Somehow, I doubt he’d include Twilight on his book list.

The Article: India’s Patent Law: A Standard We Should All Follow by Nima Desai in The Speckled Axe.

The Text: Recently, The New York Times featured an eye-opening series of articles about lawsuits filed by Bayer and Novartis in which the Indian Supreme Court has controlled the prices of expensive cancer drugs under the country’s own patent laws as well as new public health laws created by the World Trade Organization (WTO).

While there are nuanced legal issues that frame these decisions, mainstream media outlets do not report on them fully. A possible reason for the lack of coverage may be because the ruling struck a serious financial blow to the pharmaceutical industry—one that will most likely total billions of dollars lost in annual revenue. One of the major issues left unaddressed? Evergreening, a cunning pharmaceutical business tactic that will soon become a huge issue in courts around the world.

The sly tactic focuses on patent owners making superficial changes to a patented drug to extend the life of their exclusive right to manufacture and sell said drug beyond its legal expiration date. For example, some of these changes could be as minor as the color of a capsule, dosage amounts, or the use of the isomer or mirror-image of the molecular structure of the patented drug.

The longer a company maintains a patent, the longer manufacturers cannot produce and sell generic versions of these drugs. The longer generic drugs cannot be sold by third parties, the longer a pharmaceutical company can retain a de facto monopoly over sales. The consequence of this monopolization is that drugs remain out of reach to the sickest and most vulnerable individuals.

For those with adequate health insurance, the impact of evergreening is not as dramatic as described above, as insurance coverage mitigates the cost of extremely expensive medicines that remain patented. But for those across the globe who do not have health insurance or have inadequate health insurance, the expiration of a patent means that a cure is within their reach.

How The Endless Growth Of Evergreening Begins

Evergreening requires artful legal manipulation paired with unscrupulous scientific imagination. Here are the players and their playbook:

Lawyers for pharmaceutical companies work with Research and Development (R&D) to take advantage of legal and procedural loopholes present in the system. In so doing they prepare a series of patent applications that, when crafted correctly and are timely filed, extend the patent term of a drug for as long as legally possible.

The desired extension typically lasts for 20 years, which ultimately translates to tons of money finding its way into the pockets of the pharmaceutical companies. But of course, they can only win a patent term extension if they have mastered the procedural rules in the given country where they first filed the patent. As a result, the process of evergreening a patent is akin to a twenty-year long, high stakes chess game with patent offices and courts throughout the world.

Suffice it to say that the drafters of the US Constitution didn’t really envision others gaming the system this way. Nevertheless, given its high domestic profitability evergreening is commonplace in the United States as well as Europe.

In both areas, evergreening hinges on the mistaken belief that patent laws exist solely for the protection of the inventor and his livelihood. But make no mistake: this is utterly false, as the fundamentals of patent law do not support the practice.

This is how the patent law actually works: federal governments across the globe grant patents to reward and protect the inventor as well as the public, defined as the theoretical players in the “marketplace of ideas,“ which for pharmaceuticals means scientists, academia, and generic drug manufacturers. This is the basic covenant between the government and the inventor and is something steeped in American constitutional law and derivative laws worldwide.

India And The West: Tales Of Contradictions And Controversies

Despite the fact that evergreening contradicts the theoretical underpinnings of patent law, the United States and Europe still support the practice. While pharmaceutical companies like Bayer and Novartis have successfully implemented this tactic in countries where insurance companies end up footing the bill, India’s case is different.

Why? Most of India’s citizens don’t have consistent health coverage so their law doesn’t tolerate evergreening. But it’s not only the lack of widespread insurance coverage that has affected the Indian Supreme Court’s view on patents; India’s current patent law is also a byproduct of early Indian nationalism & socialism.

After gaining independence, India fervently sponsored domestic manufacturing as well as immediate, emergency responses to critical public health issues. Thus, many ignored patent law for a considerable time in the country’s early days, all while pharmaceutical manufacturing (and reverse manufacturing) boomed with support from Indian judicial and political branches. But by the 1970’s India’s patent laws had been firmly entrenched within society and soon thereafter were updated as lawmakers scribed and adopted international treaties.

