Tahir Amin: Co-Founder & CEO of I-MAK
In today’s episode, Matt Prewitt engages in a thought-provoking dialogue with Tahir Amin, the Co-Founder and CEO of the Initiative for Medicines, Access, and Knowledge (I-MAK). Together, they delve into the history of the patent and trademark systems – flaws and all, especially within the pharmaceutical realm. Tahir, drawing from his experience as a former intellectual property lawyer turned reform advocate, sheds light on how these systems have been manipulated by large corporations to prolong monopolies rather than foster invention. He proposes substantial reforms to address these systemic issues, advocating for a fundamental restructuring of the patent system. This insightful conversation highlights the complexities and challenges within the patent system and the quest for a more just and equitable approach to intellectual property.
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Transcript
Hello, and welcome to Radical Exchanges. In today's episode, Matt Pruitt is joined by Tahir Amin, cofounder of the Initiative for Medicines, Access, and Knowledge, or IMAAC, to discuss critical issues with the patent and trademark systems. Having started his career as an intellectual property lawyer in the private sector before shifting his focus to reform these systems and make them more equitable, Tahir brings a deeply considered insider's perspective to the ways that patents and trademarks have been systematically exploited to effectively extend the monopolies of large corporations, specifically in the pharmaceutical industry. After jumping off with an overview of the patent and trademark system, Tahir describes the methods that pharmaceutical companies have used to degrade the system from its original intentions of incentivizing innovation and progress. They then explore his proposals for a radical rethinking of the patent system rather than just tinkering around the edges. It's an engaging conversation about the future of IP that we hope you will enjoy. And here is Matt Pruitt and Tahira Meet.
Tahira, great to see you. Thanks for thanks for joining today. And if you could, tell people who don't know your work a little bit about yourself and about, iMac, that would be great.
Yeah, Matt. Thanks for having me, and, it's a pleasure to see you again. So the initiative for medicines access to knowledge, IMAAC, as as the acronym goes, is an organization that works at the intersection of the area of intellectual property law and, medicines. So, basically, how does the intellectual property system impact the ability for folk to be able to access their medicines in an affordable manner, but also how the intellectual property system incentivizes and drives what kind of medicines we get and, what's invested in. So we really look at the whole we call it the medicine system from sort of r and d right through to supply and access. And, our goal is to build a more just and equitable medicine system and and really trying to reform aspects where the intellectual property system, we believe, particularly patents, that's where our focus really is, how it impacts, the ability to get the get people the medicines they need at a at a price that is affordable because, patents, as Will Shaw in this discussion, give so much power in many different ways and, allows certain individuals or a few individuals to dictate what the market looks like and who who gets who gets ability to access them.
What, what led you to this work? How did you start thinking about, about patents and, and medicine?
Well, I I I I come and I jokingly say this. I come from the dark side, which was I was actually an intellectual property lawyer in my early career. I, worked in the commercial side of it. That's where I qualified, and that's, where I practiced in for a good ten years. And so, I focused on what I would call a lot of the soft areas of intellectual property, which is mostly copyright, trademarks, designs. I did do some pattern work. And, and then, basically, that really taught me how the whole system works. And as I learned to understand it more and more, I also saw what I call the what I what I now understand the practices that lawyers and corporations use or even individuals to basically, extract more from the system as it is for their own benefit, for their own profitability, motivations. And, then also just even being active for big corporations and and steamrolling smaller organizations or smaller individual traders and basically because we didn't have a legal case, but we had the deep pockets to do so. And and so it was all that that really made me sort of reconsider. And I think it was at a time when the World Trade Organization had just been born, 1995,
'96. Okay.
And some of you may remember sort of battle of Seattle and all that stuff. And I was still very much sort of to use it for a British phrase, ideas and all those. I didn't really have a human rights lens or a social justice lens. I was very much corporate. And, from from my side as a practicing attorney, I thought this is great. You know, we get this kind of more harmonized international intellectual property system. Many countries in global south didn't didn't want this, and we can get into that maybe later in the discussion. But I started to learn more about it, and I thought, this is interesting. And, and it was at that point then as I started to learn more about the, what I call the the flaws of the system, that I I started to question why I wanted to do this work and whether I could even from a kind of professional conduct point of view. Because that is when we were basically, trying to, sort of railroad people into cons sort of agreements, which we really had no right to, you know, cease and desist letters where you send a letter to prevent someone from doing something when you really had no legal basis, but you had the the power and the clout. So the combination of both. And then also just shaping the laws to how you want them to. You know, you're day in, day out, you're pestering the patent officers, the trademark officers, whatever, with with your kind of arguments, and you are shaping the law. You know? People always think law gets written, put on the book, and that's it. It's all done and done. No. The law really gets written on a daily basis, how you actually participate in it. Yeah. I think that public is left completely out of it, despite the idea that it's a democratic system.
So let's kinda well, maybe we can sort of start at the beginning. Like, what, what what what are patents, and what are they what are they for?
So patents really are for for for people who invent things as have a useful application. You can manufacture them. And, it's not it's the patents are for ideas as often is commonly understood, but they're they're for actually genuine inventions, things that can actually be manufactured at scale. So they have some industrial application. And so it's it's really rewarding the the, inventiveness of something. So it's actually something that has to be by by the pillars of the the standards that are used to grant a patent or the the what we call the patentability test is it has to be something that's novel that hasn't been published before. Now there are different rules in different countries as to what deem is deemed to be a publication, but just for general purposes, something that has to be published. And then it has to be something that is non obvious, or in Europe, we call it has to have an inventive step, something that takes it beyond what was already known that wasn't obvious to somebody skilled in that field. And, you know, there are terms such as a person's person's skilled in or ordinary skilled in the art. These are very technical terms, but really what it means is somebody who works in that field and practice it. Now it could be a team of people working in that field. It could be an individual. I think one thing that patent law mythically still tries to represent is that, you know, there's this kind of this individual in a white coat kind of sitting under a microscope kind of spending hours. No. There's teams of people, and there's there's there's it's very diff and there's also there's also there's, there's there's technology that is actually screening things. So, actually, somebody's not actually doing anything. They're just sitting back waiting for the the, the software to spit out some results, but we don't talk about that. You know? And then we're getting into realms of AI, but that's a whole different discussion. And then you've got this thing in The US. It's called utility or industrial application, which really, actually, I think doesn't really function in its as a standard because, it basically, many patents are granted, which don't even show you any utility in when you file them. There's no you're still in the early research phase. You don't know what the utility is, but it's a standard that doesn't get applied. And then there's a there is a fourth one, which I should have put before the the utility one is actually you have to oh, it's one of the social contracts of the patent system is you you have to show that you're actually engrasped the invention, actually really fully describe it in a written form, and you actually exemplify what it is that you're claiming. So at the end of the patent document, which is so you have two parts really in the description, which explains what the invention is and what the field where the field was before you stepped in and how you've evolved it, and then basically the claims, which is really the meets and bounds of what your protection is. And, so the written description is a big part of the social contract because the whole one of the main things of the patent system was that by publishing these inventions, people would then practice them once they expire. And so it's a way of diffusing information. But that's also a problematic thing because people often don't describe them. They obfuscate and don't fully describe them, but the courts and the patent officers are not fully equipped to understand all that.
Well, I mean, the way that I understand the sort of history of the, you know, I I'm I'm actually you maybe you can educate me a little bit because I'm for many Americans, I think that be you know, the beginning of patent history starts with, you know, the, the constitution. You know, the there's a a clause in the constitution that says, you know, for the I'm gonna botch it, but, you know, for the advancement of the useful arts or something like that. Right? The government can secure monopolies. Yeah. And, is that is is there a history that goes back before that? Were there other, sort of, patent? Like, like, do you know where the like, where did where does this idea come from, basically, that the government needs to, secure monopolies on inventions in order to sort of advance the arts or or or technology? Like, I'm I'm just curious about where that, does that have some sort of historical origin that sheds light on on on where we how we got here?
