Patent Baristas

Who Doesn’t Want to Save on Heathcare?

In a week of thumbing noses at patents, Brazil said it will buy a generic version of a Merck’s efavirenz anti-retroviral drug for the treatment of AIDS unless it offers Brazil a deeper discount on the medicine.  Health Minister Jose Gomes Temporao signed a decree declaring a “public interest” medicine” the first step in a process that could lead Brazil to break Merck’s patent.

In November, Brazil began price-reduction negotiations with Merck, demanding the same 65 cents per efavirenz tablet that Merck charges the Thai government.  Brazil at the time was paying $1.59 per pill, the statement said. Merck proposed a 2 percent reduction but was turned down. Currently 75,000 of the 180,000 Brazilians with HIV who receive the free cocktail of anti-AIDS drug, use efavirenz.

Brazil has repeatedly managed to win price reductions in recent years from big pharmaceutical companies by threatening to break patents but has never actually done so.  Earlier, Brazil threatened to break a patent for Kaletra, one of three anti-retrovirals made by Abbott Laboratories Inc.

The motivation is clear. Brazil would save $30 million this year alone. The question remains, however, should a government be able to invoke a compulsory license to treat an ongoing health problem and not just in the case of a drug being needed to save lives in extreme emergency situations, such as wars and pandemics?

The World Trade Organization’s Doha Declaration on the TRIPS Agreement and Public Health, an amendment to the WTO’s TRIPS agreement on trade-related intellectual property rights, affirms that the TRIPS Agreement should be interpreted and implemented so as to protect public health and promote access to medicines for all.

While the TRIPS agreement of 1994 does not require a public health emergency to be declared, it doesn’t make sense to say any patent can be broken to “protect public health and promote access to medicines for all.” That would apply to every drug. That’s what drugs are for.

Don’t Let “the Man” Take Your Phone

In a related measure, Vonage is ticked off that Verizon is asserting its patents regarding Voice over Internet Protocol, or VoIP, service.

Verizon had filed a lawsuit charging that Vonage infringed on seven of its patents related to VoIP in a U.S. District Court in Virginia. It alleged that Vonage infringed on patents held by Verizon that describe technology for completing phone calls between VoIP users and people using phones on the traditional public switched network, authenticating VoIP callers, validating VoIP callers’ accounts, fraud protection, providing enhanced features, using Wi-Fi handsets with VoIP services and monitoring VoIP caller usage.

After a jury found that Vonage infringed three Verizon patents and must pay $58 million in damages (much less than the $197 million they asked for) plus royalties to Verizon, the district court ruled that the VoIP technology Vonage was using infringed on three patents awarded to Verizon and ordered an injunction. While the jury found that Vonage must pay a 5.5% royalty rate on future sales to use the Verizon technology, Verizon asked for a permanent injunction to stop Vonage from using the technology altogether.

The U.S. Court of Appeals for the Federal Circuit has now issued a permanent stay of the injunction. Had the injunction held, Vonage would have been enjoined from using certain VoIP technology to add new customers.The court order granting the stay also set the schedule for appeal. Vonage has to present its opening brief May 9, Verizon, May 23, and then Vonage can reply May 30. Oral arguments are slated to be heard June 25.

Vonage is now taking its fight directly to the consumer by launching Free to Compete, a web site that compares Verizon’s patents to patenting oranges. In addition to the website, it will also place full-page ads in papers around the country as well as through radio and television.

In a sign that settlement talks are probably not going well, the site proclaims that “Verizon® has pursued litigation against Vonageâ„¢ in an effort to achieve in court what it cannot achieve in the marketplace.”  Framing the argument as a threat against every U.S. consumer in limiting a choice of phone service, Vonage says that this is why Vonage is fighting “The Man“.

Besides pointing out that you have to be careful what you say, the Web site gives customers and interested parties information on the court cases, as well as links to public court documents, a petition to protect the consumer’s right to choose phone providers, and an e-mail link to complain to Verizon. Some of the letters are posted on the site, along with videos sent in by the company’s customers.

No word yet as to whether or not Vonage will be dedicating their own patent estate to the public.