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December 6th, 2019 at 12:41 pm
Members of Congress Stand Up for Property Rights
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In rare but refreshing bipartisan good news out of Congress, Senator Thom Tillis (R – North Carolina) and Representatives Ben Cline (R – Virginia), Theodore Deutch (D – Florida), Martha Roby (R – Alabama) and Harley Rouda (D – California) have just taken a firm stand protecting property rights – copyrights specifically – and merit our praise.

As we’ve long highlighted, property rights constitute a central pillar of “American Exceptionalism,” and that includes intellectual property (IP) rights – copyrights, patents, trademarks and trade secrets.   Our Founding Fathers considered IP so important that they deliberately and explicitly singled it out for protection in the text of the Constitution.  As a direct result, we’ve become the most innovative and prosperous nation in human history.  And it’s not even close.

For that reason, it comes as welcome news that Senator Tillis and Representatives Cline, Deutch, Roby and Rouda recently sent a letter to the American Law Institute (ALI) to question its curious decision to develop what’s known as a “restatement” of copyright law, which Congress has already legislated over years, decades and even centuries.

For non-lawyers unacquainted with ALI, it’s an organization established in 1923 that issues what are known as “Restatements” that summarize common law principles such as contract or tort laws.  Accordingly, Restatements can assist law students, lawyers, judges or other professionals about various legal concepts as a helpful handy reference.

As Senator Tillis and Representatives Cline, Deutch, Roby and Rouda correctly point out in their December 3 letter, however, the ALI has joined too many other organizations such as the American Bar Association (ABA) in undertaking a more left-leaning political and ideological mission in recent years.  None other than Supreme Court Justice Antonin Scalia cogently highlighted that concern, as the letter notes:

The late Justice Antonin Scalia, who was the most frequent author of opinions citing ALI publications in nine opinions, wrote that ‘modern’ Restatements “are of questionable value, and must be used with caution.’  He added that, ‘[o]ver time, the Restatements’ authors have abandoned the mission of describing the law, and have chosen instead to set forth their aspirations for what the law ought to be.’  In his dissent in Kansas v. Nebraska, Justice Scalia stated that newer Restatements ‘should be given no weight whatever as to the current state of the law, and no more weight regarding what the law ought to be than the recommendation of any respected lawyer or scholar.’”

Their letter notes that Justice Scalia was not alone.  Rather, “many states have also begun to repudiate the more recent and controversial Restatement projects,” and the U.S. Copyright Office, the U.S. Patent and Trademark Office, the ABA’s own IP Law section and numerous judges and academics have expressed similar concerns.

And as it relates to copyrights, the letter wisely emphasizes that the ALI’s latest effort is particularly inappropriate:

Traditionally, Restatements have focused almost exclusively on areas of common law because judicial rulings across different jurisdictions may vary and ALI’s interpretations are predisposed to assembly, analysis, and summaries.  By contrast, laws created through federal statute, including federal copyright law, are ill-suited for treatment in a Restatement because the law is clearly articulated by Congress in both the statute and the legislative history…  Throughout its almost 100 years of history, the ALI has never chosen to draft a Restatement of an area of law that is almost exclusively federal statutory law – until now.”

The letter concludes by expressing concern that the ALI may seek to issue similar questionable Restatements on such areas as patent law, and by emphasizing that copyright law is and remains within Congress’s authority, rendering the sort of action attempted by ALI inappropriate and potentially damaging.

For that important wisdom and initiative, Senator Tillis and Representatives Cline, Deutch, Roby and Rouda deserve our respect and praise.

November 25th, 2019 at 12:34 pm
Image of the Day: Sources of Wealth in the U.S. Versus Elsewhere
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Returning to our recent Liberty Update commentary on how socialist advocates rely on a mythical misimpression of European realities, The Wall Street Journal offered a nice snapshot of the sources of wealth for billionaires in the U.S versus Europe, China and Russia:

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Sources of Wealth

Sources of Wealth

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So would socialists like Bernie Sanders prefer that wealth derive more from inheritance and political connections as they do in Europe or Russia, as opposed to business founders and financial advisors who help American workers and retirees benefit from record stock markets?

