Tag: intellectual property

From Great Ideas to Global Impact – A Talk with Andrew Byrnes

Post author By Joshua Grove
Post date July 28, 2022

The following post comes from Tuan Tran, a rising 3L at Scalia Law and a Research Assistant at C-IP².

2022 Andrew Byrnes event flyer — Click on image for full-size PDF flyer.

Small ideas can lead to big changes, which in turn can make a significant impact on the world, but—as technology executive, attorney, and investor Andrew Byrnes knows well—this is no easy task.

On May 4, 2022, Mr. Byrnes gave a talk co-hosted by the Center for Intellectual Property x Innovation Policy (C-IP²) at George Mason University, Antonin Scalia Law School, and Business for a Better World Center, School of Business, George Mason University. With his background and experiences in both the legal and technology industries, Mr. Byrnes shared his knowledge about how just a single idea can be transformed to make a great impact on society. His talk focused on two main points: how ideas are developed, and the framework he has used to implement and transform those ideas into something impactful.

According to Mr. Byrnes, the first step is “finding the idea.” There are three principles involved in the process: be curious, look at intersections, and be passionate. The first principle is to be open to the possibility of having a great idea that can either address a challenge or take advantage of an opportunity. It is important to listen and be observant, because the more one talks with new people about new topics in different contexts, the more one will be likely to come up with interesting and powerful new ideas. One of the key things to keep in mind is to not waste time looking for a perfect idea, because a big idea is usually not presented initially in its complete form. Instead, it is usually presented as smaller ideas that are eventually brought together. Second, “looking at intersections between disciplines and industries” means to be curious and examine known things and combine them “in ways that they haven’t been combined before.” For example, with patents, “most inventions are combinations of known elements.” The third principle stands out as the most important one: being passionate about the pursuit of the idea. Without passion, it is extremely difficult to go from that great idea to real-world impact.

Mr. Byrnes has laid out a framework that involves the most crucial aspects of how to accomplish the goal of transforming ideas into impactful innovation. The framework has “five pillars” in a “hub-and-spoke” formation: legal clearance, intellectual property (IP) protection, market validation, operationalization, and user adoption. As Mr. Byrnes explained, “The reason why I have this hub-and-spoke model is it’s not remotely linear. You . . . have to do all of these things in sequence and at once, and once you’ve gone through all of them, you have to go back and do them all again, because the world is dynamic, your idea is dynamic, and the operationalization of the idea will require you to . . . adjust over time.” Following is the discussion of the five pillars.

Legal Clearance

This pillar begins by “evaluating the existing law.” It is essential to understand the related law and how it could impact what will be done with the ideas, including any legal barriers that prevent the implementation of an idea. When as is common the law is unclear, there are two choices, both with costs and opportunities. Putting a hold on the idea can help avoid potential legal problems, but that might result in being left behind when the competitors decide to engage in similar markets or to produce similar products. It may be difficult to enter the market later. On the other hand, proceeding with the idea when the law is unclear might be costly later after the regulators or courts say that the implementer cannot do what they have been doing. Therefore, a company needs legal advice to understand all aspects of the related law before implementing any ideas so that the company can come up with the most suitable strategy. Lawyers are a helpful source, and—for any startups in the Northern Virginia area—so is the Innovation Law Clinic at George Mason University Antonin Scalia Law School.

Mr. Byrnes pointed out that there are “many facets” involved in IP, the second pillar. Important forms of IP for protecting one’s inventions and businesses are patents and trademarks. In short, a patent is “the grant of a property right to an inventor by the government” that can “exclude anyone [else] from making, selling, or using the invention for a [specific] period of time.” Not every idea or invention can be patented, because there are some legal requirements for patent protection; trade secrets may be able to provide protection where patents cannot. However, where applicable, patent protection can be valuable for limiting competition during the life of the patent, raising the valuation of a company, and potentially for licensing purposes. When it comes to patent protection, filing as soon as possible is important because the first inventor to file a patent application will have priority. Also, it is advisable to keep documentation and to have written agreements with employees and collaborators, if any, to ensure the ownership of our idea. Trademarks are also important. A great idea may not succeed if the consumers or clients cannot find the product or service or associate it with your company. Ideally, select a trademark “that is as strong as possible” at an early stage to ensure maximum brand protection.

Market Validation

After legal clearance and protecting IP, the third pillar is market validation. Even “a legal and protected idea” is not impactful when people do not need it. As mentioned earlier, the world changes at a fast pace, so what people needed in the past might not be what they find important in the present. Thus, to build a sustainable business from great ideas, it is vital to “(re)visit demand,” “assess the model,” and “engage prospects directly.” When revisiting demand, implementers should ask themselves whether their ideas are solving any problems or providing solutions to “pain point[s]” they envisioned at the beginning or some other problems they have developed over time. In terms of economics, business models should be assessed for their sustainability. Obtain feedback from clients and consumers using a variety of methods, both traditional, e.g., customer surveys, and creative. For example, Arctop utilizes neuroscience technology to develop an app that can evaluate a user’s experience with a product based on the user’s brain activity. This method can be a better representation of customer satisfaction than what is available through a rating system or survey.

Operationalization

As Mr. Byrnes says, it is exciting to confirm that people still love and want our ideas, “but we actually have to get it done.” The operationalization area or fourth pillar is the “get-stuff-done” (the “GSD”) stage. There are three main tasks involved in this stage: “building the right GSD team, . . . focusing on execution, and then prioritizing efficiency and viability.” Building the GSD team is the most important task. Mr. Byrnes lists being emotionally intelligent, curious, diverse in perspective, synergy-seeking, resilient, and confident as important characteristics for team members. The more people in the team who have these characteristics, the more effectively and efficiently the team members can collaborate to accomplish mutual goals. Second, “ideas alone are not good enough”; the focus needs to be on execution. Avoid “mak[ing] the perfect enemy of the good.” For example, a team may wait to act if their vision of the ways things will occur is not realized, but the result may be that, “if you wait that long, … the world’s going to pass you by.” Therefore, implementers need to be confident in the team they have built and the accomplishments they have achieved in earlier stages. As Mr. Byrnes states, “be biased to action, and that’s most likely the best risk-minimizing approach.” In addition, “prioritizing efficiency and viability” is crucial. By “spend[ing] no more money than you’re making,” the team does not “hav[e] to seek as much outside investment and engagement over time.”

User Adoption

The last pillar of the framework is about conveying to the world what you are doing. To be successful at this stage, Mr. Byrnes states, it is important to have “widespread visibility,” “a compelling narrative,” and “third-party validation.” There are several tools to help in achieving widespread visibility: “earned media,” paid advertisements, or “owned” media, such as social media. Although all of these tools helping reach as many customers as possible, the most suitable tool should be chosen carefully depending on the situation. The tools are most useful only when there is a compelling narrative to deliver to the target audience. It takes effort to come up with a unique narrative, but in general, a compelling narrative should convey a key benefit of the products directly and concisely. Finally, products and services will garner more trust and credibility when potential customers see others whom they know and trust approving or using those products or services. Thus, start-up companies are highly encouraged to seek third-party validation, whether from other companies, non-profit organizations, governments, or others.

A small idea can make significant impact on society, but the path from forming an idea to making the impact is challenging. Many companies have struggled to make impactful innovations because of the lack of relevant knowledge and experiences. During the talk, Mr. Byrnes pointed out several unique problems and a sophisticated framework of five pillars to overcome those problems. Although following the five-pillars model might not guarantee success, it significantly improves any company’s chances of creating impactful innovations quickly and effectively.

Healthcare International Law

A View from Both Sides: COVID-19, the TRIPS Waiver, IP Rights, and How to Increase the Supply of Vaccines

Post author By Joshua Grove
Post date June 22, 2021

Issue

The United States and other wealthy nations have access to plenty of COVID-19 vaccine doses and thus are beginning to get the pandemic under control, while less affluent countries do not have access to adequate doses and are still struggling with rising cases. In October 2020, India and South Africa proposed addressing this problem by waiving certain portions of the TRIPS Agreement, the most comprehensive agreement on intellectual property (IP) aspects of international trade among the WTO’s 164 member states. The waiver cites “an urgent call for global solidarity, and the unhindered global sharing of technology and know-how in order that rapid responses for the handling of COVID-19 can be put in place on a real time basis.” While this proposal broadly applies to any COVID-19-related technology, much of the conversation is currently focused on vaccines.

The proposal would temporarily suspend patent rights covering COVID-19 vaccines and possibly also be used to compel the transfer of trade secret “know-how” and “show-how.” Proponents say this would allow any manufacturer to begin production—boosting vaccine supply while slashing prices—to end the surge of cases in less developed nations. Critics argue that the reality is more complicated: the waiver will be ineffective, even harmful, and it would have a devastating impact on our readiness for future health crises.

In Support of the Waiver

For supporters of the waiver, the answer is clear: cases are rising in many nations because they still don’t have the vaccines they need. It’s only reasonable to make exceptions to our ordinary system of business incentives during times of global crisis.

