I'm Not a Big Fan of Politicians Going After Judges, but Rodney Gilstrap is the Exception to this Rule

The Federal District Court for the Eastern District of Texas is notorious for its support of patent trolls, and Judge Rodney Gilstrap is notorious for this even among the judges in that district.

Personally, he has literally been the judge presiding about ¼ of all patent cases in the United States.

He also has a history of taking Supreme Court solutions and applying them in remarkably bad faith.

Case in point, when, in Alice Corp. v. CLS Bank International, the Supreme Court ruled that patents that just added a computer to ordinary activities are invalid, Gilstrap required that defendants ask for his permission before filing to have a patent dismissed, which appears to functionally eviscerate the Supreme Court ruling, which calls for a quick dismissal of bogus patents:

For companies that get hit with lawsuits over obvious patents, the best chance they've got to fight back is last year's Supreme Court decision in Alice v. CLS Bank. Now patent defendants are often able to get a judge's opinion at an early stage of the case about whether the patent was too obvious to grant in the first place.

Patent cases still aren't cheap, but for those willing to fight, Alice is turning the tide in defendants' favor—just not in East Texas.

US District Court Judge Rodney Gilstrap, who presides in Marshall (pop. 25,000), hears more patent cases than any other judge in the country. He has gone out of his way to place additional barriers in the way of defendants seeking to knock out bad patents under Section 101 of the patent laws. That's the section that Alice relates to, which the Supreme Court said should be used to knock out "do it on a computer"-style patents.

Recently, Gilstrap published an order saying any defendant who wants to file an early motion under Section 101 "may do so only upon a grant of leave from the Court after a showing of good cause, which shall be presented through the letter briefing process."

 Under pressure, he subsequently partially reversed himself, but it's still pretty out of line.

It's gotten so bad that, in TC Heartland v. Kraft Foods, the Supreme Court specifically tightened up on venue requirements, requiring suits be filed only, "Where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business."

Well, now Gilstrap has decided that having a single employee working from his home constitutes a "Regular and Established Place of Business."

Yet under the new rules, Gilstrap still wouldn't let Cray out of the district. Cray's only tie to the district was a single salesperson, who worked out of his home in the Eastern District. In the judge's view, though, that was enough to find that Cray had "regular and established" business in the Eastern District and would have to face trial.

Gilstrap's controversial interpretation of the TC Heartland decision has been scorned by lawmakers who have supported patent reform efforts. In a hearing about the US patent system last week, Rep. Darrell Issa (R-Calif.) said Gilstrap's move "rejects the Supreme Court's unanimous decision" and was "reprehensible."

I do not know what Gilstrap's angle is, it could be something as benign as his desire to bring revenue (office rentals, hotel and hospitality, etc.) into Marshall, TX, or it could be that he hopes to get a lucrative partnership in an IP lawfirm when he retires, or maybe he's just a nut who gets off on being the center of attention.

Whatever the case might be, it is clear that something is very wrong, and the chairman of the House Judiciary Committee and the IP Subcommittee have both condemned the judge:

Two members of the House judiciary committee have criticised Judge Rodney Gilstrap for his interpretation of TC Heartland v Kraft Foods, going as far as to suggest that he is putting the needs of the Eastern District of Texas above serving justice.

Speaking at a House judiciary committee hearing on patent law last week, Republican Darrell Issa described Judge Gilstrap’s recent interpretations of the Supreme Court’s TC Heartland decision—which limited the filing of infringement suits to the plaintiff’s state of incorporation—as “an act I find reprehensible”.

House judiciary committee chairman Bob Goodlatte, without naming Judge Gilstrap, said in his opening statement at the hearing: “Unfortunately, one judge in this district has already re-interpreted both the law and the unanimous Supreme Court decision to keep as many patent cases as possible in his district in defiance of the Supreme Court and congressional intent.”

The hearing came as defensive patent aggregator Unified Patents reported a 50 percent drop in disputes seen in the Eastern District of Texas in the first half of 2017.

Issa said at the hearing: “Only two weeks ago, Judge Gilstrap interpreted the TC Heartland decision in a way that rejects the Supreme Court’s unanimous decision and at least, for the time being, ensures that as many of the cases as possible will remain in his court room.”

Not only do I approve of calling out this judge, I approve of Darryl Issa^* calling out the judge by name.

As an FYI, this nutjob wasn't appointed by a 'Phant.  Obama appointed him,

I'd really like to know what's his deal though.

^*I cannot believe that I just said that.  Issa is a nasty ratf%$# and he was for a long time before he went into politics.

More IP Shenanigans

The Department of Defense is planning to grant the pharma giant Sanofi an exclusive license to manufacture and market a vaccine for the Zika virus that the US Army has developed:

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It concerns something really exciting and important: a vaccine that shows great promise against the devastating Zika virus, which can cause microcephaly, blindness, deafness, and calcification of the brain in children whose mothers were infected during their pregnancy. If effective, such a vaccine could be a tremendous boon not just for developing countries, but for Western ones too, since the Zika virus has already begun to spread in the US, and Europe. The vaccine was developed at the Walter Reed Army Institute for Research, and the Department of the Army funded its development. Great news, you might think: the US public paid for it, so it's only right that it should have low-cost access to it. Moreover, as an act of compassion -- and to burnish its international image -- the US could allow other countries to produce it cheaply too. But an article in The Nation reports that the US Army has other ideas:

the Army is planning to grant exclusive rights to this potentially groundbreaking medicine -- along with as much as $173 million in funding from the Department of Health and Human Services -- to the French pharmaceutical corporation Sanofi Pasteur. Sanofi manufactures a number of vaccines, but it's also faced repeated allegations of overcharges and fraud. Should the vaccine prove effective, Sanofi would be free to charge whatever it wants for it in the United States. Ultimately, the vaccine could end up being unaffordable for those most vulnerable to Zika, and for cash-strapped states.