November 15th, 2019 at 11:57 am
Congress Moves to Exacerbate the Unjustifiable Electric Vehicle Subsidy Monstrosity
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We at CFIF have repeatedly highlighted how the electric vehicle (EV) subsidy complex captures the American public’s most hated elements of bureaucracy:  crony capitalism, wasteful spending, inefficient incentives and government picking winners and losers.

Whatever novelty that EVs may offer, taxpayer dollars shouldn’t be subsidizing them, and bureaucrats shouldn’t be unjustifiably foisting them upon a perfectly healthy automobile marketplace.

Unfortunately, as Myron Ebell of the Competitive Enterprise Institute (CEI) notes, the EV Industrial Subsidy Complex is now demanding even more:

Although wind and solar advocates continue to assure us that wind and solar are now cheaper than conventional power, the wind and solar lobbies don’t agree.  They are back at the trough.  And the automakers, led by GM and Tesla, are pushing to lift the limit on electric vehicle subsidies from 200,000 EVs per manufacturer to 600,000.”

Preposterously, Congressman Dan Kildee (D – Michigan), who has sponsored legislation to do just that – triple the number of subsidized vehicles allowed – defended that idea by claiming, “The whole notion is that over time, it’s going to take less to incentivize.”

Pardon?

The scheme has already had plenty of time, yet apparently it’s going to take even more to incentivize, not less.

As CFIF emphasized, the entire EV subsidy idea from over a decade ago during the Bush Administration was based upon the idea that the EV industry merely needed a temporary, limited push to create momentum that would become self-sustaining:

[T]he EV subsidy boondoggle was originally justified as a temporary, limited incentive to kickstart the fledgling EV industry.  In 2008, before the American fracking revolution subsequently eased our concerns about the overreliance on foreign oil, the Pelosi-Schumer Congress created a $7,500 tax credit for purchasers of EVs.  Senator Orin Hatch (R – Utah) at the time emphasized the subsidy’s limited scope and duration:

I want to emphasize that, like the tax credits available under current law for hybrid electric vehicles, the tax incentives in the Freedom Act are temporary.  They are needed in order to help get these products over the initial stage of production, when they are quite a bit more expensive than older technology vehicles, to the mass production stage, where economies of scale will drive costs down, and the credits will no longer be necessary.

Well, over a decade later we’re well past the ‘initial stage of production,’ yet they remain ‘more expensive’ and continue to receive taxpayer subsidies.”

We were promised over a decade ago that EV subsidies were temporary and limited.  Today, with greater energy independence achieved due to the fracking revolution and with EVs widely available for any consumers willing to purchase them with their own dollars, there’s simply no reason that the subsidy should be allowed to continue.

Let alone to be tripled.

October 29th, 2019 at 10:08 am
Pelosi Healthcare Proposal H.R. 3 Isn’t Just Destructive, It’s Likely Unconstitutional
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Alongside other conservative and libertarian organizations, we at CFIF have been highlighting the clear and present danger of Nancy Pelosi’s (D – California) proposed healthcare legislation H.R. 3 in letters to Congress and commentaries.

Pelosi’s bill includes an astonishing 95% tax on total pharmaceutical sales – not on profits, but sales – for private companies that don’t play ball to Pelosi’s satisfaction. Her proposal would also impose foreign price controls, completely restructure the popular Medicare Part D program, and create a compulsory arbitration mechanism overseen by government bureaucrats…  Pelosi’s legislation would jeopardize nearly $1 trillion in U.S. pharmaceutical investment, undermine patent protections, suffocate drug innovation and ultimately punish consumers. That’s far too high a price to pay, and responsible members of Congress must therefore stop Pelosi’s bill in its tracks.”

Now, a new nonpartisan Congressional legal analysis suggests that it’s also likely unconstitutional.  In fact, the report cites three separate provisions of the Constitution that Pelosi’s effort to commandeer Americans’ healthcare choices under federal bureaucrats’ control:

The Program created by Title I raises a number of legal considerations.  First, because the negotiation under the Program is intended to lower the prices manufacturers can charge for certain selected, single-source drugs, the Takings Clause of the Fifth Amendment may be implicated.  Second, the Program’s enforcement mechanisms – the excise tax and civil monetary penalties – may raise questions relating to the scope of Congress’s taxing power and the Excessive Fines Clause of the Eighth Amendment.  Third, the Program’s limitation on judicial review may prompt questions regarding Congress’s powers to limit the subject matter jurisdiction of Article III courts.  Finally, in setting forth the parameters of the Program, the language of Title I may implicate certain statutory interpretation questions.”

