[I]ntellectual property policy is being managed as a legal issue, whereas although this area like any other must operate through the legal system, intellectual property policy is most fundamentally an aspect of economic policy. … [T]he consideration of policy with regard to both [copyrights and patents] is dominated by IP practitioners and by the beneficiaries of the IP system. We need the expertise of lawyers in this as in many other areas of policy but it is imperative that IP policy make the transition that competition policy made over a decade ago now, from a specialist policy area dominated by lawyers, to an important front of micro-economic reform. (emphasis added)

I can’t help but nitpick: While I would welcome a shift from viewing copyright, etc. as primarily legal matters to significant matters of economic policy, it would be a failure to (continue to) not consider them as significant matters of cultural policy, as well.

(Thanks to Eve Gray for calling my attention to the quote.)

Two panels (at least) mentioned it explicitly: the panels on Openness and on Innovation and Access for Medical Technologies. I’ll try to summarize what was notable:

Openness: Tim Hubbard of the Wellcome Trust:

• Some funders are starting to require that their grantees develop data access policies.
• There is an effort to develop a “PubMed Commons”, building on top of PubMed Central, adding e.g. features for comments and tags.
• Recommendation: Policies for OA to publications and data should become standard for research funders.
• There are some problems remaining:
  • OA to publications: name control (e.g. recognizing that “Doe J Q” is the same person as “John Q. Doe”), permission problems (e.g. barriers to data mining)
  • OA to data: cultural attitudes (e.g. how to give credit/attribution, adjusting to new competitive environment — people interpreting your data before you can), practical problems (e.g. format standardization)
• The focus of the presentation was on the conflict between openness (e.g. OA to genetic data) and privacy. Even supposedlu de-identified data can be re-identified, posing a challenge to OA to data on human subjects. He suggested a solution where researchers could have free access to the complete data (with full granularity), but without handing it out in raw form: researchers could load programs onto a trusted broker’s computer, which would execute the algorithm and provide anonymized results. This would not be a perfect protection of privacy — there is still the possibility of leaks and ways to game the system — but it would make it easy enough for legitimate researchers and hard enough for malicious uses so as to discourage most of them.

Comments:

• How many funders actually have open data requirements for their grantees? This seems like a good topic for the Open Access Directory: collecting information on funder policies, as well as on projects and institutions with open data policies for their intramural researchers. This is such a nascent space that there’s a big role for sharing best practices here.
• I hadn’t previously heard of PubMed Commons — I’d certainly like to hear more about it.
• It was striking how much he presented OA to publications as a done deal — even the problems he mentioned had to do with leveraging OA for extra value, rather than the problem of getting OA to begin with. (This is especially striking since Wellcome’s own mandate after 8 months still had less than 30% compliance. I haven’t seen more recent numbers, but Wellcome announced they would start audits to increase the compliance rate.)
• Privacy is an important question when it comes to sharing data on human subjects. Unfortunately, human subjects is one of the areas where data is most critical to share, e.g. to better understand epidemics and more quickly develop responses. Hubbard’s proposal is an interesting one, and it’ll be interesting to see if anyone pilots such a model. At the same time, I think a dedicated person probably could still game such a system where motivation is high, e.g. seeking private data of a celebrity or public figure. Aside from the general damage of such breaches, they set back the research enterprise itself because people are less willing to share data with researchers. So I think there’s room for an additional layer of security, where researchers have to apply for access (which can be revoked if the system is misused). This will better give the public a sense that their data isn’t just “out there”, but there are legitimate filters to keep out bad actors. Inevitably there still will be breaches and leaks, but it’ll seem like more is being done to prevent them. There will also need to be legal and cultural elements to this too (as Hubbard also suggested), such as an effective framework for redress when private data is abused. It’s also important that the authorization system not evolve into something exclusionary: any legitimate research by a trustworthy investigator should be promptly granted access. Unfortunately, the structure is then already in place for charging subscriptions; particularly where databases are expensive to generate and maintain, there may be a temptation to do so.

Openness: Heather Joseph of SPARC:

• There is a growing but limited awareness among policymakers of the benefits of openness. We need policies to remove both access and permission barriers to research. So far most uptake of OA policies has been in the biomedical arena. There’s pushback from opponents even there.
• There’s a recognition that data is valuable and needs to be appropriately managed. But we need to move from mere “data management policies” toward open access to data.
• So far, the signs from the Obama administration are promising. The administration espouses openness (in general) and some key appointments are strong.
• Recommendation: Make OA policies throughout the government, e.g. through executive order or regulation, but not as part of IP policymaking.

Comments:

• I think this is the first time I’ve heard the suggestion that the U.S. adopt OA policies for its publicly-funded research via executive order or regulation. There’s some sense to this, I think: it has to do with the internal management of the government and doesn’t run afoul of any legislation. I see two challenges, though. First, other funding agencies don’t have the pre-existing cyberinfrastructure into which grantees could deposit their articles; funding for that has to come from somewhere (e.g. through the appropriations process). Second, as we saw with the “Fair Copyright in Research Works Act”, there’s some opposition to these policies in Congress: some members might take issue with executive policymaking — but I think that’s a fight we could win, especially with the administration on our side.