The Knowledge Ecology Institute (KEI), led by Jamie Love, made a reasonable suggestion to ensure that those most at need would have access to the drug at a reasonable price. KEI asked that, if Sanofi does get an exclusive deal, it should be obliged to make the vaccine available at an affordable price. The Army said it lacked the ability to enforce price controls, but it would ask those nice people at Sanofi to commit to affordable pricing on a voluntary basis. According to The Nation, those nice people at Sanofi refused. Speaking of nice people at Sanofi, the article notes the following:
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When there is an entire Web page dedicated to listing Sanofi's problems going back to 2009, you really have to wonder why the US Army is so keen to give the company a monopoly on this promising new treatment. The usual argument for the sky-high prices of drugs is that firms must be rewarded for taking on the financial risk of drug development, otherwise they won't proceed, and the world would be the poorer. Except, of course, in this case that risk was entirely borne by the US public, which paid for the early stage development of the vaccine with their taxes. So Sanofi risked nothing, but now looks likely to reap the benefits by being allowed to price the vaccine out of the reach of the people who most need it. You might think there ought to be a law against this kind of behavior. It turns out that there is:

KEI's Jamie Love pointed out that under the Bayh-Dole Act of 1980, it is already illegal to grant exclusive rights to a federally owned invention unless the license holder agrees to make it available at reasonable pricing. But that provision has rarely, if ever, been enforced.

Now would be a really great time to start enforcing that law.

Indeed.

I'm inclined to believe that Bayh Dole is a bad law, and it has been made far worse through the rather lackadaisical attitude toward applying any sort of public benefit to technologies that were developed at public expense.

It would be nice if  the law's march in rights, which allow for compulsory licensing, had been applied even once.

0 for 6 This Session

For the 6^th time, the Supreme Court has reversed a decision from the Federal Circuit (Patent Court):

Yesterday the Supreme Court vacated in part and reversed in part the U.S. Court of Appeals for the Federal Circuit’s decision in the consolidated patent cases Sandoz v. Amgen and Amgen v. Sandoz, completing the specialized circuit’s dismal 0-for-6 record in patent cases at the court this year.

The case involved another skirmish in the long-running battle between research pharmaceutical companies, which tend to seek more intellectual property and regulatory protections for their innovations, and generic pharmaceutical companies, which typically seek to curb intellectual property and regulatory protections.

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Sandoz emerged as the clear victor in the case, winning the right to bring “biosimilar” versions of complex biologic drugs to market sooner and also gaining a small but potentially important procedural right for future litigations.

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The first specific legal issue in the case was whether, when Sandoz filed an FDA application to market a biosimilar to Amgen’s biologic drug, Amgen was entitled to obtain Sandoz’s application. On this question, the court provided only a partial answer. It held that Amgen could not get a federal injunction to force Sandoz to turn over the application.

The Federal Circuit had also reached that conclusion, but the Supreme Court did not agree with the lower court’s reasoning. Although the Federal Circuit held that federal injunctive relief was foreclosed by Section 271(e) in the Patent Act (35 U.S.C. § 271(e)), the Supreme Court relied exclusively on 42 U.S.C. § 262(l)(9)(C), which is the provision in the Biologics Act that authorizes research pharmaceutical companies such as Amgen to sue for declaratory injunctions if generic companies such as Sandoz do not turn over their biosimilar applications.

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The second issue decided by the court was whether Sandoz provided Amgen the proper notice of its intent to market a biosimilar. The Biologics Act requires companies seeking to market biosimilars to provide notice to the first biologics company “not later than 180 days before the date of the first commercial marketing of the [biosimilar] product licensed [by the FDA].”

Sandoz sent Amgen notice while its biosimilar application was still pending before the FDA, and the Federal Circuit held that Sandoz had provided the notice too early. The court of appeals believed that the notice would have “to follow [FDA] licensure, at which time the product, its therapeutic uses, and its manufacturing processes are fixed.”

That holding of the Federal Circuit was the financial crux of the case. A delay of 180 days (approximately half a year) can mean hundreds of millions of dollars in additional revenue for a drug company that retains exclusivity over the original biologic. The Federal Circuit’s ruling meant that any company seeking to market a biosimilar would have to stay out of the market for the entire time of the FDA’s licensing process plus another 180 days after the FDA issued the license.

The Supreme Court reversed the Federal Circuit on this issue and held that “the applicant may provide notice either before or after receiving FDA approval.” To the justices, that result followed from the language of the statute, which imposes only a “single timing requirement” (180 days before commercial marketing of the biosimilar) not “two timing requirements” (after FDA licensure and 180 days before commercial marketing).

To simplify this, once again the Patent Court went with a position that favored the IP holder that had no justification in the statute (they do a lot of that), and then SCOTUS slapped them down.

It's getting to be a regular thing, because the United States Court of Appeals for the Federal Circuit is completely out of control.  Case in point, this court has literally allowed for the patenting of a rainy day.

This court really needs to be shut down, and its judges transferred to Dancing with the Stars or somesuch.

Once Again the Supreme Court Smacks Down the United States Court of Appeals for the Federal Circuit

In its ruling in Impression Products, Inc. v Lexmark International, Inc., the Supreme Court once again issues a unanimous ruling overturning an over-broad interpretation of patent asserted by the United States Court of Appeals for the Federal Circuit (Aka the "Patent Court")

A week ago they overruled the Patent Courts rules allowing plaintiffs to sue in the most gonzo patent venue in the nation, and this time they explained to the court that patent exhaustion is mandatory, not optional.

For the lay person, patent exhaustion means that the patent holder only gets one bite of the apple, so (for example) if a chip is manufactured either by the patent holder or by a manufacturer who pays license fees, they cannot charge the person who bought that chip to put in their widget.

In this case, Lexmark was using its patent to enforce a license to prohibit reselling the cartridges by toner refilling firms.

The Patent Court ruled that the patent exhaustion was basically a "default rule" which only applied to the degree that there were no other related restrictions, and the Supreme Court called bullsh%$ on this in no uncertain terms, noting that the Federal Circuit's interpretation would mean that used car dealers and auto mechanics could be locked out of business with this interpretation.

Once again, SCOTUS was unanimous in its repudiation of an excessively expansive views of patents:

Looking for a landmark ruling on patent exhaustion, the patent community got just that in the Supreme Court’s decision this morning in Impression Products, Inc. v Lexmark International, Inc. The court has been deciding a steady diet of patent cases for much of the last decade and has been rejecting the U.S. Court of Appeals for the Federal Circuit’s rulings in those cases almost routinely; the Federal Circuit is now 0 for 5 in the current term, by far the worst record of any of the federal courts of appeals. Most of those decisions reflect a cautious reluctance on the part of the court to say more than is necessary to decide the case before it, founded on an evident reluctance to wreak far-reaching and destabilizing consequences on the innovative markets for which patent doctrine is so important. In this case, by contrast, the opinion of Chief Justice John Roberts displays a confident and assertive verve, full of quotable maxims certain to populate the U.S. Reports for decades to come. More surprisingly, the opinion attracted the votes of all the eight active justices except for Justice Ruth Bader Ginsburg (who dissented only from the court’s resolution of the cross-border question discussed at the end of the post).

