Finding common cause in the patent debate
URL: http://www.nature.com/cgi-taf/DynaPage.taf?file=/nbt/journal/v18/n11/full/nbt1100_1217.html
Nature Biotech, November 2000 Volume 18 Number 11 pp 1217 -
1218
E. Richard Gold
E. Richard Gold is on the faculty of law at the University
of Western Ontario, London, Canada N6A
3K7 (e-mail: ergold@uwo.ca).
To move the biotechnology patent debate forward, the
first step is to establish clear goals for both industry and
civil society.
The biotechnology industry and its critics in civil society
continue to argue past each other about the benefits and
disadvantages of biotech patenting. However, both sides
overstate their case. Biotech patents, while important, need not
always be as strong as industry claims. The critics also overplay
the role of patents in threatening the environment and human
health, while ignoring some of the benefits.
From feeding the world at low cost and with increased
environmental safety1 to causing severe environmental harm2, it
is difficult for the outsider to reconcile the claims that the biotech
industry and civil society make about biotechnology. Outsiders
are not the only ones with this problem: both industry and civil
society more often talk past one another than with each other.
The failure of those interested in biotechnology policy to engage
in public debate—as opposed to behind-the-scenes
discussions3—is nowhere more evident than with respect to the
question of biotechnology patents4. Industry continues to insist
that strong and broad patents are essential for it to attract
investors and develop new drugs and better foods5. Members
of civil society argue that patents only serve to develop
corporate profit and do nothing to address health and
agricultural concerns2, 6.
As a result, both sides lose. Despite over a decade of debate
and the adoption of policy statements and statements of
principle, the critics must face the reality that human genetic
patents are routine and that the major Western countries grant
patents over plants and animals. The biotechnology industry has
little to cheer about, however. Despite its success in gaining
patent protection over genetic material and higher life forms,
these patents may be worth less than they appear at first. First,
many of the patents currently issued may not ultimately stand up
against challenge. In fact, in the United States, between 1982
and 1994, courts invalidated approximately one third of
challenged patents7. In addition, the standards that patent
offices and courts apply to biotechnology patents are evolving5,
8. Second, if patent offices continue to issue broad biotech
patents or too many of them, the value of each issued patent
may actually decrease9. Third, a valid patent does not ensure
successful commercial exploitation, especially when the
technology is open to as much public criticism as is
biotechnology.
It is time to move the biotech patent debate forward. In this, the
first of two articles, I examine where both industry and its critics
have room to compromise to reach a consensus. Next month, I
will introduce some promising avenues to attain that
compromise.
Deconstructing the opposing positions
There are three central planks to industry's call for strong patent
rights. The first is that industry has a leading role to play in
biotechnological development; otherwise, why worry about it?
The second is that strong patents are required to provide
industry with the incentive necessary for it to achieve this
progress. The third is that the type of progress that patents
encourage is the type that best attains society's health and
agricultural needs.
Industry credits two developments for ushering in the biotech
boom: in 1980, the US Supreme Court allowed the first patent
of a genetically modified organism10, and Congress passed the
Bayh-Dole Act11, providing universities the right to gain patents
in the results of federally funded research. The reality is that
industry only became interested in genetics once governments,
universities, and not-for-profit research centers had spent
decades developing the technology to the point that it could be
turned into products that could be commercialized12. Although
not coincidental, the Chakrabarty decision and the Bayh-Dole
Act did not cause the biotech revolution of the 1980s and
1990s; rather, all three phenomena likely arose out of the fact
that biotechnological science had reached its age of maturity by
1980.
This reality of the timing of industry involvement in biotechnology
tells us two things about its importance. First, industry plays a
relatively small role in advancing basic scientific knowledge;
only the public sector can support the labor-intensive and
time-consuming effort to create new knowledge12. Second,
once the public sector has advanced knowledge sufficiently to
lead to commercial products, the private sector will develop and
market those products.
The role of patents
Industry claims that patents are necessary to promote research.
They reason that by preventing competition during the patent
term (generally up to 20 years), they permit the holder to extract
the maximum return from the public for use of the invention. In
exchange, however, the company must disclose details of the
invention. Thus, in return for its payment of monopoly prices, the
public receives the knowledge contained in the invention, with
which other researchers can develop new inventions.
There are several problems with this model as it applies to
biotechnology. First, it assumes a one-size-fits-all approach to
technology; that is, all inventions, no matter how difficult or
expensive they are to develop, receive the same 20-year
monopoly. Pharmaceutical end-products, such as new drugs,
take many years and vast amounts of money to bring to market
because of health-related regulatory approval. On the other
hand, some inventions—such as research tools based on the
isolation of specific genetic sequences, cells, or tissues—may
take little time to develop and market, and more importantly, do
not go through the same strenuous regulatory review as do
drugs. This makes a significant difference in the cost of their
development13-15.