The Biden Administration

That is essentially what U.S. Trade Representative Katherine Tai stated when the Biden Administration announced its support for the waiver: “This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures. The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines.”

It affects all of us

WHO Director-General Dr. Tedros Adhanom Ghebreyesus says that the “me-first approach” among powerful nations “is self-defeating and will lead to a protracted recovery with trade and travel continuing to suffer.” Under this rationale, even purely self-interested parties should support the waiver, if only because modern commerce is so globally connected.

Dropping IP barriers will facilitate greater collaboration

Many say the threat of IP litigation prevents the kind of collaboration needed to quickly ramp up production and development, and that a waiver can remove that threat. The president of Médecins Sans Frontières, Dr. Christos Christou, says that “[t]he waiver proposal offers all governments opportunities to take action for better collaboration in development, production and supply of COVID medical tools without being restricted by private industry’s interests and actions, and crucially would give governments all available tools to ensure global access.”

Patents were not meant to impede emergency action

A recent editorial in the journal Nature argues that patents are designed to protect ordinary commercial interests, not to hinder global cooperation against a common threat: “A pandemic is not a competition between companies, but a race between humanity and a virus. Instead of competing, countries and companies need to do all they can to cooperate to bring the pandemic to an end.”

It solves an immediate need without setting a troubling precedent

While opponents of the waiver argue that it will weaken future drug patent protection, Imron Aly and Ahmed M.T. Riaz of Schiff Hardin LLP call those concerns “unfounded” in their post at IPWatchdog. Not only is the current proposal limited specifically to COVID-19, but it was also not created carelessly. Instead, it “has taken substantial international efforts and official international law amendments.” Aly and Riaz say this exceptional action is appropriate if it can succeed where our IP system has yet to do so: “The TRIPS waiver simply allows countries the option to suspend patent enforcement to encourage COVID-19 vaccine production, which makes sense for those countries where current investment has not resulted in vaccine access.”

Even if the waiver doesn’t work, it might work

University of Houston Law Center Professor Sapna Kumar acknowledges a number of functional issues with the waiver approach but notes that it may still have a positive effect on the pandemic: “Overall, the greatest benefit of the Biden Administration’s support for the waiver is that it signals a departure from the prior approach of punishing countries facing health crises and that it might spur pharmaceutical companies to voluntarily increase out-licensing and donations of vaccines.” Her prediction was borne out by a recent pledge to donate 2.3 billion doses by Pfizer/BioNTech, Johnson & Johnson, and Moderna.

Opposed to the Waiver

Opponents of the waiver argue that it will not be effective because it fails to address the real problems. Further, it could actually be detrimental to quality control and supply chains in the present crisis, while quite possibly affecting how pharmaceutical companies choose to allocate investment dollars in the future.

It’s a long process that requires much more than a temporary waiver of licenses

Vaccines are not like other drugs. Writing for Foreign Affairs, Peter J. Hotez, Maria Elena Bottazzi, and Prashant Yadav say that we can’t compare the current situation to similar actions on HIV treatments, and that most nations are not prepared to make use of the patented technology: “Producing vaccines—particularly those as technologically complex as the messenger RNA (mRNA) inoculations against COVID-19—requires not only patents but an entire infrastructure that cannot be transferred overnight.” The authors state that “[t]he effective transfer of such complex technology requires a receiving ecosystem that can take years, sometimes decades, to build.”

We need another way

Professor Yogesh Pai of the National Law University Delhi says that simply waiving trade secret protection won’t automatically disclose everything a manufacturer needs to know. Accessing “hard tacit knowledge of manufacturing/quality control measures for production and clinical data required for regulatory clearances” could require forced technology transfer (FTT) by national governments. He recalls how detrimental such efforts were to India’s economy when it tried FTT with Coca-Cola in the 1970s, prompting the company to leave the country altogether.

Prof. Pai instead recommends efforts to encourage voluntary cooperation: “Where blunt legal instruments don’t work, using track-1 and track-2 diplomacy to place moral coercion on western governments to nudge firms to actively engage in technology licensing may still work wonders.”

“China First” policy?

Sixteen U.S. senators issued a sharply worded letter to the executive branch, questioning the true motives of “China and other countries which regularly steal American intellectual property—like India and South Africa,” and expressing shock that an American president would go along with it: “These nations are falsely claiming that granting such a waiver would speed the development of new vaccine capacity. Nothing could be further from the truth.” Instead, the senators are suggesting that the waiver is being used as a means to unfairly to acquire trade secrets that took massive resources and time to develop.

Reuters reports that “some U.S. officials fear the move would allow China to leapfrog years of research and erode the U.S. advantage in biopharmaceuticals” and quotes a senior U.S. official as saying that the country “‘would want to examine the effect of a waiver on China and Russia before it went into effect to ensure that it’s fit for purpose.’”

IP is not the Issue

A waiver on patent rights, even with the corresponding trade secrets, can only give permission to manufacture. But Eva Bishwal of Fidus Law Chambers writes that the real problems in India “are state inaction, dearth of raw materials and low production capacity.”

According to Patrick Kilbride of the U.S. Chamber of Commerce’s Global Innovation Policy Center, and as cited in Pharmaceutical Technology, “[p]roposals to waive intellectual property rights are misguided and a distraction from the real work of reinforcing supply chains and assisting countries to procure, distribute and administer vaccines to billions of the world’s citizens.”

Low-quality vaccines could do more harm than good

Former USPTO Director Andrei Iancu voiced concern recently at a World IP Day event, asking, “if we waive IP rights, and exclude the original manufacturers, how are we going to control the quality of the vaccines that go into people’s arms? How are we going to control for the fake vaccines? Just last week we saw fake Pfizer vaccines.” And as Philip Thompson points out for IPWatchdog, when investigators are forced to “determine if adverse events or sub-par effectiveness originate from ‘real’ vaccines or fake doses, we should expect global production starts and stops to become much more frequent.”

It will discourage investment in the most critical areas

Pharmaceutical developers invest unfathomable amounts of money into bringing drugs to market. The path to success is long, expensive, and highly uncertain. But what is certain is that successful drugs can yield a profit that covers the loss from failures. Now critics are deeply worried that this waiver will skew future cost-benefit analyses against important classes of medicine. All other things being equal, a developer has a better chance at a positive return by investing in drugs that pose no risk of seizure during a global emergency. As Amanda Glassman of the Center for Global Development writes, the waiver sends the wrong message to innovators and investors: “don’t bother attacking the most important global problems; instead, throw your investment dollars at the next treatment for erectile disfunction, which will surely earn you a steady return with far less agita.” The scramble amongst pharmaceutical giants to develop a vaccine was an all-out race, with good reason, and that’s exactly how it should be. If those companies believe that forfeiture is waiting at the finish line next time around, we might see fewer contestants.

Even “no-profit” vaccine makers appear to oppose the waiver

Pfizer CEO Albert Bourla laid out everything the company has done to combat the vaccine in an equitable manner and argued that “waiver of IP rights could only derail this progress.” And while Pfizer and Moderna are selling their vaccines at a profit, Johnson & Johnson and AstraZeneca have pledged not to do so during the pandemic.

However, it appears that even those companies oppose the waiver. As reported in The Wall Street Journal, the trade group PhRMA, which represents Johnson & Johnson and AstraZeneca among many others, is “lobbying members of Congress to oppose the Biden administration’s support for the waiver.” Johnson & Johnson’s Chief IP counsel Robert DeBerardine says that patent rights are responsible for the breakneck pace of development and that the drug’s makers are the best-equipped people to continue the fight: “What we’re able to do, because we have control of the IP, is to pick the best companies to help us supply the world. If you were to give everything to everybody, you may see a flood of vaccines, but you would have no idea if they’re safe and effective.”

Conclusion

While we share the concerns of other organizations that effective, affordable, and accessible vaccines be made available to all persons regardless of location or wealth, we do not believe that upending longstanding U.S. patent policy for a solution that will do little if anything to increase the vaccine supply is advisable. Strong IP rights remain the best way to incentivize innovation and ultimately increase the supply of life-saving medicines. The Biden administration’s unprecedented support of the proposed WTO IP waiver, while well intended, is likely to create long-term harm and unlikely to have much of an impact on global vaccine supplies. Ultimately, encouraging companies to license IP and engage in voluntary knowledge transfer, along with the sharing of excess doses that are being produced, are methods far more likely to alleviate the vaccine supply issues than waiving IP rights and would be a better path forward out of the current crisis.

USPTO-DOJ Workshop on Promoting Innovation in the Life Science Sector: Day One Recap

Post author By Joshua Grove
Post date January 12, 2021

The following post comes from Colin Kreutzer, a 2E at Scalia Law and a Research Assistant at CPIP.

night view of Washington, D.C. By Colin Kreutzer

This past fall, the United States Patent and Trademark Office (USPTO) hosted a joint workshop with the Department of Justice (DOJ) entitled Promoting Innovation in the Life Sciences Sector and Supporting Pro-Competitive Collaborations: The Role of Intellectual Property. Nyeemah Grazier and Brian Yeh (USPTO Office of Policy and International Affairs (OPIA)) emceed the day’s events, which focused on the impact of patents and copyrights on collaboration and innovation in the life sciences sector. The goal was to promote dialogue between members of the innovation and legal communities working in the life sciences sector to combat the COVID-19 pandemic. Video of day one of the workshop is available here, and our summary of day two is available here.