Yeah. That's a great question. I mean, there there are various accounts of this, and I think from my and I will probably say limited because there's probably far better historians of all this that have written out the written stuff on there out there. I believe I think I think it was around in Venice was probably the first sort of origins of the patent system in early days. I think there were things called letter patents where I think monarchs would give these rights to certain individuals, usually people who were favored. And I think that became the sort of beginnings of a sort of system. And I I really think it took hold more and more with some of the philosophers like, you know, John Locke is probably cited as one of the, you know, his his his his reasoning on natural law and property. You know, second tracy of government is in every IP textbook, it pops up, and it becomes the basis of the justification for property and intellectual property. I mean, I'm not gonna go into it too deep here, but, one of the things I I'm fascinating about a lot of the standard intellectual property text, even from academics who you know, there's people who've written books like justifying intellectual property, who I think is Robert Merges. Mhmm. There's a whole chapter on, John Locke and the theory of Locke and property. Yeah. And what's what's dramatically missing from this narrative is, you know, John Locke, actually, you know, he's a he was a he was a member of the British government in some ways and advising. You know? He was a known colonialist. Right. Both are taking property and, of other people, and he justified it in other ways. And so when you look at what's in the actual article one section eight, clause eight of the US constitution, it's interesting that the word discovery is in there, which is very much relevant to how people were taking property or land of indigenous people. Right. And it's and it's part of the it's part of the language of the patent law today that, you know, if you invent or discover, that's yours. And I think that is a huge gap in the discussion around intellectual property. It's almost like this is a natural law. I don't think it is. It was an actual law to take, you know, take somebody's land from someone.
Well, there's this I mean, there's this interesting I I you know, we can we don't need to get caught up. I'm diverging up in a different direction. You know, I I'm also interested in I mean, I you know, I I don't I you you you're gonna have to pull me out of it a little bit because I I think that there's a there there is kind of some there there is an interesting connection between Locke's way of thinking about about property and and intellectual property. And so, I mean, like, the way that I understand Locke's kind of innovation is that it's not exactly I mean, it may you know, I'm I'm just I'm just gonna, walk into the, into the, meat grinder here and get and get all this wrong and and upset people who who, you know, studied this stuff in-depth. But, like, it's not, I mean, what I think is interesting about Locke is it's not he's not exactly saying that you get that you, that property rights arise from discovery. You know, he he has this idea of, like, mixing labor. It's this sort of you know? So, yeah, so Locke's basic concept is that, like, is that, you know, how how does the original right to, to a parcel of land arise? Right? So it's like, you know, we know okay. Like, if you if you buy land, then you own it because you bought it, you know, or if you inherited it, then it's because you inherited you inherited it. If you have property in something that you, you know, built, then you have property in it because you because you built it. But there's this kind of puzzle with, like, land that is just that is, like, claimed or seized or something. Right? Because those kinds of things, you'd you know, you didn't make it, and you didn't receive it from someone who who, you know, had a who had a preexisting just claim to it. Right? So so his idea is this it's he has this idea of, like, mixing your labor. So in other words, someone who mixes their labor with the land by farming it or whatever, they a property right arises, in what you mixed your labor with. And that's you know, to there might be a prehistory of that too. But to me, that feels like something kind of new with lock because it's like it's it's this idea that, it's this sort of wedge into the system that enables you to start claiming that you start claiming property rights in things that things that you didn't completely make and things that don't have a, chain of title proceeding your your claim. Right?
I think that's right. Yeah. I know that, and you're right to point that out regarding the mixing of your own labor into the whatever is already there. And I think in some ways, that gets to the broader conversation, which I'm sure we'll touch on is this idea of investment. Right. But, but I do I mean, I I guess one of what I was trying to say with the whole log thing is I I just wish there would be more sort of, transparent discussion about the origins of that rather than just talking about the, you know, here it is, and this is this is how it works. There's there's a lot more behind that.
Right. Well, I mean, this is why this is why I think there is some an in a really interesting parallel between between lock and intellectual property because, you know, patents so okay. We understand the distinction between, ideas and inventions. Right? Patent supply to inventions, not ideas. Nonetheless, let's be honest, they kind of look like ideas. Right? They they they they sort of look like, you know, sort of patterns that we discover in terms of how we can, you know, put put one device together with another device and make a third device. Yeah. And, the and and so all these kinds of patterns, they they they don't they don't really come from nowhere. Right? They were they were already they were already out there. And so there's this sort of puzzle about why, you know, the either the first person who does it, the first person who builds something, or the first person who thinks of a certain way of putting things together should have a legally protected property interest, in that thing. Right? Yeah. And, it seems to me that the justification has has always depended on what you were just alluding to, which is which is investment. You know, investment of time or investment of money or investment of some kinds of resources in the in sort of, you know, coaxing out the invention from whatever for coaxing out something new from what was already there.
Yeah.
And, I mean, maybe you can just I'm I'm I guess I'm just curious to to, steel man it a little bit. Like, you know, what what what what what is the argument for, you know, what what's the what what's the what's the argument for giving some kind of a legal monopoly to people who, to, you know, people or corporations or groups of people who who come up with a with a new invention?
Well, I I think when we look at it in terms of at least what's written in the constitution, let's just start from that premise. It's it's to incentivize. It's to get people to do creative piece of work. I mean, you know, in the in the constitution at least, copyright is obviously mentioned, you know, writings and what have you. And then inventions or discoveries are the other one, which is patents. Interestingly, trademarks and designs are not in the constitution, but get wrapped up into the bigger intellectual property discourse. But, but I think I think, ultimately, it's about creating the incentive to to invent, to to progress, progress the arts, science. It's all about progress. Right? Is the idea is is that you get rewarded with this monopoly that basically is time bound. But then once that time runs out, whatever that time is I mean, but at the currently, we're at twenty years from the date of five. It used to be fourteen years. And then, basically, that's it. Goes into the public domain. Everyone can practice it. Everyone's better off. You've got your you've got your fair share of reward for your labor, for your mixing of, you know, to use the log thing. And, and and here's your reward for it, and and the the world's better off, and there's some public utility usefulness that comes out of it. Hopefully, it gets commercialized. Sometimes people don't commercialize these things. They just sit on them. Not every patent actually has has seen itself develop into something useful in in the actual market. People just sit on them. People use I mean, today, people use it for many different things to extract licenses, you know, for the term patent trolls. They don't actually produce anything. They just send letters and say, right. You're infringing my patents. So they're accumulating patents just to kind of get rent. That's more modern day version. Back, I guess, in the older days, it was really people maybe had the patent, but they just didn't have the investment to kind of develop it. So they're gonna nope. Because it's probably cheaper to get paid. And that's one of the arguments of the modern patent system. System. If you think about it, The US or the argument is that The US, it ushered in a modern patent system because they tried to democratize invention. So they made it easier for people to come out and and actually apply for a patent, whereas maybe in some of the old versions of the patent system, the letters patent were monarchs were giving it to certain favorable people that they wanted to give these rights to, and and it wasn't really democratic. So that's something that people have made about the patent system. But I feel and, again, may get we may get to this in the discussion. I feel today we're kind of back at a kind of feudal patent system because there's more and more knowledge being accumulated in the hands of a few. You know, we we still hear the odd stories about, you know, the individual inventor. I think that's the kind of story that those who defend the patent system like to tell because it sounds good. But, really, you know, a lot of information is being sort of swallowed up by by a lot few few few fewer fewer sort of entities, and it's kind of become very kind of, sort of feudal in that sense. And I think it's only gonna get worse.
