By Kevin E. Noonan --
Ah, the popular press! Purported protectors of our fundamental freedoms, their behavior (at least in the mainstream press) has recently been less than noble. Eschewing the role of crusader (or even muckraker), the press seems to look for the common popular denominator of received wisdom, and then to trumpet it. After all, it wasn't until the war in Iraq went badly and Katrina went ashore that the press did anything more than cheerlead every move of the last, recently departed occupant of the White House.
When it comes to patents, the press has been with the Zeitgeist, echoing the clamor that there is a "broken" patent system and that it imposes a burden on us all. The New York Times has made a cottage industry of such articles (see "New York Times to Innovation: Drop Dead"; "Science Fiction in The New York Times"; "War is Peace, Freedom is Slavery, Ignorance is Strength"), most based on fundamental a misunderstanding of the underlying facts and a penchant to blindly accept as impartial, partisan advocates with their own axe to grind (see "Anti-Patent ("Sullivan?") Malice by The New York Times"). And The New Yorker has not been above similar antics regarding the state of the U.S. patent system, again missing important facts available from consultation with any patent attorney (see "The 'Unfairness' of World Intellectual Property Protection According to The New Yorker"; "Once Again, The New Yorker Gets It Wrong on Patents").
Next week, it will be Newsweek's turn, when it publishes an article entitled: "Innovation Gridlock: Today's inventors need to put together many bits of intellectual property. Too bad they are all patented." The author is Michael Heller, a professor of real estate (not intellectual property) law at Columbia. Professor Heller is also the co-author, along with Professor Rebecca Eisenberg, of the "tragedy of the anti-commons" hypothesis, that patent protection for gene sequences would impede progress in deciphering the human genome and reaping its benefits. That hypothesis was not borne out by events (see "The Future of DNA Patenting"; "The 'Anti-Commons' Aren't So Tragic, After All"). And not coincidentally, Professor Heller is also the author of "The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation and Costs Lives."
Professor Heller's thesis is the now-familiar one that patenting hurts innovation; having been proven wrong with the anti-commons idea, he has expanded his intellectual playground to assert that patenting is preventing the development of life-saving drugs. He trots out his favorite "proof" of the thesis: a quote from Peter Ringrose, former chief science officer at Bristol-Myers Squibb, in The New York Times that BMS could not investigate "'more than 50 proteins possibly involved in cancer' because patent holders 'either would not allow it or were demanding unreasonable royalties.'" Unfortunately, Professor Heller (at left) does not include "the rest of the story" as reported in the Times (see "Bristol-Myers and Athersys Make Deal on Gene Patents," January 8, 2001); in fact, BMS partnered with Athersys, a small biotech startup from Cleveland that had a (patented) technology for making "a collection of cells that produces virtually every protein" -- thus effectively, and legally, designing around those "unreasonable" patent holders.
Professor Heller also makes the (unsupported) conceptual leap that all this patenting of genetic information has resulted in the dearth of pharmaceutical innovation by major pharmaceutical companies. This statement ignores the achievements of biotechnology companies like Amgen and Genentech and the rest of the industry, who are providing an ever-increasing stream of new drugs such as Humulin® (recombinant human insulin); Epogen® (recombinant human erythropoietin); Herceptin® (anti-Her2/neu monoclonal antibody); beta-interferon (for treating multiple sclerosis); Cerezyme® (for treating Gaucher's disease); Enbrel® (soluble TNF receptor); and Gleevac® (imatinib; anticancer drug). Indeed, the Biotechnology Industry Organization says that there are more than 200 biotechnology drugs on the market as of 2007, with more than 400 drugs and vaccines in various phases of clinical testing for FDA approval (see "Guide to Biotechnology: 2007"). It also ignores (and is ignorant of) the difference between identifying targets for therapeutic intervention and finding safe and effective drugs that take advantage of this knowledge. This isn't a matter of patent law, it is science and science will occur at its own pace. Professor Heller's argument also disregards University of Chicago Professor Richard Epstein's (at right) insight, in "Overdose: How Excessive Government Regulation Stifles Pharmaceutical Innovation," that "[m]edical science is not immune from the iron
economic law of diminishing marginal returns" and the time for having "low-hanging" fruit of easily-achieved increased well-being (for example, by developing drugs against bacterial diseases) is behind us. The viability of "Big Pharma" partnering and reaping the fruits of biotechnology are evident in Pfizer's acquisition of Wyeth, which (according to the Atlanta Journal Constitution) was spurred to make the acquisition by Wyeth's robust biologics drug pipeline (see "In Wyeth, Pfizer Sees a Drug Pipeline").
Professor Heller also conflates the real problems encountered in the information technology industry with biomedical science. In biomedicine and pharmaceutical science, intellectual property tends to be discrete. For example, AstraZeneca can market and patent the acid reflux drug omeprazole (Prilosec® and Nexium®) and TAP Pharmaceuticals can market and patent the acid reflux drug lansoprazole (Prevacid®) without any interference from patent law. These molecules are discrete, and the development and patenting of one is independent of the other. The only area in biotechnology where the "patent thicket" problem has been evident is in microarray technology (used for drug and target screening and certain diagnostic applications), and that industry tends to side with IT groups (like the oxymoronic Coalition for Patent Fairness) in supporting or fomenting political attempts to reduce patent protection.
