posted July 18, 2006 07:33 AM            

Red: IP (patents, copyrights) protection should be minimized. It is too risky to do otherwise.

Blue: IP (patents, copyrights) protection should be maximized. It is too risky to do otherwise.

1) State your position. How and why will more/less government regulation of intellectual property promote innovation?

2) Present your evidence, preferably using the sites and types of sites you have encountered in this course.

3) Explain how your evidence supports your position. Tell us how to think about it.

Learn more on the case page.

posted July 26, 2006 04:25 PM            

I will talk from my own perspective, as someone who works in the Pharmaceuticals industry. Again, I am not encouraging the idea of making patent life on drugs indefinite. However, after my company spends all these monies and man power to develop a new drug, it is only fair to enable the company to at least break-even (patent life on drugs are approximately 10 - 15 years, depending on the disease state and the class of the drugs). My company needs to, AT LEAST, break-even, or the following will happen:

* Forget about new R&D! Where will the company get new money to spend on R&D for other much needed drugs, especially the R&D for Cerebrovascular diseases (i.e. stroke, MS, Alzheimer, SMA) and other hard to treat diseases (HIV, Hep.C)?

* Forget about competitiveness. Why would I waste my time and my money and my resources to develop a new drug when I know that the next day any other company can and will steal my work and write their name on it? What will motivate me to develop new drugs? Where is my edge?

* No more jobs. If I don't make my money to at least breakeven, I can't pay salaries. I will shut my labs and I won't be able to hire anyone. Furtheremore, if I cannot generate money, forget about 401K plans or paying for health insurance. The sad news is, it is not just me who will suffer. Everyone will, since I won't be able to hire new people or keep people working for free (since I did not make enough money to pay their salaries), which will mean the entire economy will suffer. No more money means no more economy.

I understand if some will say (back to Pharmaceuticals) that the price of drugs is high and if we have generics for all drugs then we all will be OK. Well, NOT! Drug companies are not the ONLY party involved in pricing a drug. R&D takes money (a LOT of it) and to do one study you have to spend a lot too. Believe it or not, to do a study (let's say a Phase III trial) that includes at least 5000 patients, they all get free drugs, which the company pays for. Patients also ask for compensation to be enrolled in a study. Who do you think pays for all that? Besides, all Pharmaceutical companies have patients assitance programs where they provide FREE drugs for those who are unable to pay for their medications.

In addition, not having patents on new products and innovations will have a negative impact on Wall Street and any kind of investment. For the most part, you invest your money (let's say your IRA or 401K or even stocks) in companies based upon projections and anticipation that they are bringing a new innovation to market, which will give them a competitive edge. Imagine this is no longer the case, why would you invest your money and how will you save for retirement? What's the point of Waqll Street then?

So, after all this effort and trouble, it is only fair to ask for protection for a certain number of years until I can at least breakeven and hopefully make profit so I can spend NEW money on R&D.

As you can see, you can apply this idealogy to any industry. If you cannot have an edge as a company, then why have a business to begin with? Where is my motivation to go to work and develop new products?

Here are some web sites to support my position:
http://www.thefactz.org/economics/papers/patents_and_ir.html
http://money.cnn.com/2003/08/11/technology/techinvestor/hellweg/index.htm
http://www.invent.org/workshop/3_1_1_how_patent_imp.asp
http://www.mech.port.ac.uk/StaffP/jgj/patentsdyson.html
http://www.druid.dk/conferences/summer2004/abstracts/ds2004-106.html
http://web.mit.edu/e-club/hadzima/the-importance-of-patents.html
http://www.uspto.gov/web/offices/ac/ahrpa/opa/kids/kidprimer.html
http://scientific.thomson.com/free/ipmatters/pii/8180019/
http://www.frompatenttoprofit.com/Essentials%20of%20Patents.htm

Cheers.

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The biggest enemy of knowledge is not ignorance. It is the illusion of knowledge.

posted July 27, 2006 03:45 PM            

What is IP?

IP is an umbrella term for various legal entitlements, which attach to certain types of information, ideas or other intangibles in their expressed form. The holder of this legal entitlement is generally entitled to exercise various exclusive rights in relation to the subject matter of the IP. The term Intellectual Property reflects the idea that this subject matter is the product of the mind and the intellect, and that IP rights may be protected at law in the same way as any other form of property.

Minimize the Protection of IP – Why?