And it strikes me that the, I mean, two two things strike me. One is that, you know, if you look at the protections that patents give to inventors, they they have limits. Right? So what, you know, what one limit is, is is is is is time. You know, there are other limits like you were talking about before, like utility and obviousness and these kinds of things, which maybe we'll talk about. But this idea that that the that the monopoly the government gives you has limits, kind kind of already already admits that there's, like, a possibility of these productions going too far. Right? You know? So it it and it's it's it's obvious in a way. Right? That if if you if a patent lasted for a hundred years, that would be that would be too long. And so it doesn't. It only lasts for twenty years. But the other thing that strikes me is just that that, you know, particularly with respect to time, it's it feels so arbitrary. Right? It's it's kind of it's it's super clear, right, that twenty years is just a round number. It's not like it's not like pegged to any sort of, you know, analysis of, like, you know, the justification for the length of the protection. Right? It's just it's just an amount of of of of time. And I I wonder if you think, you know, like, when when when you think about the problems with patents, do you think that the, like, are are are you do you believe it's a matter of sort of tweaking around the edges of these limits to, to make the patent protection system more reasonable? Or do you think there's some that there is, you know, some kind of more fundamental rethink, that that is required?
It's a great question, and it's something that, actually, I'm I'm about to embark on a residency next month where I'm gonna spend time thinking about. Is it a reform, or is it more reemerging or, rethinking, as you say? And I think, the way I look at it after spending twenty years of my life really being embedded in this work, the more I think about it, the more I think I think it needs a rethink. I think perhaps, you know, the the idea of the patent system sounded wonderful, you know, back in, you know, the eighteen hundreds and what have you, early seventeen hundred late seventeen hundreds. And I think maybe but today, the business practices, the way it works, I think it's it's it's completely different today. And, and I think, really, it's serving to just be it's like saying, like, well, we we don't wanna think of another system. We need to keep the engine of the economy moving and what have you and investment flowing. And I think, really, what the past system has become is about investment. It's about giving somebody who's putting in some investment. And no one's denying that people invest in trying to bring products to market which are useful and what have you. But there is I think the idea that it's all inventive is I mean, we have the buzzword now innovation, which I think is a hugely problematic term because I think you know, I was actually interestingly looking at the, the Google engram. And if you look at the terms invention and innovation back in the late eighteen hundreds, for anybody who's not familiar with engram, it kinda tracks how words are used or from various sort of things that Google has recorded, and it basically shows the word invention has gone down, whereas the word invent innovation has taken a surge up. But what's interesting, they connect around 1976. Okay. And the the language of innovation just skyrockets, but the language of invention drops. Now I have a theory about that. I think, actually, that's neoliberal policies that drove that, about basically keeping the market growing, keeping the economy growing. I think a lot of obsolescence. How do you keep the same product and life cycles of the same product? You know, an obsolescence is a term I think that's existed since thirties. You know? The the motor industry, we're the pioneers of obsolescence. And so, basically, I think that's crept into all different services. You know? We see that with our iPhones, our technology, and the pharmaceutical industry is very much adopted that kind of principle. And I think that for me is actually you know, when I think of innovation, I think that's saying you've taken something that already existed in that the knowledge, the in the invention past part of it, and you've applied it. Right. Anything. And I think that has muddied the whole system so much that I don't think it is a patent system anymore. You know? And and I I know you probably heard me at the convening recently that we were at. I always love to quote a UK judge who I think is very well sort of regarded in the IP space, and, he was a pro he was a pro patent person. But I like to take his thinking a little bit further than he did. He he wrote a seminal piece of what's invention got to do with it. He said, a lot of things are obvious, you know, by that standard, like, what you get a patent for. He said, why the patent system exists is because we need to incentivize the investment.
Right. Yeah. And so the idea is that innovation the term innovation is a little bit of a sleight of hand that is, you know Exactly. I've disguising the fact that that what we used to call invention isn't really what's going on most of the time now. Exactly. I mean, you you look at the history. I mean, I've I've I'm it's something I'm writing about in my book
is, you know, you look at the language and just even taking the engram, and, obviously, that's just a very surface sort of example. But even, like, terms like incremental innovation starts to appear around the nineties and maybe a little bit late. Right. And the pharmaceutical industry rolls that out every time. You know, they're the they will use the the innovation word every time anybody attacks the patent system. You're gonna kill innovation. You know? Well, you know, the patent system wasn't really about innovation per se. But Right. The language has changed as well over the years.
Right. It's it's like it's also you could also think of that as a shift between sort of discrete jumps to just sort of a continuous process.
A continuous process, a continual life cycle of basically profiteering of rent seeking or whatever it is. Right. And I think that's why I think I fall on the side of we need to rethink. Gotcha. I and, again, I'm I'm not I'm not I'm not concluding that rethink. But I well, concluding that's my thought, but that's what I feel. Because when I look at the language and how the systems are working, you know, it's like basically to the point of obviousness. I mean, a lot of this knowledge already exists. Right. Sure. It's not exact science to reapply to a different drug or a different compound or have you. You know, you're gonna get slightly different results. But, you know, we have in patent law an obvious to try test. It's what courts are supposed to apply to say, well, was it obvious to try that? Well, most things are obvious to try. Right.
So can you can you explain a little bit about how may maybe you can explain a little bit about that standard and give examples of or your example or two about, you know, like, how it doesn't really get applied?
Right. Yeah. I mean, for example, we have, like, in in science and, again, it's gonna be a little technical, so I'll try and pull it out of weeds a little bit. For example, let's say you have your you have a small molecule compound, organic chemistry. You got the compound structure. You know what it is. You know it has some certain properties. And then what you do is what companies do, pharmaceutical companies do, is they'll screen that compound because some of the some of the, properties may you know, you if you wanna produce it into a drug, they may be less stable in a certain form. So all small compounds, they have many different forms. You know? They're called crystal forms. So, basically, what you do is you screen them in different ways to see what is the best what has the best pharmacope properties so that when you wanna make a drug, it's stable. It's it does not gonna kind of, lose its kind the active ingredient, potency. Now these kinds of techniques, these are these these high through screening inputs. So you have these machines or these these softwares that basically just screen everything. It requires an individual, you know, to read the the readouts and the, you know, the X-ray sort of, readouts, what have you. And to call that an invention, that's just inherent already in the original compound. Right. But The United States' course, at least, have never held anything like that obvious when it's litigated.
And why is that? Because, you know, from from I think from an outside point of view, you'd you'd think, you know, you you you it like, I think if you just sort of read, read the black letter law about about patents, it seems like, you know, it seems like this problem is addressed. You know, there there's this standard called obviousness. And if if an invention is obvious, then you can't patent it. So but then why why doesn't that happen? So I could say that invention's obvious and and then the patent's invalid.
So to be fair, what scientists will send experts when they testify in these kinds of cases, and I have a a a great scientist who works with me on my team. You know, one of the arguments that gets made and this has been made throughout is, like, they're unpredictable. You don't know what is gonna gonna happen, so that's why they're considered nonobvious. But the thing is that what we talked about, it's an obvious step to take. Right. You're gonna screen for it. So it becomes nonobvious because you can't predict it, but you took the step because you know it's there. So you're just waiting for the results. So that's, I think, is where it gets, why the course allow it. Now, of course, the people who are testifying and the people who are the experts, they're all paid for by the corporations. And so they want they set the standard. Right. You know, it's that it's that bread and butter. They're getting paid a thousand dollars a day to be a test an expert. Then, of course, they're gonna say it's unpredictable.