The case involves the doctrine of “exhaustion,” under which a patentholder’s rights to enforce its patent ordinarily are “exhausted” with regard to any particular object at the moment the patentholder sells the object. As applied to this case, for example, Lexmark’s rights to control the use of its patented refillable print cartridges would be “exhausted” when it sells those cartridges to retail buyers, even if Lexmark conditions the sale on the promise that the buyer will not refill the cartridge. That, at any rate, is the argument of Impression Products, which makes a business out of refilling Lexmark cartridges in violation of those agreements. Lexmark’s argument, by contrast, supported by a quarter-century of Federal Circuit precedent, is that modern commerce requires that innovators have the flexibility to devise contracting structures that segment the market into separate sectors, each of which gets a different price commensurate with the uses to which products will be put in that sector.

The court could hardly have been more unequivocal in its broad embrace of a mandatory doctrine of exhaustion. For the court, the doctrine seemed to devolve ineluctably from the first principles of the law of patents:

When a patentee chooses to sell an item, that product is no longer within the limits of the monopoly and instead becomes the private, individual property of the purchaser, with the rights and benefits that come along with ownership. A patentee is free to set the price and negotiate contracts with purchasers, but may not, by virtue of his patent, control the use or disposition of the product after ownership passes to the purchaser. The sale terminates all patent rights to that item.

The court praised the “impeccable historic pedigree” of the exhaustion doctrine, tracing its lineage back to the common law’s refusal to permit restraints on the alienation of chattels.” With a flourish of rhetorical excess, the court suggested that post-sale conditions on alienation “have been hateful to the law from Lord Coke’s day to ours and are obnoxious to the public interest. The inconvenience and annoyance to the public that an opposite conclusion would occasion are too obvious to require illustration.”

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In the end, though, the opinion shows a Supreme Court persuaded that the Federal Circuit did not merely err in some detail or nuance, but was as fundamentally misguided as it was when it came up with the venue rules discarded just last week in TC Heartland LLC v. Kraft Foods Group Brands, LLC. At bottom, when the court is minded to destroy the status quo, it knows how to do it, and this opinion provides a textbook exemplar. It will take years before we can observe the transactional structures that will emerge to protect the interests that have relied on the Federal Circuit’s lax rules about patent exhaustion. About the only thing we can say about them is that it will be harder, much harder, to implement them than it was before this sure-to-be-landmark decision.

Had this decision been directed by Quentin Tarantino, this opinion would have involved Samuel L. Jackson saying, "Motherf%$#er," loudly and repeatedly.

The Federal Circuit really needs to be shut down.  It is a complete clusterf%$# that has literally supported the patenting of a rainy day.

It is a court of hammers, which naturally see everything as a nail.

More of This

Content delivery network Cloudflare was subjected to an attempted shakedown by patent trolls, and not only did they not back down, they filed a complaint with the troll's state bar:

Cloudflare, the Internet security company and content delivery network, was founded more than seven years ago but miraculously hadn't ever been hit with a patent infringement lawsuit from a non-practicing entity (commonly referred to as a "patent troll") until this March.

Rather than pay a nuisance settlement, Cloudflare is going all-out to fight Blackbird Technologies LLC, a company founded by two former big-firm lawyers that has amassed dozens of patents and filed more than 100 lawsuits. Cloudflare CEO Matthew Prince says Blackbird is a classic "patent troll," albeit one with a new, and potentially dangerous, twist on its business model.

In addition to filing its responsive papers in court today, Cloudflare also has sent letters to state bar regulatory committees in Massachusetts and Illinois, asking them to investigate Blackbird further.

In an extensive blog post this morning, Prince says that in addition to beating a patent he views as invalid, he intends to look into Blackbird's operations further "and expose how patent trolls really operate." By Cloudflare's count, Blackbird has filed 107 cases since 2014, making it "one of the most prolific trolls in the United States."

Prince goes on to say that "Cloudflare will not settle this case and doesn’t plan to settle any patent troll case, ever." In addition, Cloudflare will spend $50,000 to crowdsource prior art that could invalidate Blackbird's patents. By issuing the prior art "bounty," Cloudflare seeks not just to invalidate the patent asserted against Cloudflare, but of any of the 37 other patents and applications owned by Blackbird.

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That puts Blackbird squarely in the much-criticized business model sometimes derided as "patent trolling"—buying a patent, holding it in a shell company, filing a batch of lawsuits, and then (presumably) splitting the settlement revenue with the inventor.

There's a new twist, though. Blackbird Technologies LLC is now the patent holder and also appears to be directly owned by the attorneys who are litigating the case—Verlander and her cofounder, Chris Freeman.
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In Prince's view, Blackbird is really a law firm and so shouldn't be allowed to act as its own client. "As far as we can determine, Blackbird produces no products or services which it makes available to the public," writes Prince. "Rather, it offers litigation services and is in the business of filing lawsuits."

Blackbird's vaunted "new model" is "to distort the traditional Attorney-Client relationship," according to Prince, simply buying a client's claims rather than actually taking the person on as a client.

(emphasis mine)

We really need to find a way to shut down these parasites.

BTW, quoting from the aforementioned blog post:

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Worse still, Blackbird is a new, especially dangerous breed of patent troll. Like the dinosaur in the latest Jurassic Park movie, a synthetic combination of Tyrannosaurs and Velociraptor, Blackbird combines both a law firm and intellectual property rights holder into a single entity. In doing so, they remove legal fees from their cost structure and can bring lawsuits of potentially dubious merit without having to bear any meaningful cost. In other words, Blackbird’s new breed of entity is specifically designed to add leverage and amplify the already widely maligned problem of patent trolling.

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Blackbird Technologies has filed 107 cases since September of 2014, making it one of the most prolific trolls in the United States. Its website links to a “News” item titled “4 Frequent Filers of IP Suits to Watch this Year” which highlights Blackbird as “a newer entrant on the list of top patent plaintiffs, coming in at fourth place with 48 suits last year in the District of Delaware spanning a wide range of technologies.” Some of the patents at issue include: Bicycle Pet Carrier, Buttock Lift Support, Sports Bra, and Method for Managing a Parking Lot. A complete list of Blackbird's patents is available here. Although they have been very aggressive about filing such claims, they have still not taken a single case through trial. And only a couple of those cases made it to the claim construction phase, where the Court defines the meaning of the patents at issue. Instead, many of Blackbird’s cases have been resolved shortly after filing, suggesting that these cases were never about legal rights or claims but were instead about creating the impetus for a nuisance settlement in the face of significant litigation costs.

