someone trying to get to the same end goal at some point in the future probably would have easily developed the same method. In drugs, the end result gets patented. Some chemical formula that's just right, which (in most cases) was not simply stumbled upon in the pursuit of something else. And even if it was stumbled upon, it's still novel and was not likely to be created as a product or byproduct by another party very easily. The insight required to develop the drug was most likely unique. The equivalent to most software patents today in the drug field would be patenting methods of, say, mixing chemicals. Imagine if there was a patent on mixing two solutions by pouring one from a beaker into the other in a flask, twirling around twice and then shaking gently four times. What if someone had a license to that mixing method and everyone else had to pay to do it? It'd be ridiculous. It seems like that's basically what software patents are. The equivalent to drug patents in the software world would be, I guess, patenting an entire OS, or an app, or some fully integrated, significant piece of software. For example, no one should be able to make a counterfeit copy of iOS as a whole and sell it as their own. That I would support legally. I (think?) this is already covered by copyright law.

nickpinkston 14y ago
I'm betting that in many worlds your "pretty much any programmer may implement" goes for nearly all MechE patents too, civil maybe as well, and plenty of EE patents I'm sure. In reality, nearly all patents are just ::at best:: a year or two of an engineering team crunching on a problem using existing methods - usually far less. It's difficult to say which are which though - so maybe patents are really what we want at all for nearly all things?
- Vivtek 14y ago
  Yeah, but I don't mind monopoly protection for something somebody worked a year on. Software patents are granted for many times the effective lifetime of a technology, for something you or I could do in a week based on ideas we've all had because they're natural solutions to their problems. Like patenting the use of a hinge for a door instead of patenting how to make a hinge, and the patent being granted for the entire time humanity uses doors at all.

Cushman 14y ago

> In medicine you don't typically do Viagra 2.0, with a boatload of new IP that makes the original obsolete (and hence any competitors shipping the old version scrambling). Actually, there is an entire class of drugs known in medicine as "patent extenders". Take your expiring patented drug, alter the formulation, or attach an unnecessary chemical group that doesn't affect the mechanism of action, et voila! Twenty more years of monopoly. As a result of this, there are drugs which were prescribed twenty years ago that are no longer available-- since the original developer has moved on to an "improved" version which may be less effective, while the generic version is not profitable enough to be widely available. What this means for intellectual property, I'm not sure. It's a tricky issue.

eridius 14y ago
How do the patent extenders work? I mean, what's to stop the generic from just continuing to make the original formula, if the alterations don't actually do anything?
- josephcooney 14y ago
  Marketing, I think.
  - Scaevolus 14y ago
    Sometimes they'll severely limit the supplies of the predecessor before it becomes generic, to "encourage" people to switch over to the new drug.
- MBCook 14y ago
  Nothing. But why prescribe the generic Lowpainex when the new Nopainatall is proven to be 0.5% more effective? Plus the Nopainatall guy gave you some pens and pads and toothbrushes, and there are ads on every night telling people to talk to their doctor about the newest breakthrough that leaves old drugs behind. Your patients don't want the old drug, do they? They don't want some pain, they want none. Of course, Nopainatall is just Lowpainex combined with Tylenol... but that's inconvenient to take separately.

kaffeinecoma 14y ago

John Siracusa recently covered patents on his Hypercritical podcast: http://5by5.tv/hypercritical/68 http://5by5.tv/hypercritical/68. Nice dissection of the idea of drug patents as being "special" (vs other kinds of patentable IP) in there as well.

tzs 14y ago

On the other hand, with drugs you have the problem that for the 20 years that the patent owner has a monopoly, the price to consumers is high compared to after the patent expires and the generic version becomes readily available. People can die during this time because they can't afford the drug. A possible solution: 1. Add to drug patents a compulsory license, allowing anyone to make the drug provided they pay a royalty determined by statute to the patent owner. 2. This royalty rate would be low enough that the generic drugs are cheap--maybe 5 to 10% more than they would be if there was no patent. 3. This would make it harder for the patent owner to recover their costs over the life of the patent. We want them to recover their costs (and make enough to finance developing more drugs) so need to do something to counter this. We can do this by making the patent term longer for drug patents. Instead of 20 years, make it something like 50 years or 75 years or even 100 years. We all win with this. The drug companies (as long as they are in it for the long haul) make money when they put in the effort to develop new drugs, but the patients get the drugs at an affordable price right away instead of waiting 20 years.