Openness: Questions:

• Bruce Perens: What about other IP on publicly-funded research, e.g. Bayh-Dole? Joseph: We need to draw a distinction — we’re focusing on access to the literature and data.
• Jamie Love: If there was an access to knowledge treaty, what specific issues would you want to include? Hubbard: OA data and literature; mandated protection of private data; greater openness to economic data; standards for government data. Joseph: OA literature and data.
• Jonathan Band: Some countries hold copyright on government works (Crown copyright — unlike the U.S.) — this needs to change.

Comments:

• There’s a little surge of discussion lately about patents (and the management thereof) on publicly-funded research, e.g. owing to developments in India and South Africa. It’s an issue I’ve been involved with before, and I’m sympathetic toward efforts to improve the current system. There are some common principles, but they’re also very different questions. Specificity, so we can understand well what we’re discussing, is important in policy, and especially in these areas, which are often so challenging to understand. So: OA can advance without affecting the Bayh-Dole system; the Bayh-Dole system doesn’t necessarily do harm to OA.

Innovation and Access for Medical Technologies: Anthony So of Duke University:

• Recommendation: Public access to full clinical trial protocols and regulatory submissions.

Innovation and Access for Medical Technologies: Judit Rius of Knowledge Ecology International:

• Recommendation: Innovation inducement prizes should include an “open source dividend” to encourage open sharing of knowledge, data, material, and technology
• Recommendation: Governments should support the World Health Organization’s Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (as adopted in World Health Assembly resolution 61.21), including open access to scientific articles and data from publicly-funded research

Comments:

• The FDA Amendments Act requires the registration of clinical trials and reporting of some basic results on the OA site ClinicalTrials.gov. But the “basic results” really are pretty basic — there’s room for broader disclosure (and OA) here.
• KEI’s “open source dividend” idea is an interesting one — which may have application outside the area of inducement prizes — and one I’d like to hear more about.
• OA advocates shouldn’t forget about the WHO’s Global Strategy, which includes very favorable language toward OA. It’s worth mentioning when speaking with funders, policymakers, researchers, etc. Unfortunately, the language as adopted in WHA 61.21 only said that states should “strongly encourage” publicly-funded researchers to make their manuscripts OA, retreating from earlier language that states should “require” it. Still, as we saw with the NIH policy — maligned as the earlier voluntary policy was (and rightly so), it laid the groundwork for a mandatory policy (establishing a repository, starting to educate researchers, gathering evidence on the policy’s impact and effectiveness, building a constituency in favor of OA, etc.). We have a document representing global consensus that governments should support OA: we should remind people of that more often.

in most circumstances, prizes don’t replace patents
circumstances appropriate for prizes are limited
can be complex to administer with non-trivial administrative costs
as we consider & implement public prizes, we need to build in a system to evaluate effectiveness

prizes for achievements after the fact — don’t necessarily help

prizes ex ante — do induce effort/attention direction at specified goals

discrete prizes: designed for a particular objective; many of these, long history
series of prizes: Innocentive, X Prizes
program of prizes: Royal Society of Agriculture
system of prizes: 1 proposed

Royal Society of Agriculture: 100 years, awarded prizes & metals for innovative farm machinery
both monetary and honorific
each year, society targeted areas and announced in advanced

system: Medical Prize Innovation Act
awards based on improvements in public health
designed to produce open competition in production and distribution — patents unenforceable after award of prize

effectiveness of prizes:
purposes: achieve technical objective
encourage participation, e.g. of non-traditional participants [participatory science]
encourage unorthodox approaches (cf. limits of peer-review system)
often designed to encourage collaboration and team-building
often designed to educate & inspire non-participants [participatory science]

little scholarly evaluation of prizes
Lerner re: royal society: investments of winners 3x monetary prize; medals more attractive than monetary prizes

many rules to be decided
have to promote existence of prize to spur participation

what topics work?
ones where the market isn’t serving
but doesn’t work well for basic science

judging and establishing rules is tricky

there is a larger role for prizes than are currently used, but it’s not unlimited
don’t underestimate the complexity and cost of organizing prize contests

Next is Jamie Love of Knowledge Ecology International.

recommendations:
de-link R&D incentives from prizes
create sustainable institutions to increase the supply of global public goods

deficits in current funding system
only 10% of new drug approvals in 2007 were priority drugs

Next is Michelle Childs of Médecins Sans Frontières:

there is an absence of needs-driven research
lack of drugs, diagnostics, vaccines
antiquated or ill-adapted tools

e.g. diagnostic technology for TB as used not changed since 1800s; 50% failure rate

WHO IP report: patents not relevant or effective for needs without a market

WHA 60.30: needs-driven R&D; address link b/w costs of R&D and price of medicines, etc.

