Friday, August 03, 2007

Stupid Federal Appeals Court...

It's been months, months, since I last blogged, which is really a shame because there are so many interesting things I could have blogged about. Supreme Court rulings, 2008 Presidential Primary shenanigans, new web projects, plans to move, looking at new cars, etc, etc. And yet, for whatever reason, I didn't "pick up my pen" and it is my loss.

But today I read something that really makes my blood boil, so I'm back at the keyboard ready to take a stand. Feel free to read my primary source first, but if don't have the time, here's the summary. Pharmaceutical companies hold patents on drugs that give them sole authority over who gets to manufacture the drug. As a general rule, they elect to only allow themselves to make the drug, which means they have zero competition and without competition they can set whatever prices they want. Most non U.S. countries combat this by regulating the price of drugs, the result is in the United States drug costs are quite a bit higher than any where else in the world.

So, the District of Columbia, in their own effort to combat what they see as excessive prices, adopted a city ordinance that allows for a civil suit if the cost of a patented drug is 30% higher than in Canada, Germany, Australia or the United Kingdom. On appeal to the Federal Circuit Court of Appeals--my least favorite court for a number of reasons I've previously blogged about--deemed this to be in violation of the patent laws and an illegal usurpation of federal power.

I say fooey to that. But D.C. Council member David A. Catania has a more nuanced responce.
It implies that patents would ban any legislation that affects the ability of patent holders to charge whatever they please, which is absurd. The Supreme Court has already upheld legislation that mandates price discounts to participate in Medicaid formularies. And no one has argued that states cannot enforce antitrust and other rules that limit monopoly prices of drugs indirectly -- although the full logical thrust of the opinion would do just that.
I tend to agree. Patents only authorize the patent holder to control manufacture and use, it does not convey absolute pricing control, although absent regulation it is the natural result of a patent. But if this court ruling is correct, it means that if I obtain a patent on gun, which a state later decides to ban, or at least regulate, for safety reasons, the state would be in violation of the Patent Act and unable to do so. Essentially, anything patented is beyond state regulation! (The Congress, I presume, can still regulate under the ruling since they have the authority to trump the Patent Act.)

As is well documented, on the topic of patent law interpretation (as opposed to patent application) the Federal Circuit has a very poor record. If the Supreme Court accepts cert, and I pray they do, you can bet the farm they will overturn as they have nearly everytime the Federal Circuit has claimed its specialized area of law trumps all others.

When will Congress realize that giving an appeals court exclusive jurisdiction over a single area of law while denying them any jurisdiction over other areas ensures that the exclusive area will become paramount in all matters? Laws must be balanced with consideration to the competing interests and a specialized court like the Fed Circuit is tantamount to pressing down on one side of the scales.