The Carrot and Stick Approach to Innovation

by Dennis Crouch

A California Court of Appeals issued a product liability decision in early 2024 that raises interesting questions about the role of both carrots and sticks in innovation policy. Gilead Tenofovir Cases, No. A165558, 2024 WL 94462 (Cal. App. 1st Dist. Jan. 9, 2024) Read It Here. I first found the Gilead case while reading the Wall Street Journal with the board editorial decrying the decision for “invent[ing] a crazy new tort.”  In particular, the appellate panel agreed that Gilead could be held liable for for delaying the development of an alternative HIV/AIDS drug (TAF) that it expected would be safer and equally effective compared to its existing drug (TDF) in order to maximize profits from TDF. Although the old drug TDF had been deemed safe by the FDA and was not itself defective, the plaintiffs allege that it was clearly much worse than the potential alternative that Gilead allegedly sidelined.  In particular, patients taking TDF suffered bone and kidney damage. In its decision, the Court of Appeal held that a manufacturer’s duty of reasonable care under Cal. Civ. Code §1714 can extend beyond the mere duty not to market a defective product, permitting a negligence claim without alleging a product defect. The court relies on Mexicali Rose v. Superior Court 1 Cal.4th 617 (1992), which held that the presence of a natural substance causing injury doesn’t negate a restaurant’s duty of care in food preparation, allowing a negligence claim despite the lack of a product defect.  The court also rejected policy considerations associated with FDA-approval and adequate warnings.  However, the court did side with Gilead with regard to a fraudulent concealment claim, holding that Gilead owed plaintiffs no duty to disclose facts about the unapproved drug TAF, which was – at the time – unavailable to plaintiffs as a treatment alternative to TDF.  The appeal assumed that the plaintiffs could prove the facts alleged above. On remand, there will likely to be a  trial where this assumption will be put to the test.

The ruling in Gilead Tenofovir Cases opens the door to lawsuits punishing companies for not innovating fast enough – a sharp contrast to the patent system’s traditional approach to encouraging innovation through potential monopoly-like profits.  This flips the normal “carrot”/”stick” innovation incentive model on its head. Patents traditionally encourage innovation by rewarding it through time-limited exclusive rights enabling high prices that “fuel . . . genius,” as President Lincoln put it. Product liability laws, conversely, attempt to deter harm by forcing manufacturers to pay for injuries caused by defective products – a “stick” incentivizing safety. By penalizing failure to innovate quickly enough with tort liability, Gilead extends this disencentive to innovation: introducing disincentives for not innovating.

As the Wall Street Journal editorial board contends, this duty could spawn lawsuits against virtually any industry for not constantly upgrading products. It also seems in tension with the prevailing legal test for defective design, which balances safety risks against factors like usefulness and cost, recognizing that perfect safety is unattainable. Still, the decision here is incremental. It is based upon California Law, and the Gilead opinion dismissed arguments that its ruling amounted to “absolute liability” or a mandate for “ever-better new products.” How these assurances square with the newly recognized duty is unclear. Perhaps tellingly, the court left open whether liability might be cut off earlier, like after clinical Phase III trials of the safer alternative drug.  The court’s idea here is that liability should only attach if the better alternative is sufficiently known or foreseeable.  Thus, the case here really is about shelving known improvements.

I wonder whether there are other negative innovation disincentives.  We have all heard the mantra “innovate or die” – This “natural” competitive incentive can be distinguished from the Gilead’s that is artificially created as a public policy choice. It is the human condition — also exemplified in larger corporate institutions — to seek reward and avoid punishment.  It makes sense then that incorporating sticks like liability fears could be a useful part of the innovation policy landscape.  This is not to reflexively endorse the Gilead approach; its wider impacts seem quite unpredictable at this point. But the decision helps us challenge the one-sided assumptions that “carrots-only” frameworks like patents best spur invention and innovation. And, that some disincentives can fit within our current framework of laws.

https://www.linkedin.com/posts/patentlyo_opinion-california-invents-a-crazy-new-activity-7152977801325776896-p4Rw

 

 

 

82 thoughts on “The Carrot and Stick Approach to Innovation

  1. 14

    This feels like typical totalitarian/socialist policies. Rather than relying on the free market to encourage people and give people the opportunity to build a better mousetrap, the socialist has to try to force people because the systems they set up are so closed and rely on government control and monopolies.

    This new tort comes from not having a free market. Competition is supposed to be the driver for innovation. Not a paternal government. Imagine too that ultimately this means the government decides if you did enough to create a product to replace your old product to make it better. This is how Venezuela went from pretty good to staring in just a few years.

    1. 14.2

      Night Writer,

      Your statement of, “from not having a free market. Competition is supposed to be the driver for innovation. Not a paternal government. ” will be turned against you as the patent system will be asserted to be nothing more than an action of that same “paternal government.

      While we both know (and as well as anyone who has studied innovation knows), the patent system is expressly there so that competition IS fostered as opposed to how large established companies (aka Big Business, aka Efficient Infringers) would LOVE to compete on non-innovation factors, you will have certain folk TWIST “free market” to be the same as NO RESTRAINTS WHATSOEVER (which has NEVER been what the term Free Market entailed).

      Just like Crony Capitalism is just not the same as Capitalism, there is no shortage of people willing – purposefully – to obfuscate in order to promote their own desired system.

    2. 14.3

      typical totalitarian/socialist policies

      Typical language of the right. Socialist policies include:

      Public schools
      Public roads/infrastructure
      Public parks
      Public transportation
      Police
      Fire Department
      Public utility companies
      Social Security
      Medicare/Medicaid
      Agriculture subsidies
      Postal Service
      US Military
      Patent System

      Which ones of these socialist policies are you advocating against?