[link b/w science-innovation-entrepreneurship -- attracting participation in general, but especially to needed areas]

recommendations:
need targeted funds
support WHO proposal by Bolivia and Barbados
need new models for i+a
de-link R&D costs from prizes

change 1: created central patent court — had been significant divergence of results among different circuit courts
so central court fell in love with patents

change 2: patent office went from cost center to profit center
led to pressure to increase patent grants — also increased litigation

truth 1: there will always be mistakes
unrealistic to expect no “bad” patents

truth 2: there will always be more chaff than wheat
most innovations are worth little

truth 3: incentives matter
lower examination standards -> more applications -> fewer examiners/patent -> poorer examinations

truth 4: information flow is critical
examiners will always have limited information

needed reform: getting more information
opportunity to challenge before costly court system
current system is stacked against opposition

needed reform: address litigation
address issues with jury trials

currently:
congress: IT wants one thing, pharma wants another
USPTO: some progress, but limits to self-policing
courts: eBay, KSR, Bilski

why should you care: patents still relevant

Next is Dan Ravicher of the Public Patent Foundation.

everyone can agree that patent systems can be made better
i don’t care about the outcomes, as long as the processes are fair
who are the stakeholders: patent holders, patent attorneys, patent officials, public
we should always treat opponents with respect

reforms:
have a fair process

make quality job #1
not quantity
remove the examiner quota system
reform the continuation system
introduce more points where patents can be challenged (could go to pure registration system, with no assumption of validity upon suit [but wouldn't this create a massive amount of uncertainty?])

create fair use for patents
start negotiating point: remove injunctions as a remedy to infringement (just set a fair price for compulsory license — if infringer can’t pay, de facto injunction)
research: no research should be precluded
civil liberties

Next is Philippe Aigrain of Sopinspace.

standards of patentability

what won’t work: patentability reform just be first job
standard response: we don’t need to reform patentability standards
why this doesn’t work
USPTO adopted more extensive examination rituals — first year, sw patent grants dropped; but went up after that — because we can generate sw patent applications at will
Europe: 6-10 year backlog for category including sw patents
it’s in the interest of every innovator to understand standards of patentability

so how can we get generally understable standards of patentability?
Europe: some type of entities can’t be patented
US: history of software: committee during Carter admin was divided b/w copyright and no protection for software — but case law decided that subject matter restrictions were out

simplest approach to patent reform is to codify standard that information/processing can’t be patented — goes back to Jefferson’s stand that ideas can’t be patented

plan B: new examination ritual that leads to reject all patents on software, gene sequences, algorithms, data
already happening: US: Bilski; Europe: patent directive

Q&A

lerner: fair use is an interesting idea
compelling economic case for research exemption
less comfortable with human rights exemption — it’s amorphous

aigrain: sympathetic to fair use, but has to be carefully constructed
Europe has research exemption

ravicher: designing a fair use would be a deliberative process
if we have constitutional rights, we have to protect them
as long as the process is fair, it’ll be OK

questions:

Q: mentioned getting info into the patent system. often there’s a lot of information, but it’s of dubious quality.
lerner: it’s a needle in the haystack — examiner doesn’t know where to find the right pieces of information.
rules limit ability to bring up facts mentioned during patent examination during litigation — disinclines people to raise the info earlier.

ravicher: removing the quota system would also encourage people to raise the info, knowing that it might be considered.

love: alternatives to monopoly — in a system of liabilities rules, how to compensate for non-voluntary use?
ravicher: there are various arbitration systems, ways to compensate for loss, etc.
lerner: it may seem easy now, but later it may get more complicated.

karachelios: 1: society assumes that a system can set it owns boundaries. but it’s not that easy. 2: in case of doubt, grant or review? cultural context: if it’s profit center, grant it. if you think patent=innovation, then grant it. [systematic undervaluing of public domain, underestimating the costs of uncertainty, etc.]
ravicher: could create financial incentive for patentholders for bad patents — right to refund if your patent is held invalid.
aigrain: it’s not about old vs. new technologies, it’s about the nature of certain technologies.

Q: different purposes of patent system
ravicher: purpose is to enhance the state of technology available to the public. if the purpose is to incentivize innovation, system sucks. otherwise patents would be stronger.
lerner: sequential innovation — stronger patents != more innovation.
ravicher: sequential innovation depends on access. perspective should be on public access to technology, not the private right to control inventions.
aigrain: software copyright has enabled competition of approaches (proprietary vs. open) — patent gives only monopolies. orphan drugs aren’t just small or neglected diseases, but diseases where medicine is unpatentable.

Q: administrative reform: is patent examiner union a problem?
lerner: both labor & management have been incompetent.
ravicher: i have no solution.

rashmi rangnath: 1: what was bad about the patent bill from 110th congress? 2: what about peer to patent project?
lerner: damage calculation reform — opening pandora’s box of complexity and ambiguity. rather focus on patent quality.
ravicher: peer to patent is interesting, helpful to empower public to participate as early as possible. problem: even if we give examiners better info, if there’s other issues (e.g. not enough time), it won’t be helpful.

perens: people who’ve seen patent applications can’t participate in other projects — introduces issue of treble damages (for looking).
ravicher: the doctrine has changed somewhat but still has problems.

The next panel is on openness. First up is Konstantinos Karachalios of the European Patent Office.