There’s reason enough for Congress to resolutely reject Pelosi’s H.R. 3 due to the negative impact that her proposal would inflict upon Americans’ healthcare, our world-leading pharmaceutical innovators and our healthcare industry more broadly.  The fact that it’s likely unconstitutional offers another reason to avoid the protracted sort of legal battles that would ensue, so that Congress can work toward solutions that actually improve American healthcare, like stronger patent protections and free-market principles.

 

October 22nd, 2019 at 9:00 pm
STELA Reauthorization Offers a Perfect Opportunity for Pro-Market Reform
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In just over two months at the end of this calendar year, the Satellite Television Extension and Localism Act (STELA) is once again set to expire, pending reauthorization.

Although the law probably remains unfamiliar to most Americans, it governs the way in which people who live beyond the reach of broadcast signals can retain access to local television programming.  In addition to ensuring continued local programming access, however, the reauthorization process underway in Congress offers an opportunity to finally institute badly-needed free market reforms to the law as it currently exists.

Specifically, this week’s Senate Committee on Commerce, Science, and Transportation hearing on reauthorizing the law provides a critical opportunity for pro-market reform by modernizing anachronistic regulations like retransmission consent agreements and must-carry provisions of the 1992 Cable Act.

For those unfamiliar with STELA, here’s a brief primer and an explanation of why the current reauthorization process is so critical.

When the Cable Act became law in 1992, the overriding fear among voters and legislators was that cable operators might leverage monopoly power to block local broadcast stations in their respective areas.  Consequently, the law artificially tipped the regulatory scales in favor of broadcasters by granting them the right to guaranteed carriage or the right to compel cable operators to pay stations for consent to retransmit their broadcasts to local subscribers.  Then, in 2010 when STELA was enacted, it unfortunately maintained many of those outdated 1992 Cable Act rules.

Now, almost three decades later, the American television consumer marketplace is much more competitive and no longer resembles its 1992 state of affairs.

Among other changes over the past three decades, consumers now possess innumerable options in channel selection and the means to access them, from cable to fiber optics to online services to multiple satellite and cable providers.

Despite that evolution, however, the government-imposed advantage for broadcasters remains.  Multi-channel video programming distributors (MVPDs) like cable, satellite and fiber providers are prohibited under current regulations from disconnecting service during sweeps week, but broadcasters remain free to do the exact same thing during such events as a World Series or Super Bowl in which the local team is playing.

Accordingly, broadcasters maintain their government-created negotiating advantage through the retransmission consent rules, and are guaranteed a place on cable companies’ basic tier.  That tipping of scales has resulted in consumers suffering service disruptions and cost increases.  In fact, we’ve witnessed record blackouts already this year.

But as referenced above, the current STELA reauthorization process provides the perfect opportunity for Congress to do something about it, and allow greater negotiating balance and a more even playing field.   At a minimum, Congress can finally end the unfair prohibition against MVPDs disconnecting service during sweeps week if necessitated by a negotiating impasse with intransigent broadcasters, as well as broadcasters’ government-granted right to placement on cable companies’ basic tier, which it appears ready to do.

The bottom line is that federal government shouldn’t be playing favorites or tipping the scales in an ever-evolving consumer television marketplace like ours, and STELA reauthorization provides the perfect opportunity to correct those existing defects.

 

October 4th, 2019 at 10:29 am
Image of the Day: Mainstream Media’s Evaporating Credibility
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From Forbes, our image of the day captures nicely the mainstream media’s credibility problem, as their cries of “Wolf!” accumulate.  Simultaneously, it captures how three institutions most intertwined with conservative values – the military, small business and police – remain atop the list of public esteem.