      This new tort comes from not having a free market.
      Another person (advocating from the right) who doesn’t understand the difference between a free market and a fair market. China has probably the best example of a free market in the world — it is the wild west there. Anything goes, which is the definition of a free market.

      However, a free market is not necessarily a fair market. The antitrust laws were created because free markets aren’t necessarily good. Once a company gets sufficient market power (much easier to do in a free market), they can easily abuse their market power (to the detriment of consumers and the country as a whole).

      The right is notorious for (intentionally or not) confusing socialism with communism with authoritarianism. China, for example, is not a communist country. It is free market economy with an authoritarian government. Depending upon the source, China has either the most or second most billionaires in the world — not the hallmark of a communist society.

      Not a paternal government.
      The right doesn’t like those pesky labor laws and environmental laws. They harm profits. But don’t worry … heavily-red states like Arkansas (among others) are rolling back child labor laws. We’ll get those kids working 40 hour shifts soon enough.

      This is how Venezuela went from pretty good to staring in just a few years.
      Venezuela didn’t collapse because of a “paternal government.” The non-diversified economy collapsed when the price of oil sank (dropping 75% from 2014 to 2016) and they were hit with sanctions.

      1. 14.3.1

        Wt,

        Your view of what is ‘Right’ and what is ‘typically Socialist’ is BADLY skewed.

        No wonder why you see C0nsp1racy Theories concerning B A D acts of ‘The Right’ so inordinately.

        General services of a government are NOT indicators of socialism.

        I asked the CoPilot this question:

        What are the defining characteristics of a Socialist government?

        ChatGPT-4 answers:

        A socialist government is a form of political and economic system that aims to achieve social equality and justice by collective ownership or control of the means of production and distribution. There are different types and variations of socialism, but some common characteristics are:

        The state owns or regulates the major industries, such as agriculture, mining, manufacturing, and transportation. The state also controls the price and allocation of goods and services in the market.

        The workers have a say in the management and decision-making of their workplaces. They may elect representatives to work in cooperatives or councils that oversee the production process.

        The government provides free or subsidized education, health care, housing, and other public services to all citizens. The government also ensures that everyone has equal access to opportunities and resources regardless of their income, gender, race, or background.

        The government redistributes wealth from the rich to the poor through progressive taxation, welfare programs, social security, and other policies. The government also aims to reduce poverty, inequality, and exploitation in society.

        Some examples of countries that have adopted socialist policies or systems are China, Cuba, Vietnam, Venezuela, and Sweden. However, not all socialist countries have the same degree of economic intervention or social welfare. Some countries may have more market-oriented elements mixed with socialist principles.

        Socialism is often contrasted with capitalism, which is based on private ownership of the means of production and free market competition.
        Capitalism is associated with individual freedom, innovation, efficiency, and growth. However, capitalism also has its drawbacks, such as environmental degradation, social injustice, monopoly power, and financial instability.

        Socialism has been a popular ideology in the 20th century as a response to the problems caused by industrialization and capitalism. Many socialists believe that socialism can create a more humane and fair society where everyone can enjoy a decent standard of living. However, socialism also faces many challenges and criticisms from different perspectives.

        1. 14.3.1.1

          ChatGPT-4 answers
          It is so you to outsource research to an AI. Since you are so enamored with AI, I signed up and asked ChatGPT 3.5 the following “what are examples of socialism in the united states”

          The answer:

          In the United States, there are several examples of socialist policies or programs that aim to provide social and economic support. It’s important to note that the U.S. is not a purely socialist country but rather has a mixed-market economy with elements of socialism and capitalism. Some examples of socialist-leaning policies or programs in the U.S. include:

          Social Security: The Social Security program provides financial support to retired and disabled individuals. It is a social insurance program that redistributes wealth by collecting taxes from workers and using those funds to provide benefits to eligible recipients.

          Medicare and Medicaid: These government programs provide healthcare coverage to specific segments of the population. Medicare primarily covers individuals aged 65 and older, while Medicaid provides assistance to low-income individuals and families.

          Public Education: The U.S. has a publicly funded education system that provides free education to all children up to a certain age. This includes elementary, middle, and high school education.

          Public Housing: Government-funded housing programs aim to provide affordable housing options for low-income individuals and families.

          Food Stamps (SNAP): The Supplemental Nutrition Assistance Program (SNAP) is a federal assistance program that provides food-purchasing assistance to low-income individuals and families.

          Minimum Wage Laws: While not purely socialist, the establishment of a minimum wage is a policy aimed at ensuring a basic standard of living for workers.

          Worker Protections: Various labor laws, such as the Fair Labor Standards Act (FLSA), provide protections for workers, including minimum wage standards, overtime pay, and workplace safety regulations.

          Anything “public” is an example of socialism. It is common ownership.

          As your ChatGPT response implied, there is a lot of nuance when it comes to socialism. However, that nuance gets completely ignored by the right who like to “one bucket” things.

          Wt’s most excellent comment?

          1. 14.3.1.1.1

            It’s important to note that the U.S. is not a purely socialist country

            You missed the differences therein.

            Anything “public” is an example of socialism. It is common ownership.

            No. No it is not – and expressly in view of what the term means in political context.

            You are obfuscating. You are the one purposefully losing nuance in order to assert a political state that just is not so.

            1. 14.3.1.1.1.1

              You missed the differences therein.
              Classic ambiguous Anon statement. There are no pure socialist states (or pure capitalist states for that matter).

              No. No it is not – and expressly in view of what the term means in political context.
              From britannica.com — socialism “calls for public rather than private ownership.” Did you notice the use of the word “public” there?

              You are obfuscating.
              Talk to ChatGPT. I’m not the one who developed these examples out of thing air. It takes not much more than a modicum of effort to find discussions of these examples of socialism in the literature.

