Why does the patent system affect the pharmaceutical industry differently?
Pharmaceutical patents work because they function like property, in the sense that they have clear boundaries. It’s much easier to spot the patents and stay clear of them. In the pharmaceutical industry, either I stay outside of your property rights or I talk to you and I negotiate permission to use your patent. We’ve heard stories about semiconductor inventions covered by hundreds of patents and Internet-related products that are covered by thousands of patents. If it costs $20,000 to get an opinion about whether or not you’re infringing on a patent, then multiply that by the costs of clearing the rights for so many patents. It then doesn’t make business sense to do that examination. In business methods and software method patents, the language is more difficult to evaluate and more difficult to understand whether you’re inside or outside of the property rights. In your study, you weigh data from 1984 through 1999. How has the landscape changed since then? Software patents, in particu
