If it's for the public good, shouldn't the public pay?

March 23, 2001

In the first in a series on intellectual property rights, Alison Goddard reports on the debate over private interests versus public good.

How does one strike a balance between the public good of free access to information and the commercial necessity of paying for the creation of that information?

This question lies at the heart of the debate over knowledge and profit. It is also behind the vexing issue of how to increase access to Aids drugs among poor South Africans, the provocative notion that scientists should profit from mapping the human genome and the acrimonious dispute over whether music fans should be able to swap recordings free of charge using Napster computer software.

"The situation is coming to a head. The core issues have yet to be resolved and we are nowhere near resolving them satisfactorily," says Danny Quah, professor of economics at the London School of Economics and an expert on the economics of information technology.

Governments attempt to balance public good with private gain through a system of patents and copyrights that date, in some cases, from the invention of the printing press and are overseen by the World Intellectual Property Organisation. The system is in urgent need of radical change, say campaigners, who want a shift in favour of the public good.

The argument, particularly in the case of pharmaceuticals, is focusing on the World Trade Organisation's recent agreement on trade-related aspects of intellectual property rights. The deal has strengthened the hand of commerce by giving inventors a monopoly of 20 years from the date a patent is filed.

The debate is illustrated by the ongoing South African court case, in which 39 pharmaceuticals firms are suing the government over laws it has drafted that would allow it to procure medicines from cheaper sources. The pharmaceuticals companies claim the laws infringe their international patent rights. The case, which began on March 5, has been adjourned until April 18.

Sir John Sulston, co-founder of the publicly funded Human Genome Project, supports giving more weight to the public good, particularly in the case of pharmaceuticals.

"At a time when technology has such potential to contribute to human welfare, and has also become the most important determinant of competitiveness in global markets, it is disturbing that the monopoly of rights of the producers of technology are being strengthened.

"Global patent rules, introduced by the WTO, will raise the cost of vital medicines, with potentially disastrous implications for poor countries.

"In the pharmaceuticals sector, the winners will be the large northern-based transnational companies that, as a result of the lengthened patent protection provided by WTO rules, will be able to sell their medicines at a higher price. The losers are likely to be the millions of people who will be unable to afford vital medicines, and hard-pressed government health services.

"Patents have an important role to play in stimulating investment and innovation. But any patent system has to balance the need to reward inventors with the public interest for people to benefit from inventions," he says.

Miguel Rodriguez Mendoza, deputy director of the WTO, argues that an open trading system is a key component for development and promotion of public health.

He told a meeting convened late last year in response to these concerns:

"It is important to address this question from both the angle of providing adequate incentives to research and development and from the angle of affordable access to drugs. The challenge that we all face is how to reach an appropriate balance."

Pharmaceuticals is not the only industry in which the system of patents and copyright will have to change, according to Randall Davis, professor of computer science and engineering at the Massachusetts Institute of Technology. He recently chaired the United States National Academy of Sciences committee that conducted a $500,000 (£350,000), three-year study of intellectual property rights and the emerging information infrastructure.

"At first glance (information technology) is wonderful news for the consumer and for society. But there is also a more troublesome side. For publishers and authors, the question is, how many copies of the work will be sold if networks allow worldwide access? Their nightmare is that the number is one. How many books, movies, photographs or musical pieces will be created and published online if the entire market can be extinguished by the sale of the first electronic copy?

"The nightmare for consumers is that the attempt to preserve the market leads to technical and legal protections that sharply reduce access to society's intellectual and cultural heritage," Davis says.

Reporting last year, the committee recommended that US legislators should not contemplate an overhaul of intellectual property laws and public policy, but should allow the market to test which solution works best.

Opinion over what that solution might be is sharply divided among the computer scientists who presented society with what has been dubbed "the digital dilemma".

Tim Berners-Lee, who invented the worldwide web while working at the European particle physics laboratory in Geneva (Cern), is a firm believer in keeping the web free from domination by commercial providers. He says that he deliberately did not patent his invention because he did not want any individuals or bodies to own the web.

He uses the analogy of an information superhighway, saying: "The public road gives you access to private buildings. If you turn it round and the roads are private and you have to pay tolls to get to some public buildings, it is a commercial throttle, denying access to the public."