• Civility is important. The field is very polarized. Our publication contains others’ vision.
• The definition of patents is openness — see its etymology. The opposite is secrecy (latent). But the patent system has come to mean its opposite in public perception. How can a system survive meaning its opposite?
• Openness and transparency are major components of social trust. Patents are a pivotal element of the knowledge economy. Patent offices offer a framework of global governance — you may criticize TRIPS, but at least there’s something there to criticize. Patent offices have been assigned to focus on innovation
• Backlogs are a serious problem. It’s a latent patent thicket.
• Transparency and availability of information about patents is a serious issue.
• How much is an ICT standard worth? If there are patents in it, it’s a goldmine. Proposal: coordinate competition authorities and patent offices, and link it with standardization bodies.
• Technology transfer to developing countries: if this fails, other Millennium Development Goals will fail. Climate change: can’t progress until people know how much it will cost.
• Patent system must look outside its narrow, legal/technical field and engage more broadly with social dialogue.

Next is Tim Hubbard of the Wellcome Trust. Genome informatics. Title: “Openness and privacy: can you have your cake and eat it?”

• Open data, releasing it as you collect it, is a recent idea. Human Genome Project drove this model. Has been adopted as a requirement of many funders — must include data access policy in grant requests.
• Value of open data: maximize investment, enable competition/collaboration
• Openness has risen in other fields: OA literature, open source software
• 2003 report by Wellcome Trust did the economic analysis which lead to its OA policy. Others have followed. Remaining problems: name control, permission problems (e.g. data mining)
• Pubmed Commons: Comments, tags
• Recommendation: Success of open data and OA literature hasn’t yet lead to mandates everywhere — should become a standard.
• Data sharing: Cultural attitudes are a problem (credit/attribution, adjusting to new competitive environment — people interpreting your data before you can). Other practical problems (e.g. standardization).
• Privacy: genome sequences and genotypes are anonymized, but potentially re-identifiable. Individual data will be limited to bona fide researchers, but summaries will be publicly available — but we’ve shown that these can be re-identified too. But will your registered researchers share it with unauthorized third parties?
• In the future, the whole of the UK NHS will have DNA data attached. Plans for connecting this to research. People like to contribute to health research, but don’t want their data leaked or misplaced. UK: significant lack of trust about this.
• Hard for data to be anonymous and useful. Need to be able to do research with fine granularity of data.
• Potential solutions: Make it fuzzy (but hard); change in social values; do everything behind closed doors (literally) — but slows research; or run researchers’ code on the mainframe system, but the results are only released as summary data
• Latter: Can’t make it perfectly leak-proof, but if you make it “good enough”, most legitimate researchers will use it; make it hard and illegal to discourage bypassing
• Is this a model of a generic implementation for openness + privacy? [But everyone has to trust the honest broker]
• But conflict with profit motive, even in public sector
• Recommendation: establish principles regarding private data
• Recommendation: standards for data formats and implementation

Next: Heather Joseph of SPARC.

• Need for openness in scholarly arena. Raising awareness of lawmakers of benefits of openness, but need to see it more in policy. Keeping policymakers convinced of benefits, even for biomedical research (other fields worse), is tenuous. But initial recognition that communicating results is an essential part of research. And growing view among public that openness in research is good, and an essential component of investment in research.
• Need for policy framework to remove access and permission barriers to maximize investment. But uptake so far mostly limited to biomedical research. And there’s pushback from opponents.
• Time to move from =”data management plans” to greater push for OA to data.
• Incoming administration does seem to value communication of science. Key posts filled to date have been filled to some extent with scientists who demonstrate this.
• OA policies should be made throughout administration — whether through executive order or regulation — and not as part of IP policymaking.
• OA policies are low overhead, aren’t punitive, and take advantage of the Internet to maximize existing public investment in research, fueling innovation and economic growth

Q&A:

• Perens: (1) Patent system is seen as opaque because IP policymaking is undemocratic (WIPO). (2) To protect personal data, give it IP protection and require users (e.g. companies) to get my permissions or face class action suit. (3) Are we talking about just OA to research literature or about overturning Bayh-Dole? A: (1) Patent offices must be advocates for transparent. (2) IP protection probably won’t help much when a junior official loses a laptop of private data on the train. (3) Have to draw distinction between OA literature and patents — many Congressional offices ask about relation to Bayh-Dole.
• Love: If there was an access to knowledge treaty, what specific issues would you want to include? Hubbard: OA data and literature; mandated protection of private data, to make it useful for research; greater openness to economic data; standards for government data. Joseph: OA literature and data — need to repeat the value of this to any innovation, competitiveness, A2K agenda. Karachalios: Define a technology commons. See climate change: can’t continue with private thinking in the face of public challenges. Hubbard: Everybody seems to think they’ll make a fortune from tech transfer, but it causes a significant disruption to other activities. Another prisoner’s dilemma.
• Jonathan Band: Crown copyright — having U.S. government works in the public domain creates a lot of value. But other countries hold copyright on government-created works. We should advocate for a change to this.

