09.18.09

Patents Under Fire While Microsoft Escapes Patent Law (Again)

Posted in Europe, Microsoft, Patents at 4:42 am by Dr. Roy Schestowitz

Broken truck

Summary: Microsoft keeps dodging laws that are very controversial to begin with; Broadcom still on patent warpath

A writer for the Huffington Post has just called for the abolishment of patents [via Mike Masnick’s take]. It comes a day before the President of the FFII wrote: “Give me your ideas on what to do next Thursday for the World Day Against Software Patents, my idea is to make a fire with some EPO patents.”

[P]erhaps, without all those extra monopoly profits we wouldn’t have such great new products? The fact is there aren’t so many great new products – a well known fact among health economists is that while big pharma’s spending has soared the last decade, as patent control has tightened, drug discovery has plummeted. Pharmaceutical innovation is not lower in Europe, despite of big pharma’s lower monopoly profits. While the market for pharmaceuticals is now largely a global one, so local rules may not be so important, this was less true in the past. Historically, before pharmaceutical patents were introduced in Italy in 1978, that country accounted for about 8% of new pharmaceutical discoveries worldwide. After the industry was strangled by patents, that percentage dropped to practically zero. Switzerland, a powerhouse in the world drug industry, introduced pharmaceutical patents at about the same time. While Switzerland’s fall has not been as dramatic as Italy’s, it too is much less of a powerhouse today than it was before 1977.

Patents do not seem to lead to the innovation their proponents claim. The list of examples goes on and on: the discovery of the one-dose HIV cocktail that replaced the complicated multi-pill regime? That took place in India a country that at that time did not allow pharmaceutical patents. Of the fifteen great medical milestones recently identified by the British Medical Journal – only two were patented or could be attributed to the “incentive” that patents supposedly provide. Numerous technical studies by economists of the effect of stronger patents on innovation have failed to find any consistent increase. Put it plainly: while the social gains from abolishing patents on drugs are obvious and computable, the losses are dubious and, on the basis of empirical evidence, probably nil.

Pharmaceutical patents and the resulting monopolies have many other corrosive effects, over and above raising the prices of prescription drugs. Pharmaceutical companies spend far more money promoting their products than on R&D. Some of the giants spend as much as four times on marketing as they do on research and development. How do these companies market their products? Most of the money goes to “scientifically convincing” the medical profession to prescribe patented products. How? Well, for example, by inviting doctors and their families to week-long conferences in exclusive resorts, where two hours are for a marketing presentation (the “medical symposium”) and the rest for (all-included) leisure. A spectacular – but hardly unique – example of the level of corruption is the conviction of Pfizer for encouraging doctors to bill the government for drugs they were provided for free. These practices not only raise the cost of drugs, but corrode trust in the medical profession.

The pharmaceutical cartel, which Microsoft happens to have great stakes in, actually wants something even stronger than patents.

The other day we wrote about the Alcatel-Lucent vs Microsoft decision being overturned, which once again proves that Microsoft is above patent law. This is the second time in one month that Microsoft escapes prosecution for patent violations. As always, Masnick’s take on this is insightful.

There is a mythology in the US about the value and importance of patents — and because of that, it’s not surprising that patent trials involving juries quite often end with the patent holder being declared victor, and a huge amount being awarded by the jury. Microsoft and Alcatel-Lucent have been involved in a whole series of patent battles recently.

Another high-profile case involves Broadcom and Emulex at the moment.

Broadcom says Emulex is using its patented technology unlawfully and is off to court to stop Emulex using unlicensed technology and to get cash damages.

Here is Masnick’s take:

Can’t Buy ‘Em? Sue ‘Em For Patent Infringement!

JohnForDummies alerts us to Broadcom’s latest patent infringement suit, this time against Emulex. Broadcom is quite aggressive on the patent front, so at first this didn’t seem like a big deal.

Broadcom is not just “aggressive on the patent front”; it has fraud going on, which seems typical for patent aggressors [1, 2, 3, 4, 5, 6], Microsoft included.

“The current “patent thicket,” in which anyone who writes a successful software programme is sued for alleged patent infringement, highlights the current IP system’s failure to encourage innovation” —Pr Joseph Stiglitz (Nobel Laureate in Economics), IP-Watch

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