22 February 2014

The Politics of Patents

VotingI find it interesting that while intellectual property can certainly be a divisive topic, unlike many other areas of public policy it does not tend to divide people along party-political lines.

We have seen a number of recent high-profile examples of this characteristic.  The Raising the Bar patent reforms in Australia had broad bipartisan support, being criticised in parliament only by arch-conservative senator Bill Heffernan, and independent senator Nick Xenophon.  Over in the US, both the America Invents Act and the recent Goodlatte Innovation Act (which has yet to pass through the Senate) were supported and opposed in the House of Representatives by a selection of Democrats and Republicans. 

There is no question, also, that campaigns for IP law reform can make for very strange bedfellows.  A particularly striking example of this is the 2012 push in the Australian parliament to ban the patenting of genes, which brought together the aforementioned Senator Heffernan with Western Australian Labor MP Melissa Parke.

It is possible that the reason for this is that IP laws have impacts across a very broad range of policy areas, including industry, innovation, manufacturing, education, science, research, healthcare and international relations, to name but a few.  Perhaps people do not form views on IP per se, but rather upon the role it plays in the areas about which they are most passionate.

Patents and the Free Market

I was prompted to think about this topic again today, while reading a profile of recent appointee to the Australian Human Rights Commission, and prominent libertarian, Tim Wilson.  Wilson was previously a policy director at the Institute of Public Affairs (IPA), which is sometimes described as a ‘free-market think tank’, and courts controversy due to the secrecy surrounding its sources of funding, and its apparent influence on the conservative side of Australian politics.  And he is a great believer in the power of markets to solve most, if not all, of the world’s ills. 

In this context, Wilson’s views on intellectual property, including patents, are particularly interesting, and arguably contradictory.

Consider this account (from today’s article) of Wilson’s campaign against compulsory licensing of patents by developing nations for public health reasons:

In 2007, Wilson began at the IPA, where he soon weighed in on the issue of cheap medicines in the developing world. Wilson attacked efforts by Brazil and Thailand to promote access to affordable drugs, particularly their decision to compulsorily license patents covering HIV/AIDs and heart-disease medicines. Such action was perfectly legal under international patent law; it was also highly effective, producing a four-fold decrease in the price of second-line retro-viral medications, according to Médicins Sans Frontières. Yet Wilson opposed the measures, claiming, incorrectly, that the Thais had "nationalised" the patents, and calling it "socialism". It was crucial, he argued, that intellectual property rights - in this case, of large pharmaceutical companies - remain inviolable, in order to deter counterfeiting and maintain the incentive for innovation. He pursued a similar line in regard to the environment, arguing against the compulsory licensing of low-carbon technologies, the kind desperately needed by poorer countries to combat climate change.

At first blush, patents themselves would seem to be contrary to free-market principles being, in effect, an intervention in the market which creates monopolies and thus suppresses certain forms of free competition.  Indeed, it is not difficult to find economic and libertarian arguments opposing patents and other IP rights, e.g. The Case Against Patents from the Federal Reserve Bank of St Louis, or Intellectual Property and Libertarianism by Stephan Kinsella.

The division among free-market advocates over intellectual property rights is not new.  In her 1966 collection of essays Capitalism: The Unknown Ideal, Ayn Rand wrote:

Patents and copyrights are the legal implementation of the base of all property rights: a man's right to the product of his mind. … what the patent and copyright laws acknowledge is the paramount role of mental effort in the production of material values; these laws protect the mind's contribution in its purest form the origination of an idea. The subject of patents and copyrights is intellectual property. … Thus the law establishes the property right of a mind to that which it has brought in existence.

When someone of Rand’s disposition encounters a purported intellectual property right, they view it in terms of the individual's rightful claim to the product of his or her (intellectual) labour.  For Kinsella, on the other hand, it is just one more instance of an undeserved, and ‘unlibertarian’, monopoly privilege granted by a meddling government.

IP Rights in Mainstream Politics

From more mainstream ‘conservative’ and ‘progressive’ perspectives, patents and other IP rights present similar conflicts.  On the one hand, for example, large corporations generally have the greatest resources to conduct R&D, and to procure and enforce patents, creating the potential for the commercially largest and most powerful organisations to become more so.  On the other hand, a legally-enforceable patent right may be the only leverage an individual inventor, or a small enterprise, can obtain to prevent a larger competitor from simply copying an innovative product or service. 

Thus while intellectual property rights undoubtedly constitute a government intervention, it can be viewed as one which supports the establishment and growth of new businesses and industry.  Alternatively, IP rights can be viewed as a form of property which permit the private ownership of ‘ideas’ that should properly be available for the free use of all members of society.

Clearly, then, there are things to love and to loath about IP rights, wherever you happen to sit on the political spectrum.  Whether you are ‘for’ or ‘against’ patents and other IP rights is therefore likely to depend upon their utility, or otherwise, in your particular areas of interest.  Or, to put it another way, whether you are a socialist, a progressive, a conservative or a libertarian may be less important to your views on patents than, for example, whether you are a software developer, a foreign aid worker, or the CEO of a multinational pharmaceutical company.

Conclusion – Striking a Balance

So where do I stand on all of this?  Well, for a start I have no problem with private property, or with appropriate government intervention in markets, so I do not have to worry about suffering the cognitive dissonance experienced by a pro-patent socialist or libertarian.

As a matter of principle, I am in favour of intellectual property rights (which is just as well, otherwise ‘patent attorney’ would be a very poor career choice).  But that does not mean that we have to grant patents for all subject matter and in all fields of human endeavour.  It does not mean that the governments that grant these rights should not have power to use patented technologies for the benefit of the community, or to grant compulsory licences for others to do so – although preferably not without appropriate compensation to the patentee.  And it does not mean that IP owners should have an unfettered right to exploit their IP where this would be contrary to other overriding legal and policy concerns (an example of this is the imposition of restrictions on advertising, marketing and sale of tobacco products, including Australia’s ‘plain packaging’ legislation).

It is important to strike the right balance, in view of the wide range of competing interests across different industries and policy areas.  There will always be matters of legitimate debate: whether patents should be granted for business methods; whether patent terms should be the same in all fields of technology; whether different rules should apply to the enforcement of patents by non-practicing entities.  And there will always be challenges in finding effective ways to implement specific policy objectives within a system that is, for the most part, ‘one size fits all’.

One thing that seems clear to me is that there is little prospect of extreme views – either the absolutism of people like Wilson, or the abolitionism of people like Kinsella – taking hold.  Intellectual property rights are here to stay, although the parameters of IP systems will continue to be contested.


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