• Perfect storm in pharma industry: lower productivity of R&D pipeline, increased generic competition, VC funding drying up
• Clinical trials as a public good: non-transparent trial results (selective disclosure); avoidance of clinical trials that might reveal unfavorable outcomes (head-to-head effectiveness not compared); data exclusivity; shelved products
• Public funding for trials = less need to recoup costs with high prices
• Opportunity: Call for comparative effectiveness clinical trials; call for economic recovery package
• Implementation issues: Start with revenue-neutral strategy with targets of opportunity (e.g. comparative effectiveness trials); strategic support for alternative business models for neglected diseases; must not have conflicts of interest
• Recommendations: Public access to full clinical trial protocols and regulatory submissions; establish an independent entity to conduct clinical trials in the public interest; offer funding incentives for alternative business models to lower the costs of drug development

Questions:
[I asked about the FDA Amendments Act and clinicaltrials.gov, as well as the U.S. withdrawing support for the Declaration of Helsinki.]

Jamie Love asked a question but I was too busy Googling the above to pay attention.

Q: Is there a standard model for drug development that takes these concerns into account?
There are common elements: royalty-free access to developing countries, establishing the conditions up front from funding.

Next is Sophie Bloemen of Health Action International.

• Recommendation: Apply competition policy more strictly in the area of pharmaceuticals.
• Recommendation: Move regulatory authority from the European Commission’s Directorate General of Enterprise and Industry to DG of Health and Consumers.
• Recommendation: Re-assess IP policy toward developing countries. No correlation between EU position at WHO IGWG and in bilateral trade agreements.

Next is Ellen ‘t Hoen, formerly of MSF and futurely of UNITAID:

• Use of Doha flexibilities is widespread
• But older (generic) ARVs are much cheaper than newer second-line ARVs
• UNITAID is a multilateral funding mechanism for AIDS, TB, and malaria drugs. Explicitly supports Doha principles and other innovative mechanisms.
• Patent pool [voluntary collective license]. Supported in WHO global strategy on IP, UNITAID commitment, NGO support, response from patented and generic manufacturers positive
• Recommendations: Support UNITAID initiative to set up a patent pool for LMI countries. Support i+a agenda: implement WHO IP global strategy, WHA resolution 60.30. Obama should tell WHO DG to release Bolivia/Barbados proposal.

Next is Judit Rius of Knowledge Ecology International:

• Recognize the Doha Declaration, honoring the public health flexibilities in IP rules. Countries have the right to do this, but US and Europe are threatening when they do so. Don’t negotiate for TRIPS+ provisions like data exclusivity.
• Mandate open licensing of public funded R&D to developing countries.
• Promote R&D incentives that separate innovation from market for the product, e.g. prize funds
• Inducements should include open source dividends to encourage open sharing of knowledge, data, material, and technology
• Support a biomedical R&D treaty (WHA 61.21) — sustainable financing for needs-based R&D, open access to scientific articles and data from publicly-funded research

Next is Rob Weissman of Essential Action

• Renegotiate bilateral FTAs: Eliminate TRIPS-plus measures (minimum: renegotiate to revise patent rules to match changes in Peru/Panama), abandon anti-counterfeiting agenda for medicines (including ACTA)
• Climate change technologies: no pressure on countries for using TRIPS flexibilities regarding climate change technologies; publicly funding technologies openly licensed to developing countries
• Biogenerics: biologics are much more expensive than conventional drugs; no process for generic approval. Issues:
  • Regulatory pathway
  • Data exclusivity (submitted regulatory data — generics point to data submitted previously; exclusivity means they can’t use that data and have to re-do the tests at high expense) — recommendation: no exclusivity (alternative: cost-sharing, generics pay a share of the disclosed costs of trials)
  • Patent-related issues: how do you figure out which patents apply to a drug (patents listed in Orange Book), how do you resolve patent disputes before a patent expires — recommendation: disclose patents as a condition of enforceability, no delay for when generics can challenge a patent (industry wants a delay), no requirement for generics to share confidential information with patent holder (industry wants to require disclosure so they can assess potential infringement).
• Consequences: could have massive savings with an efficient generic approval system. Affordability depends on an effective generic market

Questions:
Love: How does biogenerics track in Europe?
Weissman: I don’t know.
Sarah Rimmington of Essential Action: Europeans have higher data exclusivity than 5 years under Hatch-Waxman. Why shouldn’t we have higher levels like Europe? Well, Europeans have price controls.
Weissman: Should they be called biogenerics or biosimilars? Question is whether they’re substitutes or in the same class.

Love: If WHO begins discussion on an R&D treaty, what advice would you give negotiators on what to include?
Rohit Malpani of Oxfam: Have to clarify funding levels.
‘t Hoen: Principle is that everyone contributes to the R&D. Priority-setting is important: how do you identify needs.
Weissman: Still being able to have a patent system for drugs makes the R&D treaty more politically feasible.
Rius: Negotiation needs is start. Prioritization is important. How to fund it is important — not high prices. Who pays for it — must include middle-income and some low-income countries.

