Intellectual Property Good - Georgetown 2024

IP Good
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Patents key for antibiotics
Grabrowski and Dimasi, 2015. (Henry Grabowski is an authority on the economics of the pharmaceutical industry, the economics of innovation, and government regulation of business and is a Duke University professor; Dr. DiMasi is Director of Economic Analysis at the Tufts Center for the Study of Drug Development and Research Associate Professor at Tufts Medical School, Tufts University, February 2015, “The Roles Of Patents And Research And Development Incentives In Biopharmaceutical Innovation”. https://www.healthaffairs.org/doi/10.1377/hlthaff.2014.1047#:~:text=Patents%20and%20other%20forms%20of%20intellectual%20property%20protection%20are%20generally,costs%20of%20imitation%20are%20low.)
Since the 1990s various health agencies have identified growing antibiotic resistance as a major health threat, but few new antibiotics have been introduced. 31 Concerns about resistance have increased. However, reserving new antibiotics as drugs of “last resort” constrains their sales. Together with rising R&D costs and other challenges, this created a disincentive to investment in developing new antibiotics.
The Generating Antibiotic Incentives Now (GAIN) Act of 2012 was designed to strengthen the pipeline of antibiotic and antifungal drugs for life-threatening or other serious infections by providing several economic incentives ( Exhibit 2 ). These include a five-year extension of regulatory exclusivity from generic competition (supplementing the five years of exclusivity for new small-molecule drugs under the Hatch-Waxman Act and any applicable orphan drug and pediatric exclusivity). These drugs are also eligible for the FDA’s Fast Track and Priority Review programs. Fast Track status provides more frequent interactions with FDA review teams and the opportunity for a “rolling review,” or review of portions of the application before the complete application is submitted. Priority reviews are expected to be completed by the FDA within six months—substantially faster than the ten months required for a standard review.
Thirty-five antibiotics have been designated as qualified infectious disease products under the GAIN Act, making them eligible for these incentives, including extended regulatory exclusivity, if the FDA approves them. 32 As of December 2014, four had been approved: dalbavancin, tedizolid, oritavancib, and a combination of ceftolozane and tazobactam. 33 The FDA is also developing guidance
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Patents key to laundry list of pharma procedures and innovation
Wilbur 19, (Tom Wilbur is Senior Director of Public Affairs at PhRMA focused on opinion research, message development and political communications. Prior to joining PhRMA in 2019, Tom worked on Capitol Hill and on political campaigns for eight years, most recently responsible for communications and strategy for U.S. Rep. “IP Explained: How patents support innovation throughout the biopharmaceutical lifecycle” August 6th 2019 (https://phrma.org/en/Blog/ip-explained-how-patents-support-innovation-throughout-the-biopharmaceutical-lifecycle) accessed on 6/19/24)--ATP
For the biopharmaceutical industry, the U.S. patent system provides critical incentives for innovation and fuels the creation of new lifesaving treatments and cures for patients. In fact, patents touch nearly every facet of biopharmaceutical innovation from initial drug discovery to new uses identified after Food and Drug Administration (FDA) approval, and most medicines are associated with multiple patents.
As medical innovation transforms to target more complex diseases and as genomics and personalized medicines are pursued, manufacturing processes are also becoming more complicated. In today’s IP Explained, we are taking a closer look at four key forms of patent protections and how each plays an important and unique role in supporting innovation throughout the biopharmaceutical lifecycle.
Active ingredient or component patents protect the biologically active component of a drug.
Drug product patents refer to the particular state in which the medicine is delivered to the patient, such as the formulation or dosage form. New dosage forms for FDA-approved medicines, such as when an injectable drug can be taken as a pill instead, can improve patient adherence to treatments, ensure proper dosage, and improve quality of life for patients. As a result, these innovations may lead to improved health outcomes and a reduction in hospitalizations.