And so, the recent Indian Supreme Court rulings seem to echo a time in the young nation’s history when foreign companies were viewed with suspicion. As a result, the big losers here are large multinational pharmaceutical companies that–equipped with modern power and international influence–rival the much-hated The East India Company of yore.

In the case against the Swiss company Novartis, evergreening played a crucial role. Here, the Supreme Court rejected a second patent term for the popularly dubbed “magic cancer bullet” medication Gleevec used to treat ten different types of cancers.

Why did the Court strike down the second term? The answer is remarkably simple: lack of innovation. In order to renew a patent, a clause in Indian patent law requires greater efficiency as well as some sort of legitimate and new “innovation.” And in comparison to the broad definitions of “innovation” in the US and Europe, the Indian bar is much higher.

Though in the case against Bayer, evergreening did not play an important part. Rather, the Indian Supreme Court addressed the costs of recently developed patented medicines that treat less-common diseases and cancers so expensive that they are out of reach for most Indian citizens. This extreme pricing scheme is the result of another successful business tactic that attempts to fill the revenue gap left by blockbuster (and now generic) drugs like Prozac and Lipitor.

Ultimately, the Indian Supreme Court ordered the German company to license its drug class patent rights to Indian-owned manufacturing companies as long as minimal royalties were paid to Bayer. As a result, India became the first country to invoke a new WTO rule that allows a country to override a patent if it prevents access to a life-saving medication.

Access To Generic Drugs: The REAL Human Rights Issue Of Our Time

India’s complex legal history has been a boon for other developing nations that benefit greatly from its export of cheap, high-quality generic drugs. The major beneficiaries are those afflicted with HIV/AIDs who get generic forms of anti-retroviral medication.

Currently, India exports 80% of the medicine now used to treat over 6.6 million people living with HIV/AIDS. In Zambia, for instance, generic Indian anti-retrovirals annually cost $120 a patient as opposed to the brand name versions that cost ten times that amount per year.

Despite massive evidence to the contrary, some critics in India and Europe claim that India’s patent rulings will not affect the most vulnerable populations who cannot even afford generic prices. In essence, they’re saying that the ruling was poorly considered and based primarily on emotion. But when put under a microscope this highly misleading argument simply doesn’t pan out: it’s common knowledge that along with other developing countries, India’s middle to lower-middle class is growing at a dizzying rate.

The protection against evergreening and other predatory business practices may literally be the difference between life and death for those suffering from diseases that now have new, promising, but patented cures. But if the patents of brand-name drugs are allowed to continue indefinitely, high prices will always keep lifesaving drugs outside the reach of millions. There’s no developing from that.

The Article: Does The Supreme Court Rely On One Man’s Decision? by Benjamin Siegel in The Speckled Axe.

The Text: The fate of President Obama’s crowning achievement of his first term — the passing of the healthcare reform law — seemingly rests on the shoulders of one Supreme Court Justice. After repeated 5-4 rulings decided recent cases, what initially seemed to be mere suspicions of a court neatly divided along party lines has become something of a known fact. Divided between four staunchly conservative and four staunchly liberal justices, Anthony Kennedy has become the one and only swing vote on the Supreme Court.

Dialogue-shifting decisions that have painted a picture of a bench divided along liberal/conservative lines include 2010’s Berghuis v. Thompkins ruling, in which the court essentially ruled to loosen an arrested citizen’s Miranda rights. That same year, the Supreme Court ruled on Citizens United v. Federal Election Commission, where they determined that political spending is protected under the First Amendment. This year brought the decision on Florence v. Burlington County, in which the court ruled that police may strip search anyone arrested for any offense, even if there is no reason to suspect contraband.

In each of the above Supreme Court decisions, Justice Anthony Kennedy was the deciding factor. Siding with the conservative wing of the court (Samuel Alito, Antonin Scalia, Clarence Thomas, and Chief Justice John Roberts), Kennedy was able to swing cases with significant impact on how the Constitution is interpreted and enforced.

While the Supreme Court bears the bold declaration above its main doors of “Equal Justice Under the Law,” it appears to be bogging itself down in a type of justice that is far from blind. In fact, the very idea of having one man consistently deciding on cases seems to be driven by a brand of justice that has its eyes wide open, inspired by and desiring to imitate the petty arguments that have become such a stumbling block to Congressional productivity. And as a Gallup Poll from February of this year painfully pointed out, the current Congress is sitting on a comfortable 10% American approval rating.