Aigrain: Do you plan a campaign to move authority to SANCO?
Bloemen: Yes, we are planning to campaign on it.

Q: Does the fact that citizens in Europe and U.S. will have crisis with access to medicines will change the way they see it? Do we have something to learn from developing countries?
Weissman: Reality is industry vs. consumers (governments, employers). Pricing fights: biogenerics, Medicare compensation for publicly-funded drugs, reimportation.
‘t Hoen: Pricing crisis will offer opportunity — more people will get involved, offer ideas.

Malpani: Advance market commitment, priority review voucher: Comments?
Rius: They’re good — consequence of IGWG. But implementations are just at the service of the current business model. But doesn’t de-link from monopoly rights. Need i+a.
‘t Hoen: Companies have scooped up extra subsidies through this. AMC goes to a pre-existing product and doesn’t change the IP. Priority review is difficult: speeding up health review is not in the interest of health consumers. But encouraging to have new proposals and to test them. But we need to assess them critically.

[end of conference. I'll post the notes from this morning later, as well as my missing-but-now-recovered post from yesterday.]

• Maintaining an innovation economy is central to America’s long run success. The financial sector relied on overly simplistic economic models, didn’t understand the role of government, used economic ideology to prop up its interests. The high tech and research sectors face similar challenges.
• Our pursuit of more protective (TRIPS plus) IP policies has hurt developing countries and undermined our global standing — makes us seen as putting profit before more fundamental values
• IP is part of society’s innovation system — gives incentives to innovate. But there are other parts of the innovation system. Other models of financing and production: public/foundation/etc. funding, open source. Other ways to provide financial incentives: trade secrets, first mover advantage, [reputation], prizes.
• Role of patent system within broader innovation system. Details of the system can affect the efficiency of the economy (e.g. patentability, etc.)
• Static inefficiency: knowledge is a public good; limiting its use necessarily causes an inefficiency. Social costs of market distortion (by monopoly power) are especially high in the case of life-saving drugs. Long history of leveraging IP monopoly rights (Microsoft, automative industry). Monopoly power, once established, can easily be perpetuated — particularly evident with network externalities, switching costs (including learning). There are also high administrative costs (patent office, suits), high uncertainty
• Can dynamic benefits be obtained with lower static costs? Concern that the patent system may actually be a net drag on innovation. Problem: rewards don’t match the marginal social returns.
• Why patents may slow innovation: knowledge is the most important input into the production of knowledge (accretion). Incentives for innovation with monopoly less than in a more competitive marketplace — cheaper to discourage competitors’ innovation and raise rivals’ costs than to innovate yourself [rent seeking]. Patent thickets can impede innovation. WWI: created patent pool for airplanes [whoa! didn't know that]. Boundaries of property rights can cause significant inefficiencies, but patents have fuzzy boundaries. Patent races may not be as effective at spurring innovation as previously thought. Direction, not just quantity, of R&D matters — may be directed at circumventing or strengthening monopoly, rather than developing new products.
• Strengthening the innovation system: Selection of projects and researchers; financing; risk absorption; incentives; (dissemination?). Need a mixed (“portfolio”) approach. We may be relying too heavily on the patent system — and the patent system may not be well-designed for its objectives.
• Financing: You need money; with patents, the funding for R&D comes from monopoly profits — a “tax”.
• Bias toward excessive patenting: Fighting a patent is a public good, but creating a patent makes a public good private; so underinvestment in fighting bad patents.
• Inequities associated with IPR
• Legal system can lead to unfair outcomes: high cost of implementing IPR. Includes the high cost of challenging patents — puts developing countries at a disadvantage (cf. “bio-piracy”). Problems of implementing compulsory licenses.
• Developing country concerns: Little incentive for R&D on neglected diseases. TRIPS has made it harder to close the knowledge gap, but with few protections for the “resources” which are plentiful in developing countries.
• Alternative: prize system. Currently: prize is monopoly power = incentives to restrict use. We could instead have prizes that return the social benefit of the innovation without the drag on follow-on innovation.
• Advantages and disadvantages of patents, prizes, and government funding, thus suggesting the benefits of a balanced portfolio.
• Recommendation: Obama’s stimulus should include more for R&D, rather than infrastructure.
• Need global cooperation to support research of interest to developing countries. And need to address other failings in our innovation system, e.g. regulation of medicine.
• Need to redesign IPR to increase benefits and decrease costs. And need to do development-oriented IP regime

[Stiglitz is an engaging and organized but rapid-fire presenter. I could easily follow along -- maybe also because I've woken up more fully -- but sometimes it moved too quickly to jot down.]

Q&A:

• Perens hits on the link between FDA approval for medicines and the patent system — must secure patent to pay for the cost of testing. Stiglitz: Conflict of interest in drug manufacturers doing own testing. Public funding also important.
• Shaver: Does your critique of patents vis-a-vis basic research also apply to more applied research (the “D” in “R&D”)? Stiglitz: Large spillovers from any research — larger spillovers from more basic research (higher cost for enclosing). Patent system more relevant for applied research than for basic. For well-defined objectives (e.g. testing for breast cancer), prize system may be effective. [Well-defined objectives = well-defined beneficiaries = natural lobby group?]

