ABOUT |
| John Barton is a professor emeritus of law at Stanford, an SIIS senior fellow by courtesy, and for the 2004-05 academic year, a visiting scholar at the National Institutes of Health's Department of Clinical Bioethics. He has taught at Stanford since 1969, and has concentrated on international and high-technology issues, teaching a variety of courses in international law and technology law. His research and publications have focused on intellectual property (particularly as related to biotechnology), the relationship between intellectual property and antitrust, and the transfer of technology to developing nations. |
| During his year at the NIH, he concentrated on issues involving the structure of the pharmaceutical industry, the transfer of vaccine technology to the developing world, and international decision-making in the medical area. He is also working on a book on international political theory. |
| Barton has done extensive consulting work for the international development community, particularly in agricultural technology transfer. He was a member of two of the working groups of the Commission on Macroeconomics and Health, and of the recent National Research Council committee studying the patent system. He chaired the UK Intellectual Property Rights Commission, which reported its findings in 2002. He received his undergraduate degree from Marquette University in 1958, and his JD from Stanford in 1968. |
| INTERVIEW |
| I was an engineer before I went to law school, so I have always been interested in law and science issues, as well as in international issues. I got into the intellectual property area around 1980 when I wrote a paper about plant breeders' rights on the special intellectual procedures for plants. I have been teaching in that area ever since - heavily in agriculture, in developing country concerns and more recently with some medical issues as well. |
| In 1980, people were just beginning to use intellectual property rights on plants in developed countries and wanting developing countries to begin doing it. The developing countries did not think it was fair. They thought that the final product would be protected, but their own genetic resources, the plants that might be used in the breeding, were not protected. |
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| "The really strong argument in favor of intellectual property is one that says we need it intellectual property as an incentive to produce products." |
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| Sometime during the 1980s, the United States began wanting every other country to have strong intellectual property rights, because we are after all, a leading exporter of intellectual property intensive products like pharmaceuticals, movies and computer software. This led to an agreement in 1995 called the TRIPS (Trade Related Intellectual Property) agreement. TRIPS, part of the Uruguay round administered by the World Trade Organization in Geneva, which sets minimum standards for the whole world on intellectual property. |
| The really strong argument in favor of intellectual property is one that says we need it intellectual property as an incentive to produce products. In pharmaceuticals for example, nobody would invest the hundreds of millions of dollars it takes to bring a product to market and through equivocal trials, unless they had a chance for exclusivity at the end in order to recover their costs. |
| The same argument works in agriculture. If you take genetically engineered materials, it takes a fair chunk of money to bring a product to market. If you cannot have some kind of exclusivity, if your product can be copied too easily, then you will not invest that money in the first place. It acts as an incentive and it really works. |
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| "The counter argument is fundamentally an argument of cost, for the higher prices can exclude the poor." |
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| The counter argument is fundamentally an argument of cost, for the higher prices can exclude the poor. There are obviously some ideological arguments as well. People feel that you should not patent life. On the other side, people feel that this is intellectual property, a result of my mind power, I have a moral right to it and you are taking it away, if you do not respect that right. |
| The real issue for the developing world is should they have to pay as much as the developed world? For some products, certainly the pharmaceutical products, you need the high price in the developed world or you cannot recoup the Research and Development expenses. But is it really fair to ask the poorest people in the world to pay the same share of those R & D expenses that we ask of the wealthy people? Most of us feel they should not. |
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| "The U.S. Supreme Court ruled that you can get a regular patent on a plant variety." |
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| Now for agriculture it gets a little more complicated. Some products really will have special research done on them for developing world needs and therefore somebody is going to have to ultimately pay that cost. Presumably, that will be at least the middle income developing world farmer, such as in China or Brazil. |
| One of the decisions that were made in December 2001 was JEM Agricultural Supply Company v. Pioneer. The U.S. Supreme Court ruled that you can get a regular patent on a plant variety. What is important about this? If you can get just the traditional protection for a plant variety, which is called 'plant variety protection,' then somebody would be free to buy the plant, they could reuse their own seed, planting it again the next year, and they could also use the material for breeding purposes. I could buy your variety, cross it with one of my varieties, see if the progeny looked particularly interesting, and maybe design something to sell. But with regular patent protection you cannot do that. With regular patent protection, the patent holder can keep the buyer from using the material for any purpose except growing the crop. So this restricts the way one can use this material in research. |
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| "Patents on intermediate processes, and what in some fields of technology one would call research tools, are a very difficult problem." |