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Blackbird Technologies has filed 107 cases since September of 2014, making it one of the most prolific trolls in the United States. Its website links to a “News” item titled “4 Frequent Filers of IP Suits to Watch this Year” which highlights Blackbird as “a newer entrant on the list of top patent plaintiffs, coming in at fourth place with 48 suits last year in the District of Delaware spanning a wide range of technologies.” Some of the patents at issue include: Bicycle Pet Carrier, Buttock Lift Support, Sports Bra, and Method for Managing a Parking Lot. A complete list of Blackbird's patents is available here. Although they have been very aggressive about filing such claims, they have still not taken a single case through trial. And only a couple of those cases made it to the claim construction phase, where the Court defines the meaning of the patents at issue. Instead, many of Blackbird’s cases have been resolved shortly after filing, suggesting that these cases were never about legal rights or claims but were instead about creating the impetus for a nuisance settlement in the face of significant litigation costs.

They actually sued Netflix over the concept of mailing DVDs.

These people don't just need to be out of business.  They need to be disbarred for "acquiring a proprietary interest in the subject matter of litigation",^* and for, "sharing fees or firm equity with non-lawyers."^†

They should also be jailed for fraud, because their use of these patents is clearly deceptive.

^*Violation of Rule 1.8(i).
^†Violation of Rule 5.4(a) or 5.4(d).

Finally!

The Supreme Court has finally ruled on the venue shopping by patent trolls:

The US Supreme Court ruled (PDF) today on how to interpret the patent venue laws, and the controversial business of "patent trolling" may never be the same.

In a unanimous decision, the justices held that the US Court of Appeals for the Federal Circuit, which handles all patent appeals, has been using the wrong standard to decide where a patent lawsuit can be brought. Today's Supreme Court ruling in TC Heartland v. Kraft Foods enforces a more strict standard for where cases can be filed. It overturns a looser rule that the Federal Circuit has used since 1990.

The ruling may well signal the demise of the Eastern District of Texas as a favorite venue for patent lawsuits, especially those brought by "patent trolls," which have no business outside of licensing and litigating patents.

The TC Heartland case will affect the entire tech sector, but the parties here are battling over patents on "liquid water enhancers" used in flavored drink mixes. TC Heartland, an Indiana-based food company, got sued by Kraft Foods in Delaware, then sought to move the case back to its home turf. Neither the district court judge nor the Federal Circuit would allow such a transfer.

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Not a word about "patent trolls" appears in today's 13-page opinion, but it's no secret that do-nothing patent holders were the issue at the heart of the contentious debate over patent venue. Plenty of companies had reason to complain about the Federal Circuit's rule, and they let their concerns be known. A brief (PDF) signed by 48 Internet companies and retailers asked the Supreme Court to uphold the "restrictive patent venue statute" that Congress had approved, and to "stop forum shopping." Trade groups representing bankers, realtors, and big software companies also supported TC Heartland.

The Texas attorney general, joined by 16 other states, filed a brief (PDF) as well, noting the incredible concentration of patent cases in the Eastern District of Texas. The AGs sided with TC Heartland, writing that they "have an interest in protecting their citizens from abusive claims of patent infringement, which businesses and residents confirm are a drag on economic growth."

Finally, the Electronic Frontier Foundation, Public Knowledge (PDF), and Engine Advocacy (PDF) chimed in, complaining that the venue rules had empowered "patent assertion entities" to the detriment of small innovators.

The Eastern District of Texas figures prominently because federal judges have the ability to set their own rules, and the judges in this district are basically the patent trolls bitches.

There are blocks of offices in east Texas that are empty but have tenants.  They are rented by venue shopping trolls.

Putting an end to this is a good first step in ending patent abuse.

I Know that Correlation is not Causation

Historical patent data


Patents vs economic growth

But it does appear that there is a negative correlation between the number of patents and economic growth:

Recently I discussed a paper by David Autor, David Dorn, Gordon Hanson, Gary P. Pisano and Pian Shu. The paper noted that as competition from China increased, innovation by US firms, measured by patent output, decreased. I believe the result, but started to wonder… are patents a good measure of innovation? Do patents drive economic growth?

I don’t know how to measure innovation, but I can look at the relationship between patents and economic growth. We being by looking at patents per capita. I found patent data going back to 1840, and population to 1850. The graph below shows patents per capita beginning in 1850. (All data sources provided at the end of this post.)

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If it kind of looks to you like patents are not driving economic growth, well, it kind of looks like that to me too. In fact, if anything, the lines seem to be more negatively than positively correlated. In years where there are more patents, the subsequent growth rate in real GDP for capita over a ten year period seems to go down. Conversely, fewer patents in one year seem to be associated with more growth over the next ten years.

This is not a surprise.

Patents are increasingly an instrument for extracting monopoly rents with no meaning productive activity, as such they are increasingly parasitic.

Nathan Myhrvold Needs to Be Fired ……… Out of a Cannon ……… and into the Sun

Nathan Myhrvold, former CTO at Microflaccid, now owns and runs Intellectual Ventures, the most egregious patent troll in the world.

Myhrvold has always maintained that his company fosters advancement, citing a lab, which has never actually made anything, and asserting that its patents actually have merit.

An appeals court has disagreed observing that simply adding, "Do it on a computer," to an existing process does not make it a unique and patentable invention:

Intellectual Ventures boasts of having more than 30,000 patents—but you'd have to look for a long time to find one that can hold up under real scrutiny.

After staying quiescent for years, IV opened up a barrage of lawsuits to enforce its patents in 2010. But the companies that decided to stand up to IV rather than buckle under have been faring well, as judges have found the patents that IV has chosen to enforce in court less than impressive. It's a telling sign about the giant patent-holder's collection. Given the opportunity to pull just about any patent out of its huge collection, one would assume the company would choose the best of the lot. But much of it appears to be exactly the kind of easy handouts from the dot-com boom era that have been called out by critics of "patent trolls."

Earlier this week, Intellectual Ventures lost two more major patent cases at the nation's top patent court. It lost a case against Erie Indemnity Company and several other insurers, which had stood accused of infringing US Patent Nos. 6,510,434, 6,519,581, and 6,546,002. The same judges also tossed patents asserted against banking company Capital One. All were found invalid under the Supreme Court's Alice Corp. precedent, which barred many patents that describe basic business processes and add computer jargon.