Another poll showed that after the three-day hearing on Obamacare, the Supreme Court’s public approval rating jumped. This is a good thing, right? Doesn’t this mean that people are beginning to believe that the decision on Obamacare might usher in a new age of a Supreme Court that is once again guided by a studious, intellectual grasp of the law? Unlikely. Maybe it is just cynicism prevailing, but perhaps it’s not that the public has become more optimistic about the court. Maybe it’s just that the Court has morphed itself into exactly what people crave in their political news feeds: partisan, polarizing, and disagreeable politics.

When the Court rules on Obamacare, the Justices’ statements will be nothing short of captivating to court watchers. If the law is upheld, the President will see it as a triumphant political victory and he will ride it well into the peak of election season. Ifit is overturned, conservative lawmakers and opposing judges will claim it as their prize. They will assert that the law failed the vital test of judicial review and the President was merely name-calling when he accused the court of activism. Either way, the court’s decision will be where the buck stops, at least for a while in terms of political rhetoric.

However, how the Justices back up their decision is almost as important as the court’s decision itself. If, in the majority opinion, we find yet another vaguely worded 5-4 call that reeks of political side-taking, both sides lose. Because if that’s the case, the only branch of government supposed to be able to lift itself above Washington’s political roughhousing will be rolling up its sleeves and trading political haymakers right there with them.

Well, so long as they have God it doesn’t matter if they’re stripped of their livelihood, right?

The Article: Study: CEO Pay Increased 127 Times Faster Than Worker Pay Over Last 30 Years by Travis Waldron in ThinkProgress.

The Text: Compensation for chief executives at American companies grew 15 percent in 2011 after a 28 percent rise in 2010, part of a larger trend that has seen CEO pay skyrocket over the last three decades. Workers, on the other hand, have been left behind.

Since 1978, CEO pay at American firms has risen 725 percent, more than 127 times faster than worker pay over the same time period, according to new data from the Economic Policy Institute:

From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.

In 1978, CEOs took home 26.5 times more than the average worker. They now make roughly 206 times more than workers, EPI found. The pay isn’t always tied to the performance of their businesses — as ThinkProgress has noted, CEOs at companies like Bank of America often pocket huge pay increases even as the company’s stock price plummets and jobs are cut.

Workers’ wages aren’t tied to productivity either. Despite substantial gains in productivity since the 1970s, worker pay has remained flat. According to Labor Department data cited by the Huffington Post, inflation-adjusted wages fell 2 percent in 2011.

As a result, American income inequality has skyrocketed, growing worse than it is in countries like Pakistan and Ivory Coast. Wealth inequality is worse than it was even in Ancient Rome. And, as pay skyrockets and tax rates fall for the richest Americans, the rising inequality has left the bottom 95 percent of Americans saddled with more debt than ever before.

Because, you know, Bush never would have done something similar….

The Article: FBI: We need wiretap-ready Web sites – now by Declan McCullagh in CNET.

The Text: The FBI is asking Internet companies not to oppose a controversial proposal that would require firms, including Microsoft, Facebook, Yahoo, and Google, to build in backdoors for government surveillance.
In meetings with industry representatives, the White House, and U.S. senators, senior FBI officials argue the dramatic shift in communication from the telephone system to the Internet has made it far more difficult for agents to wiretap Americans suspected of illegal activities, CNET has learned.

The FBI general counsel’s office has drafted a proposed law that the bureau claims is the best solution: requiring that social-networking Web sites and providers of VoIP, instant messaging, and Web e-mail alter their code to ensure their products are wiretap-friendly.

“If you create a service, product, or app that allows a user to communicate, you get the privilege of adding that extra coding,” an industry representative who has reviewed the FBI’s draft legislation told CNET. The requirements apply only if a threshold of a certain number of users is exceeded, according to a second industry representative briefed on it.

The FBI’s proposal would amend a 1994 law, called the Communications Assistance for Law Enforcement Act, or CALEA, that currently applies only to telecommunications providers, not Web companies. The Federal Communications Commission extended CALEA in 2004 to apply to broadband networks.

