An Introduction to Intellectual Property and Africa

One of the reasons it has been a slow week here at Stuffed and Starved is that I’ve been busy editing the final draft of the book. Inevitably, editing means cutting things. And one of the cuts concerns the reign of biopiracy in Africa. If you don’t know what biopiracy or intellectual property rights mean for the poor, this post offers an introduction. I was sad to lose it from the book, because it showed how The Economist has done an about face on intellectual property – it now supports them, when once it didn’t. Its original arguments were stronger.

But, since this was a little too dry for the book, out it came. And here it is for your reading pleasure (and you can read the entire thing, formatted and with footnotes, here).

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The idea behind intellectual property rights is based on this three step argument:

  1. Progress depends upon inventions.
  2. Inventions will be under-provided without sufficient incentives.
  3. Intellectual rights offer the best mechanism for creating these incentives.

Although the economists in the nineteenth century limited themselves to taking issue with the last of these steps, those with faith in it might see it as progress that, today, all three of these assertions have their detractors.

The trade-off question is this: how do you balance the rights of the creator of an invention with the public’s right to “share in scientific advancement and its benefits”?

The least-worst solution, with which most of the world lives, is patenting. Patents provide a time-limited monopoly for the inventor so that the costs of invention, plus a reward for having done it, can be recouped.

At the same time, patents demand that the invention be put in the public domain, even if only the inventor can commercialise it so that everyone can start benefiting from the knowledge, if not the product, and that rivals can figure out how to make it so that, once the monopoly expires, they can jump right into the marketplace.

A first problem is that one never knows quite how long a monopoly ought to be allowed. One doesn’t want it too short, so that the costs of invention aren’t recouped, but one doesn’t want it too long, so that the monopoly endures way beyond the costs of invention and reasonable profit, at the public expense. If the costs of your invention, plus a handsome profit, can be recouped in a month, it’s hard to make a case that you should have a monopoly for twenty years, when the society that gave you the monopoly might then take it back, and start benefiting from month two.

The trouble is every invention, its costs, and its profits, are different. To measure every single one would, it is argued, raise the costs of the system to unacceptable heights. The solution to the problem, then, has been to award a set-duration monopoly.

It’s highly unusual for economists to condone monopolies. But John Stuart Mill’s view, which has since become canonical, explains it like this:

“The condemnation of monopolies ought not to extend to patents, by which the originator of an improved process is allowed to enjoy, for a limited period, the exclusive privilege of using his own improvement. This is not making the commodity dear for his benefit, but merely postponing a part of the increased cheapness which the public owe to the inventor, in order to compensate and reward him for the service.
That he ought to be both compensated and rewarded for it, will not be denied, and also that if all were at once allowed to avail themselves of his ingenuity, without having shared the labours or the expenses which he had to incur in bringing his idea into a practical shape, either such expenses and labours would be undergone by nobody except very opulent and very public-spirited persons, or the state must put a value on the service rendered by an inventor, and make him a pecuniary grant.
This has been done in some instances, and may be done without inconvenience in cases of very conspicuous public benefit; but in general an exclusive privilege, of temporary duration, is preferable; because it leaves nothing to any one’s discretion; because the reward conferred by it depends upon the invention’s being found useful, and the greater the usefulness the greater the reward; and because it is paid by the very persons to whom the service is rendered, the consumers of the commodity.”

Although Mill’s view is now the received one, it wasn’t always. At the time it was published, it was an intervention in a hotly contested nineteenth-century debate, when, unlike today, those most in favour of free trade found themselves weighing in heavily against intellectual property rights. Consider this, from The Economist, in 1851:

“The privileges granted to inventors by patent laws are prohibitions on other men, and the history of inventions accordingly teems with accounts of trifling improvements patented, that have put a stop, for a long period, to other similar and much greater improvements… The privileges have stifled more inventions than they have promoted… Every patent is a prohibition against improvements in a particular direction, except by the patentee, for a certain number of years; and, however, beneficial that may be to him who receives the privilege, the community cannot be benefited by it… On all inventors it is essentially a prohibition to exercise their faculties; and in proportion as they are more numerous than one, it is an impediment to the general advancement…”

In 1869, the magazine went further:

…. the practical failure of the law to secure a reward to the inventor and the frequent disproportion between the reward and the service rendered… are points of no consequence so long as the public is generally a gainer by the law.

As The Economist then went on to note, the public rarely is the gainer by law. Even if we accept the logic of intellectual property (and there’s no reason why we should, since there are many alternatives), there’s a balance that needs to be struck between the needs of patent holders and the public. The current state of affairs, as Lawrence Lessig, the founder of Creative Commons, notes is less a balance, and more a ‘feeding frenzy’.

