It's Time For "IP-Free" Zones

by Seth Shulman
Aug 2000

As we move headlong into a global, knowledge-based economy, an unprecedented profusion of broad patents - on human genes, internet protocols, and business methods - is wreaking havoc and uncertainty in many high-tech sectors.

Much of the current problem results from a U.S. patent system that seems at times to have slid through the looking glass, handing out exclusive rights to breathtaking vistas of conceptual terrain with only cursory attention to prior art.

Of course, this broad interpretation of U.S. patent law has enormous global implications: other nations have little practical choice but to follow suit. In fact, there is little question that the current course in the United States represents a calculated, if misguided, attempt to capitalise on and "monetise" the technological lead it commands over other nations in many fields.

Not surprisingly, aside from the Cold-War exemption of nuclear-weapons-related inventions, the intellectual property (IP) community in the United States has been loathe to exclude any subject matter from patent protection. But problems are mounting. Patent rights are being garnered that are widely viewed as unfair or invalid. Research is being stymied. The spectre of costly litigation looms in several sectors.

Slowly but surely, in fields from genomics to banking, a key question is emerging: are there certain kinds of intellectual property that ought not to be patented? Emerging realities compel us to re-examine this vital issue.

From Toasters to Tollbooths

Two related problems raise the spectre of a full-blown IP disaster. The first is the highly conceptual nature of many of today's patents. Our intellectual property system thrived in the mechanical age, providing patent protection for tangible machines - like new toasters. In the U.S. system, 19th century inventors were even required to make prototype models to receive a patent.

But, today, we have moved unrecognisably far up the ladder of abstraction. Instead of allotting protections on new toaster designs, today's patents more often afford exclusive rights on conceptual terrain akin to the idea of making toast.

These broad new patent rights often function like needless tollbooths demanding royalty fees on everyone in an industry or, worse still, like roadblocks that deter would-be competitors. Far from their original intent, these patents deter innovation.

Lawyers normally construe this issue as a problem of a patent's "utility." To receive a patent, an invention