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Media's Evaporating Credibility

Media’s Evaporating Credibility

 

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October 1st, 2019 at 4:32 pm
Cicilline Bill Would Jeopardize Pharmaceutical Innovation by Weakening Patent Protections
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In the ongoing debate over healthcare reform, it’s important to keep our collective eye on the ball.  In that vein, as CFIF has repeatedly emphasized, we must ensure that free market principles prevail, and that includes protecting patent rights rather than weakening them.  Otherwise, American consumers will pay the price in fewer pharmaceutical innovations, shortages and worse health outcomes.

After all, as we’ve often pointed out, it’s not by accident that the United States accounts for an astonishing two-thirds of all new pharmaceuticals in the world.  That reflects the fact that we lead the world in intellectual property (IP) protections and avoid the destructive price controls that nations favoring socialized medicine impose.  As a consequence, patients in those countries don’t receive the new lifesaving and life-enhancing drugs that we do.

Unfortunately, there’s bad news to report in that regard, as Representative David Cicilline (D – Rhode Island) has introduced the misnamed “Affordable Prescriptions for Patients Through Promoting Competition Act.”  Most conspicuously, his proposal would begin prohibiting patent protections for pharmaceutical innovators developing improvements to their existing products.

Here’s why this is important.  Existing laws that have made us the most innovative nation in history allow for patent protection for new and useful improvements to existing pharmaceuticals.  Such improvements can help patients in such ways as eliminating side effects, reducing the necessary frequency or dosage, enhancing potency, boosting effectiveness or even addressing other illnesses beyond the drug’s original purpose.

But if innovators can no longer expect patent protections for the billions of dollars and years of hard work invested in developing them, then those innovations will begin to dry up.  Developing new or improved drugs typically requires over 10 years, and only approximately 10% of new discoveries actually make it to market after regulatory approval.  Accordingly, we must enhance the prospect that the fruits of innovators’ labors will be obtainable, not diminish them.

Representative Cicilline’s proposed bill is therefore a potentially catastrophic one for American consumers, who rely upon pharmaceutical innovators more and more to save lives and maintain health.  We therefore call upon all Members of Congress to oppose it.

 

September 24th, 2019 at 9:53 am
Image of the Day: Give It Some Thought, Climate Fanatics
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In our latest Liberty Update, we celebrate the environmental, economic, geostrategic and employment benefits of the American fracking revolution.  Today’s “Pepper… and Salt” comic from The Wall Street Journal offers another poignant perspective for climate fanatics to ponder:

Food for Thought, Climate Fanatics

Food for Thought, Climate Fanatics

 

 

September 19th, 2019 at 10:03 am
Image of the Day: Yes, Incomes Have Risen
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From AEI, another helpful corrective for the common claim that American incomes have stagnated, this one incorporating the fact that the average size of households has declined over recent decades:

Median Incomes

Median Incomes

 

September 12th, 2019 at 9:59 am
First Amendment Rights: Good News from the IRS on Donor Privacy
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In this era of increased harassment and persecution of people on the basis of political viewpoints and First Amendment expression, there’s actually good news to report.

In fact, that positive development comes from none other than the Internal Revenue Service (IRS), which few people typically consider a font of good news.

Specifically, the IRS just announced a proposed rule to stop requiring nonprofit organizations to file what’s known as a Form 990 Schedule B, which exposes sensitive donor information not only to the federal government and potential rogues like former IRS official Lois Lerner, but also people who seek to access and use that information to target people on the basis of political belief.

As we at CFIF have long asserted, this welcome move will help protect the privacy of American citizens, which the U.S. Supreme Court unanimously ruled in NAACP v. Alabama (1958) is critical to preservation and exercise of the First Amendment’s rights to free speech, freedom of association and freedom to petition government:

Effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association, as this Court has more than once recognized by remarking upon the close nexus between the freedoms of speech and assembly.  It is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the ‘liberty’ assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech…  This Court has recognized the vital relationship between freedom to associate and privacy in one’s associations…

The Supreme Court in that seminal ruling rightly drew a straight-line connection between privacy of one’s associations and donations and the ability to exercise one’s First Amendment freedoms:

[R]evelation of the identity of its rank-and-file members has exposed these members to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility.  Under these circumstances, we think it apparent that compelled disclosure of petitioner’s Alabama membership is likely to affect adversely the ability of petitioner and its members to pursue their collective effort to foster beliefs which they admittedly have the right to advocate, in that it may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs shown through their associations and of the consequences of this exposure. 