              And you are flip-flopping and backtracking. I didn’t see you disagree with me when I wrote what I did 2 years ago. In fact, you called it a “most excellent comment.”

              in order to assert a political state that just is not so
              Socialism isn’t just about politics — it is an economics theory, which is WIDELY practiced in the United States.

              The nuance … which you again trample over … is that a country can embrace both capitalism and socialism at the same time to a varying amount of degrees. Most progressives would have the US move to a Nordic model, which still involves a significant amount of capitalism. Perhaps you’ve heard of companies such as Volvo, Ericsson, Carlsberg, Nokia?

              It is no wonder that Scandinavian countries dominate the list of most happiest countries.

              link to forbesindia.com

              Here are the so-called secrets of the happiest countries:
              1. Strong social support: The happiest countries in the world have robust social support systems, which include healthcare, education, and unemployment benefits. This safety net ensures that citizens can face life’s challenges with confidence.
              2. Freedom and trust: High levels of freedom and trust in government and fellow citizens contribute to a sense of security and well-being.
              3. Work-life balance: Most of the happiest countries in the world prioritise work-life balance, with shorter workweeks, longer paid vacations, and family-friendly policies.
              4. Connection to nature: Access to beautiful natural landscapes and outdoor activities often plays a role in the overall happiness of the population.
              5. Equality: Low levels of income inequality and a strong sense of social equality contribute to happiness.

              Such a terrible thing this Nordic model.

              1. 14.3.1.1.1.1.1

                You see ambiguity only because that is what you want to see.

                As for Britannica, you AGAIN purposefully obfuscate and lose the nuance, and want to make ANY item associated with ‘public’ to be the same as the political notion of a Socialist State.

                That is simply false.

                There is NO government – ever – that does not deal with ‘public.”

                Your nonsense eliminates ANY idea of a ‘Right” state – even ones that you would be worried about.

                And you are flip-flopping and backtracking.

                Not at all – my position has ever been the same.

                1. There is NO government – ever – that does not deal with ‘public.”
                  I didn’t write “deal with public” or “associated with public.” The issue at hand was private ownership versus public OWNERSHIP. Try not to move the goalposts.

                  There is a difference between dealing with the public and public ownership. In a Monarchy, things are owned by the Crown — e.g., the King’s Road the King’s Forest and such.

                  Your nonsense eliminates ANY idea of a ‘Right” state – even ones that you would be worried about.
                  More Anon ambiguous statements. What do you mean by Right state? Right versus Wrong? Left versus Right? When you introduce a new term that doesn’t have a well-known usage, you should describe what it means. Didn’t being a patent attorney teach you anything?

                  Not at all – my position has ever been the same.
                  LOL.

                  as for Nordic – you do realize that those are not accepted by the (true) Sprint Left because those are entirely Paternalistic creations of White Men – talk about “White Power”… Oh, the Hegemony!
                  The true Sprint Left? And who are they now? Bernie and AOC (the two most well known progressives I know of) supposedly support the Nordic model.

                  link to markets.businessinsider.com

                  BTW — comments like yours raise to the same level of cringe-worthiness as the email at issue in the John Hopkins issue. You are way too obsessed with this.

                2. My you are fickle – and whiny.

                  Your verbiage did express “public” apart from the closed phrase of “public ownership” in at least Agriculture subsidies and Patent System (as these are NOT about the government owning the agriculture or patents); and many of the others exist in ALL forms of government – including those NOT considered — and a word you should pay attention to – in context as being Socialist forms of government.

                  I did not move the goalposts – again your accusation is off.

                  As to your willful 1gn0ring of context, when YOU introduced a new and undefined term of Sprint Right, did you see me balk and whine, or did you see me being able to think and connect what you were likely talking about?

                  Your admonition amounts to pure whining, as the context of our give and take clearly provides the spectrum from Sprint Left, Left of Center (Left), Center, Right of Center (Right) and your own “Sprint RIght.

                  This is NOT patent drafting, so your admonishment there doubly
                  F
                  A
                  I
                  L
                  S

                  That you “lol” without more says more about you than you might like.

                  That you want to assert that MY comments reflect the cringe-worthiness of the Johns Hopkins case only makes my point for me that YOU are out of touch with just how pervasive the Woke ideology is.

                  Maybe stop your skipping of what I provide and see how lawyers in general show a 95% LEFT bias on hot topic items. This way you can recognize that John Hopkins was not the isolated “wack0” that you want to pass it off as, AND recognize the Overton Shift that you seem unable to grasp.

                  And also – hoping that you at least pause given your own bias (asserting that I am 0bsessed and somehow in error just because I can show you just how off you are), here is another item for you to absorb:

                  (note that others of Sprint Left have simply denigrated the source rather than acknowledge inconvenient facts):

                  link to youtu.be

                3. Your verbiage did express “public” apart from the closed phrase of “public ownership” in at least Agriculture subsidies and Patent System (as these are NOT about the government owning the agriculture or patents)
                  Subsidies are classic socialism. Socialism encompasses control, which is what happens with regard to the patent system and with subsidies.

                  Again, referring back to the Britannica definition: “Socialism, social and economic doctrine that calls for public rather than private ownership or control of property and natural resources.” The patent system is clearly a tool for the public control of intellectual property.

                  As to your willful 1gn0ring of context, when YOU introduced a new and undefined term of Sprint Right, did you see me balk and whine, or did you see me being able to think and connect what you were likely talking about?
                  Meaningless personal insults that do not advance the discussion.

                  Your admonition amounts to pure whining, as the context of our give and take clearly provides the spectrum from Sprint Left, Left of Center (Left), Center, Right of Center (Right) and your own “Sprint RIght.
                  Meaningless personal insults that do not advance the discussion.