One of the major arguments against the protection of IP is that it is not a “real” property, so where can we draw the line to stop copying and stealing of these ideas. The rule in this country for patenting is the first inventor, or creator gets the patent, not the person who files for the patent first. For IP, people should not be regulated for thinking of new ideas and collaborating on old ideas. When an idea, or invention is not yet tangible, who is to say that the government can choose one idea, or thought over another, until the final product is created and proven, anyone should have the right to work on an idea. In a world that moves towards being dependent on the Internet everyday, we cannot afford to stop any type of innovation that may be happening. I feel that if people with great minds are scared to indulge in new ideas for fear that their idea will be ripped away because someone else started two days earlier, we will lose creation as a society, and maximizing security on IP is a risk I am not willing to take.

In 2001, at the Fifth annual “The Future of Intellectual Property in the Information Age” conference, Tom Bell brought up a great point. His point was not that companies and creators should not receive benefits, or credit for work, he thought they should receive patents for short periods of time, to promote further innovation. I have to agree with Tom Bell here, if a company is sitting back collecting money from a great product they created 25 years ago, why would they put more money at risk to create a new product, they wouldn’t, and we would be losing more good minds when society is in need of so many more, new products. In minimizing IP security, and shortening the length of patents and copyrights, we make companies work harder, and work everyday creating new products to sustain their profits and credibility. The harder the people have to work, and the more people who are working, the more products will be created to benefit society, and this will only happen if companies don’t get comfortable with “old” products.

Open Sourcing

When programmers can read, redistribute, and modify the source code for a piece of software, the software evolves. People improve it, people adapt it, and people fix bugs. And this can happen at a speed that, if one is used to the slow pace of conventional software development, will be amazing and “new” to any customer who has only used old and “closed” software. One of the arguments for open sourcing is that it is not safe, and it is very vulnerable to attacks from hackers and viruses, however this is not true. When you are working on closed source software, only the developers can create programs to fix problems, and programs to further enhance the software. When your software is open source, anybody can help fix the problems, and with new people and many minds collaborating, problems can get fixed much faster, and in most cases, much cheaper. As a user of open source software, you are not limited to the programs and protection you can buy, in most cases, you can get more advanced software, for free. Open sourcing allows the internet to keep growing and becoming stronger, Linux users have increased 212% a year since 1998, this shows that it works, and is becoming very popular in the “Internet” community. A final argument for open sourcing, and the minimization of protection against IP is the Ping O’ Death virus in 1997. While closed source software took months to fix the problem and eliminate the virus, Linux and open source had it fixed in a few hours, by working together on the source and eliminating the problem.

For people who are worried about losing money due to open sourcing; you can sell your code. Red Hat does it all the time. What you can't do is stop someone else from selling your code as well. That just says that you need to add extra value to your code, by offering service, or printed documentation, or a convenient medium, or a certification mark testifying to its quality.

Here is a quote from Info World Magazine: “... readers who are using Linux in a business environment said they found the support they received to be far more impressive than what they were used to with commercial software”

And for those still wondering if there are any “real” applications available with open source: Do the Oracle, Informix, and InterBase databases count? How about Word Perfect and the Corel office suite? Have you checked out the StarOffice and OpenOffice.org suites? Open source has all of these available, which are very popular, along with many more, so you still have options to complete work and enjoy the Internet.

As a society, we cannot take the risk of stopping innovation and technology, we must engage in every act possible to take technology and creativity to the next level, and the minimization of security against IP will help us accomplish this goal.

Thank You.

posted July 28, 2006 01:33 PM         

Minimizing IP protections...

What is Intellectual Property?

According to Wikipedia (http://en.wikipedia.org/wiki/Intellectual_property)

In law, intellectual property (IP) is an umbrella term for various legal entitlements which attach to certain types of information, ideas, or other intangibles in their expressed form. The holder of this legal entitlement is generally entitled to exercise various exclusive rights in relation to the subject matter of the IP. The term intellectual property reflects the idea that this subject matter is the product of the mind or the intellect, and that IP rights may be protected at law in the same way as any other form of property.

Intellectual property laws vary from jurisdiction to jurisdiction, such that the acquisition, registration or enforcement of IP rights must be pursued or obtained separately in each territory of interest. However, these laws are becoming increasingly harmonised through the effects of international treaties such as the 1994 World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), while other treaties may facilitate registration in more than one jurisdiction at a time. Certain forms of IP rights do not require registration in order to be enforced.

So now that we know what IP is, what is the debate?

Many people think IP rights should be maximized, giving the creator of an idea total control over the usage and rewards of that idea. Many people claim that this encourages innovation by offering a definable reward for developing said idea.

However, IP protection should be minimized to benefit the greater good – mankind.

By allowing limited access to knowledge, you are denying the collaboration that can take ideas to new levels, thus denying the opportunity for mankind to reach its fullest potential.