That logic applies with even greater force today, as we’ve witnessed time after time, because of the modern ability to instantly identify, locate and stalk people whose political views one finds disagreeable.

As we’ve further noted, the IRS acknowledges that it doesn’t even use the collected information for any substantive purpose in enforcing the nation’s tax laws, and the IRS isn’t even the agency in charge of enforcing so-called “campaign finance reform” laws in any case.  Accordingly, the information only serves to expose people to potential targeting.

CFIF enthusiastically supports this IRS decision, which will help protect the right of American citizens to exercise their First Amendment rights.

September 3rd, 2019 at 10:01 am
Image of the Day: Freedom = Prosperity, 2019 Edition
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As the 2020 election gets closer and calls for more and more government intervention increase, a handy visual reminder from Heritage that freedom, not intervention, means prosperity:

Freedom = Prosperity

Freedom = Prosperity

August 19th, 2019 at 10:09 am
Image of the Day: Middle Class Shrinking… In a Good Way
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From AEI, something to remember when we’re told that the middle class in America is disappearing.  It’s disappearing because people are moving upward:

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Middle Class Disappearing... Upward

Middle Class Disappearing… Upward

 

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August 9th, 2019 at 1:22 pm
Image of the Day: If Too Many Guns Is the Problem, Explain This
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If the problem is too many guns, explain this…

More Guns, Less Murder

 

 

August 2nd, 2019 at 1:33 pm
Texas A.G. Paxton Irrationally Joins Leftist A.G. Colleagues in Multistate Lawsuit Opposing T-Mobile/Sprint Merger
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Inexplicably, Texas Attorney General Ken Paxton has elected to join leftist state attorneys general in their multistate lawsuit opposing a T-Mobile/Sprint merger that the Department of Justice (DOJ) has approved, and a majority of Federal Communications Commission (FCC) commissioners support.

That lawsuit took the unprecedented step of challenging the proposed merger before the federal agencies had even completed their review process, demonstrating that their opposition had less to do with the facts and market realities of the case than political grandstanding.  Clearly, their state-level lawsuit centers not on the merits of the merger, especially in light of the DOJ’s announcement this week, which would introduce even greater network capacity and competition to the telecom marketplace.

By indefensibly choosing to join that lawsuit, Paxton now seeks to halt an extraordinary opportunity to accelerate innovation and 5G deployment in the U.S., bridge the digital divide in rural and urban communities and boost high-paying American jobs.

We at CFIF have long supported the proposed merger for all of these reasons and more, and we hope that Paxton and anyone else considering such a needlessly unwise position reconsider.

August 1st, 2019 at 4:29 pm
Drug Importation: An Inexplicably Bad New Proposal from the Trump Administration
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Yesterday, the Trump Administration through the Department of Health and Human Services (HHS) inexplicably introduced a proposal to begin drug importation from other countries.

Currently, Americans enjoy the safest medicine market in the entire world under the system monitored by the U.S. Food and Drug Administration (FDA).  According to FDA estimates, over 99% of drugs making their way into the U.S. via international mail failed to comply with its standards, and the United Nations World Health Organization estimates that fully 10% of all medicines worldwide are actually counterfeit.  That’s an enormous and unacceptable threat.

It’s therefore no surprise that a bipartisan array of experts and officials, including Trump Administration officials, have long panned the drug importation idea.  Just last year, for instance, HHS Secretary Alex Azar labeled drug importation a “gimmick,” emphasizing that, “the last thing we need is open borders for unsafe drugs.”  Recent FDA Commissioner similarly lambasted the idea and detailed the numerous threats that it entails.  A collection of FDA Commissioners spanning the years 2002 through 2016 went so far as to write an open letter to Congress in 2017, explaining how drug importation, “could lead to a host of unintended consequences and undesirable effects, including serious harm stemming from the use of adulterated, substandard or counterfeit drugs.”

