Are Patents Protecting Ideas or Stifling Innovation?

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A patent is a form of intellectual property that can be granted with the presupposition that an invention for public consumption will come out of it later. Parents are good because it allows “the little guy” the time to make his or her invention without worrying about some giant corporation stealing the idea and making it themselves. If a giant corporation does steal the idea, then they must pay this little guy money, which may make the idea theft not worth it in the end. However, what happens when patents for every minuscule idea are granted to people who don’t even have any desire to make something from them? As people have been saying for years, we get the stifling of innovation.

A paper published last year out of Boston University concluded the following:

In the past, “non-practicing entities” (NPEs), popularly known as “patent trolls,” have helped small inventors profit from their inventions. Is this true today or, given the unprecedented levels of NPE litigation, do NPEs reduce innovation incentives? Using a survey of defendants and a database of litigation, this paper estimates the direct costs to defendants arising from NPE patent assertions. We estimate that firms accrued $29 billion of direct costs in 2011. Moreover, although large firms accrued over half of direct costs, most of the defendants were small or medium-sized firms, indicating that NPEs are not just a problem for large firms.

Just how does the “patent troll” work? Let’s look at Peter Detkin, the man who is responsible for the term “patent troll.” He was a lawyer at Intel Corporation, and in 1999 he was being sued by companies that had never produced even one semiconductor chip, and weren’t planning to. The lawsuit was for a $15 billion patent infringement, and another lawsuit came (libel) because Detkin first used the term “patent extortionists.” In the end, the term “patent troll” stuck, but as you can tell from the study above, a more neutral-sounding name for them is “non-practicing entity.” I prefer to use “non-contributing entity,” as in “not contributing to society.”

Regardless, since this concept is relatively new, the definition of a “patent troll” is not yet fully accepted by everyone. But the basics of it is that it’s unfair and disingenuous. An article published last week from the Guardian said:

As an accompanying report by the National Economic Council and the Council of Economic Advisers (pdf) explains, many of the trolls create nothing and, via a maze of shell companies, are taking advantage of the system’s notorious inefficiencies in ways that do the opposite of encouraging innovation; they discourage it, because they create uncertainty in every startup. They are a tax on big enterprises and innovators alike – and, by extension, all of us:

“‘Patent Assertion Entities’ (PAEs) often abuse the US intellectual property system’s strong protections by using tactics that create outsize costs to defendants and innovators at little risk to themselves. The PAE business model is based on the presumption that in many cases, targeted firms will settle out of court rather than take the risky, time-consuming course of allowing a court to decide if infringement has occurred.”

One man who not only experienced a patent troll but actually beat one spoke on the TED stage last year. His brief story is here:

Maybe you’re cynically thinking “so what? Who cares if some rich corporation doesn’t get richer because there’s patent on some obscure doodad for some random device?” Well sure, when you’ve been living your whole life without the invention that someone trying to make a reality, it’s easy for us to say “I really don’t need that.” But what if we’re talking about… your own body?

Indeed. There are actually patents for your genes.

And scientists had better beware – if they try to cure cancer with a certain gene, they’re in for a world of lawsuits. From the Guardian:

Patents bestow ownership on a process or an invention. Your genes are neither. But the fuzziness of the law has meant that patents can be issued on isolated genes. The best documented case concerns two genes that all of us have, BRCA1 and BRCA2. Certain versions of these predispose women to breast and ovarian cancers, and so in the 1990s, a company called Myriad Genetics obtained the patent on these with the intent of charging for the diagnosis.

The costs are about $3,500 (£2,300). This was challenged in the US courts in 2010, the patents revoked, but Myriad won them back on appeal. In the next few weeks, the US supreme court will review the appeal decision, and rule on whether your DNA can be owned. The outcome will be of profound importance.

As well as denying access to medical diagnoses, these patent thickets also hinder scientific progress. By its very nature, research leads in unpredictable directions. Imagine a young researcher working on trying to understand a disease, for example, a cancer. The genes involved in such a complex disease are many and form intricate biochemical pathways – genes interacting with dozens of others.

But as soon as they reach one that is under patent protection, they must seek and pay for permission to continue. Last year, a study in the UK suggested that often these were simply ignored, though this is clearly not a solution to the problem. These types of patents impede research and innovation, and [the] only winners are the lawyers.

This excerpt from The Hindu talks about how Angelina Jolie’s recent publicity brought gene patents into the spotlight again:

Hollywood actor Angelina Jolie’s well-publicised decision to have a prophylactic double mastectomy may have renewed the debate on genetic testing for breast cancer — Ms. Jolie carries a cancer-linked gene, BRCA1 – but it has also revived the discussion on whether private corporations can own the patent to genes.

Although Ms. Jolie said women should undergo genetic testing if they believed they were in the “at risk” category for getting cancer, she acknowledged that at $3,000 or more per procedure, the cost of testing for BRCA1 and BRCA2 “remains an obstacle for many women.”

What her op-ed did not mention is that the sole right to administer the tests is held by a Utah-based genetics firm called Myriad Genetics. It is this company that is responsible for setting fees for testing significantly above the $200 or so that other labs charged before Myriad moved to enforce its patent.

Myriad’s patent application for monopoly ownership of the BRCA genes is facing challenges from civil rights groups such as the American Civil Liberties Union, which initially filed a lawsuit in 2009 charging that the patents were “unconstitutional and invalid.” In November 2012 the Supreme Court agreed to hear arguments on the patentability of human genes.

The debate, however, is complex and nuanced. I, like most people, believe that there should be no monopoly on natural things (such as my own body). But there are a lot of arguments to be made and many issues at hand. These decisions are going to be influenced and ultimately made by professionals.

So where does that leave us? Sometime in the next few days or weeks, the US Supreme Court will make a decision on this. So all we’re left with is a question: Patents were made to protect people, but how do we protect people from patents?

 

[June 14 Update…]

I’m very happy to report that the Supreme Court finally ruled that you own your own body – hence the fact that it’s called “your own.” From Time:

On Thursday, the Supreme Court ruled that companies cannot patent isolated human genes that are naturally occurring. [. . .] According to the court’s decision written by Justice Clarence Thomas, Myriad did not create anything new when it comes to the BRCA genes, since they are a product of nature; therefore patenting them is illegal.

This is absolutely fantastic news, and will change medicine and the science for good. That is, doctors, consumers, and researchers won’t have to worry about running into a patent issue. For more on why this is such a big deal, see National Geographic’s report here.

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