Methods of manufacturing patents cover the complex process or steps required to manufacture a medicine. Such advances can improve the safety, efficacy and quality of other types of medicines
Methods of use patents protect the use of a medicine to treat a particular disease. Innovations to medicines continue well after their active ingredients are patented and the medicines are approved by the FDA. This ongoing research can result in approvals for new uses in different patient populations, conditions or disease states. For example, medicines initially developed to treat rheumatoid arthritis have been shown to help treat other autoimmune conditions, including Crohn’s disease and ulcerative colitis. New uses give patients new, and frequently better, options to treat their illnesses.
Each of these forms of medical advancements plays a critical role in improving the lives of patients and has the potential to increase adherence, improve health outcomes and reduce unnecessary hospitalizations. By protecting all forms of biopharmaceutical innovation, we can continue to improve the lives of patients and keep the U.S. as the global leader in biopharmaceutical research and development.
Patents increase innovation. Specifically, patents provide profit-driven incentives and enable biotech advancements.
Marshall Phelps, 12-8-2016, Former Global IP Chief for IBM and Microsoft "Do Patents Really Promote Innovation? A Response To The Economist," Forbes, https://www.forbes.com/sites/marshallphelps/2015/09/16/do-patents-really-promote-innovation-a-response-to-the-economist/ // shane :D
Economists have repeatedly demonstrated that inventors are driven primarily by the expectation of profiting from owning the rights to their inventions. Zorina Khan of Bowdoin College, whose 2005 classic The Democratization of Invention: Patents and Copyrights in American Economic Development was awarded the prestigious Alice Hanson Jones Prize for outstanding work in economic history, observed that “Ordinary people [are] stimulated by higher perceived returns or demand-side incentives to make long-term commitments to inventive activity.” She also found that “their patterns of patenting were procyclical [and] responded to expected profit opportunities.”
Along with her colleague the late Kenneth Sokoloff of UCLA, Professor Khan then summarized the role of patents in helping U.S. startup businesses grow the economy from an agrarian backwater into the most powerful industrial economy on the face of the earth: Then, as now, the American formula for success was simple: Startups + patents = jobs and economic growth!
Over the last 50 years, economists have found that patents continue to foster ex ante innovation — meaning, they induce people to invent because of the prospect of profiting from those inventions. The work of economists such as Arrow (1962), Griliches (1963), Schmookler (1966), Kitch (1977), Reinganum (1981), Klemperer (1990), Romer (1990), Giulbert and Shapiro (1990), Grossman and Helpman (1991), Scotchmer (1999), and Gallini (2002) on this issue is mostly available for free online at the Social Science Research Network.
One especially interesting 2007 study by Arora, Ceccagnoli, and Cowen entitled "R&D and the Patent Premium" found that "the patent premium for innovations that were patented is substantial. Firms earn on average a 50% premium over the no patenting case, ranging from 60% in the health related industries to about 40% in electronics.” Sure, one should be cautious about academic research, especially given the old joke about how an economist opens a can of soup. (Answer: assume a can opener.) But real-world economics clearly confirms the research findings.
Consider, for example, that the biggest job-creating new industries of the last 60 years — semiconductors (consumer electronics), PCs, software, biotech, mobile telephony, and Internet e-commerce — were all launched and grew strong on the basis of patented inventions created by startup businesses. As the CEO of Juno Therapeutics, Hans Bishop, and ARCH Venture Partners co-founder Bob Nelson recently wrote in Forbes: “Let us be clear: investments in the biotech industry are based entirely on patents. Without strong patents, we cannot raise money to find cures for disease.”
Moreover, the evidence that patents foster innovation is not confined to the U.S., nor is it limited only to developed countries. In 2008, a study by the Organization for Economic Co-operation and Development (OECD) found that “stronger levels of patent protection are positively and significantly associated with inflows of high-tech product [and] expenditures on R&D.” And in another study that attracted wide attention, Shih-Tse Lo of Concordia University in Montreal found that the 1986 reforms strengthening the Taiwanese patent system “stimulated additional inventive activity, especially in industries where patent protection is generally regarded as an effective strategy for extracting returns, and in industries which are more R&D intensive. The reforms also seemed to induce additional foreign direct investment in Taiwan.” Interestingly, the evidence also shows that rather than hindering knowledge sharing, as the Economist claims, patents actually promote it. Acemoglu, Bimpikis, and Ozdaglar (2008) observed that “patents improve the allocation of resources by encouraging rapid experimentation and efficient ex-post transfer of knowledge across firms.”