                  This is NOT patent drafting, so your admonishment there doubly
                  F
                  A
                  I
                  L
                  S

                  That you “lol” without more says more about you than you might like.
                  Meaningless personal insults that do not advance the discussion.

                  That you want to assert that MY comments reflect the cringe-worthiness of the Johns Hopkins case only makes my point for me that YOU are out of touch with just how pervasive the Woke ideology is.

                  Maybe stop your skipping of what I provide and see how lawyers in general show a 95% LEFT bias on hot topic items. This way you can recognize that John Hopkins was not the isolated “wack0” that you want to pass it off as, AND recognize the Overton Shift that you seem unable to grasp.
                  Nothing to advance the discussion.

                  And also – hoping that you at least pause given your own bias (asserting that I am 0bsessed and somehow in error just because I can show you just how off you are), here is another item for you to absorb:

                  (note that others of Sprint Left have simply denigrated the source rather than acknowledge inconvenient facts):
                  Meaningless personal insults that do not advance the discussion.

                  I see you are falling back into your familiar habit of insulting instead of responding.

                4. You whined about me “moving goalposts” and you engage in moving ownership to control – AND STILL MISS

                  Your over-read of ANY government function is an improper read (that is, you blow through any nuance of actual socialism) and necessarily makes ALL governments to be ‘socialistic.’

                  Last I checked, patents are NOT controlled by the public. Maybe you need to stop throwing insults at me from the shards of your once-former glass house, and brush up on your own understanding. Alas, when you venture from patent law, you absolutely sink your credibility.

                  And please, stop whining when I point out your duplicity on being persnickity with terms that you SHOULD understand given the context of our discussion. Man up and simply accept the fact that you were not consistent.

                  And instead of simply dismissing as “not advancing the discussion, : (which is patentably false), try again to realize WHY the points advance the discussion.

                  This may take you realizing your own bias.

                  This too would prevent you from the error of ONLY seeing insults because your desired narrative is not front and center. That you do not want to learn is your largest impediment to learning.

                  But you be you and ONLY see that as an insult.

              2. 14.3.1.1.1.1.2

                as for Nordic – you do realize that those are not accepted by the (true) Sprint Left because those are entirely Paternalistic creations of White Men – talk about “White Power”… Oh, the Hegemony!

                1. Billy, you are a true piece of work.

                  “I rebut your point by pointing out that people I habitually denigrate don’t agree with you!”

                  Get the medical help you need. And wean yourself off the Internet. It’s turning you into an imbecile.

                2. Your feelings are noted.

                  As is the fact that you are simply wr0ng and employ the (yawn) projection habit of Accuse Others Of That Which Malcolm Does so often that Crouch banned the acronym.

                  By the by – you STILL have not shared how you ‘feel’ about the Israel/Hamas situation.

                3. Funny, even as weak arse as Wt’s answer was, he GAVE an answer.

                  He supported ‘the people.’

                  I suppose that includes this group of ‘the people’

                  link to instagram.com

                  You on the other hand have been totally spineless and probably cannot figure out (yet) what the Sprint Left narrative is supposed to be.

  2. 13

    Wow, what orifice did the California Court of Appeals pull out the “duty to innovate.” I never heard of that duty in law school. I thought the capitalistic economic system already provided enough of an incentive to innovate products in order to compete in the free market. I really think the CALI court lacks standing to create this new “duty to innovate” since it clearly falls under the political question doctrine. The “duty to innovate” seems more akin to the old communist mantra of nationalizing the means of production and redistributing those means of production to the people. I may personally vote Democrat but this is a bridge too far.

    FYI: California’s product liability law which spread like cancer has decimated US manufacturing here in the rust belt of America. I knew the manager at the Piper-Cesna plant and his plant was shut down since the company could not afford the product liability insurance. Michigan has drastically cut back product liability by statute in the state legislature, but obliviously this is not enough if you’ve dared to visit Detroit lately.

    I think a more rational way to reclaim US manufacturing prowess is to do away with strict product liability and create a safe harbor for manufacturers by using the Federal statute on vaccine manufacturing as a model. If manufacturers comply with good engineering design and manufacturing standards like ISO 9000 or three Sigma then only reckless conduct should impose liability like what is done in Europe with the CE mark.

    Allowing R&D to be counted as a business expense under the tax law like it was in the 1960s would also go a long way to foster on shoring of US manufacturing. Doing away with the bone headed “In re Steel” precedent forcing patent examiners to examine machine translated patent applications from overseas at the USPTO would save millions of tax dollars and unclog US courts of bogus foreign owned patent claims. Anybody else has ideas to help US manufacturing then I am all ears.

    1. 13.2

      Per some (many) of the Ziehan podcasts, this On-shoring will be (and is) happening already for a variety of reasons.

      Pax Americana and a Global Economy are receding.

  3. 12

    Somewhat OT but on the topic of unelected lifetime judges taking over public policy decisions in areas where they lack expertise (or worse):

    On Wednesday, the Supreme Court’s conservative supermajority signaled its intent to overturn four decades of precedent and award itself even greater authority to strike down policies that govern every conceivable aspect of life in the United States. This revolution has been years in the making, the result of a lavishly funded campaign to transform the courts into a weapon against any regulation you can think of. The environment, the economy, health care, civil rights, education: All aspects of federal governance will be in peril, subject to the whims of unelected judges with zero expertise or accountability and a distinct bias toward deregulation. Throughout the morning, SCOTUS sounded hostile to the very notion that elections have consequences—at least when a majority of justices dislike those consequences. And the court’s right flank evinced little concern about tossing 40 years of stable law, encompassing more than 17,000 federal court decisions, in favor of the Federalist Society’s preferred regime. It appears ready, in Justice Elena Kagan’s words, to “blow up one doctrine of humility, blow up another doctrine of humility, and then expect anybody to think that the courts are acting like courts.”