Opening Remarks

In his opening remarks, Andrei Iancu (USPTO Director and Under Secretary of Commerce for Intellectual Property ) discussed the main purpose of the workshop—to find ways of accelerating American innovation in the life sciences. “Our goal is to enhance collaboration among innovative companies and researchers to solve one of the most vexing health problems we have faced as a country in the past century.” He highlighted the ongoing collaboration between the USPTO and DOJ as “truly innovative.”

Director Iancu also emphasized the positive impact of the patent system on our economy and quality of life throughout American history. He cited the discovery and development of insulin treatments as an example of how innovations have alleviated suffering and helped treat diseases. As an economic example, he noted the massive biopharmaceutical company Amgen, whose co-founder Dr. Marvin Caruthers had once told him that patents are so critical to life sciences development that, without them, the U.S. “would not have a serious biotechnology industry.” Finally, Director Iancu pointed out a number of pandemic-era efforts that the USPTO has undertaken to keep innovation moving forward.

Session I: The role of patents in research and development of therapeutics, diagnostics, and vaccines, particularly during pandemics

In the first session of the day, Ms. Genia Long (Senior Advisor, Analysis Group) gave a presentation on the relationship between patents and innovation, and the value of innovation in improving the diagnostic and therapeutic arena of public health.

Ms. Long explained that technological innovation is a key determinant of economic and public health progress. Disease and morbidity rates have consistently declined over the last thirty years for many serious illnesses such as heart disease, cancer, HIV, and hepatitis. Much of the overall increase in life expectancy in the United States is attributable to pharmaceutical developments. These sorts of improvements are expected to continue into the future, so long as we continue to incentivize and support development in cutting-edge technologies such as gene and cell therapies.

Ms. Long built on Director Iancu’s comments about the core reason that patents are essential in drug development. The cost of developing a drug is extremely high, while the cost of copying a successful drug is very low. Without granting pharmaceutical companies a limited period of exclusivity in which their costs may be recovered, those massive R&D investments are guaranteed to be a losing bet. Realizing this in advance, of course, companies would choose not to make such investments in the first place. And we would have to do without many of the life-enhancing treatments that we now enjoy.

Ms. Long also discussed the importance of collaboration between all government actors who play a role in this innovation ecosystem. In addition to the patenting process, FDA approval takes a large part of the time and money in bringing a drug to market. The Hatch-Waxman Act provided a patent restoration period, adding time to the end of a patent life to compensate for time lost while seeking approval. But the market exclusivity period has remained steady at about 12 to 13 years. Meanwhile, patent challenges from generic drug makers have increased dramatically. Collaboration is important because pharmaceutical patents are “embedded within a larger and somewhat complex system of rules and incentives which act together to yield market results.”

Session II: Update on USPTO guidance on patentability of life science inventions

Next, Ali R. Salimi (Senior Legal Advisor, Office of Patent Legal Administration (OPLA), USPTO) gave an overview of the most recent USPTO guidance to examiners on disclosure and subject matter eligibility analysis.

Mr. Salimi first discussed the rather convoluted history of patent eligibility under 35 U.S.C. § 101. In brief, the Supreme Court has developed a set of judicial exceptions to the four statutory categories of patent-eligible subject matter: process, machine, manufacture, and composition of matter. The Court views these exceptions as necessary to prevent the basic tools of scientific and technical work from becoming inaccessible. As currently written, those exceptions are laws of nature, natural phenomena, and abstract ideas.

Mr. Salimi outlined the 2012-2014 decisions in Mayo v. Prometheus, AMP v. Myriad Genetics, and Alice Corp. v. CLS Bank, as well as the responses by the USPTO in updating its guidance to examiners. The final result was the 2019 updated patent eligibility guidance (PEG) version of the Alice-Mayo test.

The current form of the test is given in a flow chart shown at 42:50 of the video presentation. Step One of the test asks whether the claim is directed to a statutory category. If so, Step Two then asks if a judicial exception renders the claim ineligible—if the claim does recite a judicial exception, it will still satisfy §101 so long as it integrates the exception into a practical application and recites “additional elements that amount to significantly more” than the exception.

Mr. Salimi finished by briefly discussing the three disclosure requirements under § 112: written description (whether the disclosure demonstrates that the inventor actually had possession of the invention), enablement (whether the description enables a person of ordinary skill to make and use the invention), and best mode (whether the inventor knows and discloses the best mode of carrying out the invention).

Overall, he says the 2019 PEG has been well received by both examiners and practitioners, and it has done much to further the goals of clarity and certainty in patent prosecution.

Session III: Life science patents in practice

In this session, two speakers shared their own experiences with how the patent system protects inventions in the life sciences, promotes innovation and facilitates collaboration in life sciences.

David E. Korn (VP of Intellectual Property and Law at PhRMA) spoke first. As a representative of a trade association of leading biotech firms, he elaborated on the concerns about recovering large investments made in the prior remarks of Director Iancu and Ms. Long.

Mr. Korn explained that not only is the drug development process lengthy and costly, but it is also uncertain. Discovery of an active compound is just the beginning. It is followed by initial laboratory and animal testing. If successful, the developer may file an Investigational New Drug (IND) application and begin phase I and phase II clinical trials. This is followed by larger and longer phase III trials involving thousands of patients. If that is successful, the developer may file a new drug application (NDA) to the FDA and seek approval. Only after this process is the drug ready, and drugs can fail at every step along the way. Mr. Korn said the cost of developing a successful drug can be as much as $2.6 billion when accounting for unsuccessful candidates. He likened the process to a rocket mission in which “everything needs to work perfectly at each stage.”

Moreover, Mr. Korn continued, R&D doesn’t stop after FDA approval. There is ongoing research into new forms, new indications, methods of delivery, and multiple therapies. All of these innovations require additional investment and further FDA approval. He credited a number of laws with supporting pharma innovation and collaboration, including the Hatch-Waxman Act, the Orphan Drug Act, and the Bayh-Dole Act.

Next, Dr. Gaby Longsworth (Director, Sterne Kessler Goldstein & Fox) discussed life sciences patents from the perspective of a practicing patent attorney. Patents do more than allow drug developers to recoup their investments. By offering an alternative to holding information as a trade secret, they allow for more open collaboration and licensing in order to “build a common innovation instead of battling it out in litigation.” Patents can also be sold or used as collateral for a bank loan, providing research incentives and support to smaller companies.

First, Dr. Longsworth gave an overview of the three main forms of small molecule drug applications under the Federal Food, Drug, and Cosmetic Act. An NDA can be filed under § 505(b)(1) for new drug compounds, as well as new formulations or indications of an existing drug. A second type is found under § 505(b)(2), known as the paper NDA, for modifications of previously approved drugs based on safety and effectiveness data of the prior drug. Finally, there is the Abbreviated NDA (ANDA) under § 505(j). This is a duplicate application used by generic manufacturers, and it relies on studies provided in the NDA for the original drug.

Next, Dr. Longsworth discussed the general protection strategies of drug innovators. One goal is to build a strong blocking patent. She explained the importance of understanding the different types of patents available when drafting the application in order to obtain claims that will not be easily designed around. Another goal is to create a patent thicket to deter competition. It can become very difficult and expensive for generic competitors to file an ANDA when there are many patents to analyze, and it becomes more difficult for competing innovators to mount successful attacks at the Patent Trial and Appeal Board.

Panel Discussion I: Are changes to U.S. patent law needed to better support innovation in life sciences and the development of COVID-19 solutions?

After hearing several presentations on the effect of economic incentives on innovation, a panel discussion addressed the question of whether changes are needed to improve innovation, collaboration, or access to medicines. Moderated by Director Iancu, the panel featured: The Honorable Paul R. Michel (Chief Judge, U.S. Court of Appeals for the Federal Circuit (CAFC) (Ret.)), Steven Caltrider (VP and General Patent Counsel, Eli Lilly & Co.), Karin Hessler (Assistant General Counsel, Association for Accessible Medicines (AAM)), Arti Rai (Elvin R. Latty Professor of Law and Director, Center for Innovation Policy, Duke University School of Law), Corey Salsberg (VP, Global Head IP Affairs, Novartis), Hans Sauer (Deputy General Counsel and VP, Biotechnology Innovation Organization), and Hiba Zarour (Head of IP Department, Hikma Pharmaceuticals).

Judge Michel noted the problems with uncertainty in § 101 eligibility of patent claims, which he referred to as a “systemic failure” of the courts. If businesses and venture capitalists cannot reliably predict whether a claim will survive § 101, there is less appetite for investment in R&D, less commercialization, and ultimately fewer new medicines. He credited the 2019 USPTO guidance as an improvement but lamented that the Federal Circuit had not gone along with it. The best hope for clarity would not come from the courts, he said, but through new legislation.