Right. I mean I mean, I'm pushing the boundaries a little bit by saying that, but it's it's the way it works. You know? There aren't any independent experts in these cases. Yeah. I mean, the other thing that maybe you you can, you know, shed a little bit of of light on is, like, the there's a major difference that, you know, people who don't think about this all the time might not be holding in mind, which is the difference between getting something patented, getting a patent issued by the, USPTO, and that patent being held valid in court. Right? Very different. So, and, you know, my my impression is that the USPTO routinely issues patents to things that wouldn't hold up in a court if if if they were challenged. And that's and that's even this is even before we get into the kinds of questions that you're talking about about whether pat whether courts are upholding patents that they shouldn't be upholding. Right? Even, you know, e even short of that, there are patents that courts wouldn't uphold that are getting issued all the time. Right? I mean, so that's my impression. Tell me if that's right or wrong in in your view. And and if it's and if so, why is that why is that? How did that why does that happen? I think that's the right impression. I think, for example, there's a statistic out there as a colleague of mine,
Barb and Samper, who wrote a piece in science, him and Scott Hempel. They were looking at the generic, how when generics challenge pharmaceutical patents in the small molecule space, the the not the primary patents, say, the main compound, but the subsequent ones, you know, the formulations, the the the other the the things that extend the patent protection. Two thirds of those get invalidated when the companies don't settle. That in itself is a big pretty stark statistic. And I think when you look across all the other technologies or technology areas, types of patents you see The thing is is to your point is is that the the patent office the incentives of the patent office are to grant. That's how it makes a lot of its revenue. It's a revenue user fee system. Examine is a is a whole host of literature written out there. I think there's some great work by, Melissa Wasserman and, I think, it's David Frakes who talk about the amount of time examiners have to examine a patent. I mean, anybody who's not read a patent, they can range from anything like 10 pages to 800 pages. And in particular in the pharmaceutical space, you're looking at thousands of thousands of compounds or molecular structures, gene sequences or sort of, protein sequences. And to examine that in nineteen hours, that's barely two working days. Yeah. And we're handing that power to the pharmaceutical company by granting a patent, a right. And then and I think this is where another significant rethink is needed. What we have is a system whereby basically, oh, well, we'll let the the market fix it by the courts. So we have these commercial actors who will then basically decide how they want to navigate when a competitor can enter. And that's when you have these settlement agreements because of all these patterns that get stacked up. I mean, Humira, the AbbVie drug, is a great example of this. AbbVie is a is a sort of poster child for filing some more than 300 patent applications on a drug, a rheumatoid arthritis drug, and had several other uses. And, they were able to you know, their main patent was supposed to expire 2016, but they've piled all these other what we call secondary type patents, you know, subsequent different formulations, different methods of using the drug on different indications, all which are considered, patent worthy, in the current standards. And they were able to extract that protection out. The patent protection ran until about 02/3234, if I remember. But because the companies couldn't litigate through all these, there was you know, they were thrown these patents were thrown at them. The biosimilar companies said, well, screw this. We'll just settle. And they ended up coming into the market seven years later than the main pan. So that's 2000 being in 2023. And in that seven year period, AbbVie earned to the tune of a $114,000,000,000. And who's paying for that? We are. Right. And what's even worse is, and which people don't talk about is, those all those extra patents that they've filed, as part of the settlement, the companies that entered are now giving royalties on those patents. Because when you're trying to work around them, you can't. So you say, well, I'm just gonna pay rent to you. So not only are they extracting rent from the companies for that, they're also extracting seven years of extra rent from us as payers.
And how how big of a, I guess there's I guess there's two questions which kind of I feel like somehow need to be answered at the same time for for an observer of this situation to kind of make up their mind about about what's going on and what should happen. And the I mean, those those two questions are, first of all, like, how big of a problem is this? You know? Like, how how much of the, you know, issue of high pharmaceutical prices and high health care costs is caused by this? I mean, maybe if you you can give, like, some some sense of that. And and then the other and then the other question which, you know, I think just sort of needs to follow right behind it is, is, you know, if we didn't have these massive protections that we give to pharmaceutical companies, how how can we be sure? How can we be confident? Or how confident can we be that, that we will still get, progress? That we'll, you know, that we'll still get people investing in and working on and developing new, solutions to health problems?
Really, really, you know, pertinent questions. I think, on the first one, I think I think where we see these extra protections and these lengthened these protections that get lengthened out. I mean, the AbbVie case that I'm just talking about, when the main patent should have expired in 2016, they increased their price almost twofold in that seven year extra percentage period. We've done some studies. There's a report that we did call the burden of patent tickets where often it's in that extended period that they make most of their money.
And the reason that's interesting, I think, is because you can sort of, you know, like, if you it basically, the invention had already been made at that point. Right? So so there's kind of a, you know, or what you know, whatever significant progress in the in the medical sciences we're all benefiting from. By that point, it had already been made. So there's kind of a clear argument for that extended period that, whatever reward is going to the pharmaceutical company is not causing, additional sort
of medical progress to get made. Right. Which is so that's that's the great that's a great point. So the argument that they would make or the industry likes to make is, well, we are hindering medical progress. We don't give those extended patents. Because what they're saying is we're developing the existing invention. We're doing trials to bring, like, testing for other indications, or we know we're trying to improve the product. You know? And this is the innovation part. Yeah. Because, you know, we've we've got a we've got a we've got a cash cow. We wanna keep it. We wanna get the life cycle. We wanna extract every ounce out of it, which is the modern business model. You know, I'm not gonna go back to the drawing board and really reinvest top dollar to kind of come to something new. I'm gonna basically keep the gravy train going for as long as I can because my shareholders are on my back, my CEO, and the deliverables are on on the table. There's all the the sort of financialized aspect of what the pharmaceutical industry has become. That's a that's another discussion, but that's they're the those are the motivations now. It's not about let me bring out a better product or let me go on. I'm gonna just keep improving the same product. You know? It's the it's the iPhone 15 or whatever the number we're on. It's the same model. And, basically and I I'm I don't believe those are inventions. And by the you know, if we can apply the strict wording invention because doing clinical trials on a drug that you already know the mechanism of action to your point that, you know, the the the the progress has already been made by once you found the clinical trials for me is at least the last I understood it. You're just following protocol to see how it works in patients. You're not inventing anything at that point. You were investing dollars. Don't get me wrong. Clinical trials cost a lot of money. No one knows the exact figure. They cost a lot of money. But that's a different thing. That's not an invention.
Right. So is there is there some kind of, is there some kind of, like, like, weaker or more precise or more modulated form of protection that, that that the that the government needs to think about providing to incentivize that kind of of investment?
Well, for that kind of investment, I think the market has to just do its job. You get your your first mover advantage. You come up with a different indication. That's it. You know? By the time someone's run those equivalent trials or whatever it is, you know, even if they're abbreviated trials because generics and bisoners don't have to do exactly the same trials. You've still got two, three years of of advancing. And then, you know, the interesting thing is more molecule spaces when you do these, like, new indications or what have you. You're getting an FDA exclusivity already. Right. You get three years. I mean, the thing is, though, the whole goal of the patent system now is how can I lengthen my protection? It's not about necessarily, you know, for the the way the kind of social contract works. I think it's become a business tool. Yeah. So to your to your point of are we gonna harm progress and think well, there's another part of that. A lot of the basic science, the the what they call the basic science, you know, the upstream science is often done in public funding and Right. In the So there's that aspect of it. I mean, I don't wanna overstate it, but I also wanna make sure it's noted. And so, basically, even even if you look at the COVID vaccines, a lot of the work was done at, I think, it was University of Penn by academics. And then Moderna gets a lot of funding from BARDA and operation more speed. So, you know, there's a lot in the mix that benefits And
and I think just another observe another interesting observation is that, you know, suppose you do very basic research that, you know, unlocks the possibility for lots of of medical progress or or or whatever. That race that basic research is not patentable. Right? That's just research.
