NYT: Pharma wants to cheat and still be able to charge for it

Patent Law Battle a Boon to Lobbyists

By ROBERT PEAR

WASHINGTON — A fight has erupted in Congress over the question of whether drug makers and other companies should be allowed to keep patents they obtained by misrepresentation or cheating.

The issue has emerged as a contentious point in legislation to overhaul patent laws. In several cases, the courts have voided patents after finding that companies intentionally misled the Patent and Trademark Office.

The legislation, affecting a wide swath of the American economy, has been a boon to lobbyists. In 15 months, two dueling business coalitions have spent $4.3 million lobbying on the legislation, which calls for the biggest changes in United States patent law in more than 50 years. Companies from almost every major industry have joined the battle.

Patents can protect an invention for up to 20 years. But federal judges can void patents after finding that companies engaged in “inequitable conduct,” meaning that they misrepresented or concealed information with an intent to deceive the patent office. In such cases, judges can declare the patents unenforceable.

Robert A. Armitage, a senior vice president and general counsel of Eli Lilly & Company, said, “This is like imposing the death penalty for relatively minor acts of misconduct.”

Brand-name drug companies are urging Congress to eliminate the penalty — or to curtail it as proposed under a bill passed by the House.

Debra S. Barrett, a vice president of the American unit of Teva Pharmaceutical Industries, the world’s largest maker of generic drugs, said the changes sought by brand-name drug companies “would make it easier for them to cheat and get away with it, easier for them to defend their patents and more difficult for us to get generic products onto the market in a timely way.”

Consumer groups like AARP share that concern. They want to speed access to generic medicines, which can cost 30 percent to 80 percent less than the equivalent brand-name drugs.

The House has approved a comprehensive patent bill that would make it harder to prove inequitable conduct. Senators are haggling over a companion bill, approved by the Senate Judiciary Committee, and hope to take it to the floor this summer.

In the last 15 years, the United States Court of Appeals for the Federal Circuit, which handles patent cases, has affirmed findings of inequitable conduct in at least 40 cases, including 14 that involved pharmaceutical or health care products. Similar findings have been issued by federal district judges in an unknown number of cases that were not appealed.

Courts have found that drug makers knowingly submitted false statements to the patent office, inaccurately described experiments and concealed information that contradicted their claims.

In one case, the appeals court said that Novo Nordisk Pharmaceuticals improperly failed to disclose that it had not performed an experiment described in its application for a patent related to synthetic human growth hormone. In another case, the court said Pharmacia had used an “inaccurate and misleading” affidavit in obtaining a patent for a glaucoma medication.

Brand-name drug companies say that generic drug makers routinely attack their patents by accusing them of inequitable conduct when they are blameless or guilty of no more than honest mistakes.

The aggressive use of such accusations has become “a plague on the patent system,” the Biotechnology Industry Organization, a trade group, told Congress.

Harry F. Manbeck Jr., who was commissioner of patents and trademarks under the first President Bush, said the existing penalty was a powerful deterrent to misconduct.

“Patents can be very valuable,” Mr. Manbeck said. “There are strong incentives to want to get them. Cheating occurs from time to time. The inequitable conduct doctrine says that if you cheated to get a patent, you should not be able to enforce it.”

Under federal regulations, people applying for a patent have a duty to deal with the patent office in “candor, good faith and honesty.” They are supposed to disclose if their invention was previously known or used by others, offered for sale or described in a publication. In that case, it may not be innovative enough to warrant a patent.

In reviewing an application, patent examiners can search the relevant literature, but may not find all the pertinent information, so they depend on applicants to be forthright.

“If Congress eliminated or reduced the penalty for inequitable conduct, applicants would no longer have a reason to disclose all the information they are aware of,” said Robert D. Budens, president of the Patent Office Professional Association, which represents 5,500 examiners.

Mr. Armitage, the Lilly executive, said: “The doctrine of inequitable conduct is used so aggressively in litigation that it has unintended consequences. Applicants give the Patent and Trademark Office too much information, to avoid allegations that they concealed anything, and they refuse to explain the information, to avoid later allegations that they engaged in some form of misrepresentation.”

James C. Greenwood, president of the Biotechnology Industry Organization, said, “The poor patent examiner gets a dump truck full of information that he has to pore over without any assistance from the applicant.”

The number of patent applications — 467,243 in 2007 — has nearly doubled in the last 10 years and has more than tripled since 1987.

Jon W. Dudas, the under secretary of commerce for intellectual property, said: “We are getting more and more unpatentable ideas, worse and worse quality applications. Historically, in the last 40 years, the allowance rate — the percentage of applications ultimately approved — hovered around 62 percent to 72 percent. It went up to 72 percent in 2000, but dropped to 43 percent in the first quarter of this year.”

A major impetus for the patent legislation is the desire of technology companies to limit the damage awards and legal costs they sometimes face when they are accused of infringing patents. Companies like Cisco and Palm say the disputes drain resources that could be better spent on research and innovation.