Next: Eric Maskin, Institute for Advanced Study. [He's using overhead slides. When was the last time I saw an overhead projector?]

• Natural experiment: When software patents were affirmed, patenting increased, but innovation didn’t.
• For some industries, on average, the standard logic of patents may be correct. In others, patents may harm innovation.
• What makes some industries (e.g. software) different? Innovation is sequential, and research efforts are complementary. [Is that different than other industries?]
• Standard logic: Patent holder can license to others, e.g. to subsequent innovators. So if use of a patent innovation is socially beneficial, the patent holder will license it and make money from it. Problem: patent holder is a monopolist — no competition — license fee will be too high. [Also: transaction costs?]

Q&A:

• How much of this applies to copyrights too? Maskin: Patents are a blunter instrument, but much is similar. Stiglitz: Patents may have greater social impact (e.g. medicine), and may be more sequential, but much is similar. Response: Sequentiality — jazz? documentary film?
• Today, big businesses largely use patents against each other; whereas small businesses use them against big businesses.
• How well does the public funding model work for applied research?
• Can economic analysis account for more than just how much money innovation will make?
• Stiglitz: Private sector isn’t necessarily more efficient than the public sector (cf. financial crisis). Most people work in large organizations: little congruence between individual motivation and social reward. Average return on public sector research higher than private sector.
• Maskin: Harder to measure outputs than R&D inputs, but can be done when there are well-defined goals.
• How can we draw a line of patentability? It’s hard, and we need data — but we shouldn’t assume that more patents is better.
• Question about piracy. Piracy is another name for imitation. We want incentives for countries to preserve their biodiversity — U.S. companies say that incentives are important for them to develop new drugs, but we shouldn’t sign the biodiversity treaty, so they don’t have to pay.

TACD is, as the name suggests, a forum for consumer-oriented groups from Europe and the U.S. TACD has a working group on intellectual property rights, which is hosting today’s event at the Carnegie Institution in Washington, DC. It’s a star-studded cast both of speakers and of attendees.

First speaker is Arti Rai of Duke University, offering 4 recommendations.

• Good governance policies for knowledge governance. Need more evidence, and more neutral evidence, for policy making. Need neutral frames.
• Should use U.S. policy as cautionary tale, not only as positive model for other countries. U.S. has to improve patent policy and administration of patent office to be a good model for others. Need to look at empirical data — e.g., not all patentable subjects need exclusive rights.
• Green innovation. “Greatest economic and moral challenge of our time.” Patents are one way to stimulate innovation, but not enough. Carbon emissions not priced properly — market failure — patents alone won’t work.
• Focus on ends, not means. Ends: jobs, access, sustainable economic growth. Means: innovation (Romer, Solow). But innovation not high on government’s agenda — because it’s not high on lobby group’s agendas. Innovation is disruptive — the past has lobbyists, the future doesn’t. Thought: create a high-placed position in the White House to focus on innovation.

Q&A:

• Rai: USPTO claims to be voice of innovation, but it’s really the voice of patents — may be one means to innovation, but not the only means.
• Jamie Love wants to know what policies Obama will pursue (Rai has worked with the Obama team — but not speaking for Obama). Answer: Since Richardson dropped out of consideration for Commerce head, it’s thrown things for a loop [PTO is under Commerce]. Transition team has a group on innovation, separate from agency review groups. Innovation is high on the agenda — desire to fill related positions as quickly as possible, and have a higher WH presence on innovation. Love: Has Obama taken a position on the WBU treaty on exceptions for readers with visual impairment: Rai: No.
• Can we get empirical figures on patents, copyrights?

Next, Guilherme de Aguiar Patriota of the Brazilian government. Delegate to UN.

• WIPO Development Agenda: UN body that didn’t consider questions like other UN bodies. Also not considered in producing TRIPS at WTO — result of economic power focused on Uruguay Round of negotiations — wishlist of industry (esp. pharma), not from objective assessment. “One of the most Draconian” treaties from the Uruguay Round — some people think it shouldn’t even be part of WTO. TRIPS should promote impact studies to produce empirical data, broader than just considering impact on established industries — should consider scientific and social consequences. [Thought: Less-developed countries' interests are aligned with young industries of developed countries, because they're less part of the establishment. Encouraged by specialization resulting from lower trade barriers?] Suggests different technologies should be treated differently in terms of IP rights. Enforcement is a significant government action — costs of enforcement should be considered in policymaking. Sector differentiation prohibited by treaty, but there’s a lot of pressure to do it, and it’s happening informally already. Established industries will naturally advocate for extension of their monopoly. Patent reform in U.S.: pharma, IT sectors have different interests. Suggests creating legal definition of innovation. Developing countries may not have capacity to investigate patentability, so likely to follow lead of developed countries’ patent offices uncritically — potentially leading to more patents in developing countries, where local inventors will have fewer resources to challenge them. Need better international exceptions & limitations, limit encroachment on public domain.

