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Intellectual Property Rights and the Public Good

Courtesy of Dr. Ronald Phillips, U. of MinnesotaThe granting of intellectual property rights is intended to stimulate innovation. The twin goals of encouraging innovation and promoting access to inventions require a balancing act between the scope of protection and limits on proprietary rights. In the United States and elsewhere, the government subsidizes research extensively.For developing countries, access to new products, particularly drugs and seeds, is often a question of life and death. Th

By | July 19, 2004

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Courtesy of Dr. Ronald Phillips, U. of Minnesota

The granting of intellectual property rights is intended to stimulate innovation. The twin goals of encouraging innovation and promoting access to inventions require a balancing act between the scope of protection and limits on proprietary rights. In the United States and elsewhere, the government subsidizes research extensively.

For developing countries, access to new products, particularly drugs and seeds, is often a question of life and death. The market power inherent in intellectual property may restrict access by poorer consumers. Furthermore, coordination problems and the transaction costs involved in negotiating terms of access to patented innovations invariably raise the cost of producing and distributing inventions in developing nations.

One example is "golden rice," which is enhanced for beta carotene (provitamin A). It provides hope for alleviating the severe vitamin A deficiency that causes blindness in a half-million children every year. Extensive patenting has hampered delivery of this rice to those in need; forty organizations hold 72 patents on the technology underlying its production. Problems with access to golden rice and essential medicines have stimulated debate on the obligations of American universities to facilitate the provision of goods for the public benefit. A recent symposium1 at the University of Minnesota addressed this question.

Six companies hold 75 percent of all agricultural patents. Such concentration exacerbates the challenge of delivering agricultural inventions to the neediest segments of the world's population. One solution could be the compulsory licensing of patented inventions that have failed to reach the neediest markets. But there is another solution: While the public sector holds less than three percent of all patents, it does have 24 percent of agricultural biotechnology patents. Universities and other public organizations enjoy unique opportunities to deliver affordable pharmaceutical and biotechnological innovations.

What factors influence the impact of patents? First, different forms of intellectual property, such as utility patents, plant patents, plant variety certificates, trademarks, and copyrights, have distinct transaction costs and effects on downstream research and target markets. Second, national and international policies that affect the distribution of public materials are in flux. Third, multilateral treaties have limited access to research tools and finished products. The Convention on Biological Diversity, for example, has transformed plant genetic resources from a global commons into a commodity subject to national sovereignty. The International Treaty on Plant Genetic Resources for Food and Agriculture has likewise subjected an important subset of plant genetic resources to the sovereign control of source nations. Meanwhile, import restrictions on genetically modified foods and other restrictions by developed countries on agricultural imports from developing countries impose additional complexity on efforts to improve the well-being of poor countries.

Developed countries spend about $5 in ' research and development for every $100 in agricultural output; developing countries spend only 66 cents. Because of the low level of research in developing countries, wealthier countries must take the lead in fostering a suitable atmosphere for creating, protecting, and using crop biotechnologies. New organizations such as Public Intellectual Property Resource for Agriculture http://www.pipra.org and the African Agricultural Technology Foundation http://www.aftechfound.org will rationalize the huge proliferation of patents, especially in plant biotechnology. These organizations will develop a freedom-to-operate information database and facilitate the delivery of patented technologies to poor farmers while limiting patent holders' liability.

What else can be done? Improved assessment of the impact of the expiration of key patents would help. A humanitarian use exemption for special situations would be useful, and public institutions should clarify their intellectual policy policies. A recently developed clause provides a model for public institutions to modify their intellectual property policy statements.2 Other possible measures include the raising of patentability standards, evaluating the apparent loss of universities' so-called research exemption from patent infringement liability, adapting licensing policies within the public sector, and revitalizing stewardship of intellectual property. In the long run, building scientific and institutional capacity in developing countries may be the most important means by which American universities can discharge their moral obligation to the world at large.

Ronald L. Phillips is director of the Center for Microbial and Plant Genomics at the University of Minnesota in St. Paul. Jim Chen, Ruth Okediji, and Dan Burk are faculty members at the University of Minnesota Law School.

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