Many of these companies have banded together in the Coalition for Patent Fairness, which in the last 15 months has spent $2.5 million for a small army of lobbyists including Mark W. Isakowitz, a Republican, and Steven A. Elmendorf, a longtime Democratic strategist.

A rival group, the Coalition for 21st Century Patent Reform, consists of about 50 companies that zealously guard their intellectual property and are more likely to file suit to protect their patents. It includes pharmaceutical and biotech companies like Genzyme, Lilly, Merck and Pfizer. This coalition has paid $1.8 million to lobbyists, much of it to the law firm of Akin Gump.

The 90 days War for Trade

So, the war of lobbies is gonna be on for 90 days, willing to aproove the US-Colombia trade pact. Bush decided tu use de "fast track", that is surprising. He faces no political risk, so decided to go for it. Se, trade is just one tiny part of the story. Newspapers focus on thing like how it will benefit labour intensive industries like Caterpillar, and others. Or that the farmers are affraid of it. Ok, so they know how to manage themselves to get his message heard in the Congress. Cat has it lobbyists, and the farmers have their powerful organizations. Cool. The things they do not name is that so-called free trade agreement is not only about trade, but about intelectual property, investments, etc.
IP issues such as patents, trademarks, etc, are not a natural byproduct of free trade. They represent the opposite of Smith´s dreams. A patent is a legal monopoly to use and commercialize an innovative product or process. Yeah, it restricts the freedom of others to use or trade something. That happens with IP rights on use of vegetable species to heal, so big pharma is deeply interested in getting the agreement complete. Well, I am not going to bore you anymore. Check this video from the Wall Street Journal.

NYT: Earmarking is not dead

The New York Times brings today a really interesting article on "earmarks". For those of you not familiarized with the term "earmark", following the wikidefinition, it refers to congressional provisions directing approved funds to be spent on specific projects (or directs specific exemptions from taxes or mandated fees). Earmarks can be found in both legislation (also called "Hard earmarks" or "Hardmarks") and in the text of Congressional committee reports (also called "Soft earmarks" or "Softmarks").

So they are a problem because corporate interest ussually lobby politians to get an earmark on their favor. It could be a defense contract for building weapons, or a contract to build a highway, etc. Is strongly related with corruption. One of the most famous cases of earmarks related corruption was the affair of Randy "Duke" Cunningham (showing his best smile on the pic), who had received millions of dollars in gifts from a military supplier for the US government. There thousands of examples.

Check the article of the NYT:

