{from June 2005}
Earlier this year, I got to speak with my cousin, Dr. Frank Pasquale III, who teaches law at Seton Hall about patent law, his specialty. It was a sloppy phone conversation, which in my usual eagerness did way too much talking and not enough listening, but really got the gears going. This post was written as a letter some time after that, but reworked as a rough essay. My only hope is that is has some glimmer of originality instead of being a previously tried-and-failed solution.
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I got to thinking about the conflict between capitalist necessity and the recognized ownership of scientific discoveries, such as the human genome and pharmacological intellectual property. At first, I dwelt on the realization that capitalism may be by nature incompatible when dealing with scientific discovery, at least in my premise I have always held (from Proudhon) that such things are the common heritage of mankind.
If I recall correctly, my cousin said the defense of patents on such things was a weak argument, and I regret not letting him get a word in edgewise as to what he specifically meant, but I would think it a matter of one’s values being what is best for the consumer (mankind) taking precedence over businesses (corporate entities). Neither admitting nor rejecting such a starting point, the reality of the market nonetheless imposes itself on the dilemma and will not go away. Namely, many a discovery may not occur if it is not in the interest of an entity, i.e. survival through profit or at least a safeguard of expected compensation.
So the question is moral, balancing reward for effort against the ability of particular entities to control the availability (through price or blatant exclusion) of a technological triumph, such as a much-needed medical advance. However, morality does not have the tools to do more than set the stage for an artificial remediation – law – and using such tools risks damaging the mechanism of progress altogether. For the record, I am basing this on the position that collective effort historically and empirically produces far more than individuals, and this translates to the entities that have shaped the amazing scientific progress of the last century, namely government laboratories, research universities, and perhaps the largest and most fruitful of all – profit corporations.
Being a moral question upon an economic problem, and being unable to satisfy the needs of both the mechanism of capitalism and the unfettered benefit of mankind in terms of theoretical ethics, one may find a solution from the other end, adjusting the business process (and laws governing thereof) to create an economic model which is in the best interests of profit corporations to divulge their research and development for freer use in the marketplace.
This is not the denial of seemingly ridiculous patents – a cure that kills the patient (the impetus for progress). Nor is it the band-aid approach of limiting patent term lengths. What I am suggesting is a change in the remediation for the infringement of such patents. Here is the explanation in detail, using the field of biotechnology and pharmacology.
A corporate entity (profit, educational, or governmental) can patent a discovery, such as a particular human genome mapping or a pharmaceutical compound. Let’s be hopeful and say it is a component of a treatment for a particular kind of cancer. The patent is granted with a proviso that it is completely violable through compensation. In other words, and other business entity may take the discovery and instead of being sued compensatory damages with a cease and desist judgment, they would mediate compensation to the holder of the patent. The compensation could be some formula based on the holder’s research and development costs and the expected or actual profit made by the “legal infringer” of the patent. Such details could be endlessly debated, but are not the point of this solution.
In a system such as this, I would expect the following ramifications. First, an entity doing research and development could spend less resources on protecting intellectual property and other entities would have less need to replicate efforts or find ways around patents by developing similar yet non-infringing products or processes. There would still be a race to discovery (and FDA approval often times), but the “losers” that could prove some part of the result was discovered independently would have that fact taken into consideration when calculating compensation.
Secondly, patents cannot be “tabled” so that no one can implement them – the classic (if urban legend) example being the designs for alternative fuel cars in the 70s being bought by the Big Three and hidden away unused to protect their existing gas-powered market and the interests of Big oil. More importantly, with the open-market availability of patent implementation by other parties, a whole industry of independent research and development could arise, or even separate from existing entities who bring such advances to market. This could provide new levels of accountability and reduce conflict of interest in research, on top of the potential economic stimulus through ensured competition.
But this example begs one question when we step back – why would such a principle be limited to specific patents or industries or fields? If all invention and discovery is the common heritage of mankind (a priori or by legal or moral intention), and a solution is economically viable or even beneficial in a capitalist system, then it satisfies the criteria as a solution to the problem morally and economically.
But the question bigger than all of this is: Is this an original idea, one that has been tired without success, or one that has been presented before yet never implemented?
{Dr. Pasquale’s response}
This is a very good idea. The legal concept you’re invoking here is a liability rule, as opposed to a property rule. Liability rules let you take something from somebody (as long as you pay some compensation for it), while property rules protect that person’s right to exclude you no matter how much you would pay.
The best meta-site on compulsory licensing (a version of liability rules close to what you’re describing) is
http://cptech.org/ip/health/cl/
Although your precise formulation is not in the legal literature yet, there are some proposals that suggest it. For example, see
http://www.onlineopinion.com.au/view.asp?article=3559
{William D Volterman, and my response}
The last statement does complicate the ethics of it all … something to think about. And the controversy over actual versus claimed cost of R&D is the challenge. Like any other business process, third-party auditors would be sent in, perhaps even auditors by both sides, and then the court battle will not be about “tabling” or “monopolizing” a patent, but merely about cost.
And the whole argument is something I would not have thought of. Perhaps corporate milieux are counteractive to a solution. But that is if you take the premise that companies focus on short-term profits as fact.
And I have to disagree with that as a general statment. Though there are many examples of this near-sightedness, and there is pressure from stockholders to do so, I am starting to see that companies that survive long-term do not follow this pattern.
In fact, that’s why the best big companies have a few major stockholders that otuweight Joe Average day-trader or Plain-Jane investor in the board room — the big boys have enough sense and vested interest to promote long-term stability while the fickle masses do not. But this is a somewhat Randian perspective that not all agree with in accuracy, or at least in terms of other moral implications.
But my point is that the biggest companies (i.e. those known as “blue-chip” that have solid lonmg-term growth) do not follow the immediate profit at the expense of corporate citizen reputation — these same companies are responsible for a tremendous share of their respective industries research, development, and ultimately invention and progess.
{Response to Dr. Pasquale}
Wonderful reading … it reminds me of my days in the harvard Model UN. But it’s a bit lugubrious for someone like me who has been out of academia for years and never had a strong understanding of law.
I caught this in Thomas Pogge’s article:
This is a perfect example of law forming business practice instead of business necessitating law. (The present cure is worse than the disease, perhaps?) I have always asserted that businesses tend to be amoral, and merely respond to total social reality, meaning the sum of market behavior, law, consumer expectation or apathy, competition, etc..
HOWEVER, Pogge goes too far IMO:
This is furthering “national housekeeping” in a most concerning way — the government being in bed with big business on one more front. The citizen as taxpayer need not be brought into this because they are already a consumer. But this is based on my belief that market activity is always more naturally accurate to social reality than any governemental body could artificially impose an interference.
But other than this potential snafu, I find his reasoning and intentions respectable and feasible. The only negative aspect of his intention to irradicate high mortality and morbidity globally, if you can call it that, would be the challenges of extreme overpopulation. The Malthusian beast would be stirring up a storm against such efforts by man. But that’s a whole other topic for discussion.