Indeed, it turns out that the patent system is one of the most effective tools for knowledge-sharing and technology transfer ever devised. A 2006 study by French economists Francois Leveque and Yann Meniere found that 88 percent of U.S., European, and Japanese businesses said they actually rely upon the information disclosed in patents to keep up with technology advances and direct their own R&D efforts.
This is hardly a new phenomenon. The 19th century inventor Elias E. Reis reported that when he read about an 1886 patent issued to Elihu Thomson for a new method of electric welding, “there immediately opened up to my mind a field of new applications to which I saw I could apply my system of producing heat in large quantities.” Thomas Edison was known to frequent the patent office in order to study other inventors’ patents and hopefully spark ideas of his own. As for Edison himself, a 2013 study found that rather than blocking further invention, his seminal 1880 incandescent lamp patent (No. 223,898) actually “stimulated downstream development work” that resulted in “new technologies of commercial significance [including] the Tesla coil, hermetically sealed connectors, chemical vapor deposition process, tungsten lamp filaments and phosphorescent lighting that led to today’s fluorescent lamps.”
A simple thought experiment suggests why this is so. As UCLA’s Sokoloff and Yale’s Naomi Lamoreaux observed in a 1997 paper, “The very act of establishing exclusive property rights in invention not only protected patentees but also promoted the diffusion of information about technology. To see why, imagine a world in which there was no patent system to guarantee inventors property rights to their discoveries. In such a world, inventors would have every incentive to be secretive and guard jealously their discoveries from competitors [because those discoveries] could, of course, be copied with impunity. This is the world of trade secrets.
“By contrast,” the authors noted, “in a world where property rights in invention were protected, the situation would be very different. Inventors would now feel free to promote their discoveries as widely as possible so as to maximize returns either from commercializing their ideas themselves or from [licensing] rights to the idea to others. The protections offered by the patent system would thus be an important stimulus to the exchange of technological information in and of themselves. Moreover, it is likely that the cross-fertilization that resulted from these information flows would be a potent stimulus to technological change.”
PATENTS KEY TO PHARMA – otherwise companies won’t be able to outcompete and innovate with their inventions
Minesoft 23, Minesoft is a software company in Richmond, England, “The Role of Patents in the Pharmaceutical Sector”, October 23 2023, https://minesoft.com/the-role-of-patents-in-the-pharmaceutical-sector/#:~:text=Protection%20Against%20Competition%3A%20Patents%20provide,levels%20of%20competition%20and%20innovation
Patents play a multifaceted and crucial role in the pharmaceutical industry, including:
Protection of Intellectual Property: Patents provide pharmaceutical companies with exclusive rights to their innovations. These rights prevent others from making, using, selling, or importing their patented inventions without permission. This protection is vital as it allows companies to invest in research and development (R&D) with the confidence that they can reap the financial rewards of their innovations.
Incentive for Innovation: The promise of exclusive rights granted by patents serves as a powerful incentive for pharmaceutical companies to invest heavily in R&D. Developing new drugs and therapies is a lengthy and expensive process, often requiring significant financial resources. Patents encourage companies to take on the risks associated with drug development by providing the potential for substantial profits.
Exclusivity and Market Monopoly: During the term of a pharmaceutical patent (typically 20 years from the date of filing), the patent holder has a monopoly on the market for the drug or therapy they have developed. This exclusivity allows them to set the price of the product and control its distribution. While this can lead to high drug prices, it also enables companies to recoup their R&D costs and generate profits, which can be reinvested in further research.
Licensing and Collaboration: Pharmaceutical companies often license their patented technologies to other parties, including generic drug manufacturers. These licensing agreements can be mutually beneficial. The patent holder gains revenue through licensing fees, and generic manufacturers can produce more affordable versions of essential medications once the patent expires. This practice increases accessibility to lifesaving drugs and encourages innovation in the industry.
