Pharma Giant Fails To Mention -- For 18 Years -- That US Government Helped Fund A Key Patent Used In Drug That Has Generated $53 Billion In Sales So Far

from the reasonable-terms dept

It's no secret that drug prices are often high, and continue to rise -- by 32% in the past five years according to one analysis. It's only natural that many should be willing to pay even exorbitant amounts for drugs. If there is the hope of a cure, or at least of some relief from pain and symptoms, for themselves or their family, most people would probably put that above money.

It's less obvious why drug prices are so high in the first place. The standard response from the pharma industry is that companies need incentives to develop new treatments, and these are typically in the form of the high prices they can charge. Although plausible, it overlooks the important contribution that publicly-funded research makes here. Many new drugs are made possible thanks to ground-breaking early work by academics in universities or institutes, not in companies. That's not something that Big Pharma likes to talk about, as this post from James Love on the Bill of Health blog reminds us:

This is a story about U.S. patent number 6,958,335, and how it took more than 18 years for Novartis to acknowledge National Institutes of Health (NIH) funding in a key patent for Gleevec, allowing Novartis to shape the narrative regarding its role in the development of Gleevec, and also to avoid demands that Novartis make the invention "available to the public on reasonable terms," which is an obligation under the Bayh-Dole Act.

Gleevec is one of the drug industry's biggest successes. An article on the Nature site explained back in 2008:

Some say it's a miracle drug. Others call it a silver bullet. Gleevec, also marketed internationally as Glivec and sometimes referred to by its chemical name imatinib, entered the medical world with a bang. This medication was initially approved for use by the U.S. Food and Drug Administration (FDA) in 2001 for the treatment of chronic myelogenous leukemia (CML), a rare form of cancer that affects certain types of white blood cells.

That "miracle drug" has meant big money for Novartis. According to the Bill of Health blog post, by the end of 2018, the cumulative sales for Gleevec exceeded $53 billion. Love notes that as an invention that was partially funded by taxpayers, Novartis ought to have made the invention "available to the public on reasonable terms". That would presumably have translated to a lower price, and possibly to more people taking the drug, and more lives being saved. Those didn't happen, because Novartis didn't acknowledge the NIH funding until now, a mere 18 years late. Sadly, this is not an isolated case of forgetfulness, as Love points out in his conclusion:

[Knowledge Ecology International] has written the NIH on several occasions to identify cases where inventors have failed to acknowledge federal funding in patent applications. Such cases have not been difficult to find. In the 1990s, Congress and [US Department of Health & Human Services] investigated such failures to disclose, and found widespread non-compliance with disclosure mandates, and lax oversight. This is an area where new Congressional oversight would be welcome, particularly as the question of the federal role in drug development is being spun by various parties.

That's worth bearing in mind the next time Big Pharma tries to justify eye-watering drug prices because of the innovative research required to create them.

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Filed Under: drugs, gleevec, glivec, nih, patents, pharmaceuticals, public funding, reasonable terms
Companies: novartis

Big Pharma Companies Accused Of Conspiring To Inflate Prices Of Over 100 Generic Drugs By Up To 1000%

from the whatever-happened-to-that-quid-pro-quo? dept

At the heart of patents lies a quid pro quo. In return for a time-limited, government-backed intellectual monopoly, companies place their inventions in the public domain after the patent has expired. The theory is that granting patents encourages innovation, although there is plenty of evidence that it doesn't. In the world of drugs, this approach is supposed to allow other pharmaceutical companies to produce generics -- low-cost versions of drugs -- once they are off patent. People benefit because they can buy drugs at much cheaper prices than when they were still under patent.

But as Techdirt has reported, for many years, Big Pharma companies around the world have been trying to renege on that deal with society. One of the main ways is through "pay for delay" schemes. A drug company holding an expired patent buys off manufacturers of generics so that it can continue to enjoy monopoly pricing. A new lawsuit brought by 44 states suggests another way Big Pharma may have been cheating the public. It alleges that top pharmaceutical companies, including Teva, Pfizer, Novartis and Mylan, conspired to inflate the prices of over 100 generic drugs by as much as 1000%:

In court documents, the state prosecutors lay out a brazen price-fixing scheme involving more than a dozen generic drug companies and just as many executives responsible for sales, marketing and pricing. The complaint alleges that the conspirators knew their efforts to thwart competition were illegal and that they therefore avoided written records by coordinating instead at industry meals, parties, golf outings and other networking events.

