Study finds patent systems may discourage innovation

PhysOrg.com ^ | 27 July 2009 | Sherry Main

[sourcery]

(PhysOrg.com) -- A new study challenges the traditional view that patents foster innovation, suggesting instead that they may hinder technological progress, economic activity and societal wealth. These results could have important policy implications, because many countries count on patent systems to spur new technology and promote economic growth.

[fso301]

Only time they stifle innovation is when competitors in an industry come together each year to cross license each others IP. This has the effect of keeping new competitors out of the industry.

[Zeppo]

Isn't it remarkable how "studies" such as this one so often come up with the result that the "studyer" wanted?

/s

[E. Pluribus Unum]

The Case Against Gene Patents

Professor David Koepsell

I favor innovation, and am interested in ensuring that science and technology work hand in hand to both better our standard of living, and enrich those who create new and useful works. But it is not necessarily true that current intellectual property laws always accomplish this. Nor is it so that everything under the sun is subject to intellectual property protection. When Jonas Salk developed his vaccine for polio, he was asked by Edward R. Murrow who owned the patent on the vaccine. His famous reply was “well, the people, I would say. There is no patent. Could you patent the sun?”

Since the mid 1990s, patents have been granted for human genes. Although now they are supposedly limited only to “isolated and purified” genes, this is a limitation of no consequence at all. It merely means marking the beginning and end point of the gene, and perhaps leaving out a few introns (which are meaningless junk that doesn’t do anything to the functioning of the genes, and that remains as a byproduct of evolution.” I argue that this is as “”inventive” as marking the boudaries of natural features, like mountains, on a map. It gives the mapmaker no right to the mountain, nor to preclude others from depicting that mountain.

The practice of patenting genes began during the progress of the Human Genome Project, which was a world-wide publicly funded scientific endeavor to map the human genome. While the HGP released the data it found into the public domain, it left open the option of “downstream” patents for new, inventive innovations, treatments, etc., that might come from the research. Meanwhile, Celera began to patent an unspecified number of sequences it found in its private attempt to map the genome. It’s “shotgun” approach to sequencing remains a vital, patentable innovation that has changed the way gene sequencing is done. It was new, inventive, useful, and non-obvious. But this is not true of human genes that are being patented.

The first public altercations over gene patents came from groups representing those who suffer from genetic diseases. Canavan’s Disease is a monogenic disease (it is carried by one gene only) that strikes a disproportionately among people of Ashkenazi Jewish heritage. When Miami Children’s Hospital acquired a patent for the gene, a group representing families suffering from Canavan’s Disease sued under tort law. They claimed that based on the patent, he Miami Children’s Hospital was unjustly enriched when they not only collected royalties but restricted the number of labs that could offer testing for the disease and charged a fee beyond the cost of the test. Because of the restrictive licensing, many labs stopped offering the test. The case settled, and the legality of gene patenting remains unchallenged in court. It has so far been based only upon the PTO’s interpretation of regulations it has promulgated. Recently, the ACLU’s suit against Myriad over its tests for the “breast cancer genes” has brought this issue back to the spotlight.

I argue in my book – Who Owns You? - that gene patents violate the patent law because what they claim as patentable is a part of nature, and thus neither new nor non-obvious. Awarding patents to non-new discoveries does not encourage innovation, and sitting on what are essentially laws of nature, so far upstream, actually stifles downstream innovation. Moreover, There are certain things that we have regarded both culturally and legally as belonging to a commons, and thus not subject to private ownership. I argue that unmodified genes are exactly this sort of thing.