FBI Director Robert Mueller is not asking companies to support the bureau’s CALEA expansion, but instead is “asking what can go in it to minimize impacts,” one participant in the discussions says. That included a scheduled trip this month to the West Coast — which was subsequently postponed — to meet with Internet companies’ CEOs and top lawyers.

A further expansion of CALEA is unlikely to be applauded by tech companies, their customers, or privacy groups. Apple (which distributes iChat and FaceTime) is currently lobbying on the topic, according to disclosure documents filed with Congress two weeks ago. Microsoft (which owns Skype and Hotmail) says its lobbyists are following the topic because it’s “an area of ongoing interest to us.” Google, Yahoo, and Facebook declined to comment.

In February 2011, CNET was the first to report that then-FBI general counsel Valerie Caproni was planning to warn Congress of what the bureau calls its “Going Dark” problem, meaning that its surveillance capabilities may diminish as technology advances. Caproni singled out “Web-based e-mail, social-networking sites, and peer-to-peer communications” as problems that have left the FBI “increasingly unable” to conduct the same kind of wiretapping it could in the past.

In addition to the FBI’s legislative proposal, there are indications that the Federal Communications Commission is considering reinterpreting CALEA to demand that products that allow video or voice chat over the Internet — from Skype to Google Hangouts to Xbox Live — include surveillance backdoors to help the FBI with its “Going Dark” program. CALEA applies to technologies that are a “substantial replacement” for the telephone system.

“We have noticed a massive uptick in the amount of FCC CALEA inquiries and enforcement proceedings within the last year, most of which are intended to address ‘Going Dark’ issues,” says Christopher Canter, lead compliance counsel at the Marashlian and Donahue law firm, which specializes in CALEA. “This generally means that the FCC is laying the groundwork for regulatory action.”
Subsentio, a Colorado-based company that sells CALEA compliance products and worked with the Justice Department when it asked the FCC to extend CALEA seven years ago, says the FBI’s draft legislation was prepared with the compliance costs of Internet companies in mind.

In a statement to CNET, Subsentio President Steve Bock said that the measure provides a “safe harbor” for Internet companies as long as the interception techniques are “‘good enough’ solutions approved by the attorney general.”
Another option that would be permitted, Bock said, is if companies “supply the government with proprietary information to decode information” obtained through a wiretap or other type of lawful interception, rather than “provide a complex system for converting the information into an industry standard format.”

A representative for the FBI told CNET today that: “(There are) significant challenges posed to the FBI in the accomplishment of our diverse mission. These include those that result from the advent of rapidly changing technology. A growing gap exists between the statutory authority of law enforcement to intercept electronic communications pursuant to court order and our practical ability to intercept those communications. The FBI believes that if this gap continues to grow, there is a very real risk of the government ‘going dark,’ resulting in an increased risk to national security and public safety.”

Next steps

The FBI’s legislation, which has been approved by the Department of Justice, is one component of what the bureau has internally called the “National Electronic Surveillance Strategy.” Documents obtained by the Electronic Frontier Foundation show that since 2006, Going Dark has been a worry inside the bureau, which employed 107 full-time equivalent people on the project as of 2009, commissioned a RAND study, and sought extensive technical input from the bureau’s secretive Operational Technology Division in Quantico, Va. The division boasts of developing the “latest and greatest investigative technologies to catch terrorists and criminals.”

But the White House, perhaps less inclined than the bureau to initiate what would likely be a bruising privacy battle, has not sent the FBI’s CALEA amendments to Capitol Hill, even though they were expected last year. (A representative for Sen. Patrick Leahy, head of the Judiciary committee and original author of CALEA, said today that “we have not seen any proposals from the administration.”)

Mueller said in December that the CALEA amendments will be “coordinated through the interagency process,” meaning they would need to receive administration-wide approval.

Stewart Baker, a partner at Steptoe and Johnson who is the former assistant secretary for policy at Homeland Security, said the FBI has “faced difficulty getting its legislative proposals through an administration staffed in large part by people who lived through the CALEA and crypto fights of the Clinton administration, and who are jaundiced about law enforcement regulation of technology — overly jaundiced, in my view.”