Mr. Salsberg noted that from a medical standpoint, the two most important elements for getting through the pandemic are innovation and collaboration. He said the patent system is the reason we entered this pandemic with “libraries of millions of novel compounds that are ready to test right now.” Likewise, it is why we have the tools to sort through these compounds and identify those that can help with COVID-19.

Speaking for generic manufacturers, Ms. Zarour argued that innovation is not solely dependent upon IP protection: “Innovation will happen.” And while previous speakers had argued that it increases innovation, she cited a study from the Swiss Federal Institute of Intellectual Property that found an upper limit on the benefits of patent protection. At a certain point, the stifling effects of IP protection outweigh the benefits of incentivizing investments. She proposed a solution in which the initial patent for a drug would grant the inventor a period of exclusivity (e.g., 15 years) but subsequent or ancillary patents to the same drug would go into a pool that could be voluntarily licensed. This would strike a balance between the need for innovation with the need for access, and it could prevent the “evergreening” of drug patents.

Ms. Hessler also advocated for such a balance. She agreed that strong innovation incentives are responsible for the thousands of COVID-19 compounds that are already in late-stage clinical trials. At the same time, she used an example previously cited by Dr. Longsworth—a 1,000-patent thicket for a biologic manufacturing process—to argue that excessive protection can unduly impede medical access. She mentioned a proposal to cap the number of patents that can be inserted into the biologics patent dance as being a potential solution.

Ms. Hessler also said that settlement of patent litigation is becoming increasingly difficult due to “a patchwork of inconsistent regulations” and disagreement between state and federal laws. Legal settlements can expedite access of generic and biosimilar drugs by over a decade. Mr. Caltrider agreed that the settlement issue is of great importance, and that states such as California are creating laws that interfere with the federal world of patents.

Mr. Sauer said that collaboration is important in biotech because many companies in that field are small. Licensing and technology transfer are critical to the proper function of our biotech ecosystem. The small innovators must have a secure means of profitably transferring their technology to the larger manufacturers who are better equipped to fully develop and deliver the product to the public.

Mr. Caltrider pointed out that the USPTO has remained open for business since the very beginning of the COVID pandemic. Touching on the initiatives that Director Iancu had mentioned in the opening remarks, he praised the certainty and reliability of our patent system as essential to keep “the machinery working” to promote collaboration and innovation.

Prof. Rai pointed to a recent DOJ business review letter which declined to raise antitrust issues over a collaboration between large manufacturers of monoclonal antibodies. She said that from a COVID perspective, the patent system has been doing great. But she echoed Judge Michel’s remarks about § 101, calling the situation a “mess that needs to be fixed.” Finally, she described a forthcoming study on biologics litigation and a proposal regarding manufacturing process patents that are filed after FDA approval.

Session IV: Copyright and innovation in the life sciences

The final sessions of the day shifted to the role of copyright law in the life sciences. Session IV include three short presentations from: Michael W. Carroll (Professor of Law and Faculty Director, Program on Information Justice and Intellectual Property (PIJIP), American University Washington College of Law (WCL)), Mark Seeley (Consultant, SciPubLaw LLC and Adjunct Faculty, Suffolk University Law School), and Bhamati Viswanathan (Affiliate Professor, Emerson College).

Ms. Viswanathan began with a brief overview of copyright law and the balancing act it performs. Most people think of copyrights in terms of music and literature, but it can also protect software, databases, and other compilations of information. Like the patent system, one goal of copyright law is to promote innovations and investment in copyrightable works. And like patents, there exists an issue of balancing the incentive of ownership rights with access to those works. In the scientific community, copyright law seeks to balance the tendency for sharing and collaboration with the rights of the creators of original works.

Mr. Seely discussed two areas of scientific interest that are protected by copyright: scientific journals and searchable data repositories. He says that scientific knowledge is most valuable “when it is organized, standardized, updated, and indexed.” Publishers of scientific data are a crucial component of the current effort against COVID-19 because they provide useable data about known drugs, potential reactions, and other adverse events. By combining “published content, patents, with tactical mining capabilities and analytics,” these works support the pipeline of new treatments.

Prof. Carroll talked about the manner of distributing research outputs within the copyright system. The internet age has brought opportunities for vast dissemination of information. The challenge presented by open access movements has been in finding ways to utilize the internet’s potential while still protecting the IP rights of authors. Open access promotes innovation because it increases exposure of publications to readers beyond those within the narrow discipline from which the publications come, sparking new ideas in an interdisciplinary environment. It also provides information to under-resourced readers in low-income areas or developing nations. Prof. Carroll presented the standardized copyright licenses he helped develop with the Creative Commons organization, which allow authors to choose the particular terms and conditions under which their works are reused or distributed.

Panel Discussion II: Copyright discussion: Enhancing access to life science: How copyright can create incentives or barriers to building data or information pools, and related licensing

Session IV led immediately to a panel discussion by the presenters. Moderator Susan Allen (Attorney-Advisor, OPIA, USPTO) led a discussion of the role of copyright in disseminating information and supporting licensing models.

COVID-19 has resulted in many publishers voluntarily releasing relevant copyrighted information. Asked how this would affect publishing systems long term, Mr. Seeley was doubtful of any major impact. But he noted that downloads of information were much higher due to this change. If society decides, after the fact, that the emergency release was highly beneficial, it could impact future decisions about information sharing.

Prof. Carroll took the increase as an affirmation that open access systems are helping to fill an unmet need. He added that the pandemic has accelerated another trend towards the growth of pre-print servers—publication vehicles for preliminary results and yet unreviewed materials—but noted the growing pains associated with a public that is not accustomed to this type of early information sharing: “clinically actionable unreviewed results that then make it into the media can actually be harmful.”

Asked what role the government can play in supporting copyrights and information sharing, each panelist weighed in. Mr. Seeley said it’s important that governments do more than mandate certain types of publication and sharing—it should be coupled with funding to help make it happen. Prof. Carroll pointed to the recommendations he and others presented as part of the National Academies of Science, Engineering, and Medicine. He echoed Mr. Seely’s call for better funding of information infrastructure such as repositories, as well as better standardization. Ms. Viswanathan voiced support for initiatives like the Open Science Policy Platform (OSPP) and said she would like to see more empirical research on the impact that it has on business models of various stakeholders.

Closing Remarks

In closing, Mr. Yeh thanked the participants and encouraged all to tune in for day two of the conference, which would “explore different ways to expedite the development and use of therapeutics, diagnostics, and vaccines through competition, collaboration, and licensing.”

Tags Andrei Iancu. COVID-19, DOJ, intellectual property, life sciences, pandemic, USPTO

Intellectual Property Theory

Sean O’Connor’s Historical Take on Different Types of Intellectual Property

Post author By Joshua Grove
Post date June 8, 2020

The following post comes from Professor Camilla Hrdy of Akron Law. It originally appeared on Written Description, and it is reposted here with permission.

a pair of glasses, an apple, and a stack of books By Camilla Hrdy

I truly enjoyed Sean O’Connor’s new paper, forthcoming in the George Mason Law Review, called “Distinguishing Different Kinds of Property in Patents and Copyrights.” It is somewhat sui generis. But I guess I would describe it as a ‘legal-historical take on how people perceived intellectual property in the past, with theoretical implications for IP today.’

In O’Connor’s overarching framework, there are two kinds of IP. On one side, are preexisting state-of-nature rights in secret technical know-how and unpublished expression that is maintained through labor and attempts at secrecy. (I’ll call this type 1 IP). On the other side, are state-sanctioned patents and copyrights that are obtained in exchange for revealing those first rights to the public. (I’ll call this type 2 IP).

These two forms of IP are separated from one another by the act of “publication” on the part the author or creator, which transfers the rights from the private to the public sphere; and by the involvement of government, which protects exclusivity in order to encourage the act of publication and transfer to the public sphere.

O’Connor paints this distinction between type 1 and type 2 IP in a historical light, suggesting that the first came first, and the second came second. People have always had “de jure or de facto rights to maintain secrecy and exclusivity of private knowledge and skills[,]” he writes. The second type of property came only later, when “states formalized ad hoc exclusive patent and copyright grants into roughly standardized, deeded, and assignable property.” (3-4)

There is way too much good in this article to give it justice in a summary. It is full of insights on medieval publishing practices and Venetian patents, and is beautifully written. I highly recommend the full article for anyone looking for “something completely different.”

In my read, the big upshot for current IP theory is O’Connor’s view that the historic purpose of patents and copyright was “not to incentivize the authorship or invention of new things. Such creation had been taking place, often quite prodigiously, throughout human history.” (2). Instead, it was to encourage sharing those things by transferring them from the private to the public sphere. “From at least Greco-Roman antiquity,” O’Connor writes, “an important divide was acknowledged between the private and public spheres. An intentional act of publicare was required to transfer something from the private to the public.” (2). He argues that this transfer would not occur as frequently as desirable without patents and copyrights.