Well, reese basic research is no, but there's a lot of basic patents that, you know, the upstream pants that become like maybe, you know, it's the first kind of, you you identify the first sort of beginnings of that biologic drug or whatever you, and that's where everything develops from. Right. That's patented, but it's hold by somebody else. And then the companies come in, they either acquire it, get a license, and then they basically commercialize it. Now I'm not saying that commercializing it is is some kind of easy thing and, you know, it takes effort and time,
but not to the tune of what we're giving in terms of rewards. But, I mean, I think what I'm getting at though is that, like, you know, scientific discoveries, right, are not patentable. Okay. I mean, correct me if is that correct? Signed when you say scientific discovery, in in what sense? Like
like, like an an abstract principle? Yeah. Yeah. So abstract abstract abstract stuff. Yeah. No. That's that's considered non passable subject matter, like a formula or something like that. Yeah. Yeah. Or or if you if you discover a new,
you know, neural pathway or something like that. Right? That's
Well, I mean, according to case law, if it's if it's like, for example, you know, you could something that exists in nature and then you take it out to nature and you add some like, you know, mix your own label with it, then it becomes patterns. So it's like diamond chakraverty kinda set that standard in the early eighties. Like Right. But but it's just and and and, you know, again, maybe I've you know, I'm I'm far from an expert in this, but I'm just kind of reasoning through it. Right? So
it because it seems like a lot of an you know, in in many cases, if you wanna understand the genealogy of a medical breakthrough, right, a lot of the investment might have gone into you know, might have been sort of upstream of the discovery of the of the basic abstract scientific stuff, you know, as opposed to the investment that happened, you know, between the scientific stuff and the
and the and the invention. Right? I I agree with that. I agree with that. And I think where the cost does come in the commercializing all the, you know, the subsequent stages is the clinical trials point. That then that's where I think a lot of the money gets spent Is that the development aspect of it? It's not the the invention aspect of it. It's the development. You know, it's like, that's where you have to root it. And so, you know, that's fair. The clinical trial stuff is expensive, but I think that's where we could think of other models where the government actually funds you know, they do fund some of these trials already. Yeah. Yeah. And many of these, new new sort of uses of an existing drug are often born out of physicians just trying something out off label. And then drug companies pick up on it, and they go, oh, right. We'll try that. And then they get more bounce out of it. So, really, it's not they're not even really doing anything. They're just kinda just tracking what's going on in terms of the use. So one other dimension
of this that I have long been been curious about is is, a lot of people are aware of the huge difference in drug costs in The United States versus the rest of the world. Like, the same drugs are sold much cheaper in the rest of the world often. Does this have anything to do with that, or is that a separate problem?
I think there are other factors. For example, in in Europe, at least, if that's a comparison, you know, it's an obvious comparison because, you know, the industrial, global north, It's a negotiation of prices. There's a lot of government negotiation. I think that's a big factor. Certain, a health agencies, for example, The UK, the agency called NICE, they basically will look at whether an existing drug is actually a new drug is gonna basically offer any more advantage than the existing drug. And and if it doesn't really, then we're not gonna pay that new price for it. So then the this becomes an argument vis a vis patients in The US or an argument the industry likes to make that has, I think, actually crept into society is that, oh, well, you know, if you have governments intervening like that, you're taking away our freedom of choice of the drug that we want. That's why we have, you know, The US is the apart from New Zealand, the only country that has direct consumer advertising of pharmaceutical drugs. Right. Because, you know, you see it and you say, well, you go to your doctor and you say, I want that. And, basically, if if, like, a system like in The UK where they said, well, it's not adding any value, and we're not paying that price for it or whatever because they do subsidize some of it. Then people say, well, that you'll take away my freedom, which I always say, that's kinda weird because if you can't afford it, where's your freedom? Right. Yeah. It's perverse. It's it's kinda weird. So but, yeah, I think negotiation is a big factor, but I do think patents do play a role because many of the drugs I was talking about or we've done in our studies, we found that earlier entry of competition in Europe has more price now. But, yeah, we are still paying max price because of the patents. So so the patent games do extend out. And by no means am I saying solving the patent problem is gonna solve all the drug pricing problem. Right. But it's a big part of it. It's a root of it. Because in a way, all the incentives flow from the patent system is, like, basically, why am I gonna go and really go back to the lab and start developing another groundbreaking drug when I can keep milking the cow that I have that I know is so profitable?
Do you still see, big price differences internationally with, generic drugs?
No. Not so much on the generic side. I mean, I it's not something that I've really studied, but I don't think there's a dramatic difference. I think once things get into the market here, generic form, and you get maybe four or five entrants, I think FDA has done studies which show that prices drop, like, about 90%. So I think this becomes and it becomes very competitive at that point. In in a way, almost too competitive because the opposite problem, the competition problem, you kind of have people leaving the field because it's just not worthwhile for them. So that's the balance you have to get. And so, but, no, I don't think the generics in in the in the in the Europe are probably they're probably roughly the same price. Gotcha. Yeah. Interesting. It's an interesting study point, which I haven't actually seen, but I I think some what I've seen is not that different. Gotcha. Yeah. I think what you might see a difference is biosimilars, because I think biosimilars here operate in a different regulatory environment than in Europe. Because here you have this whole thing where you have to show it's interchangeable, and that's a regulatory requirement, and certain states don't allow that. So, basically, formula is what have you you know, this is why the American health care system or drug pricing system is so convoluted, and you've got so many actors who are just literally skimming off it. Whereas in Europe, you don't have that issue. And so, basically, on the bicentennial side, I think prices drop much more quickly than over here when competition comes in. Gotcha. That might be yeah. That's the difference where it might be.
And so what are the, what are the, you know, handful of reforms that you think could be made either to the patent system, to the, USPTO, or or to, like, legal patent doctrine itself? And what what are the, I know you have a handful of concrete ideas that you think could could mitigate the the issue, and, I'd love to hear love to hear what they're
Yeah. We we can we we put out a blueprint, I think, at the end of last year, where we touch on some of the key areas that we think need to happen. I think one of the basic starting points is and this sounds you know, it doesn't change the the sort of it's not reform in any form, but it's actually allowing yourself to have a more transparent system. I think drug companies, pharmaceutical companies, you know, they have to provide certain patent information for the regulatory purposes. You know, there's the US FDA orange book, and there's the purple book for biologics. And whenever you, you know, you whenever you may get a drug approved, you know, you're the originator company, you get a drug approved, you have to show which patents you will use to defend that that particular product. And the biologics is a bit different, but it's a similar concept. You don't have to list all your patents. You just have to list the ones that you think you're according to what what the statute requires. But the problem with that is is, like, there's a whole whole plethora of other parts that they have. I mean, we do this. We landscape all these. We we look at those never get known. So what we're doing is we're kind of operating policy in the dark. So, basically, a lot of a lot of, policy makers, they don't know what's going on. Because people think, oh, well, just it's just the patents that are litigated that matter. No. You file patents, and I know this from practice, you file the whole array of things to set all these traps so that your competitors have to navigate through them, like the land mines. And, basically, the longer time they spend trying to work around something, the less time they, you know, they're not gonna come to market sooner. Now, of course, there are there are periods of there's a period of time where you can't come to market anyway because the FDA gives a particular market exclusivity that no one else can compete with, and you can't even challenge that. So it's like five years or twelve years of biologics, five years of small molecules. Though that that period is, like, sacrosanct. You can't touch that. But then after that, it's like, basically, you're just trying to get your drug onto log, and then you're gonna get enrolled in litigation. So having stacks of patents helps. Even patents, you're not even gonna litigate helps because what you're doing is you're you're kind of like, if I wanna formulate it a different way and I've already patented all those different rooms, you're kind of like, oh, well, my my my opportunity is shrinking. So that I think, actually, we just have a basic transparency, like, drug companies should actually have to show all the parts they have in their portfolio on a drug. Because what that would show people is how problem how problematic the whole thing is. We've tried to do this with our databases, and we've had pushback because people saying our data's flawed, this and that. And what we find actually is we're not even actually finding all the parts. We're only finding some most you know, quite a comprehensive amount, but not all of them. So I think starting from that point, because then people can see how problematic and how out of hand this whole system has become. It's kind of become unwieldy. That would be basic, you you know, number one. We need to know what we're actually talking about as a policy. I think it also just goes to show it goes against that narrative of what the USPTO does. Oh, the more patents, the more innovation. Not necessarily. I said, I think it's an absurd measurement, and it should be stopped. And then secondly, I think these that follow on paths that come out of the main one, I think a lot of these aren't inventions in the strict term. They're just life cycle management techniques to kind of keep extracting out. I think all those should go. So we wouldn't have a problem like we have with AbbVie. Right? And that's happening in every sector and every every type of company. That would actually at least prevent sort of overpaying for five, six, seven extra years, whatever it is. I think it would also prevent settlements. We'd have different generics and biologics will start operating differently because they don't mind a settlement. You know, they don't be paid 2,000,000,000 to stay off the market or whatever, but they would have to change that strategy. So what you're doing is you're changing the entire environment. Right. I think also in the biologics space, without getting too technical, a lot of companies and it's a similar problem as I was already mentioning. Companies will patent as many different ways of making the biology so that, you know, in the biologics space, because it's much more precise, it takes away any opportunity for someone to work around it. And so what they do is even if they're not using those manufacturing process plans, they still assert them. I think there should be a rule that after your twelve year FDA exclusivity, if you have decided not to use that manufacturing process plan, you lose it. It's subject to cancellation. And I think it's kind of a use it or lose it sort of principle. You've got twelve years to figure out which is your best method of production plan. And if you don't use it, you can't just assert it just to block someone and get a a light a a, you know, sort of a a license rental. I think that's what's holding up a lot of things. And I think it's actually against the print the sort of the the sort of the, essence of the patent system. I think that's anti competitive.