For example, let’s look at some successes. The first one I point to is open source programming code, such as Linux and the “Red Hat” model. What began as a better way to build software--openness, transparency, collaboration--soon shifted the balance of power in an entire industry. The revolution of choice continues. Today Red Hat is the world's most trusted provider of Linux and open source technology. (from RedHat.com)
To explain, all software is written with source code. With open source software, the code is protected by a special license that ensures everyone has access to that code. That means no one company can fully own it.

That's why open source should be inevitable. It returns control to the customer. They can see the code, change it, and learn from it. Bugs are more quickly found and fixed. And when customers don't like how one vendor is serving them, they can choose another without overhauling their infrastructure.

Open source simply creates better software. It multiplies one company's development capacity many times over. Everyone collaborates, the best software wins. Not just within one company, but among an Internet-connected, worldwide community. It's no coincidence that the rise of open source closely followed the rise of the Internet. The perfect breeding ground for collaboration, the Internet moves ideas and code around the world in an instant.

As a result, the open source model often builds higher quality, more secure, more easily integrated software. And it does it at a vastly accelerated pace and often at a lower cost.

The basic idea behind open source is very simple: When programmers can read, redistribute, and modify the source code for a piece of software, the software evolves. People improve it, people adapt it, people fix bugs. And this can happen at a speed that, if one is used to the slow pace of conventional software development, seems astonishing.

Another area that is seeing gains from sharing IP is bioinformatics tool manufacturers.

I spoke with Jeff Dunbar from UB STOR who explained to me that bioinformatics researchers are having a difficult time seeing profits from their works because R&D is so expensive. So instead of hoarding their discoveries for no gain, the industry is now a hotbed of information sharing.

Why? Because they have been able to look beyond attempts at profit and instead look for ways to benefit mankind, and gain a little prestige for themselves or their companies. As a result, new technologies are introduced every day. These new technologies are now used to study bioinformatics and will result in earlier discovery of ways to treat diseases and produce drugs that our society needs.

Actually, this is a great segue into some of the biggest disasters resulting from a lack of information sharing. Let’s start with the drug industry.

How many of you have had your lives affected because a family member or friend has suffered from disease?

I’m sure many of you are aware of the high cost of prescription drugs. There are many factors involved in this pricing, including raw materials and earning FDA approvals. However, much of the cost of drugs results from the tremendous amount spent on research and development.

Drug companies do have patents in place to protect the return on their R&D investments. In fact, drug companies spend millions protecting their patents and attempting to extend them, all in an effort to milk the cash cow for as long as possible. Who pays for these expenses? We do in the form of higher prescription prices.

If drug discoveries were shared, think of the collaboration that could occur. Each person who views research could tweak and add information that makes the drug better - cheaper to produce or more effective.

Thinking of it even more globally, if all research on the subject were shared, might we have a cure for cancer? Alzheimers? Parkinsons? How about preventing treatable diseases and infections in underdeveloped countries? How many lives could be saved?

To bring things closer to home, what did you pay last time you went to the pump? Gas is up to over $3 per gallon. We have faced periodic gas crunches since the 1970s. Since that time, engineers at automakers have been working on alternate fuels. Now, I can’t discount that relationships between car companies and gas producers, as well as strong lobbying, hasn’t affected the development of these options.

But shouldn’t there already be alternate vehicles on the market in abundance? If the engineers weren’t so busy working for their company only, don’t you think their combined intelligence would have come up with much better solutions by now?

For centuries, universities and research communities have shared their work. Monks copied books by hand. Scientists publish new discoveries in journals. Mathematical formulas are distributed, improved, redistributed.
Similarly, before the quest for money became so dominant in society, people wrote songs and played music for enjoyment and recognition. While the music industry searches for new ways to protect their livelihoods, they really can’t use the excuse that lack of payoff will discourage new music.

Discovering and creating things are just part of human nature.

As we discussed at the beginning of this class,

Arie de Geus looked at thousands of companies to discover what it takes to adapt to changing conditions. He found that the life expectancy of the average company was only 40 years. He also looked at the 100 largest U.S. companies at the beginning of the 1900’s. Only 16 are still in existence. He concluded:

Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans.

Imagine if all of this past knowledge was kept hidden or its use was restricted to only those who are willing to pay for it. Yet this is the mentality behind protecting intellectual property. Shared knowledge propels the whole of society forward, and it is incumbent upon us as the next generation of business leaders, to bring it out of the silos and into the field.

posted August 06, 2006 07:05 PM            

quote:

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By allowing limited access to knowledge, you are denying the collaboration that can take ideas to new levels, thus denying the opportunity for mankind to reach its fullest potential.

