New Internationalist

Conquest by patents

Issue 349

Once famous for flagrantly breaking patents, the US is now the world’s fiercest protector of them. Beth Burrows examines the conversion from rebel to pitbull – and assesses the cost for us all.

Volker Steger / Still Pictures / www.stillpictures.com
Volker Steger / Still Pictures / www.stillpictures.com

Where the business of government has indeed become Business, it is difficult to hear the voices that still question the ‘need’ to be globally competitive, the wisdom of unrelenting market penetration, or the true cost of a revolving employment door between industry and government. Where commerce is king, a regulator suddenly becoming executive in the industry he used to regulate, or a trade representative being appointed to the board of directors of a company his negotiations greatly benefited, hardly merits media attention. Ethics, in such a climate, inevitably falls on hard times.

In 1992, I attended a conference in Seattle about ‘The Future of Intellectual Property Protection for Biotechnology in the United States, Europe, and Japan’. For three days eminent speakers discussed patents. On the last day of the conference, one of the panellists bemoaned the situation in Europe where at the time it was nearly impossible to obtain a patent on any form of life. He hoped that his colleagues in other places would never have to face the situation he faced with ‘environmentalists and those who would bring ethics and other irrational considerations to the table’. Those were his words: ‘ethics and other irrational considerations’. No member of the audience challenged the pairing. Not one learned lawyer. Not one high official. Not one heavily credentialed academic. Not one expert.

Patents are a form of intellectual property rights often touted as a means to give ‘incentive and reward’ to inventors. But they’re also a cause for massive protests by farmers, numerous lawsuits by transnational corporations and indigenous peoples, and countless rallies and declarations by members of civil society.

It is impossible to understand why they can have all these effects unless you first recognize that patents are about the control of technology and the protection of competitive advantage. Once you have imbibed that commercial reality, all else – including the granting of patents on anything of value, including living organisms and their parts – will make perfect sense.

Lessons from history

In the 1760s, the Englishman Richard Arkwright invented the water-powered spinning frame, a machine destined to bring cotton-spinning out of the home and into the factory. It was an invention which made Britain a world-class power in the manufacture of cloth.

To protect its competitive advantage and ensure the market for manufactured cloth in British colonies, Parliament enacted a series of restrictive measures including the prohibition of the export of Arkwright machinery or the emigration of any workers who had worked in factories using it. From 1774 on, those caught sending Arkwright machines or workers abroad from England were subject to fines of £200 (about $300 at today’s conversion rates) and 12 years in jail. That’s how serious the English were about the Arkwright patents.

In 1790, Samuel Slater, who had worked for years in the Arkwright mills, left England for the New World disguised as a farmer. Arriving in the US, he sought financing and recreated from memory an entire Arkwright factory and all its equipment. He thereby enabled the production of commercial-grade cotton cloth in the New World and put the US firmly on the road to the Industrial Revolution and economic independence.

Slater was highly rewarded for his achievement. In his own lifetime he was considered a hero. He is still deemed the ‘father of American manufacturing’. To the English, however, he was a patent infringer, an intellectual property thief.

Interestingly, patent protection was a part of US law at the time of Slater’s deed. But that protection would only extend to US innovations. It is worth remembering that until the 1970s it was understood, even accepted, albeit with grumbling, that countries only enforced those patent protections that served their national interest. When the young United States pirated the intellectual property of Europe – and Slater wasn’t the only infringer – people in the US congratulated themselves. They saw the theft as evidence of their national virility, a justifiable response to England’s refusal to transfer its technology.

By the early 1970s, the situation had changed. US industry demanded greater protection for its idea-based products – such as computers and biotechnology – for which it still held the worldwide lead. Intellectual property rights held the key. And so, together with its like-minded industrial allies, the US pushed for the inclusion of intellectual property clauses, including standards for patents, in international trade agreements.

This has engendered a huge change in trade agreements and begun a fight that’s not over yet. Ironically, adopting a worldwide one-size-fits-all patent regime might mean barring the path to development once taken by the US itself.

Victory in the first rounds went to the transnational corporations headquartered in the industrial world. They bragged openly about pushing the Trade Related Intellectual Property Rights (TRIPs) regime of the World Trade Organization – harmonized standards for copyright, patents, trademarks and the like – on to the agenda of international trade agreements. To quote from a 1995 Pfizer Pharmaceutical advertisement in the Southeast Asian edition of The Economist: ‘In conjunction with more than a dozen companies from all the relevant sections of US business, Pfizer and IBM co-founded the Intellectual Property Committee or IPC. The US Trade Representative was impressed and suggested that we increase our effectiveness internationally by joining forces with UNICE [Union of Industrial and Employers’ Confederations of Europe], the principal pan-European business group, and its counterpart in Japan, Keidanren… Working together… our combined strength enabled us to establish a global private sector network which lay the groundwork for what became “TRIPs”.’

