Reasons to Rethink Patents
The Cipro scandal that erupted here in October (in which Health Canada ordered a generic version of the anti-anthrax drug in apparent violation of the country’s patent law) is merely the latest in a series of headline-grabbers that should make thoughtful people re-examine their views on the issue of patents.
Other recent events that have brought this ordinarily inconspicuous subject to the forefront have included the decision by some African countries to violate patent laws on anti-AIDS drugs, and reports that patents have been granted over specific genes found in individual human bodies.
While I am ordinarily a great believer in property rights, I have for years harboured doubts on the righteousness of patent laws. Let me hasten to say that I consider it outrageous for the Canadian government to break its own laws, especially in the cavalier manner demonstrated in the Cipro fiasco. If a law is bad, the proper course of action for a government is to amend or repeal it, not to violate it. However, my purpose here is not (for a change) to castigate the federal government. It’s to point out why patent laws may be unjust.
The philosophical justifications for patents seem to fall into two categories. The first is what I’ll call the moral approach. It holds that the creators of inventions deserve to reap the fruit of their labour. Fair enough, but unfortunately that’s not what patent laws achieve. Rather, they ensure that one person (in some countries the first inventor, in others the first person to submit his claim to the patent office) gets to reap the fruit of his labour, while his competitors—people who may have worked just as hard and arrived at virtually identical results only days later, or in some cases even earlier—are denied the fruits of theirs. There’s no inherent justice in permitting only the first guy to reap rewards and throwing everyone else’s efforts into the trash can. So cumulatively, the monopoly granted by a government to a patent-holder may do more to deny people’s rights to their hard work than it does to protect them.
The second justification for patents is the utilitarian approach. According to this position, patent protection is necessary to promote innovation. Unless inventors can be assured that they will be able to profit from their inventions, they’ll be unwilling to devote time or resources to developing them. Since society as a whole is made wealthier by new inventions, a time-limited monopoly on the use of patentable knowledge is the price we must pay to encourage people to invent.
Drug companies in particular tend to advance this argument, because of the enormous costs involved in satisfying regulators before a new drug can be released to the market. But this, I submit, is a red herring. A strong argument can be made that these onerous regulatory requirements are at best unnecessary and at worst harmful—that many people suffer and die while waiting for a drug to be approved. Let’s not confuse the debate on patents by blaming an obstacle that arguably shouldn’t exist in the first place.
The answer to the utilitarian argument is that we can’t know for sure whether patents actually do stimulate the production of more or better products than the marketplace would produce in the absence of patents. This is just an assumption governments have accepted. We can’t run a controlled experiment in some alternate universe.
Consider the field of herbal medicine. You can’t patent St. John’s Wort—allegedly an anti-depressant—nor can you patent garlic, tea tree oil, goldenseal, or barberry—allegedly antibiotics. Consequently, the healing properties of these natural remedies haven’t been studied anywhere near as thoroughly as their patentable man-made rivals. Yet it doesn’t take a lot of imagination to see that the world might well be a wealthier place overall if people had a reason to explore and apply these natural medicines to their fullest potential, instead of conjuring up synthetic alternatives and spending money to patent them and litigate over patents.
Furthermore, the amount and quality of innovation might actually increase if companies knew they wouldn’t have a period of monopoly rights over a new product. Companies would develop products in strict secrecy, then get ready to blanket the market with them to reap full advantage of their head start before imitators emerged. They’d have to be sure that they had worked out all the bugs, exploited all the spin-off possibilities and found the least expensive way to get the product to market before the competition had a chance to snatch away those opportunities.
One thing we can predict for sure is that any attempt to retreat from the patent system would be fought tooth and claw by those who have a vested interest in the system—namely, existing patent-holders. This always happens whenever you try to abolish any offensive state-granted privilege—whether it be milk quotas or the right to own slaves. It’s an excellent reason for not allowing governments to enact such privilege-granting laws in the first place. It is not, however, a legitimate excuse for inaction, once you’ve recognized that the laws may be doing more harm than good.
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