Our system of intellectual property rights is patently ridiculous.
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April 15, 2014
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Should a company be able to patent a breast cancer gene? What about a
species of soybean? How about a tool for basic scientific research? Or
even a patent for acquiring patents (see:
Halliburton)?
Intellectual
property rights are supposed to help inventors bring good things to
life, but there’s increasing concern that they may be keeping us from
getting the things we need.
In this wild and contested jungle of
the law, which concerns things like patents and copyrights, questions
about the implications of allowing limited monopolies on ideas are
making headlines. Do they stifle innovation? Can they cause the public
more harm than good? Trillions of dollars are at stake. Companies known
as “patent trolls” are gobbling up patents, then going on lawsuit sprees
and extracting fees against infringement. Corporations are using
intellectual property law to squash competitors and block our access to
things as vital as lifesaving drugs, to place restrictions on things as
intimate as parts of the human body. Third World countries are kept from
accessing essential public goods related to everything from food
security to education.
Surely, the producers of new ideas should
be able to profit from their creations. But furious debates over what
should be protected and who should profit are calling attention to the
many things that are going wrong in this area. For example, a recent
front-page story in the New York Times
detailed how diabetics are being held hostage in America by companies
that follow Apple’s playbook to lock patients into buying expensive,
patented products that quickly become obsolete. If you don’t buy the
product, you don’t miss getting the new iPhone. You may die.
Intellectual
property rights have come under intense scrutiny, a trend on display at
a recent conference in Toronto on innovation and society, "
Human After All",
sponsored by the Institute for New Economist Thinking (INET) and the
Centre for International Governance Innovation (CIGI), where I moderated
a panel on the topic. Let’s take a look at some of the burning
questions and issues in play in this debate.
1. Why do we have intellectual property rights?
The
notion of giving inventors exclusive rights for a limited time goes
back to the medieval era. The first patent in America was granted in
1641 to one Samuel Winslow, who came up with a new way to make salt.
Patents could cover both tangible objects and also intangible stuff like
methods and ideas. The U.S. Constitution has something to say about
patents, namely this:
“The Congress shall have power
... To promote the progress of science and useful arts, by securing for
limited times to authors and inventors the exclusive right to their
respective writings and discoveries…”
Notice the
reasoning: We the People, through our representatives, grant
intellectual property rights so that we can move knowledge forward — not
enrich a few people at the expense of everyone else.
The question
of whether ideas themselves should be protected by patents troubled
some of the Founders, who saw the potential for abuse. In an 1813
letter, Thomas Jefferson observed that unlike objects, ideas inherently
want to be shared: “He who receives an idea from me, receives
instruction himself without lessening mine; as he who lights his taper
at mine, receives light without darkening me.”
Intellectual
property rights have expanded quite a bit since Jefferson's day. The
Industrial Revolution saw brutal battles over inventions associated with
things like the steam engine where the public good was often sacrificed
to individual and corporate profits. In the early nineteen twenties, US
patent law was revised to favor corporate interests. In 1930, the U.S.
began to allow patents for living organisms with the Plant Patent Act.
The Motion Picture Association of America, as it emerged, took a hard
line on intellectual property and fought for broad protections. As new
industries like biotechnology and nanotechnology popped up, companies
and individuals sought additional protections for technology. The growth
of the Internet set off a yet another wave of intellectual property
rights related to patents and copyrights.
Today, what we have is a
giant mess, a system plagued by bad actors and bad faith that has often
become a means for corporations to smash competition and block human
progress rather than advance knowledge. More time and energy is spent by
companies coming up with new ways to sue each other than coming up with
new ideas (think: Apple v. Samsung). The public purse is picked as
taxpayer-funded investments in research are appropriated by
profit-making companies. Our patent system fuels inequality by
socializing the risk associated with research and discoveries while
privatizing the gains. Meanwhile lawyers, as you might expect, are
making out like bandits.
2. Patents have exploded since the 1980s.
If
you talk to some of the bright-eyed folks in Silicon Valley, America is
on an innovation roll. Since the 1980s, the number of patents sought
has soared, and the pace is accelerating. Over the last two decades,
businesses have increasingly used patents to sue or threaten to sue
other companies to get them to pay licensing fees. 2012 was quite a year
for patents: the number of court cases increased 29 percent in that
year alone, according to
PricewaterhouseCoopers. Costs associated with the litigation come to billions per year.
Michele Boldrin and David Levine, authors of
Against Intellectual Monopoly,
have noted that in a single four-year period, from 1997 to 2001, patent
applications leapt by 50 percent. Meanwhile, the number of lawyers
working on intellectual property in America went from 5,500 to nearly
22,000.
But are we really getting so much more creative with all
these patents? Boldrin and Levine don’t think so. It appears that the
number of patents has grown not because there is more innovation, but
simply because the number of things that could be patented grew.
As
economists William Lazonick and Oner Tulum have pointed out, changes in
the law have allowed certain parties, like venture capitalists, to grow
rich on patents at the expense of the public. The Bayh-Dole Act of 1980
made it easier for companies, particularly those in biotech, to profit
from the results of government-backed research done in universities.
