Patent Wars: Tech v. Drugs

September 25, 2007
Lexero LLC

 

An article on the increasing lobbying pressure for patent
reform provides a nice explanation of the “different sides of the aisle” when
it comes to patent reform. On one side are pharmaceutical firms that prefer
substantial penalties and roadblocks for patent infringers. The other side
typically consists of technology firms that want fewer patent protections and
less damages when infringement occurs. The article takes the view that the tech
firms are winning. On the whole, this is true. Recent court decisions and proposed
legislation have sought to create more fluidity in patent processes.

 

The correct policy, however, is understanding that different
industries may need different rules. Tech firms deserve fewer protections,
because the investment of time, money and other resources is usually substantially
less than that of pharmaceutical developers. Drug companies, on the other hand,
often invest billions and billions of dollars in research and development for the
chance at a big payout. Drug companies follow the classic “high risk, high
reward” business model. If there is less incentive, that is, less potential
profits and protections, these firms will be less likely to take big chances at
drugs that could help save lives and cure serious diseases.

 

Bottom Line:
While having “one system” of patent protection may be preferable, such an arrangement
ignores important differences in the business models, risks and interests of
each industry. Legislators and courts would be wise to understand these
differences and adjust policies to account for the differing needs of contradistinctive
industries.


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