    1. 12.1

      Let me start by (yet again) saying:

      The Ends do not justify the Means.

      Then, let me note that I used this phrase (among many times) when Malcolm celebrated the Supreme Court when they trod this path to wreck patent law by rewriting 35 USC 101.

      but on the topic of unelected lifetime judges taking over public policy decisions in areas where they lack expertise (or worse):

      I explicitly noted to Malcolm that he would whine and moan when THAT SAME Court used THAT SAME tactic to arrive at a “Desired Ends” that did not ‘agree’ with what Malcolm wants.

      And now – again – we have to hear Malcolm whine and moan.

      Reap what you sow.

    2. 12.2

      Except, bureaucrats are NOT elected either. The President is. Congress is. The rest of the executive branch is either appointed or, sadly, permanently entrenched.

      Regardless, the executive branch is not supposed to legislate. The job of legislating belongs to Congress.

      The regs drafted by the agencies are supposed to be based upon statutes. If the statute is unclear, it should be Congress’ job to clear it up. Otherwise, agency overreach into substantive law is possible.

  4. 11

    Speaking of “infantile ethics,” Dennis, why not do the world a favor and purge your big of this MAGAt glibertarian s c u m b a g s? You’re about ten years late on that project but there’s no time like the present.

    1. 11.1

      You first, Malcolm.

      Maybe instead, you actually ADDRESS the points put to you and like-‘minded‘ (as little of such that exists) folks?

      You seem to enjoy the Drive-by v0m1tfest, but never seem to address the items put to you in any cognitive fashion.

      1. 11.1.1

        They can’t address the points anymore, anon. They have been relying on lying and the effects of their policies being ambiguous. But now we see the effects of their policies are leading us to disasters. Their lies are now apparent. The Woke are being unmasked and you see it in the microcosm of this blog.

        1. 11.1.1.1

          Small, but important correction:

          They can’t everaddress the points [ ], anon.

          Note that not a single Regular (with minor exception of Greg, who inserted one weak hidden link) has addressed the Israel/Hamas situation.

          Note that NO ONE has actually defended the ensuing controversy at Harvard, and how – for more than a 50 x demonstration of conduct that would see ANY student expelled, Prof. Gay maintains her $900,000 per year position – and even has an “apology” in which she has the audacity to claim herself to be a “victim.”

          These won’t – and do not – stop these same people from STILL commenting (hidden links or overtly) on political matters, so this is NOT some new found “this forum is for patent law discussions only” view.

        2. 11.1.1.2

          As you may have been following along, Night Writer, even those that show that they have cognition on patent law matters, simply lose the ability to address points presented when it comes to non-patent law, as Wt fully dives into the weeds and cannot see the items that he wishes NOT to see.

          “This is fine.”

    2. 11.2

      On point: link to patentlyo.com

      Carrot and stick as to “let’s be nice” has never worked, now has it? Not when Malcolm has acted as consistently as he has since the very start of this blog.

      Malcolm – you DO have the power to change your ways.
      You CAN actually stick the points and answer the counterpoints put to you.

      Who knows, you may actually learn something.

  5. 10

    Speaking of “innovation policy sticks” have you been struck with the huge new latest increase [24.7% here] in auto insurance premiums, and considered that U.S. design patent law policy may be playing a part? Even a minor fender-bender with the large plastic body parts on cars these days requires their monopoly sourcing at monopoly prices for mating replacements due to their design patents. In Europe they have now finally allowed, to a limited extent, such competitive sales of mating replacement parts, by, effectively, a narrow exception to design patent infringement.
    [Responses to this are welcomed, as although this is reportedly an IPL issue of huge public expense, I do not think it affects much of the income of the relatively few patent attorneys doing primarily design patent work?]

    1. 10.1

      “I> and considered that U.S. design patent law policy may be playing a part?”

      Perhaps, but MUCH more likely are the Green ‘existential thre@t’ workings that seek to make owning one’s own transportation a thing of the past.

      I had heard that the Europe item was being considered, but had not heard that it actually passed.

      1. 10.1.1

        Green ‘existential thre@t’ workings that seek to make owning one’s own transportation a thing of the past

        Ah yes, this is Operation Woodlawn where environmentalists covertly termite themselves into the insurance industry where they raise premiums so as to reduce demand for vehicles. Diabolical! And obviously working exactly as planned — moo hoo hoo hahahaha!

        1. 10.1.1.1

          An empty jest – but still no cognitive and on point reply from you as to the multiple points put to you, Malcolm.

          Shocking.

          Not.

  6. 9

    So, if a company can be held liable for not developing a potentially better alternative, could doctors/hospitals/the CDC/etc. be held liable for actively preventing the administration of a potentially successful treatment during a pandemic, a treatment that is already known to be safe for human use?

    How about when the beneficiary of the prevention is a company(ies) developing a new drug for which Emergency Use Authorization will be sought, and which will not be granted if there is an approved alternative?

    Any resemblance to actual events is purely coincidental.

        1. 9.1.1.1

          OK (I would directly call that out, as it is an important part of understanding how some people have lost sight of what is actually Central, and thus what is also actually Far Right.

          The Sprint Left – especially the Main Stream Media – are furiously trying to shift the Overton Window, and it is important to NOT let that happen.

        2. 9.1.1.2

          PM,

          Another example of Main Stream Media Sprinting Left in attempts to shift the Overton Window is illustrated by way of contrast with the Breaking Points item at the following post:

          link to patentlyo.com

          Breaking Points is the exception to Main Stream Media in which Saagar who is right of center and Krystal who is left of center, actually take the time to discuss their respective views and entertain points and counterpoints.