The feeding frenzy becomes a bloodbath when sharks move into waters previously free of predators. Under the WTO’s Trade-Related Intellectual Property Rights system, the system of patents has internationalised patent protest.

This was, again, a question that had been raised in the latter half of the nineteenth century, and the argument then was inconclusively resolved. It wasn’t clear whether patent protection had anything to do with development or national wellbeing.

That the United Kingdom and the United States had industrialised rapidly in the presence of relatively strong patent protection was adduced as an argument in favour of the link between the two. By contrast, that Germany and Switzerland had managed to catch up without patents was offered as a counter-example.

Today, there’s more evidence. In 2002, the Commission on Intellectual Property Rights contributed to the debate, observing that

“rapid growth is more often associated with weaker IP protection. In technologically advanced developing countries, there is some evidence that IP protection becomes important at a stage of development, but that stage is not until a country is well into the category of upper middle income developing countries.”

It’s not, then, that the jury is still deliberating over the link between growth and intellectual property systems. Empirical and theoretical evidence weighs against a strong system of intellectual property for the majority of people in the Global South.

It’s remarkable, then, that in international development, the British Department for International Development, whose Minister, Clare Short, spawned the Commission on Intellectual Property Rights, has since included strong intellectual property. The theory has been stretched a little.

Rather than retreat from the admission that patents are away of inhibiting growth in poorer countries, a new buzzword has emerged to patch the argument: ‘benefit sharing’. It works like this. In places where research is unlikely to take place, because skills are lacking because, in turn, the government has been instructed to reduce the amount of money it offers to research institutions through mechanisms like ‘structural adjustment policies’, the solution is not to prevent patenting or to increase domestic funding for local science.

The solution is to allow what has previously been called ‘biopiracy’. This means that foreign groups and individuals are allowed to stake out large parts of the biological commons, and should any commercial benefit arise, they will be ‘shared’. Certainly, the first half of this process has happened, with over 25,000 thousand patent applications in Africa between 2000 and 2001, only thirty one were lodged by Africans. The second part, the sharing bit, hasn’t quite happened yet. This isn’t because commercial benefits haven’t accrued. As Jay McGown notes,

“It’s a free for all out there. They’ve got to declare a moratorium on access until a just protocol is finished and implemented. Until then, the bio-pirates will keep on shouting in the ears of their victims, There’s no such thing as piracy! And at the rate discussions are going, the bio-pirates may access everything before an agreement is finalised. If that happens there really will be no such thing as piracy. There will only be patent and trade secret transgression.”

In Africa, environmental groups have been waving the flag about this for some time. That the continent has already effectively conceded these rights, by being the most open to world trade clearly that hasn’t helped it. It remains the poorest, and with the lowest rates of endogenous research.

References

CIPR, Commission on Intellectual Property Rights. 2002. Integrating Intellectual Property Rights and Development Policy: Report of the Commission on Intellectual Property Rights. London: Commission on Intellectual Property Rights.http://www.iprcommission.org/graphic/documents/final_report.htmfile://C:%5CDocuments%20and%20Settings%5CRaj%5CMy%20Documents%5CArticles%5CCIPR%20full%20report%20Commission%20intellectual%20property%20rights%20ipr.pdf

Lessig, Lawrence. 1999. The Problem with Patents. Industry Standard, 23 April 1999.http://www.thestandard.com/article/0,1902,4296,00.html?printer_friendly=
Machlup, Fritz, and Edith Penrose. 1950. The Patent Controversy in the Nineteenth Century. The Journal of Economic History 10 (1):1-29.http://links.jstor.org/sici?sici=0022-0507%28195005%2910%3A1%3C1%3ATPCITN%3E2.0.CO%3B2-L

McGown, Jay. 2006. Out of Africa:Mysteries of Access and Benefit Sharing: Edmonds Institute
Mill, John Stuart. 1848,ed. , 1909. Principles of Political Economy with some of their Applications to Social Philosophy. Edited by W. J. Ashley. Seventh Edition ed. London: Longmans, Green and Co
Shiva, Vandana. 1997. Biopiracy : the plunder of nature and knowledge. Boston, MA: South End Press
The Economist. 1851. Editorial. The Economist, February 1, 1851, 114-115
———. 1869. Editorial. The Economist, 657
United Nations. 1948. Universal Declaration of Human Rights: United Nations.http://www.un.org/Overview/rights.html
World Bank. 2000. World development report: Attacking Poverty. New York: Oxford University Press