On the other hand, as a senator in the 1990s, Vice President Joe Biden introduced a bill at the FBI’s behest that echoes the bureau’s proposal today. Biden’s bill said companies should “ensure that communications systems permit the government to obtain the plain text contents of voice, data, and other communications when appropriately authorized by law.” (Biden’s legislation spurred the public release of PGP, one of the first easy-to-use encryption utilities.)

The Justice Department did not respond to a request for comment. An FCC representative referred questions to the Public Safety and Homeland Security Bureau, which declined to comment.

From the FBI’s perspective, expanding CALEA to cover VoIP, Web e-mail, and social networks isn’t expanding wiretapping law: If a court order is required today, one will be required tomorrow as well. Rather, it’s making sure that a wiretap is guaranteed to produce results.

But that nuanced argument could prove radioactive among an Internet community already skeptical of government efforts in the wake of protests over the Stop Online Piracy Act, or SOPA, in January, and the CISPA data-sharing bill last month. And even if startups or hobbyist projects are exempted if they stay below the user threshold, it’s hardly clear how open-source or free software projects such as Linphone, KPhone, and Zfone — or Nicholas Merrill’s proposal for a privacy-protective Internet provider — will comply.

Are you sipping the Christian kool aid?

The Article: Austerity and the euro crisis: Add Hollandaise sauce in the Economist.

The Text: TEN YEARS ago Romano Prodi, the-then president of the European Commission, created a stink when he declared that the euro zone’s budget rules were “stupid” because they were too rigid. But with the onset of the euro zone’s debt crisis in 2010 the response has been to try to make them even stiffer.

At Germany’s insistence, the euro zone first gave the commission more powers to monitor and enforce deficit limits, including the threat of “semi-automatic” sanctions for rule-breakers. And second, almost all members of the European Union were dragooned into signing up to the fiscal compact, a new treaty requiring then to adopt binding balanced-budget rules, preferably in their constitutions.

The election of a Socialist, François Hollande, as France’s new president, is causing a rethink in Brussels. There is certainly a change of rhetoric about a “growth compact”. But in substance, the change may be rather modest.

To begin with, Germany says the text of the fiscal compact is non-negotiable, a position that Mr Hollande’s lieutenants seem to understand. Instead they want some form of programme to promote growth to be created alongside. Whether this takes the form of a formal protocol attached to the treaty (which must also be ratified), or a looser agreement, is yet to be decided. But with parts of Europe back in recession, leaders agree that they have to be seen to do more to promote growth.

In truth, the idea of growth was never absent from the European response to the crisis. Summits have been debating the issue since January. But fundamentally, in the view of Germany (adopted in large measure by the commission) growth would come firstly from restoring market confidence, by getting a grip on public finances. And secondly it would come from supply-side structural reforms to make countries more competitive and labour markets more flexible. With the rise of Mr Hollande, there is now a greater focus on boosting demand as well.

Although he belongs to the European People’s Party, the same centre-right political grouping as France’s defeated President Nicolas Sarkozy, the current commission president, José Manuel Barroso, warmly embraced Mr Hollande and his call for growth. “I am extremely pleased to see the new momentum that is clearly building in our member states to kick-start the stalled engine of growth,” he said at a press conference today.

Far from being stupid, says Mr Barroso, the euro zone’s budget rules are intelligent, because they allow for “adaptability” – though precisely how they can to be adapted remains to be seen (more on this below).

Mr Barroso was careful to say there should be no let-up in deficit-cutting, let alone a splurge of public spending. “Debt-fuelled growth is unsustainable”, he insisted, adding that Mr Hollande emphasised his commitment to bringing down France’s deficit.

So what to do about growth if there is little or no more money available? One proposal is to recapitalise the European Investment Bank (EIB), which has started to cut back on lending for fear of losing its credit rating.

Another is to leverage uncommitted bits of the EU’s budget, in collaboration with the EIB, to raise new joint “project bonds” to finance new infrastructure projects. A modest sum of €230m could generate €4.6 billion worth of projects, says the Commission. It argues that such investments, for things like trans-national electricity grids and pipelines, would not take place if left to member-states.

These ideas are sensible. Channelling the funds through the EIB, provides some assurance that the projects make economic sense and are managed properly. But even if countries agree to provide the EIB with the extra €10 billion that the commission is calling for, nobody should think that such extra money will lift the most troubled parts of the euro zone out of their recession.

