EDMONTON, AB, Every year, millions of HIV/AIDS sufferers in the Third World die because their governments cannot afford the expensive antiretroviral drugs needed to keep them alive.
Much of the high prices of these medicines (and a wide range of other lifesaving compounds) has nothing to do with their ingredients – many of them could be synthesized and distributed at low cost by any modern pharmaceutical company.
The companies can charge high prices because they have exclusive rights, patents, to manufacture the drugs. Understandably, there is much opposition from health activists and Third World governments – who argue that saving human lives is more important than profits – to these high prices.
Pharmaceutical patents are one small area of patent law, but an understandably controversial one. However, rather than addressing pharmaceutical patents directly, I’d like to step back and look at the larger picture and ask whether patents in themselves are a good idea.
Patents protect the hard work that an inventor or discoverer put into their product. The exclusive right of manufacture and licensing provides them with income that allows them to recoup the costs of research and development, and provides an incentive for future discovery.
By analogy, think of doctors, most of whom would help the sick regardless of how much they were paid. There is a limit to this compassionate work, however. Our society needs a lot of doctors and to make them work the long hours we need them to (and attract those who might be wavering between medicine and another career) we have to incentivize them with high pay.
The same goes for inventors: many tinkerers and researchers love the thrill of discovery more than money, but to get all the medicines, new energy sources, transportation, and communications tools we need they have to be given great incentives to continue creating things that are in demand (less gerbil shirts, more electric cars).
At the same time, it can be argued that patents in many ways inhibit innovation. Let’s say you want to be the next Nikolai Teslal and create a new technical marvel to change the world. Chances are you’ll be relying upon the inventions of others as components in your new device. This saves you lots of research and development time, as well as substantial costs: there is no need to ‘reinvent the wheel’ when you can just buy the specs for one from its inventor. But all your hopes for your invention can be sunk if the patent holder wants a very high fee for a license. You may end up giving a very large share of your profits to the creator of one minor component. It’s either that or finding yourself having to reinvent the wheel after all, trying to find some way to produce the effect you need without using the method under patent.
Some patent holders don’t manufacture the patents they hold – they merely collect rents from owning patents and licensing it. Some of these licensors did not even discover or invent the thing in question: they just bought the patent off the inventor when they were rich and the inventor needed money. These groups also regularly sue companies manufacturing devices like those covered by their patent, tying up scarce court time and serving no one’s interests but patent lawyers. In 2013 the U.S. President’s Council of Economic Advisors released a report showing that innovation in the American economy is substantially hampered by these patent assertion entities (a politer term than their more derogatory name “patent trolls”).
No one except a few intellectual property extremists are arguing for patents to be completely abolished. Almost everyone recognizes the right of inventors to profit from their discovery. What is needed is greater subtlety in the way patents are awarded and enforced.
To deal with patent trolls, laws could be changed to create “use it or lose it” patents, requiring intellectual property holders to use their patent for something other than collecting huge fees or launching nuisance legislation.
In the case of pharmaceutical research, it may be worthwhile for governments to offer bounties for successful medical discoveries to offset the cost of research, or providing substantial tax breaks to pharmaceutical companies that allow generic versions of their drugs to be manufactured.
Patents are important to both their holders and society but to do the most good to both requires them to be carefully implemented.
Michael Flood is a writer and creative director at Arrowseed, an Edmonton-based marketing firm. He holds an MA in Philosophy from the University of Alberta.
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