Comments on: The Bacterial Challenge to Patents as Innovation Incentives http://madisonian.net/2007/06/10/the-bacterial-challenge-to-patents-as-innovation-incentives/ a blog about law, tech, culture, and related things Fri, 19 Mar 2010 04:22:44 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: Bruce Boyden http://madisonian.net/2007/06/10/the-bacterial-challenge-to-patents-as-innovation-incentives/comment-page-1/#comment-216997 Bruce Boyden Mon, 11 Jun 2007 21:56:17 +0000 http://madisonian.net/archives/2007/06/10/the-bacterial-challenge-to-patents-as-innovation-incentives/#comment-216997 If you don't have a patent, and your product is in danger of being imitated or is in fact challenged by competitors, that would seem to be the situation in which you'd want to sell the most the fastest. If, on the other hand, you have a guaranteed period of exclusivity, you can afford to think of the longer term. Of course, people of all stripes, including business people, are often bad at envisioning long-term profits, but I don't see how the pressure to sell today gets greater if you lose long-term exclusivity. I suppose if there were some choice to be made -- Company X can sell 100 lots now and 0 lots later, or can instead sell 50 lots now and 50 lots 10 years from now -- then the length of patent exclusivity might add some amount of weight in favor of the first. But I don't think super-bacteria present that sort of choice; they present the choice of 50 lots now (and 50 lots of some competitor's drug now) versus 100 lots now. Given that choice, I think just about every profit-maximizing enterprise would have an incentive to opt for the latter. If you don’t have a patent, and your product is in danger of being imitated or is in fact challenged by competitors, that would seem to be the situation in which you’d want to sell the most the fastest. If, on the other hand, you have a guaranteed period of exclusivity, you can afford to think of the longer term. Of course, people of all stripes, including business people, are often bad at envisioning long-term profits, but I don’t see how the pressure to sell today gets greater if you lose long-term exclusivity.

I suppose if there were some choice to be made — Company X can sell 100 lots now and 0 lots later, or can instead sell 50 lots now and 50 lots 10 years from now — then the length of patent exclusivity might add some amount of weight in favor of the first. But I don’t think super-bacteria present that sort of choice; they present the choice of 50 lots now (and 50 lots of some competitor’s drug now) versus 100 lots now. Given that choice, I think just about every profit-maximizing enterprise would have an incentive to opt for the latter.

]]> By: Frank http://madisonian.net/2007/06/10/the-bacterial-challenge-to-patents-as-innovation-incentives/comment-page-1/#comment-216847 Frank Mon, 11 Jun 2007 10:55:19 +0000 http://madisonian.net/archives/2007/06/10/the-bacterial-challenge-to-patents-as-innovation-incentives/#comment-216847 My sense is that the patent encourages the acceleration of sales during the patent term, because that's when the owner of the patent can obtain a monopoly price. I would think that, if Cheerios were patented at some time, the effort to sell them during that time would be far more intense than late efforts. Moreover, one could invest profits from the supracompetitive price into a stronger marketing effort. I suppose the market approach here might involve overruling Brulotte v. Thys... My sense is that the patent encourages the acceleration of sales during the patent term, because that’s when the owner of the patent can obtain a monopoly price.

I would think that, if Cheerios were patented at some time, the effort to sell them during that time would be far more intense than late efforts. Moreover, one could invest profits from the supracompetitive price into a stronger marketing effort.

I suppose the market approach here might involve overruling Brulotte v. Thys…

]]> By: Bruce Boyden http://madisonian.net/2007/06/10/the-bacterial-challenge-to-patents-as-innovation-incentives/comment-page-1/#comment-216781 Bruce Boyden Mon, 11 Jun 2007 03:21:29 +0000 http://madisonian.net/archives/2007/06/10/the-bacterial-challenge-to-patents-as-innovation-incentives/#comment-216781 This sounds like a problem but I don't get the connection to patents. Don't drug companies have an incentive to sell as many drugs as possible no matter what the patent protection is? Cheerios aren't patented, but General Mills strives mightily to make sure you eat as many Cheerios as possible. This sounds like a problem but I don’t get the connection to patents. Don’t drug companies have an incentive to sell as many drugs as possible no matter what the patent protection is? Cheerios aren’t patented, but General Mills strives mightily to make sure you eat as many Cheerios as possible.

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