More Bang for Our Buck

Time to Narrow Monopoly Protections

Monopoly protections in exchange for public deposit are premised on the public gaining something from this new knowledge. In proprietary systems that prohibit third-party modification of lines of code, the public does not benefit from new, closed technologies. The only beneficiary is the proprietary software company, which has copyright-protected license to iterate a new version and collect monopoly protections again, for itself. The cycle repeats endlessly.

Of course, even when the state grants monopolies for items that the public needs, the results are not perfect. Greed gets in the way. After the initial boost from the state, pharmaceutical companies use their market position to extend their monopolies on successful “blockbuster” drugs long after initial patents expires. This practice, called product hopping, disincentivizes generic manufacturers from producing prior formulations of the drug (lest they run afoul of new iterations of the patent) and raises prices for patients who continue to be prescribed these gold-standard drugs.

Even for pharmaceuticals, a more permissive licensing model is possible. Adaptive licensing models conceptualize fast-track FDA approval followed by heightened surveillance and monitoring of patients after a drug is brought to market. While these models seem to place surveillance responsibility with drug manufacturers, they are a step toward public access to novel innovation. Another approach is for the FDA to grant the public access to proprietary data it has collected.

There are several interesting ideas here, but they are jumbled together incongruently, out of scale. One is not Arthur Quiller-Couch: the old bore is a darling you should kill. The metaphor adds nothing to the issue whether ownership of ideas is deadweight loss, necessary incentive, or something less simplistic in between.

A general attack on trade secrecy is incompatible with the strong form of the belief that it's unnecessary: if secrets don't convey advantage than requiring disclosure would be unnecessary in the face of robust free competition. Obviously one of those propositions must give way. It would instead be useful to inquire both (a) what industries find it valuable to gain state-granted monopoly protection in return for disclosure of inventions, which do not, and why; and (b) how the proprietary software industry gains both trade secret protection and a copyright supposedly dependent on public disclosure and deposit. Making these two inquiries thoroughly would equip the next draft to unify some themes and gain real analytic heft by doing so, at the expense of some lost rhetorical decoration.

Why? They could all be links. Did you actually read the article from Clinical Pharmacology & Therapeutics? What style requires you to eschew "et al." in an author citation?

Don’t Kill Your Darlings

-- By DavidRatnoff - 22 Oct 2021

Seeking Solid Ground, But Finding Quicksand

To paraphrase Arthur Quiller-Couch [1], the system of proprietary software production and distribution has murdered many darlings; good ideas made dead on arrival by restrictive licensing. Good ideas shouldn’t be restricted to those fortunate enough to work as software engineers for tech firms. But, under restrictive licensing, well-intentioned users cannot improve closed systems on their own. Worse, they can be pursued and punished for stepping into the shoes of a trusty for a proprietary ecosystem like Microsoft, Facebook, Google, or Apple.

The pharmaceutical industry illustrates this dynamic of punishing innovators that threaten firm-wide goals. Patents create short-term monopolies, but sophisticated pharmaceutical companies have the experience and incentive to extend their monopolies on successful “blockbuster” drugs long after the initial patent expires. This practice, called product hopping, disincentivizes generic manufacturers from producing prior formulations of the drug (lest they run afoul of new iterations of the patent) and raises prices for patients who continue to be prescribed these gold-standard drugs. [2]

Turning the Corner?

A leading alternative to restrictive licensing, we have learned this semester, is permissive licensing. The GNU GPL’s copyleft approach, which asserts a copyright on the software and offers a license that permits copying, distribution, and modification, subverts copyright law by expressly blessing users who seek to modify software. There are obvious reasons why permitting free tinkering and distribution of software is desirable: we can trust skilled users, who are diffusely distributed across the globe, to make useful changes to source code and publish explanations of their modifications. GitHub? is full of these user contributions. But, transposing this decentralized production and distribution model to drug manufacturing poses obvious risks. If any pharmacist were freely permitted to tinker with drug formulations, then package and market them to patients, patient safety could be jeopardized and pharmaceutical researchers may grow concerned with how their drugs are marketed to distinguish them from amateur spin-offs. Widespread lack of confidence in drug safety could undermine many of the advances of modern medicine in the last century: near-universal immunizations, widely-available HIV treatment, and the management of cardiovascular disease with statins. Yet, surely a more permissive licensing model is possible. Some have proposed “adaptive licensing” models that fast-track drug approval by the FDA but raise surveillance and monitoring of patients after a drug is brought to market. [3] While these models seem to place surveillance responsibility with drug manufacturers, they are a step toward public access to novel innovation. Next, we should consider public access to all data.

