PublishedMay 12, 2020

Open COVID Science Shows Patents Not The Only Incentive

The standard economic justification for patents is that they provide an incentive for inventions that we wouldn’t otherwise have.  In exchange for providing a patent owner with compensation for its invention, the inventor describes a new idea to the public and 20 years later, the public can use it.  

There’s a lot of reasons why that bargain might not hold([1])—for one, many patents don’t actually teach the world how to use the claimed invention ([1][2][3]), and the ones that do often aren’t for anything new ([1][2][3]).  But one major problem, a problem that the current crisis highlights, is that patent-based compensation isn’t always the best way to incentivize invention.

Open Technology

The open source and free software movement has exploded over the past 30 years.  The movement, based on the idea that users of technology benefit when they can modify that technology to suit their needs, has generated much of the software that runs the modern Internet and our broader information society.  And as the huge commercial success of open source companies like Red Hat illustrates, you don’t need to lock inventions under intellectual property in order to have a reason to create them—you can even make a profit from inventions you freely share with the world.  (In fact, open source does the opposite, using intellectual property rights to make sure that the inventions can never be locked away.)

In recent years, there’s also been a new emphasis on open science—the principle that scientific research should be widely available and benefit all, rather than locked in.  This includes medical technologies, where researchers have increasingly pushed for free access to information.  As one example, NIH implemented a policy in 2009 requiring that any NIH-funded research be made available to the public without charge.   However, this approach hasn’t gone all the way to an open model—there’s no restriction on patenting the science and preventing others from taking advantage of it.  That fact has been highlighted by the PTO’s recent “Patents 4 Partnerships” launch, which mostly offers U.S. government patents for license despite the urgent need to combat COVID.

While the federal government hasn’t yet made its inventions freely available, parts of the private sector have begun to step forward.

Open Science and COVID-19

The current crisis is a perfect illustration that financial incentives aren’t the only incentives and might not even be the most important incentives—a desire to stop a pandemic and help humanity is a particularly strong incentive to invent.  Jonas Salk famously did not patent his polio vaccine and committed to licensing it for manufacture, royalty-free.  (Albert Sabin, who invented the oral polio vaccine, also refused to patent his vaccine.)

And now, given the present COVID pandemic, we’re seeing efforts in the same direction.  The Open COVID Pledge, joined by a wide range of researchers, from major national laboratories to technology companies to biomedical research universities, is a pledge to license relevant patents and/or copyrights for use in combating COVID-19.  Other universities have joined together in the COVID-19 Technology Access Framework, a similar effort committing to royalty-free licensing of technology to treat COVID-19 during the pandemic.

Major pharmaceutical companies are joining in.  AbbVie committed not to enforce its patents on Kaletra against its use as a potential COVID treatment.  Medtronic shared the design specifications for one of its ventilators, along with a license permitting others to manufacture designs using those specifications during the crisis.  And READDI, an initiative created in response to COVID, is partnering with major research institutions and pharmaceutical companies.  The partnership will develop, via open science mechanisms, new antiviral drugs to combat future epidemics.  Using an approach modeled after an earlier open science initiative, DNDi, patents will be “the exception, not the rule” and any patents will be used to coordinate development, not to restrict access to the developed drug. 

At the same time, patent-based incentives have thrown some hurdles into the path of COVID response.  One primary example is NPE Labrador Diagnostics using patents obtained by Theranos to try to block a rapid COVID test from the market, but more recently a Utah company has been claiming to own the patent to electronic contact tracing and claiming that all of the contact tracing applications being developed and released need to license it.  (Having taken a quick look at the company’s patents, I’m skeptical of their validity, but court challenges are expensive and time-consuming and innovators might choose not to offer a contact tracing tool rather than fight.)  These sorts of patent abuses illustrate that patents aren’t just a positive incentive, but can create negative externalities that other innovators have to negotiate.

Patents Are Just One Incentive—And Not Always The Right One

Pandemics aren’t the only instance in which incentives other than the blunt tool of a patent are sufficient to obtain inventions.  Even if you aren’t stopping a pandemic, the need for a tool and the recognition that you did something is often enough to incentivize development—witness the numerous open source projects created by average people simply because they saw a problem, created something that solved it, and wanted others to benefit.  In other cases, normal commercial activity is enough to generate many other inventions—there’s no need to provide a patent to get the inventor to create their invention if a company would have developed it anyway to solve their commercial needs.  (Recently, some companies who originally patented their technology realized they’d be better off letting anyone use the patent and making money supporting those who used the patent with their expertise.)  And among a range of other approaches, prizes have shown recent success in some areas—the X-Prizes being one well-known example, ranging from the original space launch prize to more recent awards, including one for creating water out of thin air.  

Different innovation incentives will suit different areas of technology and areas of commercialization—patents have a place in the arsenal of incentives.  But as the current crisis has made clear, they aren’t the only incentive, and sometimes they do more to interfere than to help.  Ensuring an appropriately balanced patent incentive—not too weak, not too strong—is crucial to combating the next pandemic and to creating new technological innovations alike.

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

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