Seen an ad for Botox lately? Lazonick and Tulum point out that Botox is a
drug whose medical applications were developed in taxpayer-funded
universities in the 1960s. In 1983, something known as the Orphan Drug
Act allowed companies like Allergan, which got hold of Botox, to
commercialize certain kinds of drugs that were developed for use in a
small population when additional properties of the drugs were
discovered. In 2013, Botox generated $1982 million in revenues for
Allergan, of which 54 percent were for therapeutic uses that your doctor
prescribes and 46 percent were for the cosmetic uses that the company
advertises.
3. Intellectual property rights can block innovation.
One
of the biggest arguments in favor of robust intellectual property
rights is that they are supposed to drive innovation, giving big rewards
to those who come up with new ideas. But a growing list of experts,
such as Boldrin and Levine, counter that this is nonsense. “Intellectual
monopoly is not a cause of innovation,” they write, “but it is rather
an unwelcome consequence of it.” They argue that in young, dynamic
industries, intellectual monopoly doesn’t play a major role — it’s only
when the ideas run out that companies become obsessed with having the
government protect the old ways of doing business.
In other words, an explosion in patents could be a sign that a country is getting less innovative, not more.
Boldrin
and Levine provide numerous examples in their book of how patents shut
down innovation, from a steam engine patent that may have delayed the
Industrial Revolution by a couple of decades to the Wright brothers
American patent on the airplane which forced innovative work in the
industry to move to France.
More recently, Heidi Williams
examined
work done in the area of human genome sequencing by the Human Genome
Project (a public entity) and also by Celera (a private company).
Williams concluded that Celera’s intellectual property rights claims
resulted in a persistent 20-30 percent reduction in subsequent
scientific research and product development.
Economist Petra Moser
states that if you look at history, intellectual property laws have
always had the potential to squelch progress:
"Overall,
the weight of the existing historical evidence suggests that patent
policies, which grant strong intellectual property rights to early
generations of inventors, may discourage innovation. On the contrary,
policies that encourage the diffusion of ideas and modify patent laws to
facilitate entry and encourage competition may be an effective
mechanism to encourage innovation.”
4. The public is getting harmed and cheated.
It’s
increasingly clear that taxpayers are getting ripped off, particularly
in areas like in pharmaceuticals. Through entities like the National
Institutes of Health, the federal government pays for basic research
that gets plundered by corporations that make tremendous profits (and
then, of course, lobby to have their taxes reduced). Companies like
Apple expect the U.S. government to protect their intellectual property
rights all over the world, yet they assiduously avoid paying taxes.
Considering the fact that iPhones, for example, would not exist without
taxpayer-funded research in everything from touchscreen technology to
GPS, this is especially maddening.
Battles between companies and sovereign countries are heating up. Eli Lilly and the Canadian government are
gearing up
for a showdown since the Canadians took away the company’s rights to
two popular new drugs, one for attention-deficit disorder and another
for psychotic illness. Despite the fact that countries are supposed to
have the right to set their own domestic laws for rules of medicine
patents, big corporations are increasingly able to get around them and
effectively challenge national policy. Free trade pacts have become a
prime vehicle for this. The much-debated Trans-Pacific Partnership, a
free-trade pact being negotiated between North American and Asian
countries and backed by President Obama, has provoked outrage because it
would enhance drug company profits by protecting patents on drugs and
medical procedures while blocking less expensive generic drugs. The fear
is that powerful corporations will blow right past the laws of
individual countries and use patents in ways that pose serious human
rights questions.
5. Things don’t have to be this way.
While
we certainly want to promote new ideas and to reward creativity, many
feel that intellectual property laws aren’t the best way to do this. As
Levine has written:
“It is a long and dangerous jump
from the assertion that innovators deserve compensation for their
efforts to the conclusion that patents and copyrights, that is monopoly,
are the best or the only way of providing that reward.”
Several
of the economists I spoke to at the INET/CIGI conference, such as
Italian economist Giovanni Dosi and Nobel laureate Joseph Stiglitz, have
suggested other ways of rewarding inventors, such as prizes. Stiglitz
has pointed out that prizes, as opposed to patents, could help reward
research that might not be commercially profitable, like developing a
cure for AIDs, or other urgent global problems.
Clearly the notion
of public benefit has to be vigorously defended in discussions of
intellectual property rights. There are many ways the public good get a
better deal. The government, for one, could claim rights to revenues for
ideas and inventions that were funded with taxpayer money. Or it could
force companies like Apple that benefit from such research to pay their
share of taxes. So far, the government has not exercised its muscle
because there is an imbalance of power between public and private
sector.
We need to recognize that science and technology grow by
accretion, each new creator building on the works of those who came
before. Overprotection blocks exactly what it’s supposed to enhance:
ideas that help us live better. The intellectual property system needs
to be reevaluated so that social and economic progress aren't hampered
by laws that only reward the few, and the public good becomes a top
priority.
Lynn Parramore is an
AlterNet senior editor. She is cofounder of Recessionwire, founding
editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt
in Nineteenth-Century Literary Culture." She received her Ph.D. in
English and cultural theory from NYU. She is the director of AlterNet's
New Economic Dialogue Project. Follow her on Twitter @LynnParramore.
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