Briefcraft or Spycraft? Why Bother?

Litigation brought against a former employee for trade secret theft is common in the proprietary tech industry. Earlier this year, in March 2021, Apple sued Simon Lancaster, a former product designer, for leaking his knowledge of Apple’s materials and prototypes of future products. [4] Yet, to allege a trade secret violation, a plaintiff in such a case must disclose to the court which trade secret has been leaked. To preserve the competitive edge offered by trade secret law, parties in such cases submit to protective orders and other measures that restrict who can read proprietary materials and learn the details of a company’s trade secrets. Plaintiffs who are concerned about the disclosure of their secrets, and defendants who rely on this caginess to avoid liability, are both trapped in a bad system. Full public disclosure of scientific and technical knowledge would steer clear of such disputes, which waste resources that could otherwise be devoted to innovation itself. If all “proprietary” data were made public, or otherwise issued through permissive licensing, disputes about who stole what might give way to breakthrough technologies that synergize the work of many diffuse developers.

Neither Collapse, Nor Revolution

Free software is not a cure-all. To those who worry about distorting the profit motive, it seems consumers crave digital products that work. Producers of better services will ultimately beat inferior pretenders to the throne. To those who worry about destroying markets that rely on advertising, look to the success of firms in the analog age. Absent radical change to our country’s political economy, firms will operate to compete. To paraphrase my 1L contracts professor, umbrella sellers know how to find you when it is raining. They will continue to do so, perhaps without the Retina-display level observation of your behavior, from the sidelines of your private browsing of the Internet. So, if free software won’t kill for-profit firms, what might it do? It might bring the government-surveillance capitalism nexus into the open. Those seeking to obtain your data will have to work for it in the open, rather than harvest your everyday behavior from underfoot. NSA, don’t murder your darlings; good ideas are now prized.

Footnotes

1. Arthur Quiller-Couch, On Style: Lecture Delivered in the University of Cambridge (Jan. 28, 1914), https://www.bartleby.com/190/12.html.

2. Comprehensive Plan for Addressing High Drug Prices: A Report in Response to the Executive Order on Competition in the American Economy, U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Sept. 9, 2021, https://aspe.hhs.gov/sites/default/files/2021-09/Competition%20EO%2045-Day%20Drug%20Pricing%20Report%209-8-2021.pdf

3. Eichler, H.-G., Baird, L., Barker, R., Bloechl-Daum, B., Børlum-Kristensen, F., Brown, J., Chua, R., Del Signore, S., Dugan, U., Ferguson, J., Garner, S., Goettsch, W., Haigh, J., Honig, P., Hoos, A., Huckle, P., Kondo, T., Le Cam, Y., Leufkens, H., Lim, R., Longson, C., Lumpkin, M., Maraganore, J., O'Rourke, B., Oye, K., Pezalla, E., Pignatti, F., Raine, J., Rasi, G., Salmonson, T., Samaha, D., Schneeweiss, S., Siviero, P., Skinner, M., Teagarden, J., Tominaga, T., Trusheim, M., Tunis, S., Unger, T., Vamvakas, S. and Hirsch, G. (2015), From adaptive licensing to adaptive pathways: Delivering a flexible life-span approach to bring new drugs to patients. Clin. Pharmacol. Ther., 97: 234-246.

4. Apple Sues Former High-Level Employee for Trade Secret Use, Disclosure, Nat’l. L. Rev. (Mar. 24, 2021), https://www.natlawreview.com/article/apple-sues-former-high-level-employee-trade-secret-use-disclosure.

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