The lesson from this historical account, suggests O’Connor, is that if patents and copyrights were abolished or weakened, we might get more secrecy and less publicness.

“[W]e could inadvertently recreate the excessive use of secrecy that arguably hindered progress—in the sense of building off of existing knowledge available in the public sphere—in the time before proto-patents and proto-copyrights emerged in the Renaissance. Robust IP protections, together with appropriate limits on abuses of state-granted exclusive rights, will encourage more creators and innovators to choose the public disclosure and commercialization route.” (54).

This normative account seems similar to the oft-stated “exchange for secrets“/disclosure function of patents, as well as the Kitchian commercialization/coordination function. But O’Connor suggests that the “exchange for secrets” premise and its brethren are more central than is appreciated. The message I get is: lest we return to the Dark Ages, we must retain incentives to make secret knowledge and expression public.

Another upshot, albeit not much emphasized in the paper, seems to be that the “monopoly” concern many have with intellectual property is generated primarily when the state takes back what people know or already have access to — in other words, where one person’s patent or copyright impinges on other peoples’ preexisting rights to what they previously knew or used commercially. O’Connor refers to this briefly, writing (in his discussion of post-sale restrictions on chattels and the like)

[t]his view adopted Lord Coke’s sense of “monopoly”—as a legal term of art—as meaning only instances where the state took something back from the public that it previously had (most relevantly, when exclusive rights were given to a few individuals for a commodity or commercial trade that the public freely used or practiced before). (47).

I thought this interesting tension between type 1 IP and type 2 IP could have been drawn out more.

The main quibble some people might have with the article is at odds with why I personally like it. I like it because it’s original and out-of-the-box, and isn’t shy about reaching bold normative conclusions and engaging in some speculation. O’Connor sometimes provides extensive insights into what people thought about IP, going back as far as ancient and even hunter-gatherer times. (See, e.g. p. 22). But of course we can’t know that much about what people thought about IP, especially not at the theoretical depth O’Connor engages in, except what we can glean from the sources where certain individuals discussed it. I am often amazed at how many relatively rich accounts we have from Jefferson, Washington, and others during the creation of the American patent and copyright regimes in the late eighteenth century, and it still seems like it’s not enough, with conflicting versions coming out all the time. On the other hand, maybe O’Connor’s willingness to take creative leaps is better than saying “well I can’t tell you what I think they thought because I don’t have the data.”

Tags Camilla Hrdy, intellectual property, Sean O'Connor, Written Description

Biotech Patents Pharma

“No Combination Drug Patents Act” Stalls, but Threats to Innovation Remain

Post author By Joshua Grove
Post date June 27, 2019

superimposed images from a chemistry lab By Kevin Madigan & Sean O’Connor

This week, the Senate Judiciary Committee was to mark up a bill limiting patent eligibility for combination drug patents—new forms, uses, and administrations of FDA approved medicines. While the impetus was to curb so-called “evergreening” of drug patents, the effect would have been to stifle life-saving therapeutic innovations. Though the “No Combination Drug Patents Act”—reportedly to be introduced by Senator Lindsey Graham (R-SC)—was wisely withdrawn at the last minute, it’s likely not the last time that such a misconceived legislative effort will be introduced.

An Exaggerated Response to a Disputed Theory

The bill would have established a presumption of obviousness for drug or biologic patent applications whose invention was a new: dosing regimen, method of delivery, method of treatment, or formulation. While there was a rebuttal provision where the claim covered a new treatment for a new indication or “increase[d] . . . efficacy,” the latter was almost certain to introduce years of uncertainty and litigation. Further, the bill would have covered a broader class than true combination drug patents, in which one active ingredient is combined with another or with a non-drug.

Like many recent legislative efforts, the amendment sought to address a perceived lack of affordability of prescription drugs. After praising the America Invents Act of 2011 and subsequent Supreme Court rulings for strengthening the US patent system, the bill claimed that rising drug prices have outpaced “spending on research and development with respect to those drugs.” In addition to applauding Supreme Court decisions that have injected unquestionable uncertainty into patentable subject matter standards, the amendment went on to blame high drug prices on continually overstated issues related to advanced drug patents.

According to critics, combination drug patents have granted drug makers unearned and extended protection over existing drugs or biological products. But, quite simply, when properly issued by the USPTO under existing patentability standards, these are new patents for new products or processes.

Combination patents have been maligned as anticompetitive, resulting in a “thicket” of patents that impedes innovation through transaction costs and other inefficiencies. Unfortunately, notwithstanding a lack of empirical evidence validating the harm of follow-on innovation patents, patent thicket rhetoric is now being echoed by the media, the academy, courts, and policy makers in a fraught attempt to fix drug pricing.

Reports (see here, here, here, and here) from leading antitrust experts and intellectual property scholars have detailed the value of incremental innovation and challenged the notion that patent thickets are a true threat to competition and innovation. These studies have exposed patent thicket claims—much like the “troll” narrative that for years infected patent law debates—as an empty strawman theory, the repetition of which has led to undue confidence in its accuracy. The reality is that what critics point to as problematic cases of combination patents are in fact infrequent outliers, strategically highlighted to discount evidence of the value of new and innovative drug uses and administrations.

A similar claim by those promoting the patent thicket narrative is that combination patents extend exclusivity on a drug for years beyond an initial patent term, thereby blocking generic entry in the market. But if an underlying drug has gone off patent, no follow-on or combination patent will prevent a generic drug company from producing the underlying formulation—it’s only the new formulation, use, or administration that is protected.

Vague, Yet Oddly Familiar Standards

The language of the Graham amendment asserted that because “numerous” combination patents “contain obvious product developments,” a restructuring of 35 USC 103 is necessary to combat patent thickets and achieve optimal drug pricing. Suggesting that 103 obvious standards for advanced drug development should include a presumption that the covered claimed invention and the prior art to which it relates would have been obvious, the legislation would have undermined a unitary system of patent law in favor of different standards for different fields of technology. It was a bold proposal, and it’s one that ignored the proven value of new drug formulations and methods of treatment.

While the amendment provided for a rebuttal to the presumption of obviousness, the language was ambiguous and likely to render the patent system even more unreliable than it already is. The proposed statute said that an applicant may rebut the presumption of obviousness if the covered claimed invention “results in a statistically significant increase in the efficacy of the drug or biological product that the covered claimed invention contains or uses.” It is unclear what would qualify as “statistically significant,” and proving this vague standard would be nearly impossible.

In order to show a “statistically significant increase in efficacy,” long and costly head-to-head clinical trials would be necessary. To be clear, this is not a standard required by the FDA for new drug approval, let alone patentability.

As if that wasn’t enough reason to reject the Graham amendment, the language was alarmingly similar to that of an Indian patent law statute that has been recognized by the US Trade Representative as a “major obstacle to innovators.” In 2005, in order to comply with the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, India adopted for the first time patent protection for pharmaceuticals. Despite its recognition of IP rights in pharmaceuticals, India’s Act contains a troubling ambiguity in its Section 3(d), which requires an “enhanced efficacy” for known drugs in addition to the standard novelty, inventive step, and industrial applicability requirements.

India’s Section 3(d) has been invoked to reject patent protection for life-saving drug innovations, including Novartis’ landmark leukemia drug, Gleevec. Drug companies, government agencies, and policy makers have all recognized the threat to innovation that India’s patent law poses. In 2013, not long after the Novartis ruling, a bipartisan group of 40 Senators signed a letter to then Secretary of State John Kerry urging the state department to take action against India’s “deteriorating IP environment,” citing its willingness to “break or revoke patents for nearly a dozen lifesaving medications.”

Despite the widespread condemnation of India’s Section 3(d), the Graham amendment proposed adopting similarly indefinable standards to US patent law. While the language differed slightly—replacing “enhanced efficacy” with “increase in the efficacy”—it was no clearer, and implementation of this type of standard would only cause more confusion.

Protecting and Incentivizing Medical Innovation

Like most forms of innovation, the development of medicines and therapeutics is a process by which one builds and improves upon previous discoveries and breakthroughs. Sometimes those improvements are major advancements, but often they are incremental steps forward. In the pharmaceutical field, incremental or follow-on innovation frequently results in new therapeutic uses for existing drugs, which address serious challenges related to adverse effects, delivery systems, and dosing schedules. While they might not sound like medical breakthroughs on par with the discovery of penicillin, these advancements in the administration and use of pharmaceuticals improve public health and save lives.

Additionally, follow-on innovations are—and should remain—subject to the same patentability standards as any other technologies. Patents reward advancements that are novel, useful, and nonobvious, and our patent system has long recognized that patent claims are to be presumed patentable and nonobvious. The Graham amendment would have turned this established standard on its head, creating a separate and ill-defined hurdle for certain advancements in medicine.

The benefits of incremental innovation to public health and patients cannot be overstated. New formulations of malaria drugs, dosing regimens and delivery systems for AIDS patients, more efficient administrations of insulin for the treatment of diabetes, and developments in the treatment of cognitive heart disease have all been possible because of incremental innovation.