One thing that really strikes me is, you know, if you, there there's an maybe you can say a little bit more about the international dimension of it because it seems to me that one of the challenges in terms of getting these, getting, I don't know, politicians and the public to sort of buy these arguments is that, it's hard to show the counterfactual. Right? It's it's hard to show, for example, that if we didn't have all of this these whole thickets of patent protections that, you know, innovation would be the same or better even. Right? Are there other I mean, maybe you can just say give a little bit of a flavor of the sort of international IP regime and kind of answer the question of, like, are there other jurisdictions out there that have a more reasonable, shorter periods of protection or or something like that that that we can point to and say, like, look. I mean, if we if we change the system in such and such a way, it would be fine because it works there, or is there or or do or do we just black those points of comparison?
We don't. We unfortunately don't have, and that's the that's the hard part, the counterfactual, and even globally because the system has been in many ways harmonized through the World Trade Organization. That was the effort that the pharmaceutical industry as well as the copyright industries led in the late seventies, early eighties. They pushed for this. It was a kind of a and also a lot of neoliberal economists and architects, they felt post decolonization. These countries would start becoming competitors in the market, and they started pushing for a rule of law framing that would make it seem like, you know, this is what's fair, and that's the end of the trading system. So all those places, all those countries where we might have had counterfactuals have slowly started sort of being sucked up into the same system. Now the other thing is is also there's a lot of other moving pieces. For example, people might say, well, India didn't have, for example, patent laws from 1970. It repealed, at least on pharmaceutical products, from 1970 until 2005 once it reconnected with the World Trade Organization. People say, well, there wasn't much, you know, true invention coming out of India. Well, India was still a developing country coming through, and it also doesn't have the NIH spending, you know, you know, the probably the most research money out of any, you know, scientific enterprise. In fact, you know, that's what drives a lot. It's it's an industrial policy as well. So I think it's it's kind of a it's a bit of a chicken and egg in a sense of, I think, you know, pharmaceutical companies keep hold of the power. They keep making all the revenue. They they stay hold upon the investment money, and so therefore, they can keep churning it out. But you're not letting anyone else develop that investment capital. Yeah. And so it's kind of actually I think the economists have got it all wrong in that sense. They say, well, you know, have an IP system. You'll get more technology, and you'll have more innovation quote unquote. Well, no. You need to give them a free space to be able to develop the capital to kind of be competing in the market because the pharmaceutical industry don't want that because that's how they get all their capital to reinvest.
Right.
And that's the absurdity of the system. So you can't we don't have that because they won't let that happen.
Right. Do do you see, do you think that these problems are unique to, pharmaceuticals or especially bad with pharmaceuticals, or do you view these problems as applying to other areas of, you know, technology and industry too? I think it's applicable to a lot of different areas.
I mean, software has its own. So you they they all have their own unique features. I'm not an expert on all of them. I I know people I speak to in the technology sector, the software sector. I mean, it's even more rampant. You know, the industry the pharmaceutical industry, when we have these discussions, they like to say, well, we don't actually have that many when you compare it to, you know, the the £200,000 that the iPhone has or whatever it is. Mhmm. I'm like, that's an absurd argument. That means all those 200,000 are crap as well. What a terrible argument to make. Right. You know, you're just like, basically, well, they're worse than me. It's it's like but, you know, I just wanna deflect it. And that's the argument they make, but the whole plan system is is is is is corroded. It's, we've you know, I hear from software, lawyers who basically say, you know, we're just basically buying these patents just for defensive purposes. We're just trying to gain some ground. You know? It's it's a it's a battle. It's it's this hidden battle that's going on between enterprises. Right. I need I need to have more, you know, sort of armory in my pocket or my in my gun or whatever it is so I can fight these battles so I can get some leverage on what and that's all that it that's what the patent system has become.
But if you I mean, it's you know, I I guess if you frame it that way, like, you know, we're just we're just filing these patents for defense purposes, that almost makes it sound like, you know, oh, it's no big deal. It doesn't have any big consequences. Right? Because it's just, you know, the, I mean, I think that what I sometimes struggle with is is, you know, the the difficulty of drawing a line between the problem that you're describing and the, you know, very real consequences in in in people's lives. You know?
Well, I mean, the consequences I mean, we don't see them, but when you start looking at it, at least in the pharmaceutical space, I mean, if you look at if they acquire all this land, if you wanna call it like land Right. You're basically preventing anybody researching in that area. And then, basically, you're at the whim of that one particular company or a few particular companies who are battling in that space, and nobody else can get in. So, basically, in a way, I think it's very the patent system is, in that sense, anti competitive.
Right. And and, I mean, I guess it's a you know, this is it's this is farther outside your your your bailiwick, but I'm just very curious if, you know, it's something if similar sort of phenomena are happening in, you know, let's say, computer hardware or things like that. Right? I mean, I wonder if, if the I think it's patents around, you know, microprocessors or things like that are are, you know, preventing, you know, progress being made around the margins by upstarts, by by people and organizations that are, you know, outside of the, of the establishment, so to speak.
I don't have direct evidence in terms of, like, you know, let's say the phone industry or whatever. I mean, I know, you know, Samsung and Apple have had a huge battles, you know, fighting these things out. And and and, but I imagine I I'd be surprised if it wasn't preventing other entrants coming in because they're conored off so much, and they they obviously want the more powerful you you become, the it's easier to maintain that power, by by having access to all these kind of instruments that you can keep filing and doing. Certainly, in the pharmaceutical space, I think we're seeing more and more consolidation, and I think we're seeing that in other spaces as well. And I think the patent system adds to that consolidation or that ability to consolidate. And any any even in the biotech industry, small companies that might actually be doing real good upstream research, they get acquired. So there's there's really you know, it's it's, everything's getting sort of sucked into the same space. Mhmm. And and then few few of I mean, people talk about choice and freedom. I think we're having less and less of that because of the way the system's working, because it's it's very hard to compete in that space. I mean, industry likes to say, well, there is competition. The patent system evokes competition. What they're saying is competition, a few few two or three branded companies who can sort of price it at the top. You know, they kinda start with shadow pricing, and they decide what the market looks like. Like. That's not competition in my mind. I mean, if it is to some other people, then, you know, good luck. Right.