While we are at it, we should also fire the US Patent Court (technically the United States Court of Appeals for the Federal Circuit) into the sun, which has expanded IP well beyond what is necessary to foster creativity.

This sh%$ is out of control, and while some rent seeking is acceptable to encourage creativity, this is just parasitic.

Monopolies Are Always Bad

The only question is whether or not the alternative is worse.

First we have the case study of the results AT&T's 1956 anti-trust consent decree, where it was required to release its patents to the general public:

To answer these questions, we study one of the most important antitrust rulings in US history, namely, the 1956 consent decree against the Bell System. This decree settled a seven-year old antitrust lawsuit that sought to break up the Bell System, the dominant provider of telecommunications services in the US, because it allegedly monopolised “the manufacture, distribution, and sale of telephones, telephone apparatus and equipment” (Antitrust Subcommittee 1958: 1668). Bell was charged with having foreclosed competitors from the market for telecommunications equipment because its operating companies had exclusive supply contracts with its manufacturing subsidiary Western Electric and because it used exclusionary practices such as the refusal to license its patents.

The consent decree contained two main remedies. The Bell System was obligated to license all its patents royalty free, and it was barred from entering any industry other than telecommunications. As a consequence, 7,820 patents, or 1.3% of all unexpired US patents, in a wide range of fields became freely available in 1956. Most of these patents covered technologies from the Bell Laboratories (Bell Labs), the research subsidiary of the Bell System, arguably the most innovative industrial laboratory in the world at the time. The Bell Labs produced path-breaking innovations in telecommunications such as cellular telephone technology or the first transatlantic telephone cable. But as Figure 1 shows, 58% of Bell's patent portfolio had its main application outside of telecommunications because of Bell's part in the war effort in WWII and its commitment to basic science. Researchers at Bell Labs are credited for the invention of the transistor, the solar cell, and the laser, among other things.

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Our research shows that compulsory licensing increased follow-on innovation that builds on Bell patents. We measure follow-on innovation by the number of patent citations Bell Labs patents received from other companies that patent in the US. We find that in the first five years, follow-on innovation increased by 17%, or a total of around 1,000 citations. Back-of-the-envelope calculations suggest that the additional patents other companies filed as a direct result of the consent decree had a value of up to $5.7 billion in today's dollars.3

More than two-thirds of the increase in innovation can be attributed to young and small companies and individual inventors unrelated to Bell. This is in line with the hypothesis that patents can act as a barrier to entry for small and young companies who are less able to strike licensing deals than large firms (Lanjouw and Schankerman 2004, Galasso 2012, Galasso and Schankerman 2015). Compulsory licensing removed this barrier in markets outside the telecommunications industry, arguably unintentionally so. This fostered follow-on innovation by young and small companies and contributed to long run technological progress in the US.

Patent exclusivity frequently hinders, rather than helps, progress in the short term.

More generally, consequences of our increasingly monopolistic economy are, explained in detail by Barry C. Lynn:

There are many competing interpretations for why Hillary Clinton lost last fall’s election, but most observers do agree that economics played a big role. Clinton simply didn’t articulate a vision compelling enough to compete with Donald Trump’s rousing, if dubious, message that bad trade deals and illegal immigration explain the downward mobility of so many Americans.

As it happens, Clinton did have the germ of exactly such an idea—if one knew where to look. In an October 2015 op-ed, she wrote that “large corporations are concentrating control over markets” and “using their power to raise prices, limit choices for consumers, lower wages for workers, and hold back competition from startups and small businesses. It’s no wonder Americans feel the deck is stacked for those at the top.” In a speech in Toledo last fall, Clinton assailed “old-fashioned monopolies” and vowed to appoint “tough” enforcers “so the big don’t keep getting bigger and bigger.”

Clinton’s words were in keeping with Bernie Sanders’s attacks on big banks, but went further, tracing how concentration is a problem throughout the economy. It was a message seemingly tailor-made for the wrathful electorate of 2016. Yet after the Ohio speech, Clinton rarely touched again on the issue. Few other Democrats even mentioned the word monopoly.

The pity is that Clinton’s stance wasn’t simple campaign rhetoric. It was based on a substantial and growing body of research that confirms that consolidation is at the root of many of America’s most pressing economic and political problems.

These include the declining fortunes of rural America as farmers struggle against agriculture conglomerates. It includes the fading of heartland cities like Memphis and Minneapolis as corporate giants in coastal cities buy out local banks and businesses. It includes plunging rates of entrepreneurship and innovation as concentrated markets choke off independent businesses and new start-ups. It includes falling real wages, as decades of mergers have reduced the need for employers to compete to attract and retain workers.

Monopoly is a main driver of inequality, as profits concentrate more wealth in the hands of the few. The effects of monopoly enrage voters in their day-to-day lives, as they face the sky-high prices set by drug-company cartels and the abuses of cable providers, health insurers, and airlines. Monopoly provides much of the funds the wealthy use to distort American politics.

It comes as no surprise that when Reagan packed the Supreme Court in the 1980s, he chose Robert Bork and Douglas Ginsburg:  They both cut their teeth on the academic side of anti-trust law, which had been captured, largely through things like endowing chairs, by the right wing actors

They transformed the consensus, and the black letter law, on anti-trust from the idea of protecting a free and open market to a narrow view where regulation can only be justified through the showing of direct harm and immediate harm to consumers.

This has unleashed monopolies, and monopolies unleashed have lots of money to spend on politicians, which leads to more support for monopolies. (Our recent trade deals have been about expanding the reach of pharma and content monopolies, for example.)

Rinse, lather, repeat.

You Have Got to be F%$#in' Kidding Me

Another Palmer Moment

Have you heard about the latest patent?

It's literally for discussing song lyrics:

Have you ever talked about the lyrics of a much-loved song with a friend? Perhaps the discussion took place online? It might surprise you to discover that you've gotten pretty darn close to infringing a US patent.

This month, EFF's Stupid Patent of the Month feature has singled out Patent No. 9,401,941, owned by CBS Interactive, which has claimed its monopoly to "processing user interactions with song lyrics." The patent's big reveal is a "computer-implemented system" for "processing interactions with song lyrics." Supposedly, this adds to existing technology by allowing a user to select particular parts of songs, view a menu, and then write an interpretation of a selected line.

Of course, even if such an idea were patent-worthy, there were already websites offering that feature before the patent's priority date of 2011. The most notable is perhaps Rap Genius, a website founded in 2009 that is now simply called Genius.