refurb 14y ago
I can't see this working at all. R&D is an incredibly risky proposition. The drug company I worked for had a success rate of 0.69%. That is, less than one drug that ever entered formal testing in animals, ever made it to market. Note, all the work done up to the point of testing it in animals is a tiny fraction of the overall cost of getting a drug approved. So combine those two issues. You have an investment that requires huge amounts of capital, typically in the several hundred million dollar range (to get a drug approved). You also have a very low chance of a positive result. What does this mean when you are trying to raise capital? A very large pay out. If you reduced the return on this investment by 80%+ (which is what you'd do if you added a 5 to 10% royalty to the current generic prices), you'd have all that capital moving to investments with much better risk/return profiles. I don't have the source available, but I remember reading that of the drug that are approved, only 1/3 of them actually ever make a profit for the company overall. It's the massive blockbusters like Lipitor that not only pay for all the R&D that failed, but also all those drugs that didn't fail, but didn't even break even.
- 14y ago

btilly 14y ago

People love to cite drugs as being a case where patents work well. But patents are far from a perfect fit for this problem. Among other reasons, in an industry that is entirely dependent upon patent protection to defray the costs of getting FDA approval, it is impossible to get treatments through the approval process when they are not covered by patent. For example somewhere on the order of half a million people in North America have Crohn's disease. This is a rather nasty sickness that destroys quality of life, and requires lots of rounds of only marginally effective medication. Research indicates that hookworm infection is an effective treatment. The FDA has decided that this treatment requires their approval. But you can't patent hookworms, and therefore nobody will pay for the necessary tests to get FDA approval. And so a half-million people continue to suffer. If the rules were changed to grant a temporary monopoly to the company that got FDA approval for a treatment, this problem would vanish. A number of known treatments would go through trials and get approved.

lloeki 14y ago
> People love to cite drugs as being a case where patents work well. But patents are far from a perfect fit for this problem. Bringing drugs in the discussion has more of a relative role than any absolute metric though. We could subsume the reasoning as such though: - patents work better on drugs than on software by leaps and bounds - patents are far from a perfect fit for drugs - it follows that software patents are an atrocity of abysmal scale
wccrawford 14y ago
Is the cost of hookworm testing something that's in the range of crowdfunding?
- ericb 14y ago
  This is a fascinating idea. I feel like the innovation that will have the most effect on the next 50 years is the kickstarter approach.
- btilly 14y ago
  According to http://www.fastcompany.com/magazine/141/the-price-of-approval.html http://www.fastcompany.com/magazine/141/the-price-of-approva... the average cost of phase I-III trials is in the neighborhood of $150 million. So no, not really in the range of crowdfunding. And if you did get it approved, and managed to sell the treatment to everyone in the USA who has Crohn's disease, you'd need to make a profit of several hundred dollars/person just to pay for the cost of FDA approval. Realistically you'd want to charge more to recover up front risks, the cost of marketing, and uncertainty about what fraction of the target population you'd successfully sell to.

ZeroGravitas 14y ago

You missed "clear property boundaries" as a difference. It's very easy to tell if a chemical compound is being used by two different firms, it's the equivalent of the source code being identical. But for software patents, there's much more subjectivity involved, e.g. does your patent cover this type of swiping, even if it doesn't in reality could you possibly convince a jury of ordinary people of that fact?. This ambiguity is bad in itself. You might not like the chemical patent, but at least you'll know for certain whether you infringe it or not, which saves a lot of court battles.

b-man 14y ago

About patent in drugs, I found these couple of articles really pertinent: http://archive.mises.org/14949/patents-kill-compulsory-licenses-and-genzymes-life-saving-drug/ http://archive.mises.org/14949/patents-kill-compulsory-licen... http://archive.mises.org/15365/update-patents-kill-compulsory-licenses-and-genzymes-life-saving-drug/ http://archive.mises.org/15365/update-patents-kill-compulsor...