The complaint alleges that there was an agreement to maintain artificially high prices. This was done collectively to ensure that all the companies involved retained a share of the market, but with enhanced profit margins. According to Reuters, Teva, which describes itself as "The World's Generic Pharmaceuticals Leader", said in a statement:

The allegations in this new complaint, and in the litigation more generally, are just that -- allegations. Teva continues to review the issue internally and has not engaged in any conduct that would lead to civil or criminal liability.

By an interesting coincidence, back in 2015 Teva agreed to pay $1.2 billion to settle a lawsuit brought by the FTC against its subsidiary, Cephalon, over a "pay for delay" scheme to keep competitors from launching low-cost generic drugs. It's almost as if the generics industry never learns...

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Filed Under: big pharma, drugs, generics, monopolies, patents, pharmaceuticals, price fixing, price inflation
Companies: mylan, novartis, pfizer, teva

AT&T Stumbles As It Tries To Explain Why It Paid $200K To Cohen's Shady Shell Company

from the dysfunction-junction dept

Stormy Daniels lawyer Michael Avenatti yesterday dropped a bit of a bombshell on DC in the form of this document (pdf), which alleges that Trump lawyer and "fixer" Michael Cohen was engaged in far deeper, shadier financial shenanigans than had so far been reported. Numerous allegations are made in the document, including claims that Cohen may have violated banking laws in setting up and funneling money through a front company by the name of Essential Consultants, including payments made by Columbus Nova, a U.S.-based affiliate of a company controlled by a Russian millionaire, Victor Vekselberg.

But buried within the document also sits allegations that numerous companies were also paying into Cohen's shell company, which had no employees and claimed to have been focused on real estate ventures. Korean Aerospace Industries, Novartis, and AT&T all managed to pay Cohen for ambiguous services, and all have been providing some comically murky explanations as to why they'd be dumping money into a shell company operated by the President's arguably-shady fixer:

"Korean Aerospace Industries confirmed to The Washington Post that it paid $150,000 to Cohen’s company, but spokesman Oh Sung-keon said that it was not aware of its connection to Trump. The company said that it paid Cohen’s firm “to inform reorganization of our internal accounting system.” The company is in contention for a multibillion joint U.S. contract with Lockheed Martin for jet trainers."

Yeah that doesn't sound suspect at all. The documents allege that AT&T also made four $50,000 payments to Cohen's shell LLC from October 2017 to January of this year (though Reuters now says that those payments could have been as high as $600,000). A statement issued to the press by AT&T attempts to claim that the company was simply seeking "insights" into the administration, which by this point had been in office for nearly a year:

"Essential Consulting was one of several firms we engaged in early 2017 to provide insights into understanding the new administration. They did no legal or lobbying work for us, and the contract ended in December 2017."

It's worth noting that while it was nice of AT&T to confirm the validity of many of the documents' claims, the company's rushed public statement not only got the timeframe of the payments wrong, but the name of the company wrong as well.

One of the theories du jour is that AT&T was trying to secure the repeal of net neutrality, the vote for which (December 14) occurred just as the payments were wrapping up. But given that the Trump FCC had already proven itself to be a mindless rubber stamp when it comes to catering to the telecom sector's biggest companies, such additional payments likely weren't necessary to ensure the vote went AT&T's way.

Granted AT&T's also been pressuring the Trump administration to "reform" NAFTA to make it easier on AT&T's telecom ambitions in Mexico. AT&T was also trying to secure the administration's blessing for its $86 billion acquisition of Time Warner. But given the Trump DOJ proceeded to sue to block that deal for anti-competitive reasons (or hey, just good old cronyism), if the payments were to grease the M&A skids AT&T certainly didn't get their money's worth.

The most likely reason is that AT&T, for some idiotic reason, thought paying a shady NYC fixer's dubious front company would help curry general favor with the Trump administration. That's certainly not out of character. AT&T is a company with pretty greasy track record, whether we're talking about the time it turned a blind eye to drug dealers running a directory assistance scam on its own users, the time it was caught helping scammers rip off telecom systems for the hearing impaired, or that time it was caught making bills harder to understand just to help crammers rip off AT&T customers.