Safety concerns, however, aren’t the only problem with the drug importation idea.  The Congressional Budget Office (CBO) has studied the issue and concluded that drug importation would have little to no impact on actually lowering prices.  Former FDA Commissioner Gottleib concurred that the plan “would have added so much cost to the imported drugs; they wouldn’t be much cheaper than drugs sold inside our closed American system.”  Part of the problem, according to a Canadian Pharmacists Association (CPhA) statement released just yesterday, is that Canada’s market couldn’t handle the sudden onslaught of American demand, and importation would crash their market on which the U.S. drug importation plan would rely.

Additionally, as we at CFIF have long emphasized, importing other nations’ pharmaceutical policies and pricing would reduce drug innovation and availability to American consumers.  Even highly developed nations enjoy far fewer new life-saving and life-improving pharmaceuticals than the U.S., which should trigger alarm for every American.

This constitutes a rare unforced error, as drug importation violates free market principles, in addition to the fact that imported drugs meet neither safety nor dependability standards.

How else can we be certain that this is a terrible idea?  Socialist Senator Bernie Sanders (D – Vermont) advocates it.  That says all we need to know.

 

July 29th, 2019 at 5:11 pm
This Week’s “Your Turn” Radio Lineup
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Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM/99.1FM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.” Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Phil Kerpen, President of American Commitment – Puerto Rico and Energy;

4:15 CDT/5:15 pm EDT:  Tracy Beanz, Investigative Journalist with Undercoverdc.com – Jeffrey Epstein Case;

4:30 CDT/5:30 pm EDT:  Mary Clare Amselem, Policy Analyst in Education Policy at The Heritage Foundation – Josh Hawley and the College Monopoly;

4:45 CDT/5:45 pm EDT:  Quin Hillyer, American Newspaper Columnist and Writer – Mueller Hearings, Now What?;

5:00 CDT/6:00 pm EDT:  Ashton Hayward, Andrews Research and Education Foundation President – AREF and IHMC Project;

5:15 CDT/6:25 pm EDT:  Anastasia Boden, Senior Attorney in Pacific Legal Foundation’s Economic Liberty Project – Setting Quotas on Women in the Boardroom; and

5:30 CDT/6:30 pm EDT:  Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs – TV Blackouts and Regulating Cryptocurrency.

Listen live on the Internet here. Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

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July 22nd, 2019 at 1:09 pm
Budget Negotiations: CFIF Opposes Use of Drug Price Controls via “Mandatory Inflation Rebates”
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In ongoing negotiations, it’s reported that some are proposing to employ destructive drug price controls as a mechanism to reach a budget agreement.  For multiple reasons that CFIF has highlighted, that poses a potentially catastrophic idea.

Specifically, it appears that debt ceiling negotiations may include a destructive proposal to reduce federal spending levels by targeting $115 billion from Medicare, which would derive largely from alleged “Medicare savings” through instituting a government-imposed mandatory “inflation rebates.”  As we’ve explained, inflation rebate proposals work by penalizing drug innovators with higher taxes whenever their products exceed an arbitrary inflation mark.  Currently, Medicare Part D’s structure works by employing market-based competition to mitigate drug costs via privately-negotiated rebates, meaning that no specific “price” reliably represents that drug’s underlying price.  Accordingly, the proposal would inherently undermine privately-negotiated Part D plan rebates, which the Congressional Budget Office (CBO) has said “appear to make the net prices approach the lowest prices obtained in the private sector.”  Indeed, as the Altarum Institute has highlighted, those Part D plans currently achieve greater brand medicine rebates than private insurers.

Critically, it must also be noted that inflation rebate proposals would violate non-interference clauses that facilitate competition among Part D plans, which provide a critical part of Part D’s success in mitigating costs since its inception.  They would also arbitrarily apply to new pharmaceuticals while bypassing generic brands, which now constitute approximately 90% of Part D prescriptions.  The proposal would also inescapably weaken incentives on the part of Part D plan sponsors to negotiate with drug manufacturers and minimize drug spending under a regime of statutorily-imposed rebates, thereby setting a negative precedent for those sponsors.  It also bears emphasis that private-sector limits on drug cost increases already exist via “price protection rebates” that Pharmacy Benefit Managers (PBMs) negotiate with manufacturers.