The distinction between different levels of public and private knowledge is drawn by Quah, who distinguishes property (knowledge that someone owns and can charge for) from patronage (where a government or other body funds research but does not set the research agenda and the results are disseminated for free) and procurement (similar to patronage except the funding body sets the research agenda).

Under this model, knowledge that is for the public good, but costly to produce, is generated using funds raised from taxpayers and provided by governments. Once produced, however, public knowledge exists to be exploited for commercial gain.

Yet there can be complications. For example, the human genome, in which the publicly funded Human Genome Project argued that the genome is the heritage of mankind, while the privately funded Celera sought to establish commercial rights over it.

So where does one draw the line to achieve an appropriate balance? An Oxfam report published earlier this month recommended that, for pharmaceuticals, the duration of patent protection should be shortened. It also called for a $5 billion research fund into diseases of the poor to be established under the auspices of World Health Organisation, and for the creation of another fund to subsidise drug purchases and delivery systems in the poorest countries.

The possibility of such a fund was also raised by the WTO's Rodriguez Mendoza who argues that the intellectual property system "will not be sufficient to provide incentives for research and development into the diseases that mainly afflict the poor in developing countries with limited purchasing power".

"We welcome the growing worldwide recognition of this, and the initiatives being taken to fill this gap, involving intergovernmental agencies, national governments and private foundations as well as the industry itself," he says.

Another solution, yet to be raised in the general debate, has been in force for the past 30 years in the United Kingdom, according to a senior Treasury insider. In 1968, the government devised a "profit formula" - a comprehensive pricing methodology designed to ensure that companies that had a monopoly on technologies, primarily in defence, were paid a price that was fair to both the company and the public purse. The formula states that only companies that generate a profit of less than about 20 per cent, based on the return of the capital employed plus some other costs of production, can win government contracts.

Davis, meanwhile, points to the role of business models in protecting intellectual property. "Imagine it is the era of prohibition and it turns out that the average teenager can go into the kitchen and, using commonly available equipment, produce a quart of high-quality whisky cheaply and in five minutes. You cannot possibly protect against it. That is the situation that most intellectual property is in. So think of a business model that does not need protection -one that makes it easier to buy than to steal.

"Intellectual property will surely survive the digital age, although substantial time and effort may be required to achieve a workable balance between private rights and the public interest in information. Major adaptations may need to take place to ensure that content creators and rights holders have sufficient incentives to produce and extend the diverse supply of intellectual property.

"Policy-makers and stakeholders will have to work together to ensure that the important public purposes embodied in copyright law continue to be fulfilled in the digital context. The information infrastructure promises the possibility of greatly improved access to information for all of society. We, as a society, share the responsibility for developing reasonable compromises to allow the nation to benefit from the opportunities it can bring."

  • Next week: Tim Berners-Lee on intellectual freedom.

KEEPING IT FREE FUELS RESEARCH

Tufts University in Massachusetts, United States, is home to the Perseus digital library of classics texts, which describes itself as "an evolving digital library, engineering interactions through time, space and language".

Students and academics can gain access to texts and commentaries in Greek, Latin and English by visiting the library's website.

There is no charge for perusing the materials, and the library is funded through government grants and charity. It does, however, forbid commercial use of texts.

Its curators believe in the public good of allowing unfettered access. The site states: "Our primary goal is to bring a wide range of source materials to as large an audience as possible. We anticipate that greater accessibility to the sources for the study of the humanities will strengthen the quality of questions, lead to new avenues of research and connect more people through the connection of ideas."

PRIVATE VS PUBLIC DELIVERS

The race to sequence the human genome illustrates how the tension between private gain and public good can be a profitable one.

The publicly funded Human Genome Project and the commercial Celera organisation, which aims to make money from its discoveries, used different approaches, but both built on existing, publicly available data.

Celera sells subscriptions to organisations wishing to access its work, while the Human Genome Project allows free access. Mike Dexter, director of the Wellcome Trust, which co-funded the work, says: "By maintaining the principle of equal, free access for all, we have directly contributed to narrowing the gap between the rich, developed scientific world and our colleagues in poorer countries."

The race between the longer-running public project and Celera was declared a tie at a press conference called by US president Bill Clinton in June last year. The rival versions of the sequence were finally published last month.

Who won the race remains a matter of opinion, but it is generally agreed that if it were not for the competition, the publicly funded project would not yet have completed the work.

  The ownership of knowledge, back to contents

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