Unless there's some legitimate reason for these payments (which seems hard to fathom), this looks like good old American graft exposed to the light. Still, there's a lot of unsolved questions here, and while AT&T's claim that it was just looking for "insight" might work with revolving door regulators like Ajit Pai, it isn't likely to hold up under deeper federal scrutiny.

Filed Under: bribery, corruption, cronyism, michael cohen, payments, payoffs
Companies: at&t, columbus nova, essential consultants, korean areospace industries, novartis

At The Behest Of Big Pharma, US Threatens Colombia Over Compulsory Licensing Of Swiss Drug

from the destroying-lives,-destroying-peace dept

As Techdirt readers well know, Big Pharma really hates compulsory licensing of its patented drugs, where a country steps in and allows an expensive drug to be made more cheaply in order to provide wider access for its people. Such massive pressure is applied to nations contemplating this move, that even global giants like India quail. A new story is unfolding that reveals just how far companies are prepared to go in order to prevent it from happening. It concerns Colombia's possible use of a compulsory license for the drug imatinib, sold under the name Glivec, and used to treat leukemia. Despite the fact that the company holding patents on the drug, Novartis, is Swiss, the US has started to lean heavily on Colombia in order to persuade it not to go ahead with the move.

KEI has obtained a copy of a letter from Andrés Floréz at the Embassy of Colombia in Washington, DC, to the Minister of Health in Colombia, reporting on a meeting between embassy officials and Everett Eissenstat. He's the Chief International Trade Counsel for the US Senate Committee on Finance, under Senator Orrin Hatch. Apparently, Eissenstat conveyed quite forcefully his views on the negative consequences for Colombia if it decided to issue a compulsory license on the cancer drug Glivec:

Eissenstat mentioned that although Novartis is not an American company, the US pharmaceutical industry was very worried about the possibility that the case would become a precedent that could be applied to any patent in any industry which, according to him, could lead to the reputation of our country's respect for intellectual property rights being viewed as impaired and Colombia becoming one among those countries that would have special treatment...

Einssenstat also mentioned that, if the Ministry of Health does not correct this situation, the US pharmaceutical industry and related interest groups could become very vocal and interfere with other interests that Colombia could have in the US.

Nice little country you have there -- be a shame if something happened to it. Stat News mentioned a couple of forms that "special treatment" might take:

A free-trade treaty between the two countries went into effect four years ago, which obligates Colombia to comply with various international trade laws. Florez also cautioned that issuing a compulsory license for the Novartis drug may "weaken support" for bringing Colombia into the Trans-Pacific Partnership, a trade pact between 12 countries in the Asia and Pacific regions that must still be approved by Congress.

But the most extraordinary threat is the following, reported here by KEI:

Senator Hatch was so opposed to the idea of a compulsory license on the patent for a $40+ Billion cancer drug made by a Swiss company that he was willing to find an extremely sensitive area for the Colombian people and use it as leverage. The [Paz Colombia] peace process in question is the hopeful conclusion to decades of fighting in the country with guerrilla rebels that has led to hundreds of thousands of deaths.

The US is willing to jeopardize the entire "Paz Colombia" peace plan, all because Big Pharma is outraged a developing country might dare to use its international right to issue a compulsory license. As KEI Director James Love commented:

The use of these back channel methods of conveying threats and pressure is common, and the leak of these two letters provides insight into why governments that have the right to issue compulsory licenses rarely do. The fact that after meeting with Eissenstat, the Colombian Embassy connects the patent dispute to the funding of the Colombian peace process illustrates how the United States can link health and national security together in ways that a harmful to both.

It can surely only be a matter of time before Colombia obediently toes the line, and recognizes that Big Pharma's patents and profits are much more important than the health and lives of its people.