Do you want to, shift gears and talk a little bit about, trademark?
Yeah. Sure. I mean, it's a it's a topic that doesn't it's less discussed in these kind of realms.
Yeah. So, you you and I have had some great conversations about trademark, over the past, past couple months. So, you know, for those listening, this is a little bit this is a little bit, you know, us kind of working out working out ideas here. But, but I think that, I think there really is something something interesting here because as you say, there's all kinds of conversation out there. You know, there's sort of there's these three branches of of intellectual property law classically. Right? Copyright, patent, trademark. And, copyright and patent are heavily scrutinized. Right? I mean, there's there's a lot of, I mean, maybe copyright more than patent, which is why your work is so important. But, but it seems like there's very little kind of critical attention on trademark doctrine, which is, first of all, just kind of interesting, right, that, it seems to escape notice in a way. Right? There and, but there actually is something quite quite interesting and worth questioning about whether, our legal protections of trademarks are are accomplishing what we would want them to do.
So what do do you wanna do you wanna say a a few words, or should I do a bit more kind of setting up the the idea here? I mean, I would love to because, actually, I mean, this is, you know, in all in all fairness, this is an idea that you had raised with me because we were talking about pants and someone you kind of, you know, sort of try to apply something similar to trademark trademarks, and and it was fascinating. So, I I mean, this is really it's kind of burst by you in some ways with your thinking, which I think is fascinating because in my prior life as a corporate attorney, I spent a lot of time with trademarks. And so I feel I've I've always had a sort of an interest in the the trademark stuff because it doesn't get the focus that it deserves. And I think the issue you raise is is, you know, critical to to kind of unpack.
Okay. Cool. So, the I I think the best way of, of starting is just by saying that, like, in the same way that we can look at at at patents and say that they have this ostensible public purpose of of incentivizing invention and progress. There's there's this ostensible public purpose to to trademarks as well. Right? Trademarks are, you know, the basic one of the basic ideas of trademark law is that we protect trademarks so that consumers aren't able to get confused. So for example, if I'm selling a product under a certain brand, I have the right to protect that brand against a competing business who who would sell their product under, under the same brand or under a or or under confusingly similar brand. So this is why the you know, this is why we don't have, you know, knock off Coca Colas with, white and red cans that, you know, or that kind of a thing. Right? The, and on the surface, that seems like that that kind of protection you well, so okay. I guess two points. One one is that, you know, the first thing trademark is doing is is trying to make a confusion. The other thing it's doing is protecting just like patent investment in a brand, investment in trademark. Right? And, from a kind of a from a sort of a critical point of view, you might say that's the main thing that trademark law is trying to do. It's trying to protect, you know, the investments that people are making in in in businesses. But if it isn't also doing something for consumers, then there's no reason why the law should be protecting those investments, basically. So it kind of begs the question where we need to we need to ground the justification of trademark in some usefulness for, for consumers if we're going to be able to argue that we should be in protecting these kinds of investments. And I think the the the main thing to notice is just that, if what you know, trademarks are, supposed to reduce confusion for consumers, but they aren't necessarily always doing that. They can be used as a sword as well as a shield. They can be used to confuse consumers. And what one way that they might be used to confuse consumers is, is, for example, by kind of, like, breaking the implicit promise that the that the trademark is making. So, a concrete way that this could work would be that if I buy a you know, if I'm a investor or whatever, I buy a well known brand, and I reduce the quality of the product, while keeping the the price the same. There will be a certain you know? Now after a while, the market will catch up. The market will market will realize that the quality of the product has gone down. So Coca Cola isn't what it used to be, and, the market will move away from the product. But when you have a very, very strong brand, the lag will be longer. The the the sort of time that it will take the market to, to react to a reduction in quality will be longer. So in other words, there's kind of a way in which the value of a brand measures the potential for using that brand to confuse the market. If I've got a if I've got a brand that is so rock solid that people aren't gonna move away from it for years even after I, you know, completely got the underlying product quality. That's a that's a very, very valuable brand. That's a brand that a private equity company would love to buy. Right? Because then they can then they could do precisely that and take products in the in the time it takes the take sorry. Take profits in the time that it takes the market to, to realize that the product quality has changed.
I mean, I think you you in our in our sort of conversations, earlier conversations offline, I I think you said, you know, the mining the brand. Right? Extracting. And, you know, sorry. I didn't mean to interrupt you if you had an question. Please. I I think I you know, it's something that I've thought about in a in not in the way you thought about it because, I you know, when I buy something and it's sort of a particular brand and I look at where it's made, for example, and a lot of those brands, at least a lot of the older ones, are built upon this idea, this prestige of that they're either made in America or they're made in The United Kingdom. Right. And and today, they're made in China or they're made in wherever it might be, Romania or whatever because they want to labor's cheaper. And, also, I think the quality of the cloth is different as well. They they use they're even mixing cloth these. I mean, people might call that innovation. Right. Right. I mean, you know, for example, you know, just an example that you could buy, maybe some some some look at Burberry, for example. It's a British brand, well renowned. They don't make in The UK anymore. Right. Right. They mix their materials. Nothing's a 100% wool anymore.
Yeah. And I think that I mean, this raises really interesting questions. Right? Raises these questions about what are people buying? What do peep what do people think they're buying when they decide to buy something with a particular brand? Right? And, you know, one one and, you know, one argument you could make is that, you know, no. As we as as we just, were saying, you know, you could you can reduce the product quality. Burberry could reduce the quality of the wool and continue to sell it at a at, you know, this the similar price for a long time because it's a very very strong brand. Even if they didn't do that, right, even if they didn't, you know, they could make a product in in a different in a different country so that it wouldn't it's not really like as much of a British product as, as the as it was as it was historically. Now that raises this question of, like, why are people buying it? Are people buying it just because of the sort of material fact of, of, you know, the nature of the of the wool and the and the plaid or whatever? You know? Or are people buying it because they are, you know, buying the idea of of of Britishness or because they wanna support a a British, enterprise or or something like that. So what I mean, the way the way that it seems to me is that behind every brand is is a quite quite complex mixture of sort of representations and promises. And I and, you know, sometimes explicit, sometimes implicit, assertions about about about what this is. And when you own a brand, you basically have, you know, totally free reign to, to change the facts behind the brand, to chain to to, you know, alter the reality behind those implicit promises. And when you do that, you, you know, there's a a very real, very obvious, very simple way in which you are confusing the consumer, which cuts against the basic justification for for trademark. And it it just strikes me that, that, yeah, this is kind of an underexamined way of looking at it, first of all. And second, if we look at it that way, you know, if we conclude that this is a real problem, that, you know, there's, you know, a real sort of confusion going on here. It's it's striking to me how how the magnitude of that because because an enormous part of the economy is building brand equity. Right? And when you and when you when you build brand equity, you are, you're you're building up these kinds of, you know, complexes of promises, which, which are abusable and can be broken. And and and, I I mean, the way that it shakes out to me, basically, is that I think that if companies are kind of holding to those promises behind a brand, there's nothing wrong with it. You know, that it it does deserves protection. Right? But, clearly, that's not always the case. Right? I mean, the world is the world is absolutely littered with, brands that have been have been sold to a private equity company or bought by a new investor group or taken over by new management, which are, which are, you know, profiting off of some kind of historical idea of, of what they were, even though that's really not what they what they are now. And so this is there's just kind of, you know, tons tons and tons of of, money and being made on the basis of of of this kind of confusion. It just seems to me, as a society, why should we, you know, why should our, our governments protect that kind of, of enterprise? Right? Why should they I don't know.
