Brennan, Kapczynski, Monahan & Rizvi: Leveraging Government Patent Use for Health

The federal government can and should use its power to buy generic medicines at a fraction of their current price, according to Hannah Brennan, Amy Kapczynski, Christine H. Monahan, and Zain Rizvi in their new article, A Prescription for Excessive Drug Pricing: Leveraging Government Patent Use for Health. They note that 28 U.S.C. § 1498 allows the federal government to use patents without license as long as it pays "reasonable and entire compensation for such use." This provision "is regularly used by the government in other sectors, including defense," and was relied on "numerous times to procure cheaper generic drugs in the 1960s," and should "once again be used to increase access to life-saving medicines." The article is chock-full of interesting details and is a recommended read even for those who disagree with their ultimate policy conclusions.

The authors discuss how § 1498 has been used recently to acquire patented inventions ranging from electronic passports to genetically mutated mice, and how the Defense Department used § 1498 to buy generic antibiotics from Italian firms before Italy started issuing patents on drugs. They synthesize the § 1498 caselaw and note that it is not a replication of the patent damages award; e.g., lost profits are strongly disfavored, and the cases show concern with "excessive compensation" to the patent owner. Adjustments to § 1498 royalties have been made based on risks and expenses incurred by the patentee in developing and creating a market for the products, and to account for "reasonable" profits, so the authors advocate awarding pharmaceutical patentees their risk-adjusted R&D costs plus average industry returns (perhaps a 10-30% bounty). This approach to calculating patent royalties is similar in many ways to that advocated by Ted Sichelman for all patent cases, as discussed on this blog in June.

16th IP Scholars Conference at Stanford

The 16th IP Scholars Conference (IPSC) will be held at Stanford Law School tomorrow and Friday, with about 150 presentations and 200 attendees from around the world. The conference schedule is here (which is largely thanks to the work of our terrific fellow, Shawn Miller). IPSC was my first law conference right out of law school, and I was overwhelmed by how welcoming and generous the IP scholarly community was.

I'll post in the coming weeks about some of the papers I hear about at the conference, but for those who want more immediate updates, Jake Linford (whose work I've written about here) will be live-blogging at PrawfsBlawg, and Rebecca Tushnet (who was just featured on this blog) likely will do the same at her 43(B)log. Given the size of the IP prof twitter network, I'm sure there also will be plenty of tweets about #IPSC16.

Looking forward to welcoming IP scholars to Stanford! (And if you read Written Description but haven't met me yet, please find me and say hello.)