News and Commentary
Last month, the Senate Judiciary Committee marked up the “No Combination Drug Patents Act”, aimed at rolling back drug “evergreening.” Drug companies will often tinker with already patented drugs, hoping to find new applications or efficiencies with the aim of extending monopoly power. Proponents of the legislation claim that these modifications are semi-naked attempts to extend companies’ monopolies. Critics of the legislation would argue that these incremental improvements must be properly incentivized. Senator Lindsay Graham withdrew the legislation, but some version of this idea could easily come back.
Patents have been receiving more and more attention in the burgeoning US-China competition. China’s dominance of rare earth elements is another flashpoint in this saga. China holds an impressive 25,911 rare earth-related patents; meanwhile, the US holds 9,810 patents in the area.
Big data makes it easier for patent lawyers to marshall PTAB decisions in making their arguments.
Presidential candidate Joe Biden has been called out by factcheck.org for ignoring Trump’s efforts to curb Chinese IP theft.
While tech giants face accusations of anti-competitive behavior, the case for cracking up cartels may be stronger for more classic industrial firms. The markets for airplanes, memory chips, and semiconductors are all incredibly consolidated, and these companies — unlike big tech companies — actually stick consumers with higher prices. Recently, Apple surrendered in its IP fight with Qualcomm, once it became clear Qualcomm was the only company operating in that space anyway.
Pop Quiz! See if you can guess which law firm has been dominating IP law for over a century.
A new paper finds that the 1998 Copyright Term Extension Act was economically inefficient. The loss in consumer surplus far exceeded the gains in producer profits. In plainer English, the harm of restricting access for consumers swamps the benefit of added monopoly profits for copyright holders. Monopolies work by constricting the quantity supplied. Thus, unless intellectual monopolies spur innovation, economists will always score them as aggressively inefficient.
A new paper from NBER tries to use patents to settle an old debate over startups. A vanishingly small number of startups will ever succeed. Some argue too much money is being thrown after bad startups, and we could focus on funding on the best startups from the beginning. On the other hand, perhaps we need to let a thousand flowers bloom; we might only see what works through experimentation. The authors of the paper take the former view. They argue that a few early-stage founder choices, including securing IP protection, are highly predictive of future success.