An Inconvenient Truth: Patents Do Not Deter Research
|Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: February 21, 2011 @ 12:30 pm
Frankly I am getting rather sick and tired of those who oppose intellectual property protections ignoring the overwhelming truth that patents and other forms of intellectual property are a net positive for society. These anti-patent and anti-intellectual property zealots purport to present objective facts, but if you look at their reports there is never anything other than conjecture and speculation.
For example, on January 24, 2011, an article in the Chronicle of Higher Education exclaimed: “A new study released today indicates that overly complicated and restrictive patenting practices, and scientists who do not fully share information and materials, are creating a research bottleneck at the corporate level that could soon hinder work at dozens of universities.” The trouble is when you look at the “study” you notice it really wasn’t a “study” at all. The report is devoid of a single fact or concrete observation. The report is nothing more than the opinions of a panel of supposed governmental and academics experts. In fact, it is just a “consensus statement” that makes numerous recommendations without any factual support. Those familiar with the gene patent challenges in the Courts will not be surprised that the extraordinarily intellectually dishonest Robert Cook-Deegan was a member of the supposed panel of experts.
First, real studies on the issue have demonstrated that patents do not in any way, shape or form create a research bottleneck. The book Innovation for the 21st Century by Rutgers University Law Professor Michael Carrier explains the truth. Professor Carrier states:
The Supreme Court’s robust version of the statutory experimental defense stands in marked contrast to the Federal Circuit’s constricted interpretation of the common-law defense. Perhaps the most important question in this chapter is whether innovation has suffered as a result of the narrow defense. The answer, as shown by the empirical evidence, is that it has not, at least to a level that warrants expansion of the defense.
Carrier goes on to detail the comprehensive research of Professor John Walsh who in 2007 surveyed 1125 biomedical researchers in universities, government labs and nonprofit institutions. Walsh received 414 responses and the responses were overwhelmingly clear. Carrier explains that only 3% of respondents indicated that they stopped pursuit of a research agenda based on an excess of patents present in the space. Furthermore, Carrier explained that a mere 5% of respondents even regularly checked for patents related to their research and “no respondents reported that they had abandoned a line of research because of a patent.”
But why is Cook-Deegan so upset about a supposed patent thicket that doesn’t exist? Well, patenting has become big business for universities. The Madey v. Duke decision makes it extremely difficult, if not really impossible, for universities engage in commercial research to claim that what they are doing is experimental in nature and should not be considered to be infringing. The Federal Circuit appropriately recognized that as universities continue to move forward as commercial enterprises they are not engaging in pure scientific research aimed at discovery, but rather they are commercial players and such commercial use of the innovations of others ought to be and is in fact infringing activity.
So what is the connection between Cook-Deegan and the Madey v. Duke case? Cook-Deegan is the director of the Center for Genome Ethics, Law, and Policy at Duke University. Does he have an axe to grind? Frankly I don’t know and I don’t care. All I know is that his positions are not supported by factual evidence. Instead he parades his opinion and belief around as if it should suffice in lieu of facts because apparently s understanding of the issues is superior. This superiority approach is the refuge of those who do not have facts or truth on their side and is symptomatic of the worst kinds of charlatans.
Meanwhile, the charlatan Cook-Deegan, who protests gene patents specifically and patents more generally, is really doing nothing other than forwarding the Duke University line in the Madey v. Duke case. When it is convenient for Duke University they obtain patents and when it is inconvenient for them they seek to use the innovations of others without paying for them. In fact, Duke University is the owner of hundreds of patents, including hundreds of patents characterized as the gene patents Cook-Deegan apparently so despises. See Patent Reality Check: The Hypocrisy of Duke University on Patents. Maybe Duke and Cook-Deegan are still stinging over the Federal Circuit observing that they their research is commercial and not academic. That has to be a slap in the face to someone, like Cook-Deegan, who would prefer to be cloistered away from the real world and firmly ensconced in an ivory tower.
But let’s not stop here! Let’s move forward with even more proof that patents and intellectual property are a net positive for society.
I was reading the 2011 Special 301 Submission recently made by the Biotechnology Industry Organization (BIO). This submission caught my attention for many reasons, the one germane to our discussion here is the mentioning of two recently published working papers that demonstrate that strong intellectual property regimes in developing countries are objectively positive. The BIO submission explains:
Two working papers, recently presented in a World Bank Symposium, enlighten our understanding on the economic benefits of stronger IPR regimes in developing countries. The authors find that “a strengthening of IPR protection in the South (the developing world) reduces the rate of imitation, which, in turn, increases the flow of foreign direct investment (FDI). The increase in FDI more than offsets the decline in production undertaken by Southern imitators, so that the South’s share of goods produced by the global economy increases. Furthermore, real wages of Southern workers increase even though prices of goods produced by multinationals exceed those of Southern imitators.”
The second working paper adds to these findings and provides additional theory and data. The paper’s model predicts and finds evidence that in a North-South model IPR reform “accelerates Southern industrial development. The South’s share of global manufacturing and the pace at which production of recently invented goods shifts to the South both increase.”
In another portion of the BIO 301 Submission the following appears:
The biotechnology industry relies heavily on patents. The development of a single biotechnology product often takes more than a decade to be commercialized, and hundreds of millions (if not a billion) of dollars of capital investment, a significant amount of which comes from private sources. Biotechnology product development is also fraught with high risk ? the vast majority of biotech products fail to ever reach the marketplace. In addition, while biotech health inventions are entitled to the same patent term as all other inventions ? 20 years from the time they are filed – they have the additional hurdle of a rigorous pre-launch regulatory review process during which they may lose between 8 to 10 years of the patent life. Venture capital firms invest in capital-intensive, long-term, and high-risk research and development endeavors only if they believe there will be a return on their investment. Patents help provide this assurance.
“Biotech companies rely heavily on the strength and scope of their patents to generate the significant investment necessarily to bring biotech therapies and other products to market,” stated BIO Vice President for Global Intellectual Property Policy Protection Lila Feisee. “The importance of international intellectual property protection has increased as these companies seek to expand the markets for their products.”
Those who don’t like patents can pretend all they like, but the truth is that patents are required in order to entice corporations to invest the excessive amounts of money necessary to develop those innovations that we want so desperately. There is no point pretending that the revolutionary, pioneering innovations that our patent system is supposed to encourage can be made cheaply. There is also no point to delude ourselves into thinking that a corporation will spend many hundreds of millions of dollars, or even a billion dollars in some instances, without obtaining a competitive advantage that will realistically allow them to both recoup their research and development expenditure and also a profit commensurate with the risk undertaken.
Just as the evidence is clear regarding the necessity to have patents in order to obtain funding, see Start-Up Reality: No Patent = No Funding, No Business, No Jobs and Patents in the Real World, the evidence is clear that patents do not get in the way of research and development. While that might seem counter-intuitive it is the truth. Those who don’t like the truth do a disservice to everyone when they pretend that the truth is not what it is and pursue crusades that can only be characterized as disinformation campaigns aimed at forwarding their own agenda.- - - - - - - - - -
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.