Accordingly, imposing price controls in Medicare Part D would fundamentally undermine its entire market-based model, which would in turn reduce research and development and slow progress toward new and improved medicines.

Adding insult to injury, such a proposal would constitute a raid on Medicare for the benefit of other government spending pork.  During this era of budgetary waste, the last thing that Congress should consider doing is sacrificing Medicare, particularly when affordability and access to pharmaceutical innovations remains such a top public priority.  Budgetary discipline and access to medicines remains a priority of the highest order, but market-oriented solutions, not destructive gimmicks, offer the optimal solution.  Any proposal to target Medicare Part D for mandatory inflation rebates has not been subjected to full review, committee research, hearings or debate.

American citizens, particularly seniors, should not be subjected to that danger.

 

July 18th, 2019 at 8:56 pm
TV Blackouts Reconfirm Need for Free Market Regulatory Reform
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For over two weeks now, failed retransmission negotiations between AT&T and Nexstar Media Group have deprived customers across the United States of 120 Nexstar television stations in 97 markets.

That’s unfortunately something to which far too many Americans have become accustomed recently, as 2019 has already witnessed more TV blackouts than any year in history.  And the news only gets worse:  CBS is now warning that stations in numerous major markets, including New York, Los Angeles, Chicago, Philadelphia, Dallas and others, could be blacked out as this week concludes.

Here’s the overarching problem.  Current laws dating all the way back to 1992 empower the federal government to pick TV market winners and losers by tipping the scales during negotiations.  Those laws governing what’s known as “retransmission consent,” “must-carry” obligations and “compulsory copyright” all derive from a bygone era, when most markets were served by a solitary cable provider.  But today, almost 30 years later, we obviously live in a drastically different consumer marketplace.  Specifically, alternative services like satellite, internet and other cable providers provide an expansive array of consumer options in the TV marketplace.

Yet here we are in 2019, with applicable federal regulations that remain unchanged, and fail to accommodate the fundamental video market evolution that has occurred.  Consequently, broadcasters today possess an unfair regulatory advantage in negotiations with providers, which in turn empowers them to insist upon excessive retransmission consent fees while retaining the alternative option of invoking must-carry rules.  In that manner, outdated laws inhibit free market principles from functioning in what should be an ever-evolving consumer marketplace.

And who pays the steepest price of all?  Consumers.  Including in the form of blackouts like we’re witnessing.

To finally put an end to these increasing blackouts, and spare consumers the headaches, we must reduce the federal government’s interference in the nationwide video marketplace.  That will allow broadcasters and video programming distributors to negotiate in a more even, market-centered environment.  An optimal scenario would be to enact the Next Generation Television Marketplace Act proposed earlier by Congressman Steve Scalise (R – Louisiana).  But in any event, consumers should demand that the federal bureaucracy remove its metaphorical finger from the scale, and instead finally allow all parties to negotiate in a free market, one in which neither side enjoys an inherent regulatory advantage.  Eliminate the outdated regulations, and allow the free market to work.

In a video market otherwise defined by rapid evolution and ever-greater choices, consumers deserve relief at long last.

 

July 15th, 2019 at 2:22 pm
CFIF to U.S. Senate: On Drug Prices, Say “NO” to Mandatory Inflation Rebate Proposals
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On behalf of over 300,000 of our supporters and activists across the nation, CFIF has written the following letter opposing any use of Mandatory Inflation Rebate Proposals when it comes to the issue of addressing drug prices:

We believe that market-oriented solutions offer the optimal solution, and resolutely oppose any use of mandatory inflation rebate proposals – which would unfairly penalize a drug’s manufacturer with higher taxes whenever that drug’s price rises faster than inflation – that will make matters worse, not better. Among other defects, such a government-imposed penalty would undermine Medicare Part D’s current structure, which uses market-based competition to mitigate drug costs. Part D currently works via privately-negotiated rebates, meaning that no specific price reliably represents a drug’s underlying price. Accordingly, the proposal would inherently undermine privately-negotiated Part D plan rebates, which the Congressional Budget Office (CBO) has said “appear to make the net prices approach the lowest prices obtained in the private sector.” Indeed, as the Altarum Institute has highlighted, those Part D plans currently achieve greater brand medicine rebates than private insurers.