In Gottschalk v. Benson, the Supreme Court stated: “the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.” That would amount to patenting an abstract idea, contrary to long established precedent. Laws of nature are inherent in nature. We do not invent them, they are part of the fabric of everything. Gravity is an example, the laws of evolution are another, as are the laws of relativity. Scientists devise explanations for these lawsn that we call “theories”, and attempt to confirm or falsify them through experiment. As we acquire a better understanding of natural processes and products, we become better equipped to manipulate our world, create new things that nature never made, and bring our inventiveness to bear on nature to make our lives better. This is, in sum, the purpose of intellectual property law: to further the progress of the useful arts and sciences. But if we try to do so by allowing governmentally-sponsored monopolies (as intellectual property ultimately is not a free-market device) we must be careful to not stifle innovation by granting monopolistic rights over laws of nature. Instead, we should grant rights only to those things that are the products of human thought and creativity. The application, for instance, of the laws of gravity to some specific way of moving people up and down between floors. The splicing of a genetic segment into a creature in such a way that nature never devised to make an entirely new creature that might, for instance, eat oil, is inventive. Finding a gene that has evolved over millenia is not.

Finally, I argue that the genome is a commons. There are parts of the world that cannot be owned in any practical sense. Radio spectra are my favorite example. There’s no way to exert ownership over a particular band. I can exert my ownership over my possessions and my land, but the only means of trying to control a band on the radio spectrum is to broadcast over it. But along comes my neighbor who does the same thing, and cranks up the wattage. There is no winner. It is the classic tragedy of the commons. I argue that genes, which are, after all, parts of what Richard Dawkins calls “the river of life flowing out of Eden” are simply unencloseable. Parents all over the world are reproducing patented genes, technically violating the patents on those genes because they haven’t sought permission and aren’t paying royalties. The idea is absurd, of course. This is why the practice is absurd. Unmodified genes simply cannot be owned, nor should they be.

But there’s plenty of room for innovation. As I mentioned, Celera deserves the fruits of its invention in developing new, useful, non-obvious technologies for rapidly sequencing genes. When new methods of testing are developed, they ought to be rewarded. A number of corporations agree with the thesis that patenting too far upstream actually stifles innovation, and the SNP (single nucleotide polymorphisms) Consortium is a prime example. The Consortium itself is a not-for-profit organization made up of the Wellcome Trust, a number of leading academic centers, and thirteen pharmaceutical and technological companies. These members have joined efforts to discover the roughly 300,000 SNPs thought to exist in the human genome, and to release this information into the public domain, while securing for each member IP rights over real innovations developed both along the way, and as a result of the effort. The same is true of the HapMap project which includes private companies, academic centers, and public and private research institutes. These efforts underscore the role of public science in profitable enterprise, and the recognition by corporations of the role of each in spurring innovation. None of the private corporations involved in these efforts could be accused of being wild-eyed anarchists seeking to undo private property rights. They simply realize that not everything should be patented, and that upstream patents can stifle downstream innovation, slowing the progress of the useful arts and sciences, and undermining the purposes for which patents were invented in the first place.

My book is certain to cause disagreements, as there is room for reasonable people to debate my assumptions about the role of intellectual property in innovation, as well as the nature of genes and genomes. But this is an issue that requires public debate, and legal challenge. Whether the courts or legislators ultimately change the way that genes are now being patented remains up in the air, which is why now is a perfect time to decide for yourself, and make your arguments, and be heard on this vital issue.

About the Author

David Koepsell is an author, philosopher, and attorney whose recent research focuses on the nexus of science, technology, ethics and public policy. He is an Assistant Professor at the Delft University of Technology, Faculty of Technology, Policy, and Management, Philosophy Section, and he blogs at Who Owns You?

[BuffaloJack]

When someone has spent several million dollars on a risky system that has never been done before they should be able to enjoy several years of exclusive rights to their product when the risk bears fruit.

[fso301]

When someone has spent several million dollars on a risky system that has never been done before they should be able to enjoy several years of exclusive rights to their product when the risk bears fruit.

Yep.

[C210N]

Sounds like something emboldened leftists, auto industry destroyers, and capitalism snuffers might want to latch onto to further their cause. Bears watching...

[businessprofessor]

The patent debate is complex, crossing ideological lines. The difference between an abstract idea and working machine can be subtle. Could the Pythagorium Theorem have been patented? Can mathematical theory derived from this theorem be patented? At the heart of most machines is mathematical and scientific theory. Often the theory is invented and tested as part of developing a potential device.