The patent examiner actually pointed out Rap Genius to the applicant, compelling CBS lawyers to narrow their claims. They added a clause saying that their technology would suggest comments to users based on what type of comments have been written in the past. That narrower definition is unlikely to be infringed by many lyrics sites, but even the narrower definition should not have resulted in a patent grant, argues EFF lawyer Daniel Nazer, who wrote the blog post.

………

Faced with the prospect of a never-ending search for an exact list of features proposed by the applicant, the examiner eventually gives up and grants the patent. That may be what happened here.

Even aside from older technology, the patent, which was filed in 2015, should have been rejected under the Supreme Court's Alice precedent, argues Nazer. It's a series of routine Web development decisions, and that's exactly the type of "generic" computer technology the 2014 Alice decision should have rendered unpatentable.

The Alice in question is Alice Corp. v. CLS Bank International, where the Supreme Court ruled that just because you add "With a computer" to an unpatentable idea does not make the idea a patentable one.

We seriously need to fix our patent review process.

Some IP Sanity out of the EU

One of the differences between something like patents and copyrights and trademarks is that the first two are of limited duration, and the latter is forever.

This is why I am heartened that the EU Court Of Justice has ruled that the basic form of the Rubik's cube cannot be trademarked:

You all should be familiar with a Rubik's Cube, the three-dimensional puzzle toy that for some reason your grandmother kept on her coffee table to frustrate you while she watched Matlock. This invention of the 1970s still enjoys widespread popularity, with hundreds of millions of them being sold every year. The toy has been patented for some time, but ten years ago, a British company that manages the intellectual property rights for the toy also applied for trademark protection on the cube's design in the EU. The reason for this should be obvious: patent protections last for limited amounts of time, while trademark rights exist essentially in perpetuity, so long as it's actively used in the marketplace. It's an end-around to patent law designed to lock up a monopoly.

But, in the case of the Rubik's Cube, it didn't work, as the European Union Court of Justice has correctly determined that the trademark applied for by Seven Towers was for a functional and technical solution, not one of branding. German competitor Simba Toys had challenged the trademark, and it won.

ECJ judges agreed with Simba Toys' arguments. Their decision is final and cannot be appealed.

"In examining whether registration ought to be refused on the ground that shape involved a technical solution, EUIPO and the General Court should also have taken into account non-visible functional elements represented by that shape, such as its rotating capability," they said.

EUIPO will now have to issue a new decision based on the ECJ judgment.

Trade and service marks are to protect branding, not functionality, and what the Rubik;s folks were doing was trying to apply a trade mark to functional characteristics, because any patent has long since expired.

Good call by the court.

Damn!

Big pharma's bucket of cash has defeated California Proposition 61.

This is why the granting of government sanctioned monopolies through IP laws should be as circumscribed as possible.

The money generated these monopolies goes into expanding their monopolies, and they become parasites extracting more and more of a toll on the ordinary conduct of society.

Muck Fonsanto

The New York Times has looked into the potential benefits of transgenic crops, and found no evidence that these benefits exist:

The controversy over genetically modified crops has long focused on largely unsubstantiated fears that they are unsafe to eat.

But an extensive examination by The New York Times indicates that the debate has missed a more basic problem — genetic modification in the United States and Canada has not accelerated increases in crop yields or led to an overall reduction in the use of chemical pesticides.

The promise of genetic modification was twofold: By making crops immune to the effects of weedkillers and inherently resistant to many pests, they would grow so robustly that they would become indispensable to feeding the world’s growing population, while also requiring fewer applications of sprayed pesticides.

Twenty years ago, Europe largely rejected genetic modification at the same time the United States and Canada were embracing it. Comparing results on the two continents, using independent data as well as academic and industry research, shows how the technology has fallen short of the promise.

An analysis by The Times using United Nations data showed that the United States and Canada have gained no discernible advantage in yields — food per acre — when measured against Western Europe, a region with comparably modernized agricultural producers like France and Germany. Also, a recent National Academy of Sciences report found that “there was little evidence” that the introduction of genetically modified crops in the United States had led to yield gains beyond those seen in conventional crops. Continue reading the main story

At the same time, herbicide use has increased in the United States, even as major crops like corn, soybeans and cotton have been converted to modified varieties. And the United States has fallen behind Europe’s biggest producer, France, in reducing the overall use of pesticides, which includes both herbicides and insecticides.

Here's a suggestion, how about invalidating patents on plant species and granting farmers the unconditional right to replant their seeds. 

This was the state of affairs for about 15,000 years of human history, and we did just fine.

I Endorse this Group

The Repair Organization is dedicated to the idea that people have the right to repair the stuff that they own without being locked out through IP protections:

Last summer, when the Copyright Office asked if anyone wanted to defend the right for video game console jailbreakers to mod or repair their systems, no one had a formal legal argument prepared. A new association representing repairmen and women across all industries was just formed to make sure nothing like that ever happens again.

Repair groups from across the industry announced that they have formed The Repair Coalition, a lobbying and advocacy group that will focus on reforming the Digital Millennium Copyright Act to preserve the “right to repair” anything from cell phones and computers to tractors, watches, refrigerators, and cars. It will also focus on passing state-level legislation that will require manufacturers to sell repair parts to independent repair shops and to consumers and will prevent them from artificially locking down their products to would-be repairers.

………

That problem—that manufacturers of everything are trying to control the secondary repair market—has two main sources, Gordon-Byrne said. First, manufacturers use federal copyright law to say that they control the software inside of gadgets and that only they or licensed repair shops should be allowed to work on it. Second, manufacturers won’t sell replacement parts or guides to the masses, and often use esoteric parts in order to specifically lock down the devices.

These problems have been well known in the smartphone, computer, and consumer electronics for years, and it’s why groups like iFixit and the Electronic Frontier Foundation have been able to mount successful challenges to the DMCA in recent years. Increasingly, however, these problems are spilling over into just about every other industry.

………

And so The Repair Coalition will primarily work at a federal level to repeal Section 1201 of the DMCA, which states that it’s illegal to “circumvent a technological measure that effectively controls access to a work protected under [the DMCA].” Thus far, activists have tried to gain “exemptions” to this section—it’s why you’re allowed to repair a John Deere tractor or a smartphone that has software in it. But the exemption process is grueling and has to be done every three years.

………


On a state level, the group will push for laws such as one being proposed in New York that would require manufacturers to provide repair manuals and sell parts to anyone—not just licensed repair people—for their products. The thought is that, if enough states pass similar legislation, it will become burdensome for manufacturers to continue along with the status quo. At some point, it will become easier to simply allow people to fix the things they own.