Additionally, inflation rebate proposals would violate non-interference clauses that facilitate competition among Part D plans, which provide a critical part of Part D’s success in mitigating costs since its inception. They would also arbitrarily apply to new pharmaceuticals while bypassing generic brands, which now constitute approximately 90% of Part D prescriptions. The proposal would also inescapably weaken incentives on the part of Part D plan sponsors to negotiate with drug manufacturers and minimize drug spending under a regime of statutorily-imposed rebates, thereby setting a negative precedent for those sponsors. It also bears emphasis that private-sector limits on drug cost increases already exist via “price protection rebates” that Pharmacy Benefit Managers (PBMs) negotiate with manufacturers.”

The issue of reducing drug prices remains an important one, but it’s just as important that we pursue policies that make the situation better, not those that would make the situation far worse.

July 9th, 2019 at 5:48 pm
Patent Protection at a Critical Juncture
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At CFIF, we’ve consistently and unapologetically celebrated the central role of intellectual property (IP) rights – patents, copyrights, trademarks and trade secrets – in making America the most innovative, prosperous and powerful nation in human history.

Recent legal developments domestically, as well as growing focus upon Chinese IP malfeasance internationally, provide new emphasis on the importance of strong U.S. patent protections for American inventors, and highlight some increasingly obvious concerns regarding patent infringers exploiting the U.S. Patent Trial and Appeals Board (PTAB) for nefarious and selfish purposes.

A couple of weeks ago, patent holder plaintiff TQ Delta won on all eight counts in its first case in a series against 2Wire, Inc. over digital communication technology patents.  The win thereby sets a strong precedent of IP enforcement in what will be the first trial over its DSL patent porfolio.

In another recent example that will instantly resonate with parents as their children splash amid water balloons in their backyards this summer, a federal judge in Texas went to the rare extreme of actually doubling a multimillion-dollar jury award in favor of toy company Tinnus Enterprises, maker of “Bunch O Balloons” water balloon devices, in its patent infringement case against Telebrands.  More often, judges reduce jury awards that they consider excessive.  In this case, however, U.S. District Judge Robert Schroeder III held that the “serial infringement” of Tinnus’s patents and “flagrant” litigation misconduct merited more than doubling the original damages assessment.

The ongoing case of EagleView v. Verisk offers another salient example, a proverbial David innovator versus a Goliath infringer.  It also presents a perfect opportunity to correct a patent infringement injustice and offer a deterrent lesson to other potential patent violators of the consequences they will face.  In a nutshell, the plaintiff EagleView develops products that create 3-D models from aerial images of rooftops, from which insurers and construction companies can more accurately reach repair cost estimates.  After defendant Verisk unsuccessfully attempted to purchase EagleView in 2014, it allegedly shifted to using its subsidiary Xactware Solutions to infringing EagleView’s patented technology, triggering EagleView’s lawsuit for willful patent infringement.

Since that date, Verisk has employed an array of tactics to prevent EagleView’s lawsuit from reaching a jury, such as filing multiple petitions at the PTAB to invalidate EagleView’s underlying patents, which a federal Court of Appeals found “unpersuasive.”  Verisk has also petitioned the District Court multiple times to invalidate EagleView’s underlying patents, which the Court rejected similarly.  Now, Verisk has even resorted to joining the LOT Network, an openly anti-IP group that includes Google and other titans.  Hopefully, those tactics will be put to an end at long last.

All of this serves to highlight once again the need to protect IP, and patent rights specifically, at the legislative, executive and judicial levels.  At the Congressional and executive levels, legislation to address patent eligibility and U.S. Patent and Trademark Office (PTO) reform are critical, as CFIF has previously emphasized.  Additionally, abuse at the PTAB level must not be tolerated.  And at the judicial level, courts must hold patent infringers accountable, and grant injunctive relief to patent holders to halt violations.  By holding violators accountable, we can not only deter other potential violators, but also provide the incentive to innovators by creating greater assurance that their work will be rewarded and protected.

America’s tradition of leading the world in innovation and IP protection is ultimately at stake.