Intellectual Property Regime Stifles Science and Innovation, Nobel Laureates Say

07/07/2008 by Dugie Standeford for Intellectual Property Watch 25 Comments

By Dugie Standeford for Intellectual Property Watch
MANCHESTER, UK – The basic framework of the intellectual property (IP) regime aims to “close down access to knowledge” rather than allowing its dissemination, Professor Joseph Stiglitz said at a 5 July lecture on “Who Owns Science?” Stiglitz, a 2001 Nobel Laureate in Economics, and Professor John Sulston, a 2002 Nobel Laureate in Physiology/Medicine, launched Manchester University’s new Institute for Science, Ethics and Innovation.

Both were highly critical of today’s patent system, saying it stifles science and innovation.

IP is often compared to physical property rights but knowledge is fundamentally different, Stiglitz said. It is a public good with two attributes – “non-rivalrous competition” and non-excludability – meaning it is difficult to prevent others from enjoying its benefits. That runs counter to IP regimes, which are worse than exclusion because they create monopoly power over knowledge that is often abused, he said.

Patent monopolies are believed to drive innovation but they actually impede the pace of science and innovation, Stiglitz said. The current “patent thicket,” in which anyone who writes a successful software programme is sued for alleged patent infringement, highlights the current IP system’s failure to encourage innovation, he said.

Another problem is that the social returns from innovation do not accord with the private returns associated with the patent system, Stiglitz said. The marginal benefit from innovation is that an idea may become available sooner than it might have. But the person who secures the patent on it wins a long-term monopoly, creating a gap between private and social returns.

The Human Genome Project identified a gene that predicts breast cancer and that was patented by a US company, Stiglitz said. The actual cost of testing for the gene is minimal but patients’ costs are so high in the US that poor people are unable to obtain the test, he said. That raises questions about the equity and fairness of the patent system, he said.

Stiglitz raised two concerns. Developed countries are separated from developing countries by the disparity in access to knowledge and IP is making it harder to close the gap, he said, which is why developing nations in the World Intellectual Property Organization (WIPO) called for (and got) a development agenda. Moreover, IP results in less access to health care, he said. Generic medicines cost a fraction of brand names but the World Trade Organization Uruguay Round agreement on IP and trade signed a death warrant for millions of people by making access to generic drugs more difficult, he said.

Stiglitz proposed that IP regimes be tailored to specific countries and sectors. No one believes that the patent system should be entirely abandoned, but the question is whether other tools, such as prizes or government funding, could be used to promote access to knowledge and spur innovation in areas where there are well-defined objectives such as a cure for malaria, he said. Stiglitz said he is hopeful of reform because many in the US are seeking changes to the IP system.

Sulston said science can be driven by need and curiosity, which requires a substantial degree of openness and trust among players. Increasingly, however, the picture is one of private ownership of science and innovation, a situation welcomed by governments and investors who control the direction of research, he said. But the consequence is to funnel science into profitable areas and steer clear of those that will not make money, he said.

That trend has several consequences, including the neglect of research on diseases of the poor and the production of unnecessary drugs sold through high-pressure marketing, Sulston said. There has been a failure of equitable distribution of the goods of science but the solution is not to have “dull insistence on equality,” he said.

IP is an ideological issue in quarters such as WIPO, Sulston said. Drug companies see any improvements to the system as weakening it, but no one is saying they have to give everything away, he said. The system should be a “good servant” not elevated to a “theistic level,” he said.

Counterfeiting has become a major issue, Sulston said. The trend is to link counterfeiting with IP but they are not connected, he said. If drugs are sold at their cost of production or just above, counterfeiters would have little room in which to play. The IP system is causing the production of bogus products, he said.

Sulston recommended a return to the old practice of splitting research and development from production, saying mixing the two leads to lobbying and advertising in R&D. Splitting them allows equitable delivery of products and can make R&D openly accessible, but only if those who share science also share its benefits, he said.

That separation appears to be happening to some extent as private companies such as the Bill and Melinda Gates Foundation funnel money into public health, Sulston said, but he warned against a return to the Victorian days when healthcare was supported by philanthropy. He urged that global health issues be coordinated by the World Health Organization, but said it is underfunded and heavily lobbied by governments and commercial interests.

Sulston also wants more coherent thinking about a biomedical treaty being examined by the WHO, and greater input from transnational non-governmental organisations.

Reversing the trend toward privatisation of science is critical, Sulston said. The world should concentrate on the survival and thriving of humanity, and exploration of the universe, he said. The outcome, he added, depends to a great extent on “who owns science.”

Dugie Standeford may be reached at info@ip-watch.ch.

