Does intellectual property protection help or hinder innovation?

by jchong10

As inventors and researchers, we at Innovations in International Health often have to think about how to manage our intellectual property (IP). IP is a particularly controversial issue in the realm of international health, as governments struggle to balance the goals of encouraging innovation and ensuring that people have access to the care they need.

This issue has garnered much attention since 1994, when the WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement introduced IP law to international trade. Two notable fracases include big pharma vs. South Africa circa 1997, when SA passed the Medicines Act to make antiretrovirals more widely available (pharma eventually backed down in the face of international protest); and the anthrax scare in 2001, when the frightened US and Canadian governments tried to get around Bayer’s patent to ensure the affordability of Bayer’s Cipro drug to their citizens.

The second case (a classic demonstration of rich world hypocrisy) shows that even in the IPR havens of North America, when push comes to shove, the balance tips in favor or human lives.

So here’s the question of the day: do developing countries need better protection of IP to fuel home-grown innovation and spur economic growth?

Dr Ndubuisi Ekekwe certainly believes so, and he can cite his own personal experiences as evidence that a lack of IP protection can really hurt the business climate and deter innovation. Ekekwe’s view reflects the traditional economic argument for protecting intellectual property: people will innovate if there is a promise of returns.

But there are other perspectives that suggest the opposite effect. (Thanks to Adam Martin at AidWatchers for posting these links!)

This Der Spiegel article describes an argument by historian Eckard Höffner that Germany’s industrialization in the 1800s owes much to the absence of copyright law (implemented in 1837), as it allowed for the dissemination of ideas and knowledge. With so many plagiarizers around, publishers protected their profits by selling expensive fancy books to the rich and cheaper paperbacks to the masses. As a result, the book market was filled with affordable publications that were highly accessible to the public. The lack of copyright protection hardly deterred German researchers from publishing their work. On the contrary, the prospect of reaching a wide audience provided good motivation to publish their research. Authors could make a pretty penny, if not from margins, from the sheer volume of works sold.

Compare this situation to England, where copyright law has been in force since 1710. Books would typically be published as limited editions (750 copies max) and would cost more than a week’s salary of a skilled worker. Supply responded to the limited demand for books, and Germany was publishing three times as many books as England per capita at the time. Höffner argues that Germany’s open attitude toward publishing cultivated a “lively scholarly discourse” that fuelled Germany’s Gründerzeit, or foundation period, in which it became an economic powerhouse.

And here, Michael Heller and Rebecca Eisenberg introduce the concept of the “tragedy of the anticommons”, which describes how too much protection of intellectual property can deter innovation. When too many owners of property have a right to block others from using their property, no one has effective privilege of use.

Should low-tech and high-tech innovations be treated differently by IP law? How about innovations that enable people to enjoy their rights as human beings (e.g. health)? …And finally, does anybody know of a good synonym for “innovation”?


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3 Comments to “Does intellectual property protection help or hinder innovation?”

  1. This is certainly a good debate. And it is one I think should be taken seriously. Though I understand that a need for flexibility, it is very difficult for me to see the future of industry without a strong IPR. How do we expect investors to fund a perfect cure for HIV if no one can guarantee them they has a chance of reward, for their risks? No one will spend billions of dollars in R&D only for the competitor to use the idea and compete with him. Because he has no R&D budget, he can actually sell cheaper. That will destroy civilization.

    The world needs to have a balance. We want to make drugs available to the poor and sick people; yet, drugs are not sands. “Paying for today’s drugs funds future miracles”.

    I maintain my point that African herbal doctors would have built empires if there is an IPR around their ideas. They cure snake bites, repair broken bones, cure malaria, etc. But most die poor. If you put an IPR, they will innovate quicker, become better and possibly have better live standards.

    Let this debate begin, right now.

    Dr N. Ekekwe

  2. Dr Ekekwe, point well taken! Now how about situations where people need protected tools to make that next breakthrough? There’s a funny (and sad) anecdote about a university math department’s website that implored researchers to please “not hog the Mathematica licence” (…and this is was in the UK!! If software licenses are so restrictive there, they’re definitely even harder to come by in less industrialized countries. How are you going to make the next big discovery if you can’t access the tools you need?

    Open source seems to be the future, but the challenge there is to make sure that people have an incentive to contribute!

  3. This is an excellent article. thanx

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