There is a danger, moreover, of assuming that just because some European-level investment can be of benefit, all European spending must by definition be good. Sadly, this is what the commission is doing when seized the moment to urge members to support its demand for an enlarged EU budget, both for next year and for the seven-year period starting in 2014. “It will be a contradiction to support growth through investment and not be able to commit the funds necessary to work for that at the European level,” declared Mr Barroso.

It is not, surely, a contradiction to point out that an organisation that still spends about four-tenths of its budget on agricultural subsidies is failing to make the best economic investments.

The commission’s proposals are not new, but it is pleased that Mr Hollande has already made them his own and hopes he will champion them. “We are seizing the moment to advance our previous proposals in the new political climate,” said Olli Rehn, the economic and monetary affairs commissioner.

The novelty may come in the coming days. The European Commission is in the final throes of debating proposals to relax the deficit-cutting targets. The IMF has made clear its view that the adjustment in European countries has often proven to be too harsh. Its latest work on the effect of fiscal consolidation finds that, in a downturn, deficit-cuttting has a strong multiplier effect that pushes countries into unexpectedly deep recession.

Mario Monti, Italy’s prime minister, does not seem to have made much headway in his call for spending on “investment” to be excluded, wholly or partly, from the reckoning of a country’s deficit. Instead, the Commission may agree to give some countries more time to get their deficits below 3% of GDP, the threshold set by the euro’s original Stability and Growth Pact. This is what Mr Rehn had to say in a speech on April 5th:

Contrary to the misleading impression promoted by some politicians and pundits that the EU fiscal framework forces all member states into a ‘one-size-fits-all’ consolidation straightjacket, the Stability and Growth Pact is not stupid. Yes, the EU fiscal framework is rules-based, with clear reference values for public deficit and debt for triggering the excessive deficit procedure and, if needed, sanctions. But, at the same time, the Pact entails considerable scope for judgement, based on economic analysis and its legal provisions, when it comes to its application. The Pact underlines the structural sustainability of public finances over the medium term and implies differentiation among the member states according to their fiscal space and macroeconomic conditions.
All this verbiage probably spells “less pain in Spain”. Last year it posted a deficit of 8.5% of GDP, substantially higher than its target of 6%. It has been allowed to overshoot its target this year, on condition that it keeps its promise to get the deficit below 3% of GDP next year. Though it is not officially asking for a reprieve, Spain may be granted an extra year to make the target.

An obvious time to announce the change could be Friday May 11th, when the commission is due to issue its spring economic forecast (which will then form the basis of detailed “country-specific” recommendations at the end of the month).

That said, the commission wants to see greater evidence that Spain is making the full effort to control public finances. It wants to see the budget cuts that Spain has promised this year, and evidence that Madrid is getting a grip on spending in the regions. The commission also wants Spain to draw up a convincing plan to stabilise its troubled banks. Moreover, the commission may push Spain to commit to a two-yearly budget cycle to provide greater clarity. “The road to medium-term economic sustainability goes through immediate decisive action in structural reforms and financial stability,” said Mr Rehn.

Any move to lengthen the process of bringing down the deficit will have to be weighed against two factors. First is the impact on the markets: will investors fear that such a move heralds the breakdown of fiscal discipline, or rejoice that recession might be less deep? And how to explain the favour done to Spain to other countries, such as Belgium, that were told to cut the budget more deeply to meet their target, or face sanctions?

Whatever the “Hollande effect” on European policy towards public finances, the new French president is likely to be confronted with an uncomfortable decision. The commission’s economic forecast is likely to find that, on current policies, France is likely to miss its 3% target next year (the IMF reckons the deficit will be 3.9%). So even before he is formally installed as president, Mr Hollande may be asked to spell out how he intends to keep his promises both to control debt and to relieve Europe of the curse of austerity. Unlike Spain, France is unlikely to get a deadline extension.: it cannot claim to have done everything possible to control the deficit, or that it is the victim of an unexpectedly severe recession.

Europe’s budgetary policy may be getting a dollop of Hollandaise sauce, but beneath it all it will still be the same austere dish.

Who knew that the producer of Pootie Tang could be so…insightful?