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Filed Under: colombia, compulsory licensing, everett eissenstat, glivec, health, orrin hatch, threats, trade agreements
Companies: novartis

Two Pharma Companies Fined Over 'Pay For Delay'; Novartis Unrepentant About Suffering Caused

from the profits-before-patients dept

Back in April of this year, we wrote about a spate of investigations around the world into "pay for delay" deals, whereby a big pharma company essentially buys off manufacturers of generics so that the former can continue to enjoy monopoly pricing long after its patents have expired. One of those involved the European Union, and the two pharma companies Johnson & Johnson and Novartis. As PharmaTimes reports, fines are being imposed on them for their actions:

The European Commission has fined Johnson & Johnson (J&J) just under 10.8 million euros and Novartis 5.49 million euros, after finding that their subsidiaries in the Netherlands had agreed an anticompetitive deal aimed at delaying the market entry there of a generic version of the painkiller Duragesic (fentanyl), thus breaching European Union (EU) antitrust rules.

Of course, such sums are little more than a wrist slap for pharma giants, but it's nonetheless good to see the European Commission making clear that this anti-competitive behavior is not acceptable in the EU:

The payment by J&J to Novartis "shockingly deprived patients in the Netherlands, including people suffering from cancer, from access to a cheaper version of this medicine," said Joaquin Almunia, the European Commission vice president in charge of competitive policy.

Despite that fact, with the likelihood that cancer patients were probably in more pain than was necessary, some remain in denial:

In a statement, Novartis and [its subsidiary] Sandoz say they "reject the Commission's allegation that the 2005 co-promotion agreement was intended to deprive patients in the Netherlands of cheaper medicines."

Whether or not that was the "intention", it was the inevitable effect, and quibbling over the difference shows the moral squalor of companies like Novartis that regard additional suffering of cancer patients as some kind collateral damage that can be ignored in the cause of pumping up their profits.

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Filed Under: european commission, fines, netherlands, pay for delay, pharmaceuticals
Companies: johnson and johnson, novartis

Doctors Call Out Novartis For Insane Pricing On Cancer Drug

from the as-they-should dept

Novartis has been in the news lately for the lawsuit filed against it by the US government for kickbacks it allegedly gave to doctors for prescribing certain drugs. As we noted about that case, it should be no surprise that this sort of activity happens, given that the incentive structure we've created with patents is so extreme. Here's one example of at least some principled doctors striking back against Novatis. Over 120 cancer researchers and doctors have published a paper calling out Novartis specifically for its pricing on the cancer drug Gleevec (marketed as Glivec outside the US). The doctors point out that it can cost over $100,000 per year for Gleevec currently. And, Novartis has been continually jacking up the price. There had been concern when the drug was first introduced a decade ago, that it was priced way too high at $30,000, leading the company's then CEO, Daniel Vasella, to acknowledge the complaints, but to argue that it was "a fair price." Well, now the company is pricing the drug at more than three times what it thought was a fair price, and it should be no surprise that people think this is outrageous profiteering by abusing a government granted monopoly to charge way more than any fair market price would allow.

The paper these doctors published points out that such high prices undoubtedly causes harm to patients who need the drug. The lead author of the paper told CNN that this whole situation is unsustainable, and something needs to be done to bring prices down to a more reasonable, market-based level. He just focused on Gleevec because it's his area of research:

"These price increases do not reflect the cost of development of drugs or the benefit they provide to the patient," he told CNNMoney. "They are simply related to the drug companies' wish to increase profits beyond a reasonable range."

Of course, one key way to help drive down prices is to do the obvious: stop granting government-given monopolies on the production of such drugs. That, alone, is the reason why the prices are so crazy in most cases. Thankfully at least some countries have recognized how ridiculous this is. India recently blocked Novartis from trying to patent a slightly different version of Gleevec, which means that the company will finally face some real pricing pressure from generics in that country. One would hope that other countries would do the same, and recognize that competition isn't a bad thing. It might just save lives.

Filed Under: gleevec, kickbacks, pharmaceuticals
Companies: novartis

Our Patent System Incentivizes Drug Companies To Pay Doctors Kickbacks

from the the-system-is-broken dept

You may have seen the news recently that the US government has kicked off a lawsuit against Novartis, the pharmaceutical giant, for paying kickbacks to doctors to get them to prescribe certain drugs.

Authorities said the Basel-based company for a decade lavished healthy speaking fees and "opulent" meals, including a nearly $10,000 dinner for three at the Japanese restaurant, Nobu, to induce doctors to prescribe its drugs.

They said this led to the Medicare and Medicaid programs paying millions of dollars in reimbursements based on kickback-tainted claims for medication such as hypertension drugs Lotrel and Valturna and the diabetes drug Starlix.