Imposing unjustified restrictions on the patentability of advancements like these would be disastrous for drug development, as the incentives that come with patent protection would be all but eliminated. Without the assurance that their innovative labor would be supported by intellectual property protection, pioneering drug developers would shift resources away from improving drug formulations and uses. The development of more effective treatments of some of the most devastating diseases would stall, as innovators would be unable to commercialize their products, recoup losses, or fund future research and development.

As critics continue to target myopically the patent system for a broader issue of drug prices in the American health care system, it’s likely not the last time that language like this will be proposed. In order to avoid the implementation of such ill-conceived standards into our patent laws, understanding what’s at stake is critical. The future of medical innovation depends on it.

Tags "patent trolls", Antitrust, broken patent system, competition, innovation, intellectual property, Kevin Madigan, patent, patent litigation, patent reform, patentability, Sean O'Connor, Section 101, USPTO

Innovate4Health Innovation

CPIP and ITIF Release Innovate4Health Report on Role of IP in Solving Global Health Challenges

Post author By Joshua Grove
Post date April 26, 2018

This past Tuesday, CPIP and the Information Technology & Innovation Foundation (ITIF) released our joint report: Innovate4Health: How Innovators Are Solving Global Health Challenges. The report details 25 important healthcare innovations that are being created by and for people in the developing world, where some of the most urgent challenges remain. Each of these innovations is supported by a strong intellectual property system, and many would not be viable without the security provided by these rights.

The video from our release event this past Tuesday can be found here and is embedded below. The full Innovate4Health report can be found here, and the Executive Summary is copied below. The individual stories can also be found here on the project’s Medium website.

Innovate4Health: How Innovators Are Solving Global Health Challenges

Executive Summary

Many of the world’s biggest challenges are health challenges. The good news is that, more than ever, people are meeting these challenges with innovative solutions.

While we still face great difficulties, people all over the world live better than ever before thanks to innovation. New medicines prevent or alleviate disease. New devices diagnose problems, repair bodies, and overcome physical challenges. Still other inventions keep vaccines and medicines fresh and effective or ensure their authenticity. New business models help innovation to happen and ensure that it reaches those who need it.

Many of these innovations are secured by intellectual property rights, which support the ability of innovators to invent and bring solutions to market. Property rights, particularly intellectual property rights, foster the freedom of many hands and many minds to work on challenging problems. They put decisions in the hands of those closest to problems—innovators with knowledge of potential solutions and caregivers and consumers who understand their own needs best.

With just a bit of reflection, it becomes clear that innovation and the property rights that secure it are key to meeting global health problems. Sometimes, however, the blinding light of necessity makes it hard to see this fact. When people are in need, it is all too easy to grow impatient with the rights of innovators. When that happens, innovators get treated as an obstacle.

We think that better public policy would result from better understanding of how innovation can meet global health challenges. Our organizations, the Center for the Protection of Intellectual Property (CPIP) at George Mason University’s Antonin Scalia Law School and the Information Technology and Innovation Foundation (ITIF), both non-profit, non-partisan research organizations, have teamed up to tell the exciting story of how innovation is making the world healthier.

Our Innovate4Health initiative culminates with this report, profiling 25 original case studies showcasing how innovators, many in developing countries, are tackling life-sciences/healthcare innovation in their nations and across the broader developing world. The 25 case studies are organized into the six following themes:

Adapting healthcare interventions for environments where resources and infrastructure are challenging;
Providing affordable and robust tests for diagnosing diseases;
Improving HIV diagnosis and care;
Affordable interventions to meet basic needs in challenging environments;
Getting healthcare to the people in places where it’s hard for people to come to the healthcare;
Fostering health innovation in emerging economies.

Collectively the case studies tell a compelling and inspiring story of how entrepreneurs are creating IP-enabled life-sciences innovations that are helping to tackle some of the world’s toughest health issues.

To read the report, please click here.

Tags health, healthcare, Innovate4Health, innovation, intellectual property

Innovate4Health Innovation Patents

Innovate4Health: Treating Neonatal Jaundice in the Developing World with D-Rev’s Brilliance

Post author By Joshua Grove
Post date June 27, 2017

This post is one of a series in the #Innovate4Health policy research initiative.

Innovate4Health By Nick Churchill

Severe neonatal jaundice kills over 100,000 newborn babies annually and causes severe brain damage to thousands more. In most cases, the condition can be treated by simply shining a blue light on a baby’s skin. However, each year more than 6 million infants worldwide do not receive adequate treatment. The problem is particularly severe in low-income countries, where many hospitals cannot afford the equipment to treat jaundice.

To address this global health problem, the innovators at D-Rev, a non-profit firm based in San Francisco, designed a high-performance, affordable device called Brilliance to treat severe neonatal jaundice. Brilliance has been praised by users as “effective and user-friendly,” and it was honored as the top innovation in the Health category of the 2016 Tech Awards. Since the introduction of the first Brilliance model in 2012, D-Rev estimates that the device has treated over 250,000 babies and has averted approximately 3,400 infant deaths and disabilities.

Neonatal jaundice occurs when a newborn has elevated levels of bilirubin in the blood. Approximately 18% of babies have severely high levels of bilirubin, which, left untreated, can lead to brain damage, cerebral palsy, hearing loss, and even death. Severe jaundice can be treated with a process called phototherapy, which involves placing the baby under special blue lights. When the light is absorbed by the infant’s skin, it helps break down bilirubin. Treated properly, severe jaundice usually does not cause lasting damage.

Phototherapy has long been recognized as a simple and effective treatment for severe neonatal jaundice; but at around $3,000, traditional phototherapy devices are prohibitively expensive for many hospitals in developing countries. Hospitals that can obtain a traditional unit are often unable to afford the maintenance and repair costs necessary to keep it running. The unreliable electrical systems in many developing countries can cause voltage spikes that damage device components. Commonly used fluorescent lamps require frequent replacement. As a result, phototherapy is unavailable to babies in many developing communities.

D-Rev is a product development company founded in 2007 to provide world-class, affordable healthcare technologies to people living on very low incomes. After learning that severe jaundice continues to cause brain damage in many parts of the world, D-Rev staff members visited hospitals in India and Nigeria to assess the availability of effective phototherapy and found that most of these hospitals did not have phototherapy devices that met standards for care. With the problem identified, D-Rev’s design team got to work.

D-Rev’s advanced devices, for which they are seeking a patent, uses LEDs that last 60x longer than fluorescent lamps, saving hospitals over $240 per year on replacement bulbs. Brilliance is designed to withstand a range of power fluctuations without affecting performance and operates without cooling fans or filters, so there are fewer parts to maintain. The device is height-adjustable and can be integrated with the wide variety of other critical neonatal medical equipment found in hospitals serving low-income communities.

Importantly, D-Rev’s devices are inexpensive to manufacture, which allows D-Rev to sell them for hundreds, instead of thousands, of dollars. The newest model incorporates the technology in their patent application, which ensures light intensity levels remain consistent across the treatment area at any angle of tilt. D-Rev also developed an integrated light meter to help healthcare providers ensure that infants receive appropriate doses of light, something many low income hospitals were previously unable to do. Thus, the innovations developed by D-Rev are improving the technology and reducing cost, making much needed treatments more accessible in the developing world.

After successfully designing an affordable and effective phototherapy device, D-Rev’s next challenge was to find a way to deliver Brilliance to the hospitals that needed it most. D-Rev’s CEO, Krista Donaldson, recognized that the firm would need help to establish a sales and distribution network, noting, “We knew we needed to license in this case.” To achieve its goals, D-Rev needed to find a partner willing to manufacture its products and distribute them to hospitals and clinics in the poorest communities in the world.

D-Rev licensed its technology to Phoenix Medical Systems, a neonatal equipment firm based in India, who agreed to manufacture and distribute Brilliance while capping its price. The licensing agreement was structured so that D-Rev would take a smaller royalty on sales to public and district hospitals, which tend to serve lower-income patients. In this way, D-Rev used its intellectual property rights to align the incentives of Phoenix’s sales team with D-Rev’s goal of reaching those patients who are most in need of affordable phototherapy.

Donaldson has explained why D-Rev’s protection of its intellectual property “is a prerequisite to having the broadest possible impact.” First, intellectual property rights allow D-Rev to ensure that the quality of its products remains consistent. As Donaldson notes, a medical device “cannot fail the user, particularly a user in a vulnerable population.” Second, inconsistency erodes consumer trust, which limits the impact of a product. Third, D-Rev recognizes that designing an effective product does not necessarily solve the targeted problem. By retaining control of its intellectual property, D-Rev can ensure consistent manufacturing of its products, sustainable delivery to users who need it, and continued maintenance and support. Finally, D-Rev protects its intellectual property because the market is “the most economically sustainable and scalable way” of reaching their intended customers.

D-Rev has demonstrated that the value of intellectual property goes beyond incentivizing life-saving innovation like Brilliance. Intellectual property rights empower innovators to increase their impact by partnering with market leaders like Phoenix. As Donaldson concluded: “To succeed, serious partners (for-profit or non-profit) must also make an investment, and none are willing to do that with the threat of knock-offs.”