Professor Heller also draws the wrong conclusions when he assesses the different reactions to biotechnology patenting in the U.S. and the competing economies of Europe and Japan. While it is evident that America's early embrace of patent protection for biotechnology was an important reason why biotechnology breakthroughs occurred here rather than abroad (see "The Continuing Value of Biotech Patenting"; "Disadvantages For Biotechnology Patents in Japan"), Professor Heller concludes that the U.S. Patent and Trademark Office has issued "hundreds of thousands of weak, vague patents" and "if you are a U.S. innovator, there is no way even to figure out who owns rights relevant to your proposed new drug." To anyone with experience in biotechnology and pharmaceutical patent law or drug development, those statements are worse than hyperbole -- they are just simply untrue (at least as far as pharmaceutical and biotechnology patents are concerned).
Finally, he accuses U.S. scientists of being forced to be "patent pirates" as if this was a serious impediment to biotechnology innovation. While using patented materials or processes for commercial development (in or outside the groves of academe) is not tolerated, Professor Heller does not provide any examples of purely academic research being impeded by patents (if for no other reason than the ideas, the scientific breakthroughs, and the information of discovery are not patentable).
Professor Heller tells a compelling story, and it probably provides impetus for future sales of his book. He has been consistent in his "perils of patenting" theme throughout his career (clearly eschewing Emerson's caution about intellectual consistency). But his thesis is wrong and the history of the biotechnology era in the U.S. clearly demonstrates it is wrong. What won't help American innovation is Newsweek's giving Professor Heller yet another platform for this failed thesis.
I enjoy Mr. Noonan's articles, including today, except his unfounded and inexplicable statement in paragrapg one that "After all, it wasn't until the war in Iraq went badly and Katrina went ashore that the press did anything more than cheerlead every move of the last, recently departed occupant of the White House." The press did nothing more than cheerlead Bush in the early years? To what press could Mr. Noonan be referring? Certainly not the U.S. press. Having lived through it, there was never a media pep rally for George W. Bush.
Posted by: Bob Billings | January 27, 2009 at 07:00 AM
Dear Bob:
I realized when I was writing this that reader's perceptions would differ, but my point could have been expressed the other way with equal justification: after Katrina and the downturn in the war in Iraq (i.e., 2006-2008), the press followed the public dissatisfaction with Mr. Bush by being much more negative than they were beforehand (2003-2005). Would you disagree?
Thanks for the comment
Posted by: Kevin E. Noonan | January 27, 2009 at 07:14 AM
Kevin, do you send your writings to the publications as reader's response? I think you should.
Posted by: Prior Art | January 27, 2009 at 09:02 AM
Wonder how Mr. Heller would feel if people freely copy his work without any attribution or compensation? He wouldn't have any motivation to write and publish in the first place. Patents are no different. Even countries like China and India are beginning to appreciate the value of patents, because now, the home-grown inventions need patent protection.
Posted by: Fan | January 27, 2009 at 09:34 AM
Kevin,
As you correctly point out, Prof. Heller makes the usual "rhetorical nonsense" that patents stifle biotech innovation without any supporting factual evidence, just speculation. The same argument was made as to why Madey v. Duke University should be reversed to allow for a "research exemption." Interesting how no data was ever provided to show how not having a "research exemption" impedes biotech research. In fact, the continued fiing of biotech patent applications (which normally require biotech research to happen) suggests otherwise. I'm sorry, but academics like Heller need to focus on reality (and the facts), not just spin theories.
Posted by: EG | January 27, 2009 at 10:57 AM
I agree with "Prior Art" - you should submit your post to Newsweek as a reader response.
Posted by: Pacific Reporter | January 27, 2009 at 11:25 AM
Umm, Gleevec (imatinib) isn't a monoclonal antibody. It's a "small molecule" drug (albeit a molecule of substantial size within that category). Certainly it isn't a biologic.
Posted by: EDD | January 27, 2009 at 06:40 PM
Dear EDD:
Quite right. My mistake. Thanks for catching that - we corrected it.
Posted by: Kevin E. Noonan | January 28, 2009 at 05:45 AM
Bob writes: "The press did nothing more than cheerlead Bush in the early years? To what press could Mr. Noonan be referring? Certainly not the U.S. press."
Kevin, in the future, please just ignore the wingnuts.
Posted by: [email protected] | January 28, 2009 at 02:58 PM
Dear PF:
Everyone is entitled to these sorts of opinions. Although I don't agree with Bob on this, he did give me the opportunity to make the related point - I would expect Bob and many others noticed how the press turned on President Bush like dogs when they thought the public had lost faith in him.
Unfortunately, the same will probably happen to President Obama. It will be interesting to see if the purported motivation for the initial press obsequiousness (patriotism over 9/11 and the war(s)) also works for the kind of economic crisis we are facing (and how much "better" things will need to get and how quickly before the press starts showing its fangs again).
Thanks for the comment.
Posted by: Kevin E. Noonan | January 28, 2009 at 03:20 PM