The New York Times goes after patent trolls in a long review in the Sunday paper link here. Its author, David Segal, thinks he has found the worst offender, Erich Spangenberg, whose company, IPNav, even has a classy website, link here on which it claims to have "Monetized to date: $610,549,103" and makes its sales pitch to existing and prospective clients.

It is at the top of the list of patent trolls, ranked according to the number of defendants added to their suits from 2008-2012. The total number of patent infringement suits (in litigation?) has jumped from 2304 in 2009 to 4731 in 2012. One estimate of the costs of these suits was 29 billion in 2011. Only $6 billion went to inventors, with the balance going to lawyers and the trolls themselves as expenses and profits.

The article has a lot of details on how IPNAV operates, some of which have gotten it in trouble with the law, but so far it has escaped using lots of money and legal talent. But the bottom line is that it is a huge tax on innovation and on consumers with no redeeming features. The question is how long the U.S. or the patent system survives.

Arlene Weintraub writes that the drug companies are lobbying to get expanded protection for new generic biologic drugs link here.

First a definition. According to the Sino-American Biomedical and Pharmaceutical Professionals Association (SABPA) in a 2006 pdf, biologics are protein or carbohydrate based, extracted from a living entity, posessing a complex physicochemical structure, and are defined by the manufacturing process link here. In 2005, it reports the five leading drugs sold under Part B of Medicare were biologics, valued at more than $4 billion.

In what follows, I am uncertain that I have matters right, but here goes. According to SABPA, biologics cannot be regulated as generics since they can't be shown to be chemically identical to previous approved drugs--the chemicals may be the same, but their structure differs. They must therefore have efficacy and safety data submitted separately, an expensive and time-consuming process. This is the Pharmas justification for asking that a patent's life be extended.

The SABPA definition is notable in that it seems to open the way for defining and patenting such a drug according to one or more of these terms, an almost infinite set of possible patents. The big Pharmas mouths must be watering.

The issue according to Weintraub is whether TEVA and other generic makers, can limit the patent extension beyond the initial monopoly or whether the extension is granted for 10 or more years as the big Pharmas would like. "Right now, the U.S. Food & Drug Administration has no mechanism for reviewing or approving these complex medicines. But several bills introduced this year seek to clear the way and Teva Pharmaceuticals, the world's largest generic-drug manufacturer, is working like mad to make it happen."

Mike Masnick fails to see any justification for a longer patent. He has written on the subject several times, most recently here link here.

Given the amounts of money and the importance of controlling health care costs, we are sure to hear more on this.

It is heartening to find more and more critics of our intellectual property regime, partly as a result of growing knowledge but more importantly, the growing critical reaction to the extreme excesses of the application of the law. A new voice for me is that of Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC. whose book, THE CONSERVATIVE NANNY STATE; How the Wealthy Use the Government to Stay Rich and Get Richer, is available for download on line link here under a Creative Commons license. The book is about much more than IP, as the subtitle indicates, but this review focuses on the IP issues Baker covers. He calls the chapter, "Bill Gates Welfare Mom: How Government Patent and Copyright Monopolies Enrich the Rich and Distort the Economy".

He begins by examining the richest man in the world, Bill Gates, and Microsoft, noting that it was not Gates hard work or brilliance, or the superiority of his software, but his government provided monopoly based on IP law that made him today's Croesus.

The heart of Baker's argument is that the same situation applies to patent protection in the pharmaceutical industry, and copyright protection in the entertainment industry. Vast segments of the economy are dependent on government-enforced monopolies for their profitability and survival. "In the case of prescription drugs, patent monopolies raise the average price of protected drugs by more than 200 percent, and in some cases by as much as 5,000 percent." "In the case of copyright protection, items like software and recorded music and movies that would otherwise be available at zero cost over the Internet, can instead be sold for hundreds of dollars. Clearly these forms of protection are substantial interventions in the economy."

He goes on, "The government is not obligated to award patent and copyright protection; it only makes sense if these are the best ways to promote innovation and creativity." "Copyright and patent protection support a $220 billion a year prescription drug industry, a $25 billion medical supply industry, a $12 billion recorded music industry, a $25 billion movie industry, and a $12 billion textbook industry. According to the International Intellectual Property Alliance, industries that rely heavily on copyright and patent protection accounted for $630 billion of value added in 2002, almost 6 percent of the size of the economy."

Baker's more original argument is that IP does provide an incentive for innovation as the constitution requires, but that there are less costly ways of doing so. He does so in a section titled "Efficient Mechanisms for Supporting Innovation and Creative Work".

He opens with an example, that "patent-protected brand drugs sell for more than three times the price of generic drugs that sell in a free market. This means that the country could save approximately $140 billion a year on its $220 billion annual bill for prescription drugs if the government did not provide patent protection and drugs were instead sold in a competitive market." The country could save much of that, if the research were carried on by the government, as in fact much of it already is (though to the gain of IP owner).

Baker next turns to copyright and singles out the textbook racket for close attention, arguing that revised texts are constantly being marketed with little real change in substance and at great cost. Again he would turn to the government to fund standard texts, but would allow copyrighted versions as well, which would have to find their place in a freely competitive market.

For the broader class of copyrighted material, Baker suggests a voucher system in which individuals would be given a set value of vouchers that he could credit to one or more artists. They in turn would put their creations on the internet, making them free to download. If the artist wants to copyright his work and sell it at whatever the market will bear, he could alternatively do that.

Baker ends by noting that these may not be the best alternatives to patents and copyrights, but that alternatives need to be explored.

The rest of Baker's book is ideological and will put off any who are not self identified progressives or liberals. But his basic argument is that conservatives have framed the issues in terms that they would keep the government out of much of the economy but that this is a lie. For Baker, the issue is that the government intervenes for the rich to the cost of for everyone else.

Martin Crutsinger writes that the US today started a world wide effort to expand enforcement of copyright link here. "U.S. Trade Representative Susan Schwab said the administration planned to join with other countries to negotiate an Anti-Counterfeiting Trade Agreement that would toughen efforts to confront copyright piracy." The move is initially directed at Canada, the 27-nation European Union, Japan, South Korea, Mexico, New Zealand and Switzerland. Schwab is quoted, "Today launches our joint efforts to confront counterfeiters and pirates across the global marketplace."

Her statement raises a lot of questions. Where do most of the violations occur? I suspect in poor developing countries which are not immediately the target here. But if we rope in the developed countries, copyright enforcement is likely to be part of more free trade agreements, extending the power of the new effort.

Schwab said the new agreement, which the administration hopes to negotiate quickly, would set a higher benchmark for enforcement that countries will be able to join on a voluntary basis voluntary if they want access to US markets. If the wording has to be negotiated among that large a group of countries, one wonders how quickly it can be done.

Schwab is also quoted, "Global counterfeiting and piracy steal billions of dollars from workers, artists and entrepreneurs each year and jeopardize the health and safety of citizens across the world." One may ask who benefits from copyright other than the owner of the copyright, typically a big company. Think Disney and Mickey Mouse, created by the long dead Walt.

So here we go with another effort to expand the reach of our state created monopolies.