          One wonders what this blog would be like if addressing counterpoints and engaging on the merits were actually done by the likes of MaxDrei, Malcolm, Breeze and Greg “I-Use-My-Real-Name-Except-When-I-Post-As-Dozens” DeLassus (we can even expand this to marty and the usual examiners) engaged FULLY on the merits.

          1. 9.1.1.2.1

            TP does not even want persons with alternative POVs to comment. Yay censorship! But, then, I believe he is not from the US, so free speech is a foreign concept.

  7. 8

    link to twitter.com

    OT, but this goes to show you just how twisted our world is. WT and I argued over the veracity of the laptop. WT told me that the Wash ing ton Pos t story about Rus s ia supposedly (and ridiculously) planting parts of the laptop made all of the laptop unreliable. This was state disinformation that WT was parroting.

    Get that the Wo ke are dishonest. Get that the Wok e are a political movement composed of total itaria ns and fas cis ts.

    We need to fight these people. I hope I can get a large non-profit to file et hics complaints against the “pro fessors” writing these offensi ve papers claiming that all the law firms are rac ist and that the inno vation engine is ra cist. We need to hold these people to account to write ethi cal papers.

    1. 8.1

      Don’t forget either that the #dirty51 have not been prosecuted for election interference despite conspiring to and lying about the origins of the laptop. The FBI had already had a copy of the laptop when the Dirty 51 wrote the letter discrediting the laptop and they either knew or should have known that it was real. The DOJ is Woke and corrupt. The Dirty 51 rather than being in prison have been rewarded for helping Joseph Stalin Biden be elected president. And remember that each of the Dirty 51 had security clearances that they abused and some were government employees.

      Rather than being secretary of state, Blinken should be in prison. We need to fight the good fight against the totalitarians who are taking over our country.

      And this is applicable to patent law as we see the judges on the CAFC being corporate appointments and the CAFC willed with antipatent judicial activists and not people who care about creating a consistent, workable corpus of patent law opinions. This is a form of fascism.

    2. 8.2

      Not just veracity of the laptop – how about Biden’s handpicked slate of Deep State apparatchiks that “vouched” that the items were Russian Disinformation?

      But I have to ask (again), exactly with whom is that “ethics complaint” going to be filed with?

      What body would be able to bring any type of remedy to the “ethics” that you seek to be corrected?

      I ask not to be a pain, but to continue to show that Academia – writ large is a captured entity – you will find no remedy there.

      1. 8.2.1

        how about Biden’s handpicked slate of Deep State apparatchiks that “vouched” that the items were Russian Disinformation?
        Did you read the letter? Probably not. This what the letter actually stated:

        We want to emphasize that we do not know if the emails, provided to the New York Post by President Trump’s personal attorney Rudy Giuliani, are genuine or not and that we do not have evidence of Russian involvement — just that our experience makes us deeply suspicious that the Russian government played a significant role in this case.

        Seriously, you need to stop getting your news from right-wing podcasts and actually look at the source material. They didn’t “vouch” for the statement that it was Russian disinformation.

        This is what they also wrote:
        Such an opera on would be consistent with Russian objectives, as outlined publicly and recently by the Intelligence Community, to create political chaos in the United States and to deepen political divisions here.
        You don’t have to look far to find evidence for that. Just 10-14 days ago and video from one of the Russian was published in which one of Putin’s propagandists stated ‘we’re hoping for a US civil war.’

        With nearly everyone on Facebook, Twitter (X), or some other type of easily-accessible social media, Russia continues to provoke each side into going after the other. What is sad is that I’ve seen the impacts of these Russian attacks on our society in the lack of civility people have towards one another. We have far more in common with one another than we do with those in Russian, China, Europe or anywhere else in the world. However, those that want to destroy the US are doing everything they can to set us upon one another. I only wish that we woke up to the true threats to our society — those threats originating from outside our border not inside.

        1. 8.2.1.1

          Did you read President Biden’s (AND most all of the Mainstream Media’s) REPEATED admonishments from the letter?

          That would be a clear no.

          Open your eyes son – see more than what you want to see.

          Lack of civility…

          THAT has never harmed this country. Kowtowing TO civility and not engaging your cognitive abilities…

          THAT is a recipe for disaster.

          However, those that want to destroy the US are doing everything they can to set us upon one another. I only wish that we woke up to the true threats to our society

          Again – open your eyes to Biden’s divisiveness and the Democrat Party’s blatant “Equity Agenda” that is nothing more than Woke divisive nonsense.

          While there certainly may be threats from outside of our borders, the current party controlling the Executive Office (and it is a party, not the doddering puppet) are FAR MORE of a threat.

          1. 8.2.1.1.1

            Again – open your eyes to Biden’s divisiveness and the Democrat Party’s blatant “Equity Agenda” that is nothing more than Woke divisive nonsense.
            Comrade Anon — you will receive many thanks from Glorious Mother Russia once the stooge Joe Biden has removed and Most Subservient Donald Trump has been returned to the US Presidency. We will then be able to continue our Special Military Operation to reunite the Russian Peoples without interference. Glory to Russia!!!

            I’ve had a couple people I know fall down this same rabbit hole. It is pretty sad to watch.

            1. 8.2.1.1.1.1

              Your “Russian Collusion” mindless trope is exactly that:

              A mindless trope.

              Further, you rather obliterate (or rewrite in an oh-so-1984 manner) history as Russia made no such Special Military Operations while Trump was in office, only doing so while Democrats like Biden and Obama were in Office.

              More inconvenient facts for you.

              1. 8.2.1.1.1.1.1

                More inconvenient facts for you.
                Inconvenient? Hardly.