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| Also, basic kinds of procedures, like certain procedures for putting a gene into a plant, have been patented. Sooner or later these patents are going to expire of course, but nevertheless, it is essentially impossible to do research in this area now without infringing patents or obtaining licenses in order to use these procedures. |
| Patents on intermediate processes, and what in some fields of technology one would call research tools, are a very difficult problem. Certainly each of those patents serves to encourage the research to develop that specific research tool, that procedure. On the other hand, it makes it harder and more expensive for someone else to develop a final product. The lawyers say that you can always get a license. The fact of the matter is it is not that simple. Sure, negotiations between two or three people on a license are fine. But, if there are eight or ten people on the license, the chances are that no one will ever carry out those negotiations. It is a problem. |
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| "For these patent related reasons, along with a lot of other reasons, we have had a lot of significant mergers in the industry." |
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| This is not the only problem that is coming up in this area. Because these patents are so significant, a number of leading private sector companies in the field have fought over patent rights, have often litigated and brought a large number of law suits against each other. One of the ways that they have settled those lawsuits is to buy the opponent. So, for these patent related reasons, along with a lot of other reasons, we have had a lot of significant mergers in the industry. |
| What was once almost a cottage industry of small farms producing seeds, plus a few very important seed companies, is now a highly centralized industry with about five companies holding most of the world's market. Given the fact that these companies are facing significant political pressures about biosafety and genetic engineering, they are now reducing their level of expenditure. And because they are an oligopoly, they have limited incentive to compete with each other. |
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| "The public sector research is declining for somewhat different reasons." |
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| The public sector research is declining for somewhat different reasons. First, the taxpayers of the U.S. and Europe are concerned about paying for research in developing countries. Second, there is the fear of building competition (although I do not think that is as strong an argument as is often suggested). And third, particularly in Europe, some of the European donors for the Public International Agricultural System do not want to see their money used for genetic engineering, instead of traditional breeding, so they have been reducing expenditures for the genetically engineered component of the research. |
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| "Our job was to see what the impact of intellectual property is on the poor and developing world." |
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| I was invited with five colleagues by Secretary of State Clare Short, the British Minister in charge of the British equivalent of the U.S. Agency for International Development, to study the impact of intellectual property rights on developing countries. Our job was to see what the impact of intellectual property is on the poor and developing world, and how the situation could be improved. We were given very substantial resources to visit the developing world and to hold workshops and conferences in London. Our report Integrating Intellectual Property Rights and Development Policy came out in September 2002 (http://www.iprcommission.org/papers/pdfs/final_report/CIPRcoverintrofinal.pdf). |
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| "We found that poor countries really do not need much of a system for intellectual property rights." |
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| The key issues in agriculture were two-fold. The first is what kind of intellectual property rights should there be? The second is what kinds of access should the developing nations have to genetic resources, and whether their genetic materials are being used unfairly? We found that poor countries really do not need much of a system for intellectual property rights. Poor people cannot afford increased prices. Moreover, there are very few scientists in the poor countries who are encouraged and incented to do significant research because the scientists are not there. However, for middle income, scientifically capable countries, like India, Brazil and China, some sort of intellectual property system is more likely to be useful. One size does not fit all and we talked about the details of the systems that make sense. |
| In addition to wanting weaker systems in the poorer countries and stronger systems in the middle income countries, we also recognized the need of the very poor farmer to exchange seeds. Very poor farmers tend to exchange their seeds at the end of every crop year, share them with their neighbors and then they have them for next year's planting. You do not want an intellectual property system which, even though it might help them get better seeds, prevents them from doing that. Those are the main points in terms of the intellectual property system. |
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| "We are urging that patent systems in places like the United States and Europe provide for disclosure of the origins of the genetic material that is being patented." |
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| In regards to the materials coming from the developing countries, we recommended that patents give credit to the country from which a product originates. We are urging that patent systems in places like the United States and Europe provide for disclosure of the origins of the genetic material that is being patented. We are also proposing that everybody join a new international convention that provides a benefit sharing mechanism for any profits of genetic plant materials coming from developing countries. |
| I do not know, of course, what the United States government is going to do in response to this report. The United States is achieving more balance between its traditional position of hyper strong intellectual property protection for pharmaceuticals and a concern to make sure there is access for the poor. I hope it will do the same sort of thing for agricultural materials. Although much of what is needed in the agricultural context can be done by the developing countries themselves, if they use the flexibilities granted to them under TRIPS. |
