The Effects of Intellectual Property Protection on Agricultural Research: Patents Are Not The Problem

    By Kevin E. Noonan --

Perhaps the most beautiful sentence in scientific literature is this one:

It has not escaped our notice that the specific pairing we have postulated immediately suggests a possible copying mechanism for the genetic material.

James Watson & Francis Crick, "Molecular Structure of Nucleic Acids; A Structure for Deoxyribose Nucleic Acid," Nature 171: 737-38 (April 25, 1953)

It is beautiful because of its elegance, its understatement, and because it provokes in the reader recognition that one of the fundamental mysteries of life on this planet has been answered, with the tantalizing promise that the first two human beings who know that answer are preparing to tell the rest of us.  Perhaps this type of sentence can only be written by scientists who realize that they have made such a fundamental discovery that worries about careers, funding, and all the other cares of the working scientist are no longer their concern.

Unfortunately, for more mundane topics there is a tendency to provoke, posture, or puff up the significance of the research, a tendency that sometimes results in mischaracterizing what has actually been found.  A recent example of this is a paper in the January issue of Nature Biotechnology by Zhen Lei, Rakhi Juneja, and Brian D. Wright entitled "Patents Versus Patenting: Implications of Intellectual Property Protection for Biological Research."  The paper purports to show that agricultural scientists believe that university patenting impedes the free flow of academic exchange and, as a consequence, retards their research.  Upon more careful reading, however, it is clear that the scientists are woefully misinformed about the difference between patents and "intellectual property," and that most of their responses are self-serving and reflect the cultural differences between academics and industry, with university technology transfer professionals being caught in the middle.

First, the authors report the results of a qualitative research survey on the attitudes of agricultural scientists at several University of California campuses (Davis, Berkeley, and Riverside) and the University of Arizona.  The researchers, using a survey format that both asked for detailed narrative answers and for rankings on a 1-5 scale, asked the scientists about the effects on their research of university involvement in intellectual property protection.  The response rate was about 25%, which the authors say is typical in these types of studies.  The responder pool was characterized as follows:  56% of respondents undertook at least one project directed towards commercial application, 45% report some funding from industry (by comparison, 23-28% of biomedical scientists have industry funding), 40% disclosed inventions within the last 5 years, and 34% had applied for patents.  Of the last group, one third (13%) had research tool inventions and 9% had patented research tools themselves.

The scientists believe, the authors summarize, that "contrary to the current consensus, proliferation of IP protection has a strongly negative effect on research in their disciplines" (which were limited to agricultural science).  Upon more detailed questioning, the authors report that the scientists attribute problems stemming from delays in their research or blocked access to research materials to university requirements for material transfer agreements (MTAs).  These, the scientists understand, are required by university administrators "to protect the value of IP rights held by their institution or to reduce their exposure to lawsuits by third parties."  

The authors characterize as "standard policy" the requirement for MTAs between academic scientists who exchange research tools.  Surprisingly, formal agreements between universities account for only 21% of instances where respondents to the survey supplied research tools to colleagues (overall, the authors report that 48% of academic exchanges are covered by MTAs), and the respondents reported that they frequently ignored the university requirements for these agreements.  Even more surprisingly, about 25% of respondents reported sending research materials to industry without a formal MTA.  The researchers do not find the MTA process itself particularly difficult (a question on this point averages between 2.5-3.0 on a scale of 1 to 5, where 5 = very difficult), but this may be due to the fact that the scientists themselves do very little of the negotiating between universities.  Delay is the reported "dominant transaction cost" of MTAs (4 months from academia, 6 months from industry), and overall delays averaged about 9 months in the survey.

More generally, the respondents reported on average that IP rights had a negative effect on their incentive to invent or conduct related research (2.7 average on a 1-5 scale), and a score of 2.3 versus 3.7 on whether the effects of IP protection on research is negative or positive, respectively.

Paradoxically, patents seem to have a much lower effect on research, primarily because the respondents reported that they routinely ignore the existence of patent protection for research tools.  Of the 85 respondents, 77 reported that they "have never checked whether a tool that they might need in planned research is patented," a result consistent with reports of only 5% of biomedical researchers who actively assess the patent landscape for research tools.  The reason, according to the scientists, is that most think they won't be sued (despite Madey v. Duke University), something the authors state is "consistent with the rational toleration of researcher infringement often reported by industry patent holders," citing Eisenberg, 2006, "Patents and Data-Sharing in Public Science," Indus. Corp. Change 15: 1013-31.  This casual attitude regarding patent infringement may explain why the respondents reported no reason to support efforts to provide them with a stronger research exemption (citing Cukier, 2006, "Navigating the Future(s) of Biotech Intellectual Property," Nat. Biotechnol. 24: 249-251).

With regard to IP protection of research tools, the authors report that "[t]he type of research tools that are most frequently exchanged between researchers are quite distinct from those that researchers choose to patent.  Vectors, plasmids and gene clones are the most commonly exchanged unpatented tools, followed by seeds, germplasm and plant varieties.  Gene and protein sequences feature most frequently in invention disclosures, followed by seeds, germplasm and plant varieties."  In what is perhaps another surprise, despite their negative views on "IP protection," the respondents did not report encountering a "patent thicket" or an "anticommons effect" with regard to research tool patenting.

