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How Effective is the Current Patent System for Global Technological Innovation?

5/5/2010 | German House New York

How Effective is the Current Patent System for Global Technological Innovation? Perspectives from the United States and Europe

The debate is long standing and highly controversial: supporters of the patent system view patents as essential for funding of R&D, innovation, and economic development. Detractors claim it interferes with research, stifles incremental improvements, and costs too much. The GCRI, in cooperation with the American Friends of Bucerius and RWTH Aachen University, hosted a panel discussion on the efficacy of the current patent system in the United States and Europe.

German Consul General Dr. Horst Freitag welcomed the guests before introducing two of the evening’s hosts, Dr. Joann Halpern and Dr. Nina Smidt. Dana Beldiman, a counselor on intellectual property protection, then introduced Peter J. Esser, a registered patent practitioner.

Esser spoke about the functions and needs for the patent system as a driver for innovation. He emphasized that the marketplace can and often does reward innovation. However, without exclusive intellectual property rights, “technical progress will largely stagnate in the absence of an incentive for creativity and effort.” He used the “Wikimedia Commons” as an example to support his argument. The Commons makes a significant amount of content available in the public sphere or public domain, with the concomitant spread of knowledge. The Commons are largely free of rules, and, by extension, rights. According to Esser, “This serves to spread knowledge, but leads to minimal innovation.” On the other hand, a patent system – at the cost of complex rules and regulations - provides the framework that gives rise to the legal underpinnings that support innovation. Furthermore, in order to maintain and foster innovation, periodic maintenance and systemic reforms are required.

Based on his dialectical task of understanding how society and culture frame scientific and technological innovation, and how this investigation shapes society and culture, the second speaker, Professor Myles W. Jackson, focused on the practice of gene patenting. In his discussion of the patenting of a natural product, he alluded to the U.S. Supreme Court’s decision that natural products may not be patented. In response, Jackson raised the following philosophical question: “What does one have to do to a molecule to make it substantially different from a naturally occurring one?” The standard reply, “excise it from the genome, clone it, and splice out the introns” is insufficient, in Jackson’s opinion, because the human body can isolate a gene, copy a gene, and cut out the introns at the mRNA level. In support of his argument he cited the recent Federal Circuit Court decision to invalidate Myriad Genetics BRCA 1 and 2 gene patents. That decision was based on the fact that genes are a product of nature. Jackson also addressed the problems associated with applying chemical intellectual property law to DNA, and the inability of chemical IP law to cover the unique status of DNA. Finally, Jackson cited studies which show that secrecy has increased in laboratories where the information that is generated might be patented. He points out that “this is an anathema to the original concept of a patent: it is a quid pro quo. The inventor shares his/her information with the public, and the government ensures that he/she receives exclusive privileges in the form of royalties for the use of his/her invention.”

Dr. Regina Oertel had similar concerns about information dissemination. Oertel identified the conflict faced by university researchers who collaborate with industry. On the one hand, researchers are encouraged to create and share scientific knowledge, yet the demands of industry require them to limit the dissemination of knowledge associated with specific innovations. Oertel clearly illustrated the delicate balancing act that many university researchers have to perform. RWTH Aachen University is known for its strong links to the German industrial sector, and its Entrepreneurship Center fosters a highly innovative climate. Yet Oertel also acknowledged that the university’s high potential of innovative ideas is not exploited by means of intellectual property rights. She also presented the patent topic as relatively new to German universities. In the ensuing discussion, the head of the WIPO New York Office, Rama Rao Sankurathripati, shared his perspective on the efficacy of the current patent system by saying “In Europe and the U.S. there is no current patent system.” He referred to the key issues of patent funding, examination, and granting and how the current debate is fueled by the entrance of newly developed countries into the system. Regarding the system’s efficacy for global technological innovation, he said that the emergence of new technologies and innovations question the very same concept.

Although the event did not offer a solution to the discussion’s question, all panelists agreed that the current system, both in the U.S. and Europe, is functioning well, with room for improvement. In terms of harmonization, a “gargantuan task of unifying the system” lies ahead, in which the developed and newly developed countries will play a significant role.

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  • Featured Speakers

    • Dr. Horst Freitag (Welcome Remarks)

      Consul General of the Federal Republic of Germany, New York

    • Dr. Dana Beldiman (Moderator)

      Partner, Caroll, Burdick & McDonough LLP

    • Prof. Myles Jackson

      Professor of the History of Science, Director of Science and Technology Studies, New York University (NYU)

    • Dr. Regina Oertel

      Director of Technology Transfer and Research Funding, RWTH Aachen University