“We want to become an umbrella organization for repair,” Gordon-Byrne said. “We want to help the small repair technicians that aren’t getting help from anywhere else.”

When the DMCA was passed, we were warned that this would happen.

And now it has.

The law needs to be fixed, though repeal would be a better option.

This is Insanely Sensible

The Virginia AG has set up an task force specifically to go after patent trolls:

Suing a company for patent infringement just got a lot tougher in the state of Virginia.

The state (technically a commonwealth) has created a new legal office focused entirely on patent litigation. Specifically, the state's Patent Troll Unit will look to extract penalties and legal fees from companies who make unjust patent infringement claims against businesses operating in the state.

The task force will seek out companies who file infringement claims on dubious or vague patents, seeking a quick payout. The legal team, reporting to the Attorney General, will file for injunctions against companies it deems acting in "bad faith" with infringement claims.

………

"Virginia businesses of all sizes can be targets, from a small, local business up to a large, high-tech firm," Virginia Attorney General Mark Herring told the local Augusta Free Press.

"Under the bipartisan legislation we were able to help craft last year, my office has strong new enforcement powers and we’re going to use them to protect Virginia businesses from these bad actors.”

………

Those who believe they are being targeted by a patent troll are being advised to contact the Attorney General's office with details including the demands of the patent troll, contact information and patent details.

This is an excellent idea.

Defending against a patent troll is frequently expensive, and so companies frequently settle. 

Having the Attorney General's office on your makes it far less ruinous to fight patent extortion.

Why it Pays to be a Professional Badass

After a patent troll realized that they had sued Newegg, a company that is known for going to the mat against patent trolls, they dropped their case like it was plutonium:

A shell company that sued dozens of computer peripheral makers has quickly dropped Newegg house brand Rosewill from its list of defendants. The motion to dismiss, filed yesterday, comes just days after Newegg's lawyers filed notices of their appearance in the case.

Minero Digital LLC dismissed its case against Rosewill one day after Newegg Chief Legal Officer Lee Cheng authorized his outside lawyer to try to settle the case in exchange for a "nominal donation to charity." During that conversation (the attorneys' first discussion about the case), Newegg's outside counsel said that although the proposed agreement wouldn't pay Minero anything, it was likely to be Newegg's best and final offer. He suggested Minero search the Internet for news articles about Newegg's policies on settling "patent troll" type cases. (The short version: Newegg doesn't pay patent trolls.)

The next day, Minero dismissed the lawsuit against Rosewill. The dismissal is without prejudice, which means it could be re-filed in the future.

It appears that Newegg Chief Legal Officer Lee Cheng is kind of bummed, because no one wants to dance with him any more, "I never get invited to parties anymore. Now I keep getting kicked out."

BTW, while there are a concerns about how one reigns in patent trolls while continuing to incentivize creativity, adding transparency to the process, to prevent obscure shell companies from obscuring who owns, and who benefits from, their behavior.

I think that naming and shaming the likes Nathan Myhrvold, who tries to pretend that he's a scientist and philanthropist, and not an extortionist, would make the world a better place.

Ripper Patent Rulling In Oz

The Australian Supreme Court just completely slapped down gene patents, which, with a bit of common sense, should be an end to that particular abomination in IP land:

Australia's highest court has ruled unanimously that a version of a gene that is linked to an increased risk for breast cancer cannot be patented. The case was brought by 69-year-old pensioner from Queensland, Yvonne D'Arcy, who had taken the US company Myriad Genetics to court over its patent for mutations in the BRCA1 gene that increase the probability of breast and ovarian cancer developing, as The Sydney Morning Herald reports. Although she lost twice in the lower courts, the High Court of Australia allowed her appeal, ruling that a gene was not a "patentable invention."

The court based its reasoning (PDF) on the fact that, although an isolated gene such as BRCA1 was "a product of human action, it was the existence of the information stored in the relevant sequences that was an essential element of the invention as claimed." Since the information stored in the DNA as a sequence of nucleotides was a product of nature, it did not require human action to bring it into existence, and therefore could not be patented.

Although that seems a sensible ruling, the pharmaceutical and biotechnology industry has been fighting against this self-evident logic for years. The view that genes could be patented suffered a major defeat in 2013, when the US Supreme Court struck down Myriad Genetics' patents on the genes BRCA1 and the similar BRCA2. The industry was hoping that a win in Australia could keep alive the idea that genes could be owned by a company in the form of a patent monopoly. The victory by D'Arcy now makes it highly likely that other judges around the world will take the view that genes cannot be patented.

………

Striking down gene patents in Australia, as in the US, clears the path for new entrants to the gene testing market, which is likely to drive down prices. It could also spur more biomedical innovation by allowing researchers freedom to investigate previously patented genes and develop new therapies, without fearing potential lawsuits.

If the judgement is followed by courts in other jurisdictions, and the whole idea of gene patents is rejected, the number of people whose lives could be saved will be correspondingly greater.

It has been patently^* clear for decades that isolating genes is a process of discovery, and not invention, and hence they should not be covered by patents.

The biotech industry's counter-argument has always been, "But we want our money!:

In a statement, Myriad also expresses its disappointment with the ruling. "The High Court's decision comes at a critical time when we're entering the golden era of personalized medicine," it says, as GenomeWeb reports. "In order for personalized medicine to become a reality, strong patent protection is essential because it provides the research-based companies like Myriad with an incentive to continue to invest in R&D."

(emphasis mine)

Basically, they are arguing that if we won't allow them to patent their discoveries, they will take their marbles and go home.

There are two things wrong with this:

• Patents are for inventions, not discoveries.
• Allowing for rent seeking through patents makes it more likely that genetic products will will be released without adequate testing, because the potential profits are so huge.

And that is ignoring the fact that it is taxpayer funded research that have led to these discoveries.

^*Pun not intended.

Nice That This Has Made The Times

It appears that the mainstream media is finally noticing that a big problem in US healthcare is prices, and not people taking their children to the doctor for a case of the sniffles:

As complaints grow about exorbitant drug prices, pharmaceutical companies are coming under pressure to disclose the development costs and profits of those medicines and the rationale for charging what they do.

So-called pharmaceutical cost transparency bills have been introduced in at least six state legislatures in the last year, aiming to make drug companies justify their prices, which are often attributed to high research and development costs.

“If a prescription drug demands an outrageous price tag, the public, insurers and federal, state and local governments should have access to the information that supposedly justifies the cost,” says the preamble of a bill introduced in the New York State Senate in May.