April 7, 2008
Pork Barrel Remains Hidden in U.S. Budget
By RON NIXON
WASHINGTON — Sometimes on Capitol Hill, lawmakers find that it pays to ask nicely instead of just ordering the bureaucrats around.
With great fanfare, Congress adopted strict ethics rules last year requiring members to disclose when they steered federal money to pet projects. But it turns out lawmakers can still secretly direct billions of dollars to favored organizations by making vague requests rather than issuing explicit instructions to government agencies in committee reports and spending bills. That seeming courtesy is the difference between “soft earmarks” and the more insistent “hard earmarks.”
How much money is requested for any specific project? It is difficult to say, since price tags are not included with soft earmarks. Who is the sponsor? Unclear, unless the lawmaker later acknowledges it. Purpose of the spending? Usually not provided.
How to spot a soft earmark? Easy. The language is that of a respectful suggestion: A committee “endorses” or notes it “is aware” of deserving programs and “urges” or “recommends” that agencies finance them.
That was how taxpayer money was requested last year for a Christian broadcasting group to build a shortwave radio station in Madagascar, a program to save hawks in Haiti, efforts to fight agriculture pests in Maryland and an “international fertilizer” center in Alabama that assists farmers overseas.
After hard earmarks figured into several Congressional scandals and prompted criticism of wasteful spending from government agencies and watchdog groups, Congress cut back on their number last year and required disclosure of most of them. (There were more than 10,000, costing nearly $20 billion last year, according to the Congressional Research Service.)
But soft earmarks, while not a new phenomenon, have drawn virtually no attention and were not included in the ethics changes — and current ones under consideration — because Congress does not view them as true earmarks.
Their total cost is not known. But the research service found that they amounted to more than $3 billion in one spending bill alone in 2006, out of 13 annual appropriations bills. And the committee that handles the bill, which involves foreign operations, has increasingly converted hard earmarks to soft ones.
“This shows that even though lawmakers now have to disclose their pet projects, we’re not getting a full accounting of earmarks,” said Ryan Alexander, director of Taxpayers for Common Sense, a group in Washington that tracks earmarks. “We may just be looking at the tip of the iceberg.”
Representative Jeff Flake, Republican of Arizona, said he did not believe gentler language changed anything when it came to pork-barrel spending.
“No matter what you want to call it, an earmark is an earmark,” said Mr. Flake, a longtime foe of earmarks. “If Congressional leaders don’t believe that soft earmarks are earmarks, then I think that makes the case as to why we need tougher reforms in place.”
Soft earmarks are included in a number of spending measures, but they tend to occur more frequently in spending bills that give money to the State Department, the United States Agency for International Development and other foreign aid programs.
Federal agencies are not required to finance soft earmarks. However, officials have traditionally felt obliged to comply with such requests.
“Soft earmarks, while not legally binding, frequently come with an implicit threat: If you don’t take our suggestions, we will give you a hard earmark next,” said Andrew Natsios, former administrator of A.I.D. in the Bush administration.
In its report, the Congressional Research Service said agencies also could face budget cuts if they did not finance soft earmarks.
Mr. Natsios said two lawmakers once threatened to cut his budget if he did not pay for one of their requests. He declined to identify them.
Congressional leaders say soft earmarks are merely suggestions and not really earmarks. They argue that money is awarded at the discretion of the agency, largely through a competitive process.
“Recognizing organizations with a record of relevant work is part of Congress’s budgetary role,” Representative Nita M. Lowey, Democrat of New York, said in an e-mail message.
“It broadens the competitive grant process beyond administration priorities and encourages current recipients to maintain high performance standards,” said Ms. Lowey, who is the chairwoman of the House appropriations subcommittee on state and foreign operations.
Mr. Natsios agreed that some soft earmarks in the bill could result in a competitive bidding process. But that is not the case if the report names a specific organization, which routinely happens.
In considering lawmakers’ spending requests, some committees in recent years have switched hard earmarks to soft ones, saying it gives agencies more flexibility. Critics, including Mr. Flake, suggest it is being done to avoid scrutiny.
“With the efforts to shine more light on the earmarking process,” he said, “I am concerned that we might see increasingly creative ways to steer funding to recipients of funding that members of Congress want to see it go to.”
Financing for the shortwave radio station, called the Madagascar World Voice, for example, began as a hard earmark request by Representative Pete Sessions, Republican of Texas.
Mr. Sessions originally sought $2.5 million for World Christian Broadcasting, a group based in Nashville that broadcasts in several countries and promotes abstinence to prevent AIDS. The House Appropriations Committee converted it to a soft earmark.
A spokesman for World Christian Broadcasting said the organization had been in discussions with A.I.D. about the financing.
Another soft earmark was included for the International Fertilizer Development Center, in Muscle Shoals, Ala. The group has been criticized as wasteful by watchdog groups and Senator John McCain of Arizona, a critic of earmarks who is the presumptive Republican nominee for president.
John H. Allgood, director of finance and administration for the group, which teaches third world farmers about soil fertility management and other agricultural practices, confirmed that his organization received financing from A.I.D. but did not know whether it was through an earmark.
Mr. Allgood would not say how much money the group received, and the aid agency did not respond to requests for the information. The fertilizer center previously received a $4 million hard earmark requested by Senator Richard C. Shelby, Republican of Alabama.
A soft earmark, of course, does not guarantee financing. For example, the Sesame Workshop, home of Big Bird and the rest of the Sesame Street gang, said it did not receive any money despite such a request.
Still, organizations spend millions each year lobbying Congress for them. Lobbyists say getting a client’s organization into language in committee reports, which accompany spending bills and contain more detailed instructions to agencies, can have an impact.
“I certainly wouldn’t call them earmarks, but it does say to the agency that this is something that Congress is serious about,” said Fredrick Baird, known as Tripp, a lobbyist with J. C. Companies, a lobbying firm headed by former Representative J. C. Watts, an Oklahoma Republican.
Other than the amendment that Mr. Flake offered last year to shed more light on the process, no efforts to curb soft earmarks have been proposed.
President Bush signed an executive order in January that directed agencies to ignore all earmarks in committee reports.
But legal opinions by the Congressional Research Service and the Government Accountability Office found that Congress could get around the order by simply inserting them in the text of spending bills or including language in the bills that directed agencies to treat earmarks listed in committee reports as if they were written into the law. That frustrates groups seeking openness in government.
“Soft earmarks are even more insidious than hard earmarks,” said Keith Ashdown, vice president of Taxpayers for Common Sense. “With hard earmarks, at least you know something about the amounts and recipients. With soft earmarks, everything is done in secret.”
Tom Torok contributed reporting from New York.

Music Lobby has suicidal tendences?

The music industry has been lobbying the the governments all around the would for decades. They want ti make us see that listen to a song without paying the rights is a felony. It is not. Intellectual property rights are not natural or constitutional rights. They are nothing more than a interference in our liberties, justified only if it is strictly necessary to the goal of fostering invention and creativity. Nevertheless, it need to be strictly justified and is not a matter of property or poor musicians dying in the streets.
They even want to commit suicide, lobbying so radio stations would be forced to pay fees for playing their songs. Are this guy completely out of their mind? They want to kill all the free publicity and marketing they recieve for being played at the radio?. Who knows what they want. Besides more and more money earned by decree.

Check out "Broadcasters, artists sing different tunes on Hill", at Politico.com