Yeah. I I think I I mean, I I I I think there are a couple of things. I think one, it shows just a bit like the well, a lot like the patent system. It's the trademark system is out of date given the business practices. I think that ultimately is I I think that's relevant to both because the way these these tools are used are very different from what they might have been hundred years ago, fifty years ago, what have you. You know, the world has changed, and it will all it'll keep changing. And, to your point of, you know, private equity firms or big brand house of just accumulating brands and just sucking them up and maybe just extracting whatever they can out of them, but not really maintaining the sort of prestige of what the original feature of the brand was. I think, more and more that is the case with a lot of brand. I mean, I I'm a consumer. You're a consumer. I think I think there's a lot of stuff that is not what it used to be, and I'm old enough to say that. Sadly. You know? And and and and, and I think I think then that becomes it. It becomes a confusion thing. People might argue, well, it's still the goodwill of the company. It's still got the they're still using the the sort of heritage of the company. They still probably try and you know, in their manufacturing or whatever it is, keep to those principles. We don't know that. There we there's no there's no they're not obligated to. They're not obligated. And I think, you know, it raises a question that maybe, you know, if you I don't know if you agree with it. I think does does that mean that we have to build in a sort of an obligation or a transparency system? It's like for consumers, like, you know, branding has to come with all these these kinds of, sort of, well, different kinds of guarantees that, you know, this is what's actually,
you know, what what it means vis a vis the the heritage of the brand, if you wanna call it that. Well, I think it this is where it parallels patent. This is why, you know, it it is kind of an, to me, closely connected to to to your way of thinking about patents because, it seems to me that what we need is just a more sensitive system. So, you know, we we need sort of a a clearer idea of what values or what social goals intellectual property protections are are trying to uphold. And then we need, and one and on the basis of those kinds of clear ideas, we need to have systems that are supple, so that they ensure that they aren't, you know, just basically operating to facilitate, you know, rent rent seeking and and and profiteering when they have exceeded you know, when they are no longer protecting those goals. So, you know, for so for for for, you know, like, the sort of classical the classic, like, libertarian argument for, for trademark is that it reduces consumer search costs. It's easier to find the product that you're looking for, as a result of the fact that trademarks are are protected. And and it's not only it's not just about sort of prestige brands that need to uphold a certain standard. I mean, there's there there are also budget brands and, you know, brands that are are, you know, just targeting targeting a certain niche in the market or, you know, whatever. But, but but increasingly, you know and and so that so that kinda makes sense. Right? That there's there's this kind of there's this whole kind of semiotic world out there that consumers are navigating largely through advertising, by the way. So this whole question about about trademark cut you know, really cuts to the core of, like, the entire advertising industry. But but the, you know, the fact that a product can come out that serves some niche that is different from other kinds of products and they can represent itself through a brand, you know, that representation of it through a brand does help people find that niche product that, you know, that product that is in in some relevant way different from, from from the other products. That reduces confusion. But I think we're just increasingly today in a world in which the confusion often runs the other way. The confusion is like, the confusing question now is, like, should you buy the brand name Dijon mustard or the store brand Dijon mustard, essentially. Right? And, and, you know or or should you buy the should you buy the generic nameless, you know, Amazon thing from a factory in China, or should you buy, the brand name electronics? You know, the, the the the representative content of brands is today confusing us in the direction of supporting the brand as often as it's clarifying the
the offering for the consumer. I I think I think, yeah, I know that's a succinct way of putting it. It's, and it is it is doing that. I think I just think we just don't see enough of it. We hear about it in a maybe specific, exploration. I mean, even in the pharmaceutical industry, there's a different argue a different way of looking at, you know, the generic brands are solid because, you know, they're they're saying it's, oh, it's not the original. Right. It's same active ingredient. And, you know, the industry, pharmaceutical industry has done a remarkable job of basically getting people afraid of generics or cheaper affordable versions. You know? Just imagine even do the exercise yourself. You go to your pharmacy. You see the Walgreens version, and you see the branded version. Psychological thing, these are very different products because the brand has painted this picture. I mean, in some cases, in the pharmaceutical space and, again, I don't wanna overstate something because it might seem a little dramatic, but I suppose to people, you know, you you hear all these, talks about all Indian generic drugs are very bad and what have you. And, of course, there are problems. There are batch problems. There are manufacturing problems. Even some of the bigger pharmaceutical industry have had that issue. So it's always funny how it's always the other generic, country you know, company who's got the problems. But what is interesting, some of the active ingredients, the the kind of raw materials, often come from China or India. The fact that the same branded companies are using the same but we don't know that. They don't tell you that.
Yeah. Yeah. Ex exactly. You know? And it it's the same with all kinds of it's the same with all kinds of, you know, of of products. It's it's true in the in the food industry, in the beverage industry, in the clothing industry. You know? I mean, I I think, you know, we people who know these industries know well that, you know, you you've often got, you know, factories or or, you know, bottling plants and one one somewhere that are that are, you know, doing certain runs of product that are branded for a company. And, and then, you know, the exact same product and selling it under under generic, under generic name somewhere else. Right? So
Yeah. I think I think I mean, I I know transparency never resolves this problem, but I think there needs to be a definitely a more they they have to meet certain standards because I I I think it comes really down to also the way the business will works today. And I think there's this the same with the patent system. You know, those who defend the patent system, it's almost like you can't mess with the golden child.
Right.
It's an older system. And they say anything, you've gotta look at it where it is today and what's happening. And we're still applying the same 200 year old, 300 year old rules to a business practice that has evolved and become so profit oriented, extraction oriented that it will do anything to maintain this this idea, this notion that everything's the same still as it was. And that for me is hugely problematic with these systems.
Yeah. I I, you know, obviously agree. And I think there we're we're in sort of an interesting moment where I think we have, we have an opportunity and, I think, I think kind of an important, an important opportunity to rethink the way that we're doing a lot of these a lot of these things. And, it you know, I also think that as, you know, as we rethink these big social structures like, like intellectual property, It doesn't necessarily have to be about, you know, completely tearing everything up and starting over. I mean, there's there's a smarter way of doing this, I think, which is, which is thinking about the principles. You know, thinking about thinking about the the underlying principles behind these systems that were set up a long time ago. And, you know, sometimes the basic principles need to be questioned too. That's that's that's that's the case. But but a lot of times, the the basic principles are valid. And what we need to do is just understand the difference between the particulars of, you know, how the, how these these institutions and structures and legal roles are being administered today and the and the principles that they're that they're supposed to be protecting. And Yeah.
Yep. Sorry. I didn't mean to interrupt me. Yeah. We we say, you know, at least in the past, say, we say, we have to bring the integrity back to what we do with the principles. And and I think, you know, the the market forces and the the actors, you know, the Wall Streets or whatever, they wanna break all those principles because they're they wanna they wanna get whatever they can out of it. And that's not always beneficial to the public and being rarely beneficial. So, you know, fundamentally agree. Yeah.
Well, this was great. This is, I think, it's a great I suppose.
Thanks so much for the, the conversation, and, more to come. Yeah. I loved it. Thanks a lot. Appreciate it, man. Thank you.
Thanks again to Tahir Amin and Matt Pruitt. The Radical Exchanges podcast is executive produced by Gee, Angela Corpuz, and Matt Pruitt and is co produced and audio engineered by myself, Aaron Benavides. This episode was produced and recorded by Matt Pruitt. If you would like to learn more about Radical Exchange, please follow us on Twitter at rad x change or check out our website, radicalxchange.org. And if you'd like to join in the conversation, we'd love to hear from you. So hop on our Discord where we have channels discussing topics like what you heard today, as well as topics like plural voting, community currencies, soulbound tokens, and more. There will be links for all of these in the description. Have a great day, and stay radical.