In an article being published Thursday, more than 100 prominent oncologists called for support of a grass-roots movement to stem the rapid increases of prices of cancer drugs, including by letting Medicare negotiate prices with pharmaceutical companies and letting patients import less expensive medicines from Canada.

“There is no relief in sight because drug companies keep challenging the market with even higher prices,” the doctors wrote in the journal Mayo Clinic Proceedings. “This raises the question of whether current pricing of cancer drugs is based on reasonable expectation of return on investment or whether it is based on what prices the market can bear.”


………

“The industry has used R&D costs for the justification, but anyone who is reasonably sophisticated understands those are sunk costs and have little to do with pricing,” Mr. Rother said. “The more important information is any calculation of value. If the drug actually cures people, then what costs in health care are you saving?”

Dr. Jerry Avorn, a professor at Harvard Medical School and critic of some drug company practices, said the industry “has brought this on itself by charging prices that are so astonishing, it makes citizens wonder, ‘Where did this figure come from?’ ”

Yes, it does make citizens wonder.

What could help is ending evergreening, where a company uses a compliant FDA and US Patent Office to extend their legal monopolies, or the insane way in which the orphan drug act is used to grant legal monopolies on drugs that are literally thousands of years old.  (For example Colchicine has been in use for at least 3500 years, and when the company got exclusivity, it raised the price by a factor of 50)

The problem with drug prices, as well other medical prices, is that we have structures in place that allow corporations, which are by their very nature designed to function as sociopaths to extort excessive rents.

And we are exporting this model to the rest of the world through out trade deals like the TPP and TTIP, which will put the health of citizens in the signatory nations at the same sort of risk that exists here.

The Latest in Patent Abuse

Colgate just filed a patent on Indian herbal recipes that have existed for thousands of years:

India has successfully blocked two patent claims of US consumer goods major Colgate-Palmolive, which wanted intellectual property right (IPR) cover on two oral compositions made from Indian spices and other herbs.

One patent battle took almost seven years, after the New York-based company filed a claim at the European Patent Register on September 29, 2008, for a composition containing botanical extracts from three herbs, including cinnamon, a common kitchen spice across India, known here as “dalchini”.

India opposed the claim using the traditional knowledge digital library (TKDL) database, created in the last decade to fight biopiracy.

The database, maintained by the Council of Scientific and Industrial Research (CSIR), submitted its plea in May 2011, and the European patent office ruled in India’s favour last month.

Two years after filing the first patent claim, Colgate-Palmolive moved another application in 2010 before the European patent office, seeking protection for another oral composition containing nutmeg, ginger, “Bakul” tree, camphor, cinnamon, turmeric, Indian banyan, black pepper, long pepper, Neem and clove. The solution is for treating oral cavity diseases.

………

The digital database, containing Ayurveda, Unani and Siddha formulations, and known medicinal properties of Indian herbs, was created following India’s successful IPR battles on haldi (turmeric), neem and Basmati rice.

The Union Commerce Ministry spent Rs 7.61 crore in 2000 as legal fee to reverse a patent examiner’s decision on basmati rice. “Going by that standard, the TKDL has saved upwards of Rs 500 crore so far, and more to come. In the next step, the government should not only add many more ancient books to the TKDL database but also incorporate knowledge from manuscripts,” said Gupta, who retired in 2013.

There needs to be some sort penalty when firms file fraudulent, because this sort of crap is endemic.

We May Be Seeing the Beginning of the First Pandemic Caused by Patents

We are seeing a major Middle East Respiratory Syndrome outbreak in Korea:

Two men have died of Middle East respiratory syndrome in South Korea, officials said Thursday. Theirs were the third and fourth confirmed deaths in what has become the largest outbreak of the virus outside the Middle East.

As fear spread, the government of President Park Geun-hye was accused of not doing enough to contain the outbreak and of endangering the public by withholding information about it.

At a news conference on Thursday, the influential mayor of Seoul, Park Won-soon, castigated the national authorities for not disclosing that a doctor at a Seoul hospital who was quarantined on Sunday with symptoms of the syndrome, known as MERS, had attended a gathering of more than 1,500 people in the southern part of the city only the day before.

More than 1,160 schools and kindergartens in South Korea have been shut down temporarily, and many Koreans are wearing surgical masks in public.

It has a fairly high mortality rate (about 40%, down from earlier estimates of over 50%), largely due to "co-morbitities" (Things like diabetes, heart disease, asthma, COPD, etc.).  The mechanism seems to involve a phenomenon known as HLH, which is one of the cytokine storm syndromes (the immune system going haywire), which causes edema in the lungs, and things like secondary pneumonia.

Historical note:  The lethality of Spanish Influenza was also largely caused this cytokine storm/pneumonia mechanism.  (Got your attention now?)

Note also that the cytokine storm tends to effect young adults more than the rest of the population. (I definitely have your attention now.)

One problem with dealing with what is (at this time) a small problem, is that, using purloined samples, the Erasmus Medical Center in Rotterdam sequenced the virus, and filed a patent on the genome, preventing timely research on things like vaccines and antiviral medications:

In the ongoing investigation of the MERS virus, a team from Erasmus Medical Center in Rotterdam received two patient samples from Dr. Ali Mohamed Zaki, an Egyptian scientist working in Jeddah, Saudi Arabia. After sequencing the MERS DNA, EMC claimed ownership of the samples. EMC now requires scientists hoping to work on the MERS problem to sign legal agreements with Erasmus. The U.S. Centers for Disease Control and Prevention (CDC) is still waiting to receive samples of MERS for testing that were collected in October 2012 because the legal teams from the CDC and Erasmus cannot negotiate agreeable terms for a material transfer agreement. As a result of these legal delays during a disease outbreak, Margaret Chan, director-general of the World Health Organization, publicly criticized Erasmus for putting patent laws ahead of protecting "your people."

I have covered these issues here.

Labs cannot do research because the Erasmus Medical Center has this tied up in patents, even though it is an discovery, and invention which is what has traditionally been required for patents.

Right now, MERS, a coronavirus,  is not that contagious because, unlike some of its near relatives in that viral family like the common cold, because, unlike the cold, it lurks deep in the lungs, as opposed to the nose and sinuses, so coughing and sneezing out virus is far less likely.

At least, it's not that contagious right now. 

I don't know about you, but I'd like to see a vaccine, and perhaps some antiviral drugs, before it develops an affinity for sinus tissue, and starts behaving more like measles.

That cannot happen, because of our current insane patent regime.