"Intellectual Property Regime Stifles Science and Innovation, Nobel Laureates Say" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Comments

Michael Tiemann says
07/07/2008 at 2:00 pm

I very much agree with the remarks of Dr. Stiglitz and propose that software patents, which only came into being in the past 30 years as the result of a judge’s ruling, not specific legislation, are even more egregious and even more harmful to innovation and the public than pharmaceutical patents. The best way to “protect” software is to develop it–to permit innovation from all corners and all comers, not to offer it as a slave to nor an enabler of monopoly.

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Michael Tiemann says
07/07/2008 at 3:58 pm

I very much agree with the remarks of Dr. Stiglitz about the harm caused by the current IP regimes with respect to both the protection of real innovation and the interests of the public, upon which rests the basis of civil law.

But even more egregious and harmful are software patents, a judicial invention of the past 30 years that has no explicit basis in any law. Software patents have become the legal landmine issue of the 21st century, and evidence of their harm only strengthens the argument against them.

I think it is very difficult to propose a general solution to the overall problem (the dull insistence on equality), but certainly we should specifically work to completely rescind all software patents and declare the field of software one that is open to all who wish to innvoate. And we should educate the public and policymakers alike that the best way to “protect” innovation is to practice it, not to promise it as an enabler for, nor as a reward for monopoly.

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Tim Allen says
07/07/2008 at 6:52 pm

I disagree with Dr Stiglitz. Who is going to pay for all research, both failed and successful. A change has happened in our society and that change is entitlement. Many people have no respect for what it takes to create, to develop, to invent, to produce, to be successful. They simply think those who worked hard should give it all away.

For example, lets take the breast cancer gene example from above. The test is expensive because of the patent rights held on it. But it is highly unlikely that the initial research would have ever been done without the guarantee of a return on investment created by patent rights. Under his program it is unlikely the discovery would have happened as soon as it did…..thus leading to …ugly results.

Just because well to do countries are the ones to benefit most does not make it a bad thing. That’s why we attract the most talent, because people want to live here because of the higher standard of living.

Unlike what is taught in grade school classes today, we are not all winners. Sometimes someone else is better. That’s what makes life worth living.

I think the Dr. is conveniently forgetting what motivates people.

Yes, there is room for other types of motivation as suggested by the Dr. But there is no reason to change one part of the system that is working.

As far as the argument that successful software gets sued for infringement…..show me a system that is more efficient than waiting for a winner to come along to figure out who gets what and still provides the motivation of our system.

Its not a perfect system, but there is none better.

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Kory Wright says
07/07/2008 at 6:57 pm

“The basic framework of the intellectual property (IP) regime aims to “close down access to knowledge” rather than allowing its dissemination,”!!!!

Every patent in every country is a simple tradeoff. If you describe what it is that you have invented then you get short term rights to it.

Thats right, no patents are granted without full disclosure of how they work. Please tell me how full publication results in “stifling access to knowledge”?

In fact, the patent system is the best way to disseminate knowledge. Without the benefit of a short term monopoly much of the knowledge would remain trade secrets that die with the inventor or remain secreted away for much too long.

The patent system acts to disseminate knowledge, not stifle it.

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Slated says
08/07/2008 at 11:22 am

This is uncanny. I just wrote about this shortly before discovering this article.

[quote]
Two people on opposite sides of the world have exactly the same idea at the same time. Which one of those two people would be most morally justified in claiming to own the exclusive rights to that idea?

Should it be the first to dash through the doors of the USPTO office, with a big wad of cash in his hand?

…

Using the premise of “business considerations” to justify state-sponsored racketeering is a very poor excuse to subject mankind to a totalitarian regime of intellectual slavery. Granting Intellectual Monopoly to businesses under the premise that they “need” to recover their investment costs using “royalties”, rather than by more ethical means, is merely further rewarding someone for already being sufficiently affluent to spend money on a patent applications and research (or more likely – lobbying), instead of rewarding actual invention, which may have already occurred elsewhere without financial backing, and should in no way be interpreted as proof or justification of exclusive “ownership”.
[/quote]

http://slated.org/the_right_to_own_knowledge

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JMTorres says
08/07/2008 at 6:59 pm

“Stiglitz proposed that IP regimes be tailored to specific countries and sectors.” Unfortunately, it appears that Professor Stiglitz has failed to consider the administrative costs of such a policy. In the U.S., the patent system is largely codified in statutes and agency regulations that judges must interpret and apply to the facts of individual cases. The subject matter exceptionalism advocated here will only provide more work for judges and more revenues for law firms. A simpler approach, which would certainly be more administrable, would be to shorten the patent term by an amount designed to blunt the putative anticompetitive effects of the patent grant. Let’s not forget that the patent grant is not perpetual. In time, all patented knowledge falls into the public domain.