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| "Developing countries are desperately in need of some new technologies." |
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| We need more public sector research for most of these problems. Developing countries are desperately in need of some new technologies. Technology is an extremely important part of economic development. But because there is not a big enough market, the private sector will not invest in the research needed in these regions. Therefore, we have to find public sector money in both the developed and the developing world in order to pay for a good chunk of the needed research. |
| If a country fails to comply with TRIPS, it can be brought before a WTO dispute settlement panel and the WTO can make a finding that that country is violating TRIPS, and therefore, other nations are free to impose trade sanctions against that country. A trade sanction oriented towards this very specific context should be comparable with the level of harm created in a certain situation. This is a scenario which may happen, and has already happened on the pharmaceutical side. Canada and India have been sued before the WTO. In both cases, the dispute panels at the WTO have issued decisions governing technical features of these national patent regimes. This has not happened yet in agriculture, although it could. |
| On the other hand, there is a fair amount of flexibility within TRIPS. And our recommendations in the report are consistent with TRIPS. If a dispute settlement panel was brought, and the developing country was complying with our recommendations, presumably the developing country would win. |
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| "Most of us in the intellectual property area feel that patents are statutory exclusion rights, which are best analyzed on a policy basis." |
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| There are plenty of people who say that intellectual property rights are really rights deriving from the act of creation. I have to admit, I find myself sympathetic with that in the context of copyright. Hamlet really does belong to Shakespeare; there really is something wrong with taking it away from Shakespeare. |
| Most of us in the intellectual property area feel that patents are statutory exclusion rights, which are best analyzed on a policy basis: designing a set of procedures which give people exclusivity under certain circumstances in order to encourage them to do research. Then if they do not work, the law is changed. It is a much more pragmatic kind of perspective. |
| In our report, we say that intellectual property rights are an incentive to encourage research. The rights should be designed in such a way that the costs fall equitably on different people depending on these people's ability to pay. Take the drug example: It is the patient or taxpayer or HMO contributor, who should pay the largest part of the developing cost, because they have so much more money than the person in the developing country. Now, I recognize fully that there are some wealthy people in the developing world, and some very poor people in the developed world. I would like to see equitable arrangements to deal with each. |
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| "The humanitarian exception and how we deal with the poor in this situation is really a very fundamental issue." |
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| The humanitarian exception and how we deal with the poor in this situation is really a very fundamental issue. It may be one we cannot solve within the intellectual property system. The developing countries should be entitled to compulsory licenses, or other ways of essentially putting pressure on an international company to make access to the technology more available. |
| The sub-Saharan African markets are so small that they probably will not encourage most developing countries or corporations to do any significant research for them. The developing world can get the spill-over from research done for the developed world, but they are not going to succeed on encouraging research on their own. And if we are going to try to keep things as low a cost as possible, it is even harder to justify the poorest countries paying for the cost of research. There is a genuine tension in this issue and that is where most of us feel that we are going to need more public sector activity, simply because the private sector has no incentive to do the research. |
| There are some things you can do with the laws in the developing countries which will really help with the systemic problems. There are proposals for a number of mechanisms that are being thought about to try to create intermediary organizations, cross licenses, channels to make it easier for the developed country corporations to license technology for developing country use. A number of private sector initiatives of this type are going on. |
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| "A patent is a right, which you get from the government, to exclude people from practicing a particular sort of technology." |
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| A patent is a right, which you get from the government, to exclude people from practicing a particular sort of technology. You have to describe this technology so the rest of the world knows how to do it, and can do it after the patent expires. You can only get this right if you come up with an invention that is new and obvious and can tell the world how to practice the invention. |
| We do not have real good numbers for how much money is being spent on lawyers instead of research. I did a study which was published in Science a couple of years ago, in which I compared the growth rate of R & D expenditures and the amount of money being spent on intellectual property lawyers, which was growing at a faster rate. I was not in any position to use the numbers to draw a conclusion that lawyers are getting X percent of the total R & D budget. |
| The transaction costs of operating the patent system are pretty substantial. A typical patent costs $30,000. If it is much more complex than the usual patent, it will be more, particularly if it requires the patent lawyers to learn new areas of science and spend a significant amount time with the scientist or engineer who is doing the research. The patent litigation in the U.S. or in the U. K. costs about a half million dollars for each party for each point litigated. Those are big numbers. |