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This statement contradicts itself in a sense. In the case of Pharmaceuticals, for example, access to information is not limited. The secrets to developing any drug are listed on the prescribing information (PI), which is available with every script. Obviously, the science behind a drug is no longer a secret. The only limit that is imposed is to prevent any other company from "stealing" the work and just putting their names on it (taking credit for the work when they've done nothing).

Collaboration is not limited. Since the science and the information is not kept secret, any other company could develop a better drug; just don't steal the work that has already been done and get the credit. As for the benefits for mankind, I don't see a contradiction between being able to get credit for the work and benefiting others. How will patients suffer if my company has a patent life on our stroke drug for 15 years? Are we preventing them from getting it? How are patents preventing patients from benefiting from drugs? As indicated earlier, any other company could develop something better, and they could refer to the science that was used to develop previous medications.

quote:

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I spoke with Jeff Dunbar from UB STOR who explained to me that bioinformatics researchers are having a difficult time seeing profits from their works because R&D is so expensive. So instead of hoarding their discoveries for no gain, the industry is now a hotbed of information sharing.

---

Exactly my point. This is a perfect example of collaboration. R&D is VERY expensive and I would not want anyone to steal my work once I am done with it. Now, we could collaborate with another copany to invent a drug, which will also be protected by a patent to protect both companies from other entities that would rather be lazy and just steal efforts.

quote:

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Why? Because they have been able to look beyond attempts at profit and instead look for ways to benefit mankind, and gain a little prestige for themselves or their companies.

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I disagree (with all due respect of course). If the R&D efforts did not result in a drug that will generate profits and enable the compaies to, at least, breakeven, there will be no more collaboration, simply because there will be no money to spend on R&D. If the work is not protected, everyone will suffer, including mankind.

quote:

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I’m sure many of you are aware of the high cost of prescription drugs. There are many factors involved in this pricing, including raw materials and earning FDA approvals. However, much of the cost of drugs results from the tremendous amount spent on research and development.

Drug companies do have patents in place to protect the return on their R&D investments. In fact, drug companies spend millions protecting their patents and attempting to extend them, all in an effort to milk the cash cow for as long as possible. Who pays for these expenses? We do in the form of higher prescription prices.

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The high cost of drugs are mainly due to R&D expenditures, but also due to your own HMO. HMO's charge patients what they see fit, even pharmacies have their own mark-up, which they need to have to keep the business running. Pharmaceutical companies are not to blame for the high cost of R&D. It simply takes a lot of time, effort, man-power, material, labs and many other factors to make one new drug. Nothing is free. We can't obtain free raw material. We have to buy the labs and the equipment. We also have to pay our chemists and biology experts. We must pay for three phase trials that usually include thousands of patients to test the drug. During such trials, all patients are getting free medications that companies pay for. Testing for safety and efficacy is not free of charge.

So, it is a huge yes that I would want to protect my investment after all this work. However, there is no contradiction between this goal and making the drugs available for patients. Your local HMO makes it difficult for you to get your medications, not the pharmaceutical companies. Believe this fact: all companies would love to have all their drugs available for all patients. There isn't any company that wants to limit access to the drugs. Access to drugs is through HMO, not big pharma.

quote:

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If drug discoveries were shared, think of the collaboration that could occur. Each person who views research could tweak and add information that makes the drug better - cheaper to produce or more effective.

Thinking of it even more globally, if all research on the subject were shared, might we have a cure for cancer? Alzheimers? Parkinsons? How about preventing treatable diseases and infections in underdeveloped countries? How many lives could be saved?

---

Drug discoveries ARE shared. Protecting my work and efforts do not contradict with sharing the science (again, refer to the PI of any drug and there it is). If two or more companies shared the R&D efforts for one drug, yes it becomes less expensive for each company individually, but at the end of the day it is still a very expensive mission to develop that new drug.

Patents do not prohibit researchers from investigating treatment options and cure for hard-to-treat diseases, as cancer or PD. It is a simple fact: until today, many companies have tried to find a cure for any neurological disorder but failed, simply because brain cells do not reproduce once dead. I am specialized in stroke and PD myself, and I can say this with confidence: the brain of a PD patient dies slowly (the substantia nigra region, where it is believe to be the site of neurogical damage - dopamine deficiency -, which causes PD). They've went as far as surgical interventions (Deep Brain Stimulation), which is the best therapy today. But even that, this procedure does not replace dead neurons (cells).

The point here is simple: patents do not stop researchers from all over the world to do their work adn continue their research. They provide resources to ensure that the work will continue and grow. Until nanomedicine is fully developed and utilized, there is no cure to any brain disease, which is unfortunate.