                Further, you rather obliterate (or rewrite in an oh-so-1984 manner) history as Russia made no such Special Military Operations while Trump was in office, only doing so while Democrats like Biden and Obama were in Office.
                You do realize that Russia was in Ukraine while Trump was in office?

                Special Military Operations? I see you are using the Russian term for it (unsurprising). Let’s call it what it is — it was an invasion by Russia of a sovereign country.

                You asked me earlier what I thought about Hamas/Israel, and I gave you a very direct answer. Let’s turn the table.

                Are you willing to condemn Russia in its invasion of Ukraine? Or do you believe that Russian was justified in its actions? What is your position on this?

                1. You do realize that Russia was in Ukraine while Trump was in office?

                  Sure – from the days of their invasion during Obama’s term.

                  Duh.

                  As to the current invasion of Ukraine: the start date is 24 February 2022.

                  Please check who controlled the oval office on that date.

                  As to “Special Military Operations? I see you are using the Russian term for it (unsurprising).” – I merely cut and pasted YOUR use of the term.

                  Those are four fingers pointing back at you, son.

                  You asked me earlier what I thought about Hamas/Israel, and I gave you a very direct answer

                  THAT was not a direct answer, That was a nonsense candy-arse avoid any true position ‘answer.’

                  Notwithstanding to answer your question, I am fully willing to condemn NOT only the current invasion of Ukraine by Russia – under Biden’s watch – but also the prior invasion of Ukraine by Russia – under Obama’s watch.

                  Russia is in no way justified in its actions (even as there are realistic military advantages – as deeply covered by Peter Zeihan) for these actions.

                  Do lack any ‘clarity’ in my answers? Note the difference between these and your own candy-arse “I support the people (but refuse to address any reality) so-called answers of yours.

  8. 7

    The study of innovation carries many examples of efforts by individuals and corporations to build a buffer of innovation around an existing (developed and implemented) product line.

    No one has ever attempted any type of Duty to move the choice of what one manufactures to something else.

    If the item being manufactured should not be out in the public for safety reasons, then the question NEED BE on why that item is permitted to be in the public.

    Once THAT question is resolved, then “Duty” has been met.

    The fact that the alternative was in possession is rather a red herring.

  9. 5

    It is not accurate to say that the California decision is about “punishing companies for not innovating fast enough.”

    The court in that case, way up front in the opinion, made crystal clear that Gilead did not have any “duty” to innovate, so they didn’t have any duty to invent the tenofovir alafenamide fumarate (TAF) drug at issue in the case. The court acknowledged that a “duty to innovate” would create an “endless obligation to pursue ever-better new products or improvements to existing products,” which would be “unworkable” and “unwarranted.”

    The allegation was instead that Gilead had already developed the TAF drug, but according to the plaintiffs, voluntarily delayed commercialization of TAF to maximize the profits from its existing predecessor drug tenofovir disoproxil fumarate (TDF), which Gilead allegedly knew was inferior to TAF in causing significantly more harmful side effects. The actual tort is thus not based on Gilead “not innovating fast enough,” but “not commercializing fast enough,” by allegedly delaying release of an already-invented and superior drug, resulting in injury to plaintiffs who were forced to use the inferior predecessor drug.

    With all of that, the opinion may have significant problems and it’s unclear if the decision will stand. The decision could be read as imposing a duty to commercialize drugs at the earliest possible time, which could create incentives inconsistent with public health and safety.

    1. 5.1

      Any such notion of “tort” should be focused on TDF – alone.

      Even other historical tort cases (I recall shower safety glass in the dim recesses of L1), came about from SOCIETY WRIT LARGE having such in such widespread use – NOT from an unused ‘buffer’ item.

      Delayed release is NO reason.
      “Inferior” is NO reason.

      TDF was ON THE MARKET with its quantified acceptable risk.

      Duty met.

    2. 5.2

      > voluntarily delayed commercialization of TAF to maximize the profits from its existing predecessor drug tenofovir disoproxil fumarate (TDF)

      I’m missing something wrt the court’s economic analysis here. How would this scheme maximize Gilead’s profits? Why wouldn’t the customers/patients switch to the better ( and, thus, presumably more expensive ) solution? And even if they don’t, so what? They’re also making the competitive solution…

      Fwiw, this appears to be a SJ motion, not a 12b6 motion, so there has to be some there-there

      1. 5.2.1

        Oldcurmudgeon, I don’t think the court went into an economic analysis but it’s pretty easy to see how that type of conduct could increase Gilead’s profits. Here’s an article that lays out the argument:

        link to nytimes.com

        Bottom line, Gilead apparently had patents on both TDF and TAF, but the TDF patent expired in 2017 while the TAF patent extends much longer, until 2031. If Gilead delays release of TAF until after the TDF patent expires, the article explains, they can ensure that whatever product they had on the market had patent protection.

        It’s not hard to see how this could maximize profits. Gilead could make more profit by only having a single drug on the market at a time, as it reduces their manufacturing, distribution, etc. costs. Having both on the market would not have increased the combined market for both drugs because you’re still dealing with the same underlying number of HIV patients, it would simply have increased their costs. TDF sales would also likely have dried up anyway given the advantages of TAF.

        One flaw with this theory is that Gilead could have simply just released TAF right after its patent issued and discontinued TDF at that time, thus still having a single drug on the market while enjoying extended patent protection. It’s possible this didn’t happen because switching from TDF to TAF could have entailed significant production costs, which Gilead was able to defer by simply delaying the TAF release until after the TDF patent expired.

        1. 5.2.1.1

          Thanks LR,

          It still appears to come down to a decision NOT of the government’s dominion of what a corporation chooses to do.