#Innovate4Health is a joint research project by the Center for the Protection of Intellectual Property (CPIP) and the Information Technology & Innovation Foundation (ITIF). This project highlights how intellectual property-driven innovation can address global health challenges. If you have questions, comments, or a suggestion for a story we should highlight, we’d love to hear from you. Please contact Devlin Hartline at jhartli2@gmu.edu.

Tags Brilliance, CPIP, D-Rev, intellectual property, ITIF, neonatal jaundice, Nick Churchill, patent

Alliance for Creativity and Entertainment (ACE) Unites to Fight Online Piracy

Post author By Joshua Grove
Post date June 14, 2017

As digital piracy shifts away from torrent downloads and towards unauthorized streaming and theft-based extortion, stakeholders from all parts of the creativity community are reassessing their efforts to fight online infringement. This week, a global coalition of creators and leading on-demand entertainment services joined forces to better address the ever-evolving threat that piracy poses not only to artists and copyright owners, but to consumers and end users. Named the Alliance for Creativity and Entertainment (or ACE), the group brings together 30 industry leaders—including Amazon, HBO, Warner Bros., Netflix, Disney, Hulu, and the BBC—to maximize consumer experience while ensuring the vibrant creative ecosystem they support is not undermined by piracy.

In an opening press release, the Alliance describes the recent exponential growth of digital distribution models and the development of nearly 500 online services that provide consumers with a legitimate on demand viewing experience. And while these platforms have revolutionized the way consumers watch TV and movies, they’ve also added great value to a creative sector that is responsible for $1.2 trillion and 5.5 million jobs in the US alone.

Unfortunately, illicit websites—which sometimes offer pirated works within hours of release—remain a burden to the creative ecosystem and the artists and platforms that drive it. Despite encouraging efforts both in the US and abroad to disable some of the worst offenders, the constant game of cat and mouse with mirroring websites and the emergence of illicit streaming sites continue to frustrate the fight against piracy. According to the press release, in 2016 there were an estimated 5.4 billion downloads of pirated films and television shows and 21.4 billion total visits to illicit streaming websites that profit from the theft and unauthorized distribution of creative works.

To combat these enduring acts of infringement, ACE brings together creative companies from all over the world to combine resources and work in concert with seasoned antipiracy experts at organizations such as the Motion Picture Association of America (MPAA). Specifically, “ACE will conduct research, work closely with law enforcement to curtail illegal pirate enterprises, file civil litigation, forge cooperative relationships with existing national content protection organizations, and pursue voluntary agreements with responsible parties across the internet ecosystem.”

By reducing illegal online piracy, ACE will also work to eliminate the risks to consumers that so often accompany the illegitimate distribution of creative works. A recent study by the Digital Citizens Alliance found that one in three pirate sites expose users to infectious malware and that visitors to these pirate sites are 28 times more likely to encounter malware than visitors to legitimate websites. The serious threats posed to consumers by malware and viruses include not only identity theft and financial loss, but the complete immobilization of entire computer systems, as seen in the recent Wannacry attack.

With pirate site operators finding new ways to profit from the theft and distribution of creative works, it’s encouraging to see a unified and global effort dedicated to reducing piracy, supporting creators, and protecting consumers.

Tags copyright, copyright infringement, intellectual property, Kevin Madigan

From Star Wars to La La Land: How Intellectual Property Fuels Films

Post author By Joshua Grove
Post date May 11, 2017

The following post comes from Mandi Hart, a rising third-year law student at Antonin Scalia Law School, George Mason University, who worked as a video producer before going to law school.

By Mandi Hart

Movies are a first-love in America and around the world, and their production is made possible by the existence of intellectual property (IP) rights. Although most moviegoers may not recognize the vital role that IP plays in film, without it, screens would be dark. This post explains the critical role that copyright, trademark, and patents play in film production and financing.

Copyright is the Lifeblood of Movies

Copyright secures to creators certain exclusive rights in their original works of authorship, including rights of reproduction, distribution, public display, performance, and the creation of derivative works. These exclusive rights make it possible for creators and copyright owners to deploy their creative works as property rights in a free market.

Copyright’s exclusive right to distribute creative works is particularly important in the film industry. Distribution deals are essential to the filmmaking process, as many filmmakers finance the production of their movies by selling the exclusive right to distribute their film in a given territory. Distributors purchase these rights via a pre-sale, committing to pay a certain amount to the producer when the completed film is delivered in accordance with technical specifications. The pre-sale agreement serves as collateral for bank loans that provide actual cash for a film’s production. Once a film is completed and delivered, the payment from the distributor is then used to pay back the loan.

Without copyright, producers would have no distribution rights to sell in the first place, and without distribution deals, many producers wouldn’t be able to secure the funding necessary to make their movies.

Copyright also makes it possible for authors to option pre-existing works for adaptation into movies. An author or publisher can sell a film producer the right to create a derivative work from a novel, short story, play, or comic book. And films themselves might inspire derivative works—think of the breadth and popularity of Star Wars movies and shows today, 40 years after the original movie was released. Copyright not only protects the original creative works that often serve as the foundation for films, it also makes possible the many licensing deals that turn individual films into trilogies, series, or full-blown universes.

Copyright also fuels the music and sounds we hear in movies. From original scores and sound effects to the innumerable songs licensed for use in movies, copyright ensures that the people involved in the creation of movie sounds—whether artists, composers, or engineers—are incentivized and rewarded for their contributions.

By giving artists and creators a property right in the fruits of their artistic labor, copyright provides the foundation for the creation of movies as we know them today.

Trademark Helps Movies Get Made and Protects Their Brands

Just as copyright protects several aspects of any given film, trademark helps establish and protect a movie’s brand while providing supplemental sources of financing. As studios move away from traditional film financing mechanisms due to economic recession, consolidation within the industry, and risk-aversion in credit markets, a growing number of producers are looking for new funding sources. Product placement has become an increasingly common source of financing, providing mutual benefit to producers and marketers.

Featuring recognizable brands in a film enables a producer to leverage the reputation and public perception of certain products to craft characters and settings. Indeed, a character may become identified with a particular brand or product—think James Bond driving an Aston Martin, ET eating Reeses Pieces, or Carrie Bradshaw wearing Manolo Blahnik. A product may even become a character itself, as with the Wilson volleyball in Castaway.

The inclusion of known brands lends authenticity to the world of the film and the characters inhabiting it. When Mia asks Sebastian to get the keys to her Prius from a valet in La La Land, and Sebastian sees nothing but Prius key fobs on the valet stand, more is communicated to the audience than just the type of car Mia drives. Viewers get a sense of the world in which Mia lives, her friends and associates, and her subculture and values.

And of course, Prius benefits from the connection with an acclaimed film that won multiple Academy awards. While product placement represents a creative choice, it is also a shrewd business move for producers in need of funds and marketers looking for more subtle promotional opportunities than the traditional hard-sell advertisement.

Additionally, trademark serves to protect merchandise and ancillary products created in connection with a film. Marketing trademark-protected clothing, toys, home appliances, bedding, wallpaper, and other film-related merchandise is another critical source of revenue for producers, particularly those hoping to build a film franchise. Just as copyright is central to film financing and content, trademarks make an increasingly vital contribution to production funding and the creation of on-screen worlds.

But Without Patented Technology, Films Wouldn’t Exist

In addition to copyright and trademark, patents also play an essential role in film. A patented invention—the kinetoscope—allowed individual, consecutive images imprinted onto film to be projected in order and at speeds capable of creating the illusion of movement. Thomas Edison, holder of the kinetoscope’s patent, began documenting the world around him and created the first microdocumentaries for exhibition to paying customers. Across the Atlantic, the Lumiere brothers also embraced the possibilities that early film technology offered, creating short fiction films, the most enduring of which, Trip to the Moon, is still watched to this day.

The original film technologies, to both capture and display moving images, gave birth to a new form of leisure and entertainment. In less than three decades an entire industry had been established to exploit the commercial value of film and to satisfy the growing public appetite for movies.

Sound recording and playback technology revolutionized the industry and were followed just a few years later by technicolor, the debut of which—in The Wizard of Oz—changed filmmaking forever. Patented technologies created, then upended, the film industry, and to this day provide the foundation upon which advancements in filmmaking and viewer experience are based.

Just as the development of VistaVision in the 1950s gave directors more onscreen real estate and enabled sweeping scenic compositions, the implementation of Dolby Surround Sound in the 1980s allowed composers and sound editors to weave rich sonic tapestries. Composers were able to create complex filmic symphonies, and sound editors could immerse the audience more deeply into the world of the film by literally enveloping them in the movie’s aural field.

The switch from analog to digital, and the integration of computer technology into filmmaking, allowed for special effects unlike anything seen before. Computer-generated images put an end to an era of hand-drawn animation and manual splicing, as entire worlds could be created and manipulated digitally. Today, the development of 3D and virtual reality technology are set to revolutionize the film industry, changing the way images are captured and exhibited. Add to the distribution mechanisms numerous exhibition platforms (laptop, tablet, cell phone, etc.), and it is obvious the central role that patented technology plays in film creation and consumption.