Q&A:

• Question about WIPO copyright committee [or patents? lost track].
• Good focus on global social benefit, rather than on one company or industry.
• Question about Brazil’s Petrobras’ patents and green innovation — do they get in the way, shouldn’t Brazil walk the walk? A: Petrobras should follow international standards.

Next: Hugh Hansen of Fordham University.

• Rational, fact-based decision-making is important. Non-interested assessments are important. Civility in the debate is important. IP academics used to be “secular priests” for IP. People in cities don’t innovate because they don’t have garages. Bias against capitalism is counterproductive. Protectionism is a prisoner’s dilemma: you have to ratchet up to protect your people relative to others (other companies, other countries). [Do you?] Little diversity in IP regimes = few laboratories to see how different policies work. Distrust: WBU treaty seen as Trojan horse.
• U.S. and E.U. should embrace protection for traditional knowledge, genetic resources, as a matter of social justice. [This is an area I want to know more about -- should check the presentations from the recent ALA conference.] Comparison to raw natural resources.

Q&A:

• Lea Shaver of Yale Law takes issue with general distrust of capitalism — thinks a lot of IP criticism is based on conservative economics (anti-monopoly).
• Is Obama administration a good opportunity to change shift to multilateralism rather than bilateral trade agreements? [Everybody wants to know about Obama.] A: You can only have a re-examination of IP policy when people trust the re-examiner. New WIPO DG is trusted party; so is Obama. Need dialogue among people who disagree. [Nice in theory, but when do we stop having "dialogue" and start mobilizing for policy change?]
• Bruce Perens: We need a fund for [free/cheap?] representation of smaller parties in IP disputes. Winning a dispute can be a Pyrrhic victory — you spend so much defending your position. Need better balance for IP, quid pro quo. Well-constructed patents are theoretical. A: IP has always been about securing rights for rightsholder, not about quid pro quo. [What about compulsory licensing for music recordings?]
• Too strong competition policy is damaging — our present antitrust law is well-balanced.

Last is Sisule Musungu of IQ Sensato. [Everybody's joking about the lack of coffee. Addicts, I tell you. But wish I had guaraná.] Title: opportunities for Obama administration and EU to do good with IP policy. More will be posted on his blog later.

• Obama: “Change has come to America”. What change is coming to patent and copyright policy? Leadership is important — we assume there’ll be good leadership from Obama on this. [Do we?] But less clear on lower positions: IP czar, USTR, etc. Also important is leadership at WIPO, other countries (e.g. Brazil, some African countries). Also needed at WHO — now seeing significant lack of leadership.
• Areas to do good: Innovation and access to medicine. Used to be: you’re either for access or for innovation. Pharma industry used to resort of insults and name-calling. Others focused on balancing. Financing is still an unresolved question. Obama should support the WHO working group on IP and their recommendations.
• Patents.
• Copyright. Had been focus on broadcasting treaty — no justification — “others have rights, therefore we have rights”. Obama should drop it — it just eats up attention that could go to more important areas (e.g. WBU treaty). Need global E&Ls (e.g. distance education).
• IP enforcement. Stop “counterfeit policymaking” — doing something major without evidence and in secret (e.g. ACTA). If there’s a legitimate interest in enforcement, why can’t we discuss it openly? Also applies to EU bilateral agreements (e.g. African, Caribbean countries — asking them to take on enforcement responsibilities even the EU doesn’t have).
• Generally, IP will be everywhere internationally, either because of forum shopping or because the issue touches on it (e.g. climate change). Should borrow WIPO’s principles: inclusiveness, focus on public domain, balancing interests of different countries and sectors. [Are these really WIPO's principles?]

Q&A:

• Is there compulsory licensing for patents (cf. copyright on sound recordings)? Is there use it or lose it for patents (cf. trademarks)? Concerned about move to protection by contract (nondisclosure). A: Compulsory licensing for patents is rarely applied.
• Michael Geist: Thanks for bringing up ACTA. Optimism about WIPO is based on a few countries like Brazil that have started to use it; but ACTA’s a closed door deal. What countries might push back on ACTA? A: We might see pushback when ACTA starts being used e.g. as a basis for technical assistance.

Final comments from panelists:

• de Aguiar Patriota: ACTA isn’t being pushed at WIPO because the developing countries would fight for their interests there — another example of forum-shopping; e.g. moved to World Customs Union, less balance of developed:developing countries, delegates aren’t negotiators but customs officials, close relationship with INTERPOL and enforcement interests — less substantive expertise. Breeds mistrust.
• Hansen: I don’t understand what the problem with ACTA is. There were always outside meetings where like-minded countries. Forum-shopping is appropriate — only applies to interested countries. [But they'll negotiate it in private first then pressure everyone else to adopt it later.] He says WIPO is an example of mistrust, so people go elsewhere [isn't it the other way around?].
• Musungu: People negotiating ACTA don’t know what they’re negotiating. ACTA won’t apply only to the countries who are negotiating it, but it would be used as a standard for other countries too. We need everybody to make their argument on the basis of evidence.

First panel’s over; will blog about the later panels in separate posts.