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Patents prevent freeriding.
Kingston 01 — William Kingston, Professor of law at Trinity College Dublin, 2001, (“Innovation needs patents reform, ScienceDirect, Mar 1st, Available Online at https://www.sciencedirect.com/science/article/pii/S0048733300000901, Accessed 6-19-2024)
The mechanical and electrical industries could live with a patent system which was unsuited to the protection of inventions which resulted from investment in R&D, because they have other ways of obtaining the protection they need, especially through the power to exclude competitors that goes with massive investment in productive assets and in resources for marketing. There is one industry, however, which simply cannot do without patents, and that is chemicals, especially pharmaceuticals. The formula discovered in the laboratory is identical with the formula that is patented and with the formula of what the physician prescribes and his patient takes. Once that formula is known, investment in resources to make the product delivers only a trivial barrier to copying, and if the drug is effective, little persuasion is needed for its sale. Because chemical inventions can be communicated so easily to others, therefore, if patents did not protect them, free-riding would ensure that investment in research would not be justified. This is why it was from a revolution in the pharmaceutical industry that the stimulus for revolution in patents eventually came, and the cause of both was antibiotics.
The first of these was penicillin, but this was never patented, partly because the authorities in Britain, where it was discovered, considered that it was wrong that something which was so much to the benefit of mankind should be a monopoly. The next one of great importance was streptomycin, and this was patented in 1947. Penicillin had undoubtedly been discovered through a “flash of creative genius,” but the origin of streptomycin could not have been more different. It emerged from Merck's funding of the painstaking examination and testing of more than 10,000 kinds of soil microbes for antibiotic activity by a team led by Selman Waksman of Rutgers University, New Jersey; and it started a deluge of inventions from pharmaceutical firms which were (and are) typically the output of large-scale, routine activity which is anything but inspired (see Kingston, 2000 for a full account).
Nothing could have been clearer at the time than that investment in antibiotics R&D could not be made on the large scale which was desirable unless patent protection would be available for its results. It was equally clear that the Courts would insist on looking for the “flash of genius,” which research for antibiotic inventions on the Waksman model would be unable to supply (Waksman, 1975). Consequently, there was no option but to change the patent law fundamentally. This would require careful drafting, because a law which frankly recognized that investment had replaced individuals as the source of what is to be protected, would not have been within the power given to Congress by the Constitution. Change could therefore only come about in a way that forced the reality of invention by investment into the pretence of invention by individuals.
The year after the streptomycin patent issued, the New York Patent Bar Association drafted a Bill and was able to get it introduced in Congress, and this, supplemented by other Bills and pressures, led to the first major revision of the U.S. patent law since 1870. This was the Patent Act of 1952, and it was explicitly intended to make the patent system suitable for protecting inventions which were the result of investment in research and development, by killing off the “flash of genius” requirement.
Patents foster innovation and promote competition
Abbot 6/18’ Alden Abbot is an anti-trust expert and former ftc general,“ The US Needs A New, Pro-Patent, Pro-Growth Innovation Policy,” Forbes, 6/18/24, https://www.forbes.com/sites/aldenabbott/2024/06/18/the-us-needs-a-new-pro-patent-pro-growth-innovation-policy/
Furthermore, patents promote competition to the benefit of American consumers. Prior to the 1980s, U.S. antitrust enforcers deemed patent-licensing restrictions anticompetitive. But economic research came to recognize that such restrictions actually facilitated the adoption of new and rival technologies that would enhance competition for the consumer’s dollar. This new learning caused enforcers to adopt a generally permissive, bipartisan stance toward patent licensing beginning in the early 1980s. This was reflected in enforcement guidelines released jointly by the Department of Justice and the Federal Trade Commission in 1995 and updated in 2017. The Guidelines’ discussion of the beneficial aspects of licensing restraints is instructive: “Field-of-use, territorial, and other limitations on intellectual property [patent] licenses may serve procompetitive ends by allowing the licensor to exploit its property as efficiently and effectively as possible. These various forms of exclusivity can be used to give a licensee an incentive to invest in the commercialization and distribution of pr

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