Industry has sometimes been careless in drawing distinctions
between these two types of inventions5. Given that a patent
allows its holder to prevent anyone else from using the
invention, a patent right over a research tool affects a vast
amount of research. Unlike patents over end-products that have
limited spill-over effects on research activities, patents over
research tools have a potentially dramatic effect: they could
potentially stifle further R&D. This problem has been dubbed the
tragedy of the anticommons16.
Third, while the purpose of patents is to encourage industry to
invest in R&D, in certain industries patents may actually
discourage investment. Patents play an important but limited
role in promoting investment in mature technologies where
innovation is regular and stable17, 18. However, strong patents
undermine investment in technologies in their formative
stages14 or in which there is a fast pace of innovation9—both
characteristic of the biotech industry.
Patents can deter innovation in one of two ways: through the
grant of broad patent rights in an emerging field, and through
the grant of a large number of patents in a highly active
scientific field. Because the biotech industry is young, patents
often tend to be quite broad. While the inventor is well
compensated, others in the field are less well off, because in
the universe of inventions to be made in that field, whole
categories of invention will be covered by patents, deterring
further research—and thus, investment— in an emerging area.
The grant of a large number of patents in an active scientific
field reduces levels of innovation in two ways. First, the
existence of a larger number of patents makes it more unlikely
that a new inventor will succeed in getting a patent, since the
patent space is already more filled. Second, the value of each
patent falls as the number of patents grows. There are two
reasons for this. First, when potential researchers must buy
rights to a large number of patents, they will be willing to pay
less per patent than if there were only a small number of
patents. Second, in those industries with a fast pace of
innovation, competitors leap-frog each other by borrowing
ideas from one another. Patents deter this process, limiting the
ability of innovators to reach the next plateau of innovation.
The last plank in industry contentions about the need for strong
patent rights is that patents encourage the type of innovation
that is best for society. We are not, after all, concerned about
what benefit industry ultimately derives from patents; rather, we
ought only to be concerned about how patents benefit society
as a whole. If the best way to help society is to help industry, so
be it, but helping industry in and of itself should not be our goal.
Biotech critics
While shorter, my critique of that portion of civil society critical of
the biotech industry also aims to demonstrate that they have
room to accept some of the industry's arguments regarding
patenting. The essential argument of the critics that I wish to
examine is that biotech patents are incompatible with
addressing the social and ethical concerns related to
biotechnology.
The opponents of biotech patents raise two types of
arguments19. The first, or deontological, argument is that
patents—in that they imply ownership of biological
material—are unacceptable because they violate ethical or
religious norms20. According to some religious views, only God
can "own" plants and animals, not people20, 21. The problem
with the deontological argument is that it assumes a universality
of moral norms with respect to property in biological material
that simply does not exist. Not only do different religions have
different views of biotechnology21, many of us do not subscribe
to any religious views. At most, those opposed to patents on
deontological grounds can ask to be exempted from having to
hold patents on biological materials and to have their own
inventions exempted from patent coverage. Both of these
requests are easily met under current patent law.
Critics in civil society are on a stronger footing with respect to
their objections to the consequences of biotech patents. These
range from concern that patents will lead to the
commercialization and objectification of plants, animals, and
human genetic and biological material—which, they claim, is
objectionable in its own right22, 23—to fear that the very
economic stimulus that patent advocates embrace will lead to
biotechnologies that will endanger the environment22, 24, 25 and
human health25, 26 as well as further shift resources from
developing to developed nations22, 25-29.
In their concern over the consequences of biotech patents,
many critics make the same mistake as does the industry: they
overestimate the effect of patents in spurring innovation. As
discussed earlier, the economic data do not support the
contention that patents are a prime motivator of biotech
innovation. Thus, while patents may contribute to the critics'
concerns, the situation is not likely to be much better without
patents. In fact, given one positive aspect of patents—that they
focus moral responsibility on one actor—the situation may even
be worse.
As I have argued elsewhere30, patents provide a focus for
moral and public responsibility regarding the use of an
invention: the patent holder. In a world where patents exist, the
public can apply pressure to the patent holder to change the
way in which it conducts business. This is because the patent
holder is not only easily identifiable by the public, but has the
power—through its exclusive rights to use the invention—to
control not only how it uses its invention, but how others use it as
well.
In the absence of a patent holder, the invention would be free to
all to use. Not only would the invention likely be
created—because market forces stronger than patents are at
work—but no one entity could be held responsible for the use of
that invention. As history teaches us, when moral responsibility
is spread thin, no one steps forward to ensure compliance with
ethical norms. Thus, in the absence of patents, the critics may
well have more to fear than at present.
The critics also downplay the advantages that biotechnology
may hold in store for healthcare and the environment. While
biotechnology is not likely, by itself, to address such perennial
problems as malnutrition and illness, it can be part of the
solution31. Simply because biotechnology has not yet yielded
answers to these problems does not mean that it is incapable
of doing so.
Given that both industry and civil society have space in which to
negotiate over the strength and coverage of biotech patents,
next month we will find out where, within that space, they can
achieve compromise.
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