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| "The scope of what is patentable is significantly wider in the United States." |
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| The U.S. patent system is very similar to that of most of the other nations of the world. We have a few technical differences, but fundamentally they are about the same. You have to apply for a patent in each jurisdiction in the world that you hope to get coverage. If I apply for a patent in the United States, but not in Europe, you can practice the technology in Europe just as readily as you want. |
| The scope of what is patentable is significantly wider in the United States. In other words, we allow patents in business methods. We allow patents for things that many feel are scientific discoveries like gene sequences, which are allowed in Europe, but not in many developing countries. We even allow patents on protein coordinates, the exact shape of a particular protein that might be therapeutically important. These patents are designed to keep anybody from using that shape in a computer model from figuring out what kinds of drugs or chemicals might be active against this protein. So we go very, very far in our patent law. Nobody else goes that far. Currently, in this life area, and especially in this bioinformatics area--we are talking about data bases, methods of searching genomic information, etc.--in this area the United States patent system has become extremely broad, and this has serious implications on how you can conduct scientific research. |
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| "The United States law, at least in the statute, does not make a distinction between a discovery and an invention." |
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| The United States law, at least in the statute, does not make a distinction between a discovery and an invention. Theoretically, we allow patents on discoveries, but the discovery does have to be new. The logic is that if nobody ever knew of a gene sequence before, and as long as I am the first one to identify the sequence, I can get a patent on it in the United States. |
| A lot of people in the rest of the world think that does not make any sense, and that there should only be patents on what we would all consider inventions. Of course, we want patents on inventions. If I take the gene sequence, modify it, put it together with other gene sequences to make it work better, and insert it into a plant, obviously under United States law, I have a patentable invention. In many other countries I do as well, although in some countries they will not let you have a patent on any living organism, except for microbiological organisms. |
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| "People's attitudes toward intellectual property protection depend on what kind of intellectual property they have to protect." |
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| Realistically, people do not apply for patents as often in the poor countries as they do in rich countries. They do not have the market there to justify the expense and the quality of review is often poorer than it is in the United States or Europe because you do not have as well-educated or as big a patent office. The international treaties, the TRIPS agreement and some other earlier ones that are referenced in TRIPS, have been pushed to try to build minimum standards. |
| People's attitudes toward intellectual property protection depend on what kind of intellectual property they have to protect. The United States is very strong on biotechnology and wants strong protections on it. In regards to the questions of traditional knowledge, indigenous communities and developing countries, developing countries want stronger protection and the United States wants weaker protection. |
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| "This question of who is breeding what and where is very important in thinking about bio-piracy and intellectual property issues." |
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| This question of who is breeding what and where is very important in thinking about bio-piracy and intellectual property issues. The reality is that most of the crops evolved initially in the developing world. Realistically, those crops came over hundreds if not thousands of years ago. And now the majority of the breeding material in the developed world is in fact just reused. There are a few crops where the genes are actually flowing, but in most of those crops, the real movement of genetic resources is generally from the north to the south. |
| The main point we make in our Commission report is that we want to make sure the source of genetic material is disclosed to a U.S. or European patent office when the patent is sought. Very often the patent office does not know where the material comes from or whether it is pirated. |
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| "Most of the public sector research institutions should really be looking toward the needs of the poor." |
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| In the U.S., the Bayh-Dole Act gave universities increased rights in inventions made on government contracts and grants. The idea was that by giving universities the patent rights, they would have more incentive to commercialize these inventions, bring them out to the public sector and help them reach the world. This works sometimes. Sometimes, however, it simply becomes a way to try and get money for the university. Universities are a wonderful place to give money, but I am not sure if that is what we want to be doing with our public policy here. |
| We are also concerned that most of the public sector research institutions should really be looking toward the needs of the poor. If they are going to start charging, then either they are going to be charging the wrong people, the poor, or they are possibly going to be misdirecting their research program towards research goals which help the wealthier farmers, who are able to pay the royalties, rather than towards the poor. |
| Intellectual property rights are essential but can be overdone and it is not necessarily wise to make them stronger. Sometimes they can make life more complicated. The job is to reach an optimal strength of intellectual property rights, and that optimal strength is different in different countries. |
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