One last comment: patents do not limit access of drugs to patients at all. Every company, including mine, has a program to provide free medications to those who are unable to pay for them. Obviously, companies would not be able to do that (provide free medications) unless they are able to manufacture them. To continue manufacturing them, you need resources (i.e. money). It is a circle. Patents provide protection and do not limit access and do not cause patients suffering whatsoever. If patents hurt mankind, then how come all pharmaceutical companies have these free programs to provide free medications for the cash paying patients who cannot afford it?

Cheers.

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The biggest enemy of knowledge is not ignorance. It is the illusion of knowledge.

Gung Ho!

posted August 07, 2006 04:46 PM         

1. “There are no cures for diseases above the neck.”

Learning would be accelerated with open information sharing and it is likely that this would eventually be proved false. In fact, it may have already been proven false if we had been operating under open information sharing practices all along.

2. “Researchers need their rewards to provide incentive.”

There are individuals who follow the “Only money matters” model, but as we learned in Economics, that is certainly not true for all.

In addition, there are non-profit centers such as Myelin Repair Foundation, which was started by former Silicon Valley CEO and MS sufferer Scott Johnson, to combat Multiple Sclerosis. The Foundation conducts and shares research and then sells their discoveries to drug companies. They receive huge investments from companies and individual donors – those who can afford to give, not from the less fortunate who need the drugs.

For more information, visit http://www.myelinrepair.org/

Lastly, there are different and lucrative economic models that drug companies can follow to turn their profits, such as distinguishing their brands through service and quality.

3. “Drugs are not expensive because 95% of Americans have health insurance.”

We are living in a global society and there is a moral duty to reach the rest of the world, especially those that are dying from lack of basic medical care.

4. “The average time to develop a new drug is 10-20 years at a cost of $500 million.”

Obviously too long and too expensive! Collaboration will speed development and reduce financial burdens. This results in more efficient delivery of new drugs to a larger universe, at a lower cost.

5. “Hybrids are the result of the thirty years of research. It’s too bad that Americans won’t buy them.”

Is it realistic to think that we have really given this our best effort? Between the changeover costs and influence from oil companies, auto manufacturers have hardly been giving this their best effort. And if even if they had, they would have had a much lower achievement rate keeping knowledge within their boardrooms and not sharing it with the scientific community.

For more information, visit http://www.sonyclassics.com/whokilledtheelectriccar/

6. “Intellectual property rights protect creativity.”

posted August 07, 2006 04:53 PM            

IP is often viewed as not a real form of property. For instance: if someone steals my car, I’m left without a car and the thief has gained one. However, if I come up with a story that turns into a best seller and someone takes my story line; I still have my best seller. My IP is still mine.

However, Intellectual property is “real” property. At first glance it may not be tangible; however Intellectual property is recorded onto something that is tangible; whether it is a book, CD, or a website.

Initially the base of this country's economy was land; that was all there was. Soon after, the base of the economy became manufacturing, which was called the industrial age. Now, we are in what is referred to as the information age. The way information-based products are protected is through intellectual property, including copyright. Which leads into the true purpose of copyright- it is to promote the progress of knowledge and learning.

Focus #2: Open Sourcing- When programmers can read, redistribute, and modify the source code for a piece of software, the software evolves. People improve it, adapt it, and fix bugs.

Making money through traditional methods, such as sale of the use of individual copies and patent royalty payment, is more difficult and sometimes impractical with open-source software. Some closed-source advocates see open source software as damaging to the market of commercial software.

Studies about security in open-source software versus closed-source software show that closed-source software has fewer advisories.

Advocates of closed source argue that since no one is responsible for open-source software, there is no incentive or guarantee it will be fixed, and there is nobody to take responsibility for negligence. Having the source code for a program could also make it easier for a malicious person to discover security vulnerabilities that they can take advantage of (instead of reporting or fixing them).

Developing software is an unusual commodity that not everyone can create and usually takes serious effort. Copying and editing with open source software can be quite effortless and not cost anything, yet if sold commercially has great industrial value. The original developer, who intensely labored over the code, does not receive the monetary reward that others are seeing. The only way this could work was if the code editors were seen as co-developers and they all received recognition and reward.

The most obvious complaint against open source software revolves around the fact that making money through some traditional methods, such as the sale of the use of individual copies and patent royalty payments, is much more difficult and sometimes impractical with open source software. Many see the introduction of open source software as damaging to the market for commercial software.

Most software development companies sell licenses to use individual copies of software as their primary source of income, using a combination of copyright, patent, trademark and trade secret laws (collectively called intellectual property rights laws). Fees from sale and licensing of commercial software are the primary source of income for companies that sell software.