Conclusion

In any given film, copyright, trademark, and patent play crucial roles in crafting the story, securing financing, and translating script to screen. Copyright secures property rights in (and incentivizes the creation of) original films as well as adaptations of prior works, while trademark contributes to the development of setting and characters. As an industry founded on patented technology, filmmaking relies on the innovation made possible by a patent system that encourages and incentivizes inventors. Those who developed sound recording and transmission technology, technicolor, panoramic projection, and many other innovations at the heart of moviemaking could not—and would not—have done so without the assurance that they would own the fruits of their innovative labor.

Next time you settle into a plush reclining chair, as the lights dim and the trailers begin, think about all the intellectual property embedded in the story you watch play out on-screen, because without it, that story wouldn’t exist.

Tags author, copyright, derivative work, distribution right, film, intellectual property, La La Land, Mandi Hart, patent, publisher, Star Wars, technology, Thomas Edison, trademark, video producer

Intellectual Property Theory

In Defense of an Inclusive IP Conversation

Post author By Joshua Grove
Post date May 9, 2017

hand under a lightbulb drawn on a chalkboard In a recent essay responding to a divisive critique of his book, Justifying Intellectual Property, Robert Merges makes clear from the start that he won’t be pulling any punches. He explains that the purpose of his essay, Against Utilitarian Fundamentalism, is to address the misleading and polarizing conclusions of Mark Lemley’s 2015 article, Faith-Based Intellectual Property, recapitulate the arguments he makes in Justifying IP, and show that those who approach intellectual property theory through a nonstrict empirical lens can still make meaningful contributions to the debate.

Merges exposes the key hypocrisy of Lemely’s article: By flippantly dismissing theories that deviate from his own, Lemley ultimately champions the same inflexible exclusivity he purports to condemn.

The underlying dispute between Lemley and Merges turns on what place nonstrict empirical research has in theoretical IP debates. Philosophical empiricism is the idea that experiment-based evidence is the best path to knowledge. Strict empiricists, such as Lemley, argue that hard data-driven evidence is the only evidence capable of supporting reasonable theoretical conclusions. (As an aside, Lemley’s insistence that strict empirical data is the only evidence worthy of scholarly discussion is curious given his vigorous promotion of theories that lack any empirical support. I should also note that his conclusions regarding the current state of the empirical evidence are controversial in their own right, particularly when combined with a willingness to make broad policy recommendations that ignore important empirical criticisms of the data supporting those recommendations.)

While nonstrict empiricism recognizes the importance of data-driven evidence, it allows for the inclusion of evidence-based investigations into human nature and the way people distinguish right from wrong. This research into the nature of duty and obligation—also known as deontology—is seen by nonstrict empiricists in the IP field as a significant supplement to data-driven evidence in reaching meaningful conclusions on theories of ownership and property.

Strict versus nonstrict empiricism debates—sometimes referred to as utilitarian v. deontological—are not new and are not confined to discussions of ownership and intellectual property. What makes the dispute between Lemley and Merges notable is that Lemley, in disparaging Merges’ approach to research, adopts a rigid position on what evidence merits consideration by IP theorists, making the claim that only hard, data-driven empirical research should influence scholarship. It’s a bold assertion that has led many to offer critical responses to Lemley’s essay (see here, here, here, here, and here), especially considering that the exclusive and narrow-minded approach to IP theory he accuses Merges of supporting is exactly what his essay ultimately promotes.

Lemley Misrepresents Alternatives to Strict Empiricism

Merges first takes issue with Lemley’s critique of nonstrict empirical IP theories as inherently suspect due do their basis “on fundamental commitments that are resistant to counterarguments, particularly empirically-based counterarguments.” Lemley contends that these theories operate with a bias similar to blind religious faith, have an intrinsic disregard for reason, and have no place in scholarly discourse. According to Lemley, they are unscientific and unpersuasive views that cannot be seriously considered in discussions of IP law and policy. In his provocative essay, Lemley uses highly-charged rhetoric to associate nonstrict empirical theorists with religious fundamentalists, resorting to ad hominem attacks and scare tactics to argue that his foundational beliefs are the “one true path.”

Merges points out that by relegating all non-empirical theories into a single, derogatory category, and raising his preferred empirical/utilitarian theory to a “true path to enlightenment” status, Lemley commits the fatal error of promoting an exclusive approach to scholarly discourse. Lemley’s argument has roots in the works of Oliver Wendell Holmes and Richard Posner, who dismissed non-empirical foundations as incapable of being influenced by reason. But Merges repeats that he is “not rejecting empirical evidence of all kinds, but expressing honest doubts about the adequacy of the available evidence,” and that Lemley’s mischaracterization of this skepticism is “more in the way of propaganda than scholarship.”

Research on People’s Moral Intuitions Reveals Significant Shared Judgments About IP

Lemley conflates that which is empirical with that which is rational, assuming there is no empiricism in the study of people’s moral judgments. But Merges notes that deontologists, or those who study the nature of duty and moral obligation are “interested in shared judgments about right and wrong, rather than a strict and exclusive interest in empirical data about the consequences of different courses of action,” and that studies in this field can reveal important theoretical foundations to IP.

Discussing the importance of empirical evidence derived from studies on moral obligations, Merges presents a hypothetical ethical dilemma that has revealed “universal morals” shared across cultures, age groups, and other demographic categories. In the “trolley problem,” a person is presented with the scenario of an out of control trolley headed for a group of five bystanders, and the only way to avoid the trolley killing the entire group is to activate a switch that will divert the trolley to a path that will result in the death of one person. Another variation involves pushing one person in front of the train to save the group of five. Merges notes that researchers found widespread agreement across ethnicities, ages, and backgrounds about which actions were right and wrong, and that rather than based on “irrational institutions,” these judgments are based on a “universal moral grammar” hard-wired in all human beings.

These inherent principles have been directly tied to shared ideas regarding both tangible and intellectual property. Merges describes studies in which children are exposed to a person handling an object, then putting the object down, at which point someone else picks up the object. The children not only routinely infer ownership of tangible goods with first possession, but have also been found to associate creative labor with ownership. As Merges explains, “there are strong regularities in people’s thinking about ownership, fairness, and the importance of creative labor,” and these regularities are “less due to socialization in a particular culture and more due to a basic shared moral sense.”

Though strict empiricists criticize these findings as non-empirical forms of evidence, Merges rejects the idea that strictly empirical studies are the only form of rational and practical investigation. He confronts this argument by showing that empirical evidence focusing solely on consequentialism, or the final net consequence of an action, is not only largely impractical, but often leads to morally reprehensible outcomes.

Illustrating the impractical nature of strict consequentialism, Merges fills nearly an entire page with the myriad potential consequences of both strict and liberal liability standards for internet service providers in identifying copyright infringement. What’s clear is that the vast and complex consequences cannot warrant a “net grand total” conclusion of any kind, and that exercises in attempting to draw causal connections are hopeless. Merges also invokes a hypothetical example of enslaving writers and forcing them produce original content to show that, while it may be the most efficient way to deliver works into the market, it’s a utilitarian approach to IP that’s contrary to the shared moral ideas of right and wrong that societies invoke to reject such operations.

IP Theory Should be Inclusionary and Diverse

Merges dedicates the end of his essay to a summary and defense of his arguments in Justifying Intellectual Property, including the explicit assertions that his ideas do not “have any claim to exclusivity,” and that his book promotes a “public space” in which differing opinions are not only welcome, but essential to a meaningful debate. For Faith-Based Intellectual Property to insist otherwise leads Merges to question whether Lemley has any real awareness of the work he so vehemently criticizes.

Discussing his pluralistic approach, Merges identifies four “midlevel principles” that serve as a bridge between those with differing foundational commitments to IP. According to Merges, proportionality, efficiency, nonremoval or the public domain, and dignity make up these midlevel principles and create an “overlapping consensus” among scholars and theorists with otherwise conflicting views. Offering an example of this consensus, Merges discusses a recent amicus brief that both he and Mark Lemley cooperated and agreed on. Merges explains that the fact that the two authors could discuss and agree on case outcomes and underlying policy rationales directly refutes Lemley’s conclusion that the sides have “nothing to say to each other.”

Concluding his essay, Merges maintains that Justifying Intellectual Property seeks to formulate a liberal theory of IP while respecting all manners of approaches, and that the book “neither predicts nor expects universal agreement.” And while Merges accepts that some may accuse the book of being wrong, naïve, boring, or didactic, to accuse it of being resistant to inclusive discourse and reasoned arguments reveals an unawareness of its actual content. Lemley’s response is an unfortunate reaction to an open assessment of the ways those with differing views can come together. Ironically, Lemley promotes the very same exclusive approach to scholarly debate that he claims to reject.

Tags copyright, intellectual property, Kevin Madigan, patents

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