A reason to protect rich inventors

There is a knock-down, drag-out fight going on over intellectual property at the World Trade Organisation talks in Geneva. The sparring partners are a sort of caricature of Poor vs Rich: developing nations on the one hand and the powerful pharmaceuticals lobby on the other.

Countries including India have been pressing the US to allow the governments of developing countries greater freedom of manoeuvre. They want to be able to force drugs companies to license patents to generic companies during national health emergencies. Originally this demand was driven by the Aids crisis in poor corners of Africa but lately it has expanded to include many countries - and drugs for many diseases.

In making their case for bending patent rights, the developing nations are joined by pressure groups and generic drugmakers. The team makes two points. The first is that the pharma industry can spare a little of its profits. (Face it: even before its Pharmacia merger, Pfizer is the world's sixth biggest company.)

The second is that the best way to get self-interested companies to share their wealth is to squeeze them relentlessly at every stage of their existence. Otherwise, the needy get nothing.

The drug companies for their part are mounting a blocking action with all their might. They are making breathy general threats about "the end of innovation". They are even alleging that poor countries will abuse a new agreement to get cheap Viagra for all of Africa and the subcontinent. Horrors! In considering all these heated claims, we may want to consider the arc of another industry with a similarly intense dependence on brain power: software.

In 1976, a 21-year old software writer published a document entitled "An open letter to hobbyists". He and a colleague had spent a good part of the past year improving their product: "Now we have 4k, 8k, extended Rom and disc Basic." The author noted bitterly that: "The value of the computer time we have used exceeds $40,000." Although the software was popular, the software writer and his partner did not always get paid: hobbyists were pirating their work.

In a tone every bit as crabby as that of today's anti-retroviral researcher, the young man assailed the pirates: "Most directly, the thing you do is theft." Of course, he allowed, he would like to develop more software: "Nothing would please me more than to be able to hire 10 programmers and deluge the hobby market." But partial payment was not enough. With all the arrogance of the talented, the man warned he might withhold his research if he did not get the right price. And then: "Will quality software be written for the hobby market?"

Bill Gates, the young man, did receive his payments. And he did innovate his way to billionairedom. A shift in personality accompanied Mr Gates's shift in net worth: Bill Gates the ungenerous legalist became Bill Gates the philanthropist.

And, as it happens, a share of Mr Gates' philanthropy is now aimed at alleviating the Aids crisis that triggered the pharmaceuticals industry's current intellectual property quandary. In India, for example, the Bill and Melinda Gates Foundation recently gave $30m for HIV prevention. The foundation is also funding a private/public partnership to develop an Aids vaccine.

The transformation of Mr Gates illuminates an important truth about what happens when we protect intellectual property. It is that the pharma propagandists are right: we get unforeseen benefits. Who could have known that sufficient respect for Mr Gates's rights regarding Basic software would lead to millions for India? Advocates of big patent loopholes for troubled countries may also want to note that it is the strong patent protection afforded to drug companies that has enabled them to provide any number of gifts and subsidies to alleviate Aids in Africa.

The difference between those who recognise these points and those who refuse to do so may have something to do with having personal experience of the value of intellectual property. Mr Gates's foundation has not joined the big push to weaken patents; in an e-mail to me, it noted that although access to medicine is crucial, "protecting intellectual property rights is essential for innovation". Such conviction must in part stem from his experience in building his business.

By contrast, the Rockefeller Foundation, also active on global health, takes another approach: its website baldly calls for "removing the restrictions imposed by current intellectual property policies". Perhaps that attitude partly stems from the origins of the foundation - created from the wealth of the Rockefeller family. That wealth was largely generated not by development of intellectual property, but by control of a dumb commodity: oil.

Indeed, perhaps it is no coincidence that countries rich in natural resources (Argentina, Brazil, Zimbabwe) tend to be the least respectful of patent rights while countries that are less dependent on resources (Japan, the US, Europe) are pharma's big defenders.

But it is the Gates story that is most relevant here. The truth, for better or worse, is that great innovators are rarely Albert Schweitzers who want "just enough to work". Instead, they tend to be rather imperious types, who ask: "Who can afford to do professional work for nothing?"

© Copyright 2002 Financial Times

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