          Given the fact that TDF is approved, I cannot see culpability on any non-government-controlled decision as to what someone chooses to do in the marketplace.

          To hold otherwise is to FORCE an independent actor to do something that there is no law (or basis in law) to so do.

  10. 4

    While the people at Gilead who made their immoral decision might escape personal responsibility in this world,

    I hope they all live long and happy lives

    because when they die

    they are going to Hell.

    1. 4.2

      Forced altruism is just another name for tyranny.

      One has no obligation to save another under the law.

      You want to apply your morals to others? What happens if others want to apply their morals to you, and you happen to not agree with those morals?

      1. 4.2.1

        Anon says, “One has no obligation to save another under the law.”

        Certainly not under *your* law.

        Don’t worry, G-D will explain it to you some day.

        1. 4.2.1.1

          You appear to be conflating G-D’s law and real (governing) US law.

          My post at 4.2 STILL applies:

          Let’s modify slightly for your latest post:

          You want to apply your version of G-D’s law to others? What happens if others want to apply their version of G-D’s law to you, and you happen to not agree with that version of G-D’s law?

  11. 3

    Boeing was selling 737’s with a single Angle of Attack Sensor, charging extra for the second one. In hindsight, that’s insane, because people wouldn’t pay extra for obvious safety because that’s what people do, and betting everyone’s life on a single sensor is reckless.

    I think this concept would have to be limited to a regulated product context, or some kind of balancing test where life and limb are at high and obvious risk.

    It simply can’t be an unlimited tort that a company must market the best things it can think of at all times. That turns capitalism on its head.

  12. 2

    I very much doubt such a decision will survive appellate court.

    Look at that case citation again: “Cal. App. 1st Dist.” The ruling that Prof. Crouch is citing is the appellate review.

    [T]here is NO WAY that such a decision will survive Supreme Court review.

    This case is decided by a California court under California law, so the last word on the subject should be that of the California Supreme Court, not the U.S. Supreme Court. Do you perceive a federal preemption issue here? I guess that I am not clear where the Supreme Court’s jurisdiction is supposed to attach to this case.

        1. 2.1.1.1

          BBoB,

          marty is a regular here (usually popping up on 101 threads).

          He is not an attorney (but did sleep at a Holiday Inn last night, so…)

          1. 2.1.1.1.1

            Sorry, the reference to Holiday Inn went over my head — more details please.

            What’s up with Malcolm. He suddenly goes quiet when an anti-pharma position is taken by a liberal judge. How quickly his liberal idealism fades when it impacts his job.

            1. 2.1.1.1.1.1

              BBoB,

              Can you really say that you would be shocked by ANY hypocrisy from Malcolm?

              As to the reference, there is a series of these. Try this string in YouTube “ no but i slept at a holiday inn”

              This will provide a string of references.

    1. 2.2

      Totally agree with minor caveat – I have not dug in to see if there are any US Constitutional or Statutory defenses that might give SCOTUS review authority. One issue that could have been raised has to do with preclusion based upon US patent and FDA law.

      1. 2.2.1

        What bothers me about the case is that for much of the relevant time, the second, supposedly better drug was not approved by the FDA, so it was illegal to market it. They still needed to do trials to get approval. Eventually it was approved, but at the time, no one could know if it would be or not, or how long it would take. So it’s more than just that they shelved the drug, they still had work to do and still needed FDA approval. I am having a hard time seeing how that could be considered to be the cause of the plaintiffs’ harm.

        Also, there is this line:

        1. 2.2.1.1

          This line:

          By deferring development of TAF, in contrast, Gilead was able to maximize its sales of TDF, while using the later release of TAF to extend the patent coverage of tenofovir-related medications.

          Sounds strange to me. How does the patent get extended by holding back a release of one version of the drug?

          1. 2.2.1.1.1

            I agree – perhaps we can have some clarity as to this “extend[ing] the patent coverage” angle.

    2. 2.3

      The decision was issued by an intermediate appellate court in California, so Gilead can still petition for review with the California Supreme Court.

      Also, even if the California Supreme Court chooses not to review this decision, that court has a special power to “de-publish” any intermediate court of appeal decision. Depublication in this context isn’t the same as having an unpublished disposition by the Federal Circuit that can still be cited but is simply non-precedential. Depublication by the California Supreme Court effectively makes a decision uncitable in any other case within the state. The California Supreme Court often does this with controversial intermediate appellate decisions that may have unknown consequences, and this is the type of case that I could see getting depublished if the California Supreme Court declines to review it. I imagine there will be calls by stakeholders in the pharma industry for depublication if that happens.

      With respect to the U.S. Supreme Court, it has direct appellate jurisdiction over decisions of the highest state court (which here would either be the California Supreme Court, of if it declines to review this case, the intermediate appellate court that issued the decision), but it can only review state decisions on issues of federal law. Gilead did make arguments here that the plaintiffs’ claims were barred by federal preemption, and federal preemption of state law is a common basis for U.S. Supreme Court review of state court decisions. But this is a fairly poor candidate for U.S. Supreme Court review because the factual record was not developed. The Supreme Court would more likely take a case like this after at a later stage, where there are actual facts in the record and not just the allegations made by the plaintiffs.

    3. 2.4

      Please Pardon Potential re(P)eat…

      Your comment is awaiting moderation.

      January 16, 2024 at 1:41 pm

      iss”u”e….

      More balderdash from Greg’s Sprint Left propaganda machine…

      Intelligencer should be fined for its lack thereof.

      poor little dog sitting in flames, “This is Fine.”

  13. 1

    The ruling in Gilead Tenofovir Cases opens the door to lawsuits punishing companies for not innovating fast enough
    I very much doubt such a decision will survive appellate court. And there is NO WAY that such a decision will survive Supreme Court review.

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