From: J. Andrew Rogers (andrew@ceruleansystems.com)
Date: Sat Mar 05 2005 - 11:22:08 MST
On Mar 4, 2005, at 8:29 PM, Phil Goetz wrote:
> BTW, the period for patents is apparently now 20
> years. I think it's 12 for pharmaceuticals?
It used to be a maximum of 17 years from the date a patent was granted.
However, this led to the "submarine patent" problem where a patent
could be kept in-process for decades using procedural tricks without
starting the clock but still having claim from the original filing
date.
This was fixed a few years ago by making the patent only valid for 20
years from the filing date, not the grant date, thereby rendering the
submarining of patents largely pointless.
Pharmaceutical companies have a different set of problems. After
filing for a patent on a new medicine and then getting FDA approval,
they typically only have five years on the patent left in which to
recover several hundred million dollars before the generics swoop in.
However, many people are not aware that there is a kind of evil
relationship here. By law, any medical technology that is not FDA
approved must be sold at cost until the approval date, but this does
not preclude the widespread usage of the product on a provisional basis
while the FDA is reviewing it.
The Federal government is a very large medical purchaser, and many
times will universally adopt a patented medical technology prior to
official FDA approval. In cases like this, the FDA has a bad habit of
not approving some medical technology until the last possible date
before they are legally required to make a decision. By using their
leverage in the FDA to delay approval of some hot new medical
technology that the government and everyone else has been using for
years, the Federal government buys themselves a few years of at cost
usage of the technology before the company that created it is legally
allowed to make a profit on it. Unfortunately, this also substantially
reduces the window in which the company can recover their sunk cost
because the clock is running out on the patents. Having the Federal
government being both a major medical purchaser and running the FDA
creates a clear conflict of interest that is exploited to its
advantage.
Intellectual property is largely irrelevant with respect to FAI as it
is a commercial issue, and therefore mostly irrelevant to SL4.
j. andrew rogers
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