The charges are detailed in a whistleblower lawsuit first filed against Novartis Pharmaceuticals Corp by a former sales representative in January 2011 and which the U.S. government has now joined.

Of course, this is hardly a surprise to anyone who has followed the medical profession at all over the past few decades. The stories of "favors" and benefits for doctors from mis-named pharmaceutical "sales reps" (often very young, just out of school, incredibly attractive, but with little knowledge of the actual field), whose jobs often seemed more akin to cruise director and entertainer rather than knowledgeable, helpful sales person, are everywhere. That it's finally taken this long for the government to think that maybe, just maybe, this might distort the nature of our healthcare system, and lead to wasteful prescriptions, including prescriptions that cost significant taxpayer money is somewhat incredible.

What's worse, as economist Dean Baker points out, is that anyone at all is surprised that this happens. After all, when our own government policy is to hand those drugmakers incredibly powerful monopolies on life-saving pharmaceuticals, we've actually created the incentives ourselves for such activity to take place:

When the government grants drug companies patent monopolies that allow them to sell drugs at hundreds or even thousands of times the free market price it gives them an enormous incentive to do things like pay off doctors to prescribe drugs. Everyone who has ever taken an intro economics class understands that fact.

Unfortunately our leading economists do not seem aware of how protectionism in the prescription drug industry leads to corruption that can both raise costs and jeopardize the public's health.

Perhaps that's why it took the US government so long to even attempt to crack down on such activities. It created the environment in which such activities thrive and are encouraged.

If we want to stop such practices, perhaps, rather than just suing the pharmaceutical companies, we start to look at the ridiculous incentive structure we've set up, whereby drug companies take on very little of the actual risk (most drugs today are actually first created by universities using publicly funded money), but are given incredibly powerful monopolies, such that the prices are considered unbelievable.

True competition in the market would -- as always -- lead to both more actual innovation, lower prices, less corruption and (most importantly) better health and public safety.

Filed Under: kickbacks, patents, pharmaceuticals
Companies: novartis

Indian Supreme Court Rejects Trivial 'Evergreening' Of Pharma Patents

from the saving-lives dept

Back in October last year, in the context of India showing itself increasingly sceptical about pharma patents that drive up drug prices beyond the reach of its citizens, we wrote about an important court battle over Novartis's drug Gleevec, sold as Glivec in India. The definitive judgement from India's Supreme Court was announced today, reported here by The Guardian:

The Indian supreme court has refused to allow one of the world's leading pharmaceutical companies to patent a new version of a cancer drug, a decision campaigners hailed as a major step forward in enabling poor people to access medicines in the developing world.

Novartis lost a six-year legal battle after the court ruled that small changes and improvements to the drug Glivec did not amount to innovation deserving of a patent. The ruling opens the way for generic companies in India to manufacture and sell cheap copies of the drug in the developing world and has implications for HIV and other modern drugs too.

The key issue at stake is a practice known as "evergreening": making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's control over it. It's a way of cheating on the implicit bargain of patents: that a government-backed monopoly is granted in exchange for the invention entering the public domain at the end of the patent's lifetime.

That's what makes today's decision so important. It's not just about allowing Indian generics manufacturers to offer Glivec for a fraction of the Novartis price; it's equally about establishing the principle that "evergreening" patents won't be as easy in India as it is elsewhere, where the practice is common. This will allow India's pharma companies to produce a wide range of drugs at low prices that can then be sold to emerging countries unable to afford Western prices.

Doubtless, many lives will be saved as a result, but that doesn't seem to be any comfort to the head of Novartis in India, who is quoted in a press release as saying:

"We strongly believe that original innovation should be recognized in patents to encourage investment in medical innovation especially for unmet medical needs," said Ranjit Shahani, Vice Chairman and Managing Director, Novartis India Limited. "We brought this case because we strongly believe patents safeguard innovation and encourage medical progress, particularly for unmet medical needs. This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options."

That's pretty much what you'd expect him to say, since we've heard it here on Techdirt so many times before: without patents that allow monopoly pricing and big profits, there will be no investment in new drugs, and everyone will suffer etc. etc. But this simply isn't true. Much of the fundamental research that leads to important new drugs is done in public laboratories, paid for by taxpayers around the world, not by pharma companies.