One conclusion that can be readily drawn from the study is that both the authors and scientist respondents did not distinguish between patenting and MTAs, comingling them under the umbrella term "IP protection."  This is perhaps one reason why the results they report are contrary to a variety of reports from the U.S. (Walsh et al., 2003, "Science and the Law: Working Through the Patent Problem," Science 299: 1020; Walsh et al., 2005, "Science and Law: View from the Bench: Patents and Material Transfers," Science 309: 2002-03), Germany (Straus, 2002, Genetic Inventions, Intellectual Property Rights and Licensing Practices), Australia (Nicol et al., 2003, Patents and Medical Biotechnology: An Empirical Analysis of Issues Facing the Australian Industry, Centre for Law & Genetics, Occasional Paper 6) and Japan (Nagaoka, 2006, "An Empirical Analysis of Patenting and Licensing Practice of Research Tools from Three Perspectives," presented in OECD Conference in Research Use of Patented Inventions, Madrid) finding that "patent thickets" (Shapiro, 2001, "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," In: Innovation Policy and the Economy 1: 119-50) or the "anticommons" (Heller & Eisenberg, 1998, "Can Patents Deter Innovation? The Anticommons in Biomedical Research," Science 280: 698-701) rarely affect the research of academic scientists.  One explanation for this disparity is that there are many and significant differences between patent protection and MTAs.  For example, patents promote disclosure, whereas MTAs typically require continued confidentiality.  MTAs are exactly that:  agreements concerning the transfer of materials.  This means they are limited to tangible items that can be transferred and exclude intellectual property such as know-how, trade secrets, and methods (indeed, their tangibility makes them move akin to personal property than intellectual property).  Patent rights are exhausted by a sale (see "Quanta Computer, Inc. v. LG Electronics, Inc. (2008)"), whereas with MTAs, the granting institution typically retains ownership of the transferred materials and requires either their return or certification that they have been destroyed after the term of the agreement has expired.  In addition, while patents are governed by Federal statute, and are encumbered with protections against improper use (such as patent misuse and Walker Process antitrust concerns, for example), MTAs are private contracts between the parties, governed by state common law that typically permits any behavior not in direct contravention of criminal or other statutes (i.e., contract law is much more permissive than patent law).

Thus, the actual conclusions of the paper are not related to the effects of patenting on academic research at all.  Rather, the authors report the subjective opinions of academic scientists on the delaying effects of institutionally-mandated MTAs on their research, something the authors report that the scientists consider puts "sand in the wheels" of an otherwise "lively system of interdisciplinary exchanges" of research materials.  No doubt the researcher respondents feel this way; however, the disparity between these results and the results of the academic reports that the authors admit are contrary should raise a few questions about the nature of the study and the elicited responses.  Academic researchers are focused, ambitious, egotistical people used to having their own way; these traits are perhaps necessary for them to have the temerity to believe they can make sense of a complex world, and are certainly an expected consequence for individuals having the intelligence of most academic researchers.  The law presents them with another, different set of rules and a logical structure that differs from science, having to take into account the unpredictable peculiarities of individual human beings.  Particularly in view of the power differential between tenured professors and the staff of most university technology transfer offices, the scientists frequently believe they can ignore the rules (see their disdain for potential patent infringement reported in the paper), or if "forced" to comply, believe that it must have a negative effect on the only thing they are interested in, getting their research done as timely as possible (since there are usually other researchers actively engaged in their area). 

Indeed, rather than patenting or other intellectual property protections, academic competition may be the greatest impediment to the "free exchange" of research materials and information.  As the study authors admit, "[l]ong before the proliferation of IP protection, scientists were often secretive and uncooperative in their interaction with competitors (Hagstrom, 1974, Am. Sociol. Rev. 39: 1-18)," and "[r]espondents anticipate a moderate (3.2/5) degree of difficulty in obtaining tools or materials from rivals."

But recognizing these nuances of the problem is not as "sexy" as pitching the results as being "contrary" to the "developing consensus" that patents have not had a negative effect on university research.  While the authors believe that there is an advantage to obtaining "direct" results of the effects of "IP protection" from the researchers, an uncritical acceptance of the responses, and a failure to appreciate the important distinctions between MTAs and patents (which promote disclosure and hence academic cooperation and the free flow of information) leads them to conclude that intellectual property protection impedes academic freedom and stifles research.  From the responses reported in this paper, nothing could be further from the truth, and failing to address or even simply report that does little to illuminate an important issue for U.S. patent policy.

Comments

[Fan]

Kevin,

The caustic connection between the Watson & Crick's observation to the "puffery" of the Nature article is brilliant !

Fan

[EG]

Kevin,

More of what appears to be the same "rhetorical nonsense" by academia about the "supposed" impeding of biotech research and data sharing because of patents. Again, I see no factual evidence to support this "supposed" conclusion.

[Humorless Democrat]

Anyone who has a good vantage point for viewing academia close-up (e.g. whose spouse works in an academic lab) knows full well that the real impediments to progress and data sharing are the oversized egos of the professors involved and their petty fighting over what the rest of us regard as small potatoes. PhDs, heal thyselves. Or at least find the gene that induces maturity in academic scientists. But don't blame the patent system for your self-inflicted woes.