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Innovation Gridlock

Today’s inventors need to put together many bits of intellectual property. Too bad they are all patented

Published: February 1, 2009 5:19 pm

Today’s inventors need to put together many bits of intellectual property. Too bad they are all patented
The first decade of the 21st century has seen startling advances in biology. Scientists have cracked the genomes of humans and many plants,animals and microbes. They’ve uncovered new cellular processes affecting inheritance of diseases. Likewise,investment in biotech research and development has been steadily increasing. But life-saving drugs that should exist,and could exist,are not coming to market.

The problem is that now more than ever biomedical invention requires assembling scattered bits of intellectual property. Because of the patent system,that task has become exceedingly expensive and complex. The idea of granting drug patents is to spur discovery and cure disease,but a proliferation of patents is having the opposite effect. It is creating a gridlock that stifles innovation.

This intellectual gridlock doesn’t happen just in the drug industry. Most innovation in high-tech fields—banking,nanotech,semiconductors,software,telecom—demand the assembly of many patents or intellectual property. Next-generation wireless broadband requires many broadcast-spectrum licenses.

The problem is especially acute in the US patent system,as it applies to biotech. Compared with Europe and Japan,the American system allows patents on a wider range of subject matter,for relatively less significant discoveries,and with lower standards for patent grants. The result: the US Patent and Trademark Office issues hundreds of thousands of weak,vague patents and has a multiyear backlog of applications. If you are a US innovator,there is no way even to figure out who owns rights relevant to your proposed new drug. The sheer number of US patents is not necessarily a sign of superior innovative talent and competitive strength.

New drugs remain the starkest victim of this destructive patent gridlock. This problem started in 1980 when the US Supreme Court began allowing patents on living organisms. That shift helped jump-start the biotech revolution,leading to a wave of scientific discovery,including about 40,000 DNA-related patents. The downside became visible in the 1990s as drug developers began confronting the new patent thicket.

Imagine a drug developer walking into an auditorium full of owners of DNA patents needed for a particular medical breakthrough. Unless he can strike a deal with everyone,there’s no way forward. Peter Ringrose,former chief science officer at Bristol-Myers Squibb,told The New York Times that the company would not investigate “more than 50 proteins possibly involved in cancer” because patent holders “would not allow it or were demanding unreasonable royalties.”

A survey sponsored by the National Academy of Sciences found that scientists now routinely respond to gridlock by becoming patent pirates. Commercial drug developers,of course,cannot risk disregarding competitors’ patents. Many of the world’s leading drugmakers simply redirect investment towards less challenging areas and innovation quietly slips away.
Heller,a Columbia Law School professor,is author of The Gridlock Economy.

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