Here, for example, is the story of how Novartis came to gain its highly-lucrative monopoly on Gleevec/Glivec, as told by the key researcher who actually developed it: Brian Druker, chair of Leukemia Research and professor of medicine at the Oregon Health and Science University Cancer Institute. He explained how the crucial initial research was carried out in an opinion piece published on the Livemint site in 2007:

The basic research that led to the identification of enzyme inhibitors for CML [Chronic Myeloid Leukaemia -- the main condition that Glivec is designed to treat] dates back to 1960 with the identification of the Philadelphia chromosome in patients with CML by researchers at the University of Pennsylvania, Peter Nowell and David Hungerford. In 1973, Janet Rowley at the University of Chicago determined that the abnormal chromosome was due to a translocation of genetic material.

No pharmaceutical companies seem to have been involved in this early work, and they were also minor players in the crucial move out of the laboratory, into product development, as Druker explains:

In 1993, I moved to Oregon Health Sciences University in Portland and had a single goal of finding a company that had the best inhibitor for Bcr-Abl [the cancer-causing protein] and to bring it into clinical trials. My work in Oregon on a therapy for CML was primarily funded by public sources, particularly the National Cancer Institute. My persistence with scientists at Ciba-Geigy (now Novartis) helped to keep the development of imatinib on their agenda despite uncertainty from product managers.

So not only was the drug developed largely thanks to public funds, but the pharma company that ended up making all the profits from it wasn't even hugely enthusiastic about the project initially: it was only Druker's "persistence" that led to the drug being approved. And if you're wondering about his views on the current world of pharma, with its stratospheric prices and a habitual recourse to evergreening to extend patents way beyond their original life-span, here's what he wrote back in 2007:

Pharmaceutical companies that have invested in the development of medicines should achieve a return on their investments. But this does not mean the abuse of these exclusive rights by excessive prices and seeking patents over minor changes to extend monopoly prices. This goes against the spirit of the patent system and is not justified given the vital investments made by the public sector over decades that make the discovery of these medicines possible.

The fact that many key drugs have only been possible thanks to those "vital investments made by the public sector" is nearly always overlooked by defenders of the pharma patent system. It's another reason why the Indian Supreme Court's decision is not only right, but just.

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Filed Under: drugs, evergreening, gleevec, glivec, india, patents, pharma, pharmaceuticals, small improvements, supreme court
Companies: novartis

Emerging Countries Take Note: Big Pharma's Losing Patent Battles In India

from the this-could-get-interesting dept

Techdirt has been following the important story of the kidney and liver cancer drug marketed under the name Nexavar since March, when India granted a compulsory license for the first time since re-instating patents on pharmaceuticals. Naturally, the patent holder, Bayer, fought back, and appealed against that decision. Now we learn from Intellectual Property Watch that Bayer has lost:

Last Friday (14 September), the Chennai-based Intellectual Property Appellate Board (IPAB) which is responsible for hearing appeals on patent applications, rejected a petition by German pharma major Bayer AG, seeking a stay on an order of India’s Controller of Patents granting a compulsory licence (CL) to Indian generic drug maker Natco Pharma Limited, for a drug used to treat liver and kidney cancer.

It's quite possible that Bayer will try to appeal to a higher court, but what's noteworthy is that this is just one of several other important pharma cases in India at the moment. For example, the Delhi High Court held that Roche’s patent on the cancer drug Tarceva was valid, but that an Indian generics manufacturer had not infringed on it because it had only been selling a variant of the drug. Another high-profile case concerns the blood cancer drug Gleevec, sold as Glivec in India, whose manufacturer, Novartis, is fighting India's refusal to grant it a patent. Here's the background:

The legal dispute in the Glivec case centres around a provision of India’s 2005 patent law, called Section 3(d), which states that "the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant." The dispute brings to the fore a fundamental question: what is an "invention"? Or more precisely, how much innovation is required to obtain a patent in India?

Novartis insists that it is not fighting in order to get more money, but to vindicate its "honor". What this probably means is that it is trying to establish the principle that patents can be given for new forms of drugs, even if they provide no enhancement over earlier versions. If it loses the Gleevec/Glivec case, that could have serious repercussions for future patent applications by the company in India.

