3 May 2010

How Intellectual Property Is Making Us Dumb

By James Arvanitakis and Spike Boydell
Patents don't always encourage research and innovation, write Spike Boydell and James Arvanitakis. Especially when they are applied to parts of the human body
BCRA1 and BCRA2 are a random mix of letters and numbers that mean nothing to most of us.

These letters are key to understanding the changing nature of research and genetics. They shed some light on the ludicrous notion that patents always encourage research and innovation and help us think through some broader concerns about who "owns" the human body.

Property rights are fundamental to our capitalist system. In Adam Smith's day, property meant land. And property rights worked in a reasonably simple fashion: if you owned the land, you put a fence around it. You could sell it, farm it, build a castle on it. .

Today, property rights and ownership are much more complex. For starters, a range of developments have made property rights associated with land much more complicated; these include the separation of buildings from land in leasehold arrangements, the separation of water from land in rural environments, the restoration of Native Title after 200 years of supposed terra nullius, and debates around mineral ownership with State government support for the "extinguishment" of Native Title on the grounds of the public interest.

We now see claims of rights associated with everything from carbon to intellectual property, with the Australian government supporting intellectual property (the property of your mind or intellect) as the "edge that sets successful companies apart". In other words, we now see a complex "constellation of property rights" that continue to be debated, negotiated and asserted (pdf).

Discussions of property rights have been transformed in a way that Adam Smith and the other founders of modern economics could never have imagined.

And so we return to BRCA1 and BRCA2.

These symbols represent the protein codes for the genes that respectively assess a woman's risk of breast or ovarian cancer. Their discovery in 1995 by the US Government-owned (read: publicly owned) National Institute of Health was a fundamental breakthrough in the detection and fight against these lethal cancers. In 1998, Myriad Genetics claimed a patent on BRCA1 and BRCA2 on the grounds that it extended the code. That's right. A large biotechnology company, Myriad, claims ownership of particular gene codes in humans because it extended the research of the National Institute of Health.

A New York court ruled last month that the patents to BRCA1 and BRCA2 should never have been granted, as Leslie Cannold and Luigi Palombi discuss here. Myriad, unsurprisingly, have declared that they will appeal the ruling.

This case raises a number of vital questions about both patents and the nature of scientific discovery.

Claims of having "discovered" the knowledge which is patented imply that a scientist "discovers" something in isolation: sitting in their lab somewhere. Rather, knowledge breakthroughs are like building blocks: each generation of researchers builds on top of previous generations — and learns from the mistakes they made. In addition, we all learn from peers. The notion that someone could claim outright ownership of a "discovery" was, in fact, an alien concept even a generation ago. For example, Jonas Salk and his peers never claimed ownership of 'their' polio vaccine (pdf). It's well documented too that copying and imitating actually stimulate (pdf) learning and acquiring knowledge — and not just product development. The "discovery" model therefore risks misrepresenting the research process.

All too often, those who claim intellectual property rights as a return for their investment in research and development — particularly pharmaceutical companies — fail to acknowledge the role of public institutions like the National Institute of Health in the production of knowledge that led to product development in the first place.

Research and development — for which companies are remunerated if their lawyers have secured the appropriate patents — is not always linked to innovation. Pharmaceutical companies spend a great deal of time and money on extending the life of patents on profitable medicines, or "evergreening" patents by researching minor variations on existing products and then registering them for new use. This has nothing to do either with innovation or with the development of new medicines. There exists too an increasingly questionable link between patent protection and increased research and development in infectious diseases — which predominantly affect the third world (pdf).

A disturbing example that most of us would remember is when a number of large pharmaceutical companies insisted on the enforcement of patent laws that ensured generic anti-retrovirals were not made available to HIV sufferers in low-income nations. That battle was won, but the risk of patents being used to stop the supply of generic drugs remains.

This brings us to a related point: that patents, rather than promoting research and development, can actually retard it. Myriad held the BRCA1 and BRCA2 patents for 12 years and during this time, its lawyers ensured that diagnostic labs, both public and private, could not test people because the genes were private property.

What this means is that when an organisation patents a gene, researchers interested in finding diagnostic tests or therapies based on that gene will shy away from it for fear of infringing the patent.

Consequently, "ownership" of knowledge limits the exchange of ideas and can actually stifle innovation — particularly if it isn't seen as profitable. Patents also mean that other parties do not have "ownership" rights — which effectively shuts out weaker players. While monopolies mean more profits, they also stifle innovation (pdf).

