Have you ever wondered why virtually no breakthrough drugs are invented in garages, as various Internet and software companies have done?
Maybe it's because the science of modern medicine is so complex that it requires a nano-molecular-bio-chemical laboratory to invent, say, a purple pill.
But there's a darker reason why new medicines aren't being developed in your neighbor's garage: It's simply too hard to enforce patents.
If your neighbor had invented Nexium, he'd need an army of lawyers to protect his patent — because it would come under attack the minute he filed it.
Today's patent protection process is fundamentally broken. And its weaknesses are being exploited by copycat artists looking to make a quick buck off someone else's hard work. Congress is hoping to fix the problem, but it will get a lot of resistance.
When even the big pharmaceutical companies are losing ground in court, the little guy doesn't stand much of a chance.
It's a shame. Inventors of drugs are responsible for literally thousands of life-saving treatments. Yet every time they invent a cure, they're forced to play Russian roulette in the courtroom defending their patents from constant lawsuits filed by generic companies.
Much of this problem stems from an area of patent law known as "inequitable conduct," which is grounds for invalidating a patent.
Here's how it works:
Let's say you invent a green pill that cures hangovers. So you immediately file a patent to protect it. When filing that patent, you must disclose a wide range of information to government authorities, including how the drug was invented, lab results about its effects, and profiles of similar drugs already on the market. Your application is reviewed, accepted, and you are issued a patent giving you exclusive rights to sell the green pill for 17 years.
But what if you stole part of your invention from someone else's existing patent but didn't mention it in your application? In that case, your green-pill patent could be challenged — even after it had been issued — on the grounds of "inequitable conduct."
If a court found that you deliberately withheld required information from your patent application in order to deceive regulators, your patent could be ruled unenforceable by a judge. In legal speak, you'd have been found guilty of "inequitable conduct."
Or at least, that's how the inequitable conduct rule is supposed to work.
In reality, this process is often abused — and has become backdoor for undermining even the most legitimate inventions.
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