More generally, this current round of high-profile drug patent cases may well have major knock-on effects in other regions of the world. Western pharma companies are probably worried that their recent failures in India to gain certain patents or block local manufacturers of generics could be repeated elsewhere as emerging countries wake up to the flexibilities within the TRIPS agreement that India is currently exploiting. The Intellectual Property Watch article mentions three nations that are already considering this -- Botswana, South Africa and Swaziland.

An article in the leading medical journal The Lancet agrees that India's growing success might well encourage others:

In trying to limit compulsory licences and avoid efficacy tests on products, the Bayer and Novartis cases are seeking to undermine public health considerations aimed at improving access and therapeutic advantage. The TRIPS Agreement does not limit the grounds on which compulsory licences can be granted, and does not prevent patent applicants from having to demonstrate enhanced efficacy for their allegedly new and useful inventions. There are many problems facing access to and rational use of medicines in India but the provisions within the country's patent laws, if more extensively and properly applied, should help rather than hinder such access. India's laws and experiences could provide a useful example for low-income and middle-income countries worldwide.

Watch this space.

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Filed Under: big pharma, drugs, india, patents, pharmaceuticals
Companies: bayer, novartis, roche

Putting Tooltips On Links? Company Demanding $80,000 For Patent Infringement

from the the-patent-system-at-work dept

Two months ago, we received an email from a guy at a company who claimed that an operation called Webvention was claiming that his company's website was violating its patent by having links on their website that would show additional info when you moused over the links -- commonly called "tooltips." This is a standard feature in HTML. I asked the guy for details and he suddenly got worried and said he would need permission to share the threat letter. I even promised him I'd keep his company's name out of it, I just wanted to see the specifics of what the threat letter said. After emailing me back once to say he was busy but would get to it, he then stopped responding to all my emails. I eventually did write a post about how Webvention was suing a bunch of website operators, noting how incredibly vague the lawsuit was, and also pointing out that this was one of Intellectual Ventures' one-time patents.

While the guy who contacted us never came through with any details, it looks like many of the details are now coming out. Ars Technica calls our attention to the news that two of the companies who received similar letters, Tenneco and Novartis, have both sued pre-emptively, asking for the patent to be invalidated, or failing that, for a declaratory judgment that they don't infringe. While Ars Technia says that the patent covers "rollover images," I believe it's even worse than that. They seem to believe it covers tooltips. The key claim in the patent (5,251,294) is:

28. A computer-based method for aiding a user in accessing a body of stored information which includes segments of related information, the method comprising displaying a set of labels, each label providing an abbreviated indication of information content of a corresponding one of said segments, said labels being displayed in an organized model reflecting relationships among information contents of said corresponding segments, enabling a user to point to individual labels in said model using an electronic pointing technique, and for each label to which said user points, displaying to the user, for previewing, the information content of the corresponding segment.

Yeah. Tooltips. Anyway, the lawsuit filing actually shares much of the details of the threat letter that my original source was unwilling to share. Webvention apparently offers a special deal: if you pay up within 45 days, it'll only cost you $80,000, for using one of the most basic features on the web today. The letter also claims that a ton of companies have, in fact, licensed this ridiculous patent, including HP, Symantec, Panasonic, American Express, Nokia and Google. If so, that's really sad that those companies would give in on such a lawsuit. Joe Mullin's story at Law.com (linked above) notes that at least Nokia and Google are supposedly paying members of Intellectual Ventures -- which is supposed to protect them from bogus patent claims. It would be a bit ironic (and would certainly question the value of IV) if it turned out that both companies paid up to avoid a lawsuit from an ex-IV patent (the other possibility might just be that Webvention considers IV members to have "licensed" the patent, which would be misleading).

Either way, kudos to Novartis and Tenneco for fighting this shakedown, whereas others appear to have given in. This use of the patent certainly has the feeling of the infamous JPEG patent (5,253,341) which was used to terrorize all sorts of websites that had JPEG images on their site, until it was finally knocked down by the USPTO. Of course, the real shame is all those companies who have already paid up for this patent. Assuming this patent is also struck down eventually, the companies who paid up won't get their money back. It's a shame they can't sue the USPTO for outright fraud in approving such a patent in the first place.

Filed Under: patents, tooltips
Companies: intellectual ventures, novartis, tenneco, webvention