We should not confuse living things — in this case, humans — with machines. After Myriad patented BRCA1 and BRCA2, there was a spike (pdf) in patent applications for key cell receptor and genetic sequences. Even with an appeal against the withdrawal of the patents yet to be launched, the Myriad case has set a disturbing and far-reaching precedent that life forms themselves can be claimed as private property — despite the fact that these genes belong to, and can be an intrinsic part of, each human individually.

While in the US the reversal of the Myriad case means that the US patent office will not grant any further patents on human genes isolated from the body, Australia's intellectual property laws and those of the World Intellectual Property Organisation remain.

It is important that we use the Myriad example as the impetus to review the issue of patents. We need to question the simple message that more intellectual property rights equals more innovation and investment. Even if this was the case, which it is not, patent law tells us nothing about what a "fair return" is. The ideological push for intellectual property rights has little to do with delivering innovation and everything to do with profits and rent-seeking behaviour.


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Posted Monday, May 3, 2010 - 13:28

It has been a long time since I've studied patent law but couple of comments. there was the case that said an individual didn't have property rights over their DNA (the case may have been overruled, i can't even rememebr the name of it). if that is still good law, how can a corporate legitimately have ownership of a collective DNA? IP is meant to be about the balance between makers and users. The compulsory licensing scheme under the patent act is very onerous, what investor would back lawyers to apply to the court for a compulsory licence (still with requisite licence fee), only to have their IP challenged in the same way later.

Second comment is about R&D tax incentives in this country. Is there a link between giving these, sometimes, extraordinary amounts of money back to institutes for R&D and a requirement to allow/ licence the benefit in a technology transfer system?

in addition, is there any requirement when partnering with CSIRO that there be public benefit licensing for continued research?

more questions than answers, but thoughts appreciated.

Posted Monday, May 3, 2010 - 17:09

Some good points here, particularly about earlier research and rent-seeking. The latter is particularly relevant to crops - as US patent law (from my understanding) enables applicants to patent descriptions, biotech companies have attempted to patent crops from around the world in spite of the fact that others have been planting them for thousands of years - with, of course, the objective of guaranteeing an income stream from something they didn't create (see RiceTec and basmati).

More generally, I think people need to understand patents and IP law as the comparatively recent phenomena they are. For a long time, being the first one to do something was considered to be enough of a head start. Now we have patent-mania as described, which - most seriously - affects needed technology transfer to developing countries.

Really, rent-seeking does best describe this, and rent-seeking is of course extractive rather than productive. I'm all for a review.


Posted Monday, May 3, 2010 - 17:50

I agree with the sentiments expressed here however a simpler analysis produces the same conclusion. Private companies are first and foremost profit making enterprises, every other consideration is secondary. The idea (asserted out of self-interest) that pharmaceutical companies are interested in human health above their own concerns for making profits is plainly unsustainable.

Posted Monday, May 3, 2010 - 17:53

I was having this same discussion with a friend yesterday. We discussed the company that tried to patent the neen tree as well as the cave in to Disney allowing them to extend the intellectual rights to their characters to seventy years after the death of Walt. This is despite so many of their characters being borrowed in the first place from old fables. Even the mouse who first appeared in Steamboat Willy was a rip off of a movie character who was a steambot captain, right down to Mickey whistling his theme song. This is not as bad as the medical instances but it does set a nasty precedence.
Where is the Mouse Liberation Front in medical circles.

P. P. Strawman
Posted Tuesday, May 4, 2010 - 10:07

Mr Arvanitakis & Mr Boydell, could you please give a further description or stipulate the Australian laws you claim allow a person or entity to place patents or copyrights over a human body.

As far as I can possibly remember there is no ownership whatsoever in a human body within Australia. I am unsure about the laws within the US, but I would assume they are similar. Within your article you state that the courts had dissallowed the patent.

Intellectual property rights are an essential part of our capitalist society. To protect our brands and products and therefore the Goodwill of our businesses and profitability. You haven't shown any evidence that eliminating IP rights would aid research in medical fields but implied it might. Destroying IP rights would place a large burden on many industries, such problems are already noticable by fake product knock-offs from China at the moment (not in the medical field but otherwise). Cheep labour (in some instances even same quality) but stolen idea.

You must distinguish the difference between owning a patent on a type of medicine, or formula created by a medical company and the attempt to own a human body which is not possible as far as I am aware. An old saying is that necessity is the mother of all invention. It would also be reasonable to assert that profit also drives research. Should you destroy IP law, hence destroy companies ability to generate a profit, as that medicine (or invention) would automatically be "knocked-off" by a lab in a developing nation (or even another company within but with no research program of their own), then you destroy the incentive to research and create new medicines. It will not be until these cheaper labs develope their research programs to be on par or more advanced that you would find any great new leaps into research. Then you would have a catch 22, as research programs cost money.