Nothing annoys me more than supposed conservatives in the media advocating for enhanced government intervention. Case in point, Tuesday night the self-proclaimed conservative pundit Larry Kudlow completely swallowed the pro-big-government arguments of Eli Lilly CEO John Lechleiter regarding ways to address "The Growing Innovation Gap". One of Mr. Lechleiter's arguments was that pharmaceutical companies like his need stronger patent rights.
Patents are, by nature, government-granted restraints on freedom. Every Tuesday (the day of the week the Patent Office issues new patents) there are roughly 4,000 new things that no American is allowed to do, and there is no fair use defense to patent infringement like with copyright and trademark. Thus, only those who love big government and the meddling of Washington bureaucrats into the lives and affairs of American citizens and American businesses can inherently want a bigger, stronger patent system. Thomas Jefferson, the founder of our patent system, was right to be skeptical of patents when he labeled them a necessary evil which must be short-lived and strictly limited to only those few situations when they are absolutely necessary.
So, when Mr. Lechleiter was clamoring for stronger patents, what he was actually asking for was more government intervention to protect his company from competition. I don't blame him. If I were Mr. Lechleiter, I, too, would want stronger patents to use as blockades from competitors. In fact, I'd want patents that lasted 100 years, or 1000 years. Who cares about whether that would be good for society? So long as it made me and my shareholders rich, it must be a good thing. This is the trap faux-conservatives like Mr. Kudlow fall into all the time. They assume government enabled profits are acceptable. They are not. Corporate profit is good, but only when it is earned in the marketplace, not when it is served up through government protectionism.
That's right, the CEO of the company that is barely a year removed from pleading guilty to illegal marketing of its best-selling product, Zyprexa, and paying $1.42B as a result thereof, and is now focused on pumping lifestyle -- not life saving -- drugs like Prozac and Cialis into the bloodstreams of Americans, goes on national television to ask for more government entitlements, and Mr. Kudlow plays the salivating sidekick, ready to ask for an autograph and bite the ankles of anyone who disagrees. One wonders what favors Mr. Kudlow received for completely abandoning his supposed conservative principles. My biggest fear is that members of the audience actually believed Mr. Kudlow represents a true conservative position. Let me be clear, he does not.
What Mr. Lechleiter failed to mention, and what Mr. Kudlow failed to research, is that, with respect to pharmaceuticals, companies like Eli Lilly already get market exclusivity for at least five years when they develop a new drug. This is guaranteed to them by the FDA approval process. They can even get extensions if they test the drug on children or if the drug is for an orphan disease. This amount of market exclusivity in the United States gets buttressed by what are already the most pro-monopoly patents issued in the world. Through "evergreening" of patents, pharmaceutical companies manipulate the patent system into garnering many more years of protection from competition. It's no surprise big pharma gets a lucrative shake from our national laws, as their lobbying organization is only outspent by two others (the Chamber of Commerce and Exxon). For the world's largest companies who exert the most influence on Congress to claim a disadvantage in the marketplace, when they have both the belt of FDA exclusivity and the suspenders of patent exclusivity, smacks the sense of entitlement that brought down welfare (and rightly so). This is the rich demanding to be richer, and not because they deserve it, but because they want it. It'd be pathetic if it wasn't so literally sickening. Mr. Kudlow should be called to task for playing a part in the unapologetic land grab.
Outside pharmaceuticals, the overwhelming empirical evidence is that patents do not create a net-positive effect on innovation. Rather, the inherent cost and risk of the patent system (i.e. being sued for patent infringement by all those people to whom the Patent Office grants patents every week) saps more money out of industry than it puts back in. Do you know where all that money goes? It lands in the pockets of patent attorneys like yours truly, thank you very much. I have a cushy lifestyle thanks to the propaganda that builds an irrational appetite for government entitlements in the form of patents. Fortunately for my soul, I use my talents to fight for freedom, not government intervention. I only wish Mr. Kudlow and other supposed-conservatives would consider joining me in doing so.
America has been, and will continue to be, the most innovative place on earth because of our freedom, not our patents. In choosing between the two, a true conservative should always select freedom, not government intervention. For Mr. Kudlow to completely fail at recognizing this point discredits his political attestations entirely. Yes, a properly functioning patent system can help a vibrant innovative economy. But great care must be taken to avoid the negative effects that over-patenting, unmerited patenting and excessive patent rights can have on society. A conservative, which Mr. Kudlow purports to be, should be naturally skeptical of patents and strident in ensuring that we adopt a a "measure twice, cut once" philosophy when it comes to patent policy. Above all else, the Patent Office should make sure that it does no harm, because when it comes to the Patent Office, we should all remember President Reagan's nine most feared words in the English language, "I'm from the government and I'm here to help."
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