There is a large amount of controversy about software patents and business process patents. The business process patents often seem obvious. Software patents seem more of copyright issue. On the other hand, almost every machine now has embedded software.

I do not have any answers to intellectual property questions except that they deserve careful study. I do not see that traditional left-right divisions provide insight into the debate about intellectual property rights.

[3niner]

It also discourages innovation, when companies are allowed to patent trivial or obvious methods. It has the effect of preventing engineers and inventors from being able to use standard practices.

[SampleMan]

Very short sighted idea. Patents make inovation worth while. Of course allowing patent infringement would create a short term explosion in innovation, but only until the newcomers figured out that they weren’t protected either.

It would be the death of R&D. Why develop anything, when it can just be copied.

[SampleMan]

Could the Pythagorium Theorem have been patented?

Why not? Are you suggesting that if Pythagoras would have exclusive use for 15 years in say 540BC that the technological development would have been delayed?

Your argument appears to be that nothing is a mystery once it is revealed, and therefore it is unfair to keep people from copying it once they have it figured out.

[businessprofessor]

Obviously the world was much different in Pythagoras’s day. I am not clear on the distinction between a patentable machine and abstract idea. Patentable machines often have key mathematical and scientific theory. Can a new machine be built that uses some of the theory in another patented machine? The theory may be so general that it can be used in many machines totally unrelated to the patented machine. I do not have answers. I am just posing controversy.

The most valuable patents are the most general. TIVO has patented key elements of the DVR. Can the TIVO patents force anyone who wants to develop a DVR to pay royalties? I do not know the TIVO patents but I do not agree with the claimed generality of its patents. Perhaps my argument is based on prior art such as buffering concepts and prior digital video devices. A British inventor received a patent on hyperlinks, effectively putting a toll on web based information exchange. Even without the existence of prior art, the idea of a hyperlink seems obvious.

Even if patent controversy is resolved, patent examiners are a problem. To properly evaluate patents, you need to be a specialist in the particular field with an advanced degree. It seems that patent examiners lack expertise to evaluate submitted inventions.

[Mr. Lucky]

Example?

[fso301]

There is a large amount of controversy about software patents and business process patents. The business process patents often seem obvious.

Separating the eureka moment from the obvious is problematic. It's usually only after the eureka moment that something seems obvious. My feeling has always been that if something such as Microsoft and the "double click" was so obvious, why didn't anyone think of it previously? Ultimately, obviousness is a matter for the courts to decide.

Software patents seem more of copyright issue.

Yes and no. Patents and copyrights convey rights to the owner. From a standpoint of encouraging innovation, a software patent may be better than a copyright because the patent is only valid for a fixed period whereas copyright claims can extend beyond the life of a patent.

[SampleMan]

Even without the existence of prior art, the idea of a hyperlink seems obvious.

There are very, very few developments which do not appear to be obvious in hindsight, yet original thought remains one of the rarest occurrences. Without patents to protect even "simple" thought, the only way to make money would be to have enormous capital and secrecy so that you could instantly flood the market place. But even then, large R&D couldn't be paid for.

Patents turn development into a race. I'm certain that increases vice decreases technological advancement. It also forces people to think in different directions. Look at big screen TV's.

[3niner]

My more recent examples are a bit too close to home, for me to want to talk about them, but there are a couple of older examples that are interesting.

In the 1980s, someone tried to patent the idea of swapping bytes to convert data between systems that used different byte orders. This had been done since the 1960s, and engineers considered it so obvious that nobody had thought to patent it. The US Patent Office was actually going to award the patent, and considerable pressure was applied by the software engineering community before they finally disallowed it.

At a later date, a patent was actually awarded retroactively for the invention of the semiconductor. The inventor had contributed nothing to the actual development of semiconductors, but managed to convince the patent office that he had developed the fundamental priciples first. The actual inventors didn't have documentation that went back that far. This was a blatent attempt to use the patent system to rob all semiconductor developers. I don't know how this one ended up, but I know that it cost a great deal of money for many businesses which had done real development work.