Enabling Innovation Policies

For Hans Sauers, it is clear that the COVID pandemic is being used as a cover narrative to argue for a quantum leap in the debate over IP and public health. In other words, taking away or denying patent rights is, according to some, no longer enough. Affirmative expropriation and the forced transfer of industrial property is taking its place on the NGO agenda – at least with respect to vaccine originator companies from North America and Western Europe. It is unclear why, but no nongovernmental group is demanding similar access to Russian, Chinese, or Indian COVID vaccine technology, even though there is no convincing reason to be dismissive of these products. Expectations that manufacturers around the world could, due to reduced IP protections, “freely” and independently make versions of existing COVID-19 vaccines within months are simply unrealistic. Indeed, there is no such thing as a “generic vaccine,” as some IP waiver proponents expect. Any resulting products would inevitably differ in quality, safety, and efficacy, and would not be approvable without running new rounds of expensive and time-consuming clinical trials. This inefficiency would be exacerbated by the diversion of scarce raw materials away from up-and-running manufacturers to inexperienced, first-time producers, who would produce at lower efficiency (at least initially) and, indeed, often in regions that lack biologics-manufacturing infrastructure. Such supply diversions, and the resulting inefficiencies, would only make it harder to maintain current global vaccine production, and worldwide COVID vaccine output would decline, not grow.

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In his new book, Innovators, Firms, and Markets: The Organizational Logic of Intellectual Property, John Barnett draws on an intellectual toolbox consisting of economic theory, economic and legal history, and political economy, to show that significant reductions in the strength of patent protection are likely to have unwelcome consequences for innovation and competition policy. Counterintuitively, weakening patents can raise entry barriers and shelter incumbents by disadvantaging firms that are rich in ideas but poor in the capital and expertise required to convert ideas into commercially viable products and services. The result is an innovation ecosystem in which research and development and its commercialization tend to take place within integrated financing, production, and distribution environments that can only be feasibly maintained by a small handful of large firms. By contrast, robust IP protections enable innovation ecosystems that support a variety of more‐ and less‐​integrated structures for funding and extracting value from R&D investments.

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Learn how to protect your intellectual property (IP) domestically and internationally at Phoenix (PHX) Startup Week. Join Wayne Stacy, Director of the USPTO’s Silicon Valley Regional Office, and Ruth Soberanes, International Trade Specialist for the U.S. Commercial Services – Phoenix, in a discussion of why and how startups should consider protecting their intellectual property (IP), what to expect when selling domestically vs. internationally, and U.S. government resources available to assist startups going global.  PHX Startup Week is a five-day online event providing education, connection, and support to entrepreneurs in collaboration with StartupAZ Foundation. Registration is required, but the USPTO does not charge any fees associated with registration.

Register here.

Munk Debates wants to help the world rediscover the art of civil and substantive public debate by convening the brightest thinkers of our time to weigh in on the big issues of the day. Their debate on vaccines provides two interesting perspectives on the vaccine rollout and IP protection.

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In this 2-minute video, Gaétan de Rassenfosse, Chair of Innovation and IP Policy at EPFL, explains that foreign companies operating in China are less likely to have their patent applications granted than their Chinese counterparts. This discrimination occurs in technologies of strategic importance to the Chinese government, particularly in the telecommunication and biotech industries.

Watch the full video here.

As Craig Moss, Executive Vice President of Ethisphere, explains in his article, the increasing prevalence of sensitive digital information has led companies to rely more heavily on trade secret protection as an IP strategy.  At the same time, however, the increase in digital activity makes trade secret protection more difficult, as digital assets are easier to copy and move than physical ones.  Furthermore, effective protection can be even more difficult because trade secrets often need to be shared with third parties—such as contract manufacturers, R&D centers, resellers, and joint venture partners—in the normal course of business.

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The article above describes a common difficulty of intellectual property (IP) claims for artificial intelligence (AI): patent claims for AI are often deemed to be no more than abstract ideas.  The United States Patent and Trademark Office (USPTO) has established a number of specific categories of AI in order to distil its definition, but the overarching theme amongst these categories is that, if a human mind can accomplish a particular task, it is likely an abstract idea. Of course, AI is, by its nature, an attempt to replicate the human mind, albeit in perhaps a stylized or exaggerated fashion; thus, the difficulty of patenting this technology is readily apparent.

In addition to with patents, legal battles also remain with regard to trade secrets. Rather than engage in litigation to prove infringement, a company seeking to protect a trade secret must instead demonstrate that the secret was misappropriated and that it took reasonable measures to maintain confidentiality. The distinction between patents and trade secrets remains very important for companies: trade secret law undoubtedly offers protection where patents do not, and vice versa.

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Innovation Council member SARIMA has published an article by Dr Andrew Bailey, in which he explains the various views on the issue of access to IP in light of the COVID-19 pandemic. He sees a need for governments to build capacity in the manufacture of vaccines, in order to both meet local demand and assist with pandemic response. 

During the pandemic, there was incredible collaboration across institutional, corporate, and national boundaries to address the urgent health crisis. Bailey hopes that this experience will shape global thinking about collaboration, and about how to ensure equitable access to healthcare whilst taking care to properly respect the infrastructural investments, trade secrets, and know-how of manufacturers.

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