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John Wilson says
09/07/2008 at 2:39 am

@Kory Wright

“Every patent in every country is a simple tradeoff. If you describe what it is that you have invented then you get short term rights to it.

Thats right, no patents are granted without full disclosure of how they work. Please tell me how full publication results in “stifling access to knowledge”?”

Would that you were right where it comes to software patents. The USPTO requires no working piece of software or even a model of such in order to patent software. At worst, which is often is, all it requires is a loosely worded conceptual statement of how the software would work.

Not a line of code, nothing.

This obfuscates knowledge rather than disseminates it and creates situations, all too common, where something unheard of when the patent was granted somehow end up covered by said patent.

It is not the idea of patents that is questioned here it is the leaving behind of the requirement common right up till the close of World War II that a patent application had to be accompanied by an actual working model.

For something physical a series of drawings explaining it graphically. For a medicine or other chemical the actual chemical breakdown. A similar situation with software would be code that illustrates the patent and produces the results the patent claims.

What is happening now confuses patents with trade secrets and attempts to merge the two with the result that the societal deal of granting a temporary limited monopoly in return for the development/innovation/invention in return for it benefiting society and the economy as a whiole has become badly broken.

ttfn

John

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DarkPhoenix says
09/07/2008 at 7:43 am

“Thats right, no patents are granted without full disclosure of how they work. Please tell me how full publication results in “stifling access to knowledge”?”

Because the US patent system is so screwed up at this point, you don’t actually have to publish the workings of your ‘device’ to get a patent. If it were so, there would be less problems.

Another big problem is that patent times are fixed, but not all areas of development move at the same pace. This is especially obvious in computer science, where patents last way way way longer than the tech in question is useful. Getting a 20-year patent on technology that is only likely to be useful for 6 months to three years is a waste of money, and the only reason it is even being performed now is because the companies hope to use outdated patents to prevent competition, by tying old technology to new technology. The problem? Computer science, and science in general, is not developed in a vacuum; it is built upon what already exists; giving monopolies here is the equivalent of road-blocking segments of science, making it impossible to study in certain directions (like cryptography, which is so loaded with patents that NO ONE can do reasonable studies or innovate in it).

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Ed says
09/07/2008 at 4:27 pm

Currently, the idea on patents is that if something wasn’t invented at least a year before the patent was filed, then it is patentable. In my opinion, if two or more people independently discover it within the same year, it could still be pretty obvious – especially in a rapidly moving field such as software, a new (non-patented) product can inspire an obvious response in a great many people, such that dozens of people would have the same idea within a year. As I understand it, evidence of this sort of thing is not currently accepted by the courts; the task is always to find prior art that predates the filing of the patent. Furthermore, at least for an informal subject area such as software, what constitutes prior art is excessively formal: my impression is that the software industry utilizes web forums and mailing lists far more than printed publications, yet last I knew, prior art must be either a printed publication, a newsletter, or a published product.

That having been said, I find the lack of need for a model to be most egregious – IMHO, if someone cannot figure out how to write a code snippet to implement their concept, they have no business getting a software patent on it. Realize that this code does not need to compile, and it does not need to have the various support libraries behind it; it just needs to logically express the claims. As I understand it, patents were intended to protect only extraordinary inventions; anything which would be obvious to an ordinary practitioner of the art was to be exempted. As such, this requirement should be fairly trivial to meet for anyone who really could come up with an innovative software concept and could recognize it as innovative.

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Caryn says
15/07/2008 at 6:58 pm

@Ed:
“Furthermore, at least for an informal subject area such as software, what constitutes prior art is excessively formal: my impression is that the software industry utilizes web forums and mailing lists far more than printed publications, yet last I knew, prior art must be either a printed publication, a newsletter, or a published product.”

I’m a searcher at the USPTO, and wanted to clarify this misconception. When we are searching for prior art, we do try to get anything published, including Web publication. For example, I often use Google Groups to find information from mailing lists. The main problem, of course, is that not every published piece of literature is indexed, so whether it’s in print or on the Web, it can be very hard to find. However, if we do find it, we can use it.

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Michael says
18/07/2008 at 5:38 am

First thing you need to do is close the US Patent Office (and all others) and only have International Patents.

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Las Vegas says
20/01/2009 at 7:41 pm

This obfuscates knowledge rather than disseminates it and creates situations, all too common, where something unheard of when the patent was granted somehow end up covered by said patent.you are right 100%.

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