There had been no public consultations or voluntary-sector involvement in the creation of TRIPs. As James Enyart of Monsanto Corporation explained it: ‘Industry… identified a major problem in international trade. It crafted a solution, reduced it to a concrete proposal and sold it to our own and other governments… The industries and traders of world commerce have played simultaneously the role of patient, the diagnostician, and the prescribing physician.’

Theft and counter-theft

Ironically, in the fight over TRIPs, both sides used arguments about theft to make their case.

When US business groups explained the ‘need’ for patents and trademarks in trade agreements, they alleged $40-60 billion losses due to intellectual property piracy; they blamed the losses on Third World pirates; they discussed how piracy undermined the incentive to invest; and they claimed that the quality of pirated products was lower than the real thing and was costing lives.

The opposition to TRIPs pointed out that many of the products made in the industrial world, almost all its food crops and a high percentage of its medicines had originated in plant and animal germplasm taken from the developing world. First knowledge of the material and how to use it was stolen, and later the material itself was taken. For all this, they said, barely a cent of royalties had been paid. Such unacknowledged and uncompensated appropriation they named ‘biopiracy’ and they reasoned that trade agreement patent rules were likely to facilitate more theft of their genetic materials.

The revolving door

It’s not uncommon for US officials involved in bodies regulating biotech products to move on to plum jobs in the private sector. Or for people working for biotech giants to join government departments. Such infiltration was documented by the Edmonds Institute in 1999 (www.edmonds-institute.org/olddoor.html]). Here are a few examples, with some updating:

L Val Giddings, former biotechnology regulator and (biosafety) negotiator at the United States Department of Agriculture (USDA/APHIS)... became Vice-President for Food & Agriculture of the Biotechnology Industry Organization.

Michael (Mickey) Kantor, former Secretary of the US Department of Commerce and former Trade Representative of the United States... became a member of the board of directors of both Monsanto and Pharmacia.

Linda J Fisher, former Assistant Administrator of the US Environmental Protection Agency’s Office of Pollution Prevention, Pesticides, and Toxic Substances... became Vice-President of Government and Public Affairs at Monsanto for a time... and then was made Deputy Administrator of the Bush Administration Environmental Protection Agency (EPA).

A fuller update with British and Canadian examples is due to appear later this year.

Their claim that materials ‘collected’ in the developing world were stolen, elicited a counter-claim that these were ‘natural’ or ‘raw’ materials and therefore did not qualify for patents. This in turn induced a counter-explanation that such materials were not ‘raw’ but rather the result of millennia of study, selection, protection, conservation, development and refinement by communities of Majority World and indigenous peoples. Further, as Pat Mooney of the international civil society organization the ETC Group put it, to consider only the inventions of white men in lab coats to be inventions worthy of recognition and reward is to hold a fundamentally racist view of human creativity.

Others pointed out that trade agreements which forced the adoption of unsuitable notions of property and creativity – not to mention an intolerable commercial relationship to nature – were not only insulting but also exceedingly costly. To a developing world whose creations might not qualify for patents and royalties, there was first of all the cost of unrealized profit. Secondly, there was the cost of added expense. With the extension of patents to living organisms, human body parts and genes, and with the extension of the industrial patenting system to the whole world via various trade agreements, Majority World communities faced a very legal, sizeable, and collectible bill for royalties.

Patents on seeds, for example, could result in a) farmers being denied their traditional rights to save seeds (planting seeds without paying royalties is making an unauthorized copy of a patented product); b) farmers having to pay royalties for every seed and farm animal derived from patented stock; and c) farmers being forced – given the direction of research and the increasing ownership of seed companies by agrochemical corporations – to become more dependent on fertilizers and herbicides made by the same companies who collected their traditional seeds in the first place and would later sell back the chemically dependent derivatives. The cost of patents on biologicals used in healthcare and medicines would be even higher and more horrific.

For most of the people on the planet, the whole patenting process would lead to greater and greater indebtedness; for them, the trade agreements would amount to ‘conquest by patents’ – no matter what the purported commercial benefits. TRIPs would usher in the beginning of an age in which ethics was a commercially unviable, irrational consideration.

Beth Burrows is President / Director of The Edmonds Institute ([http://www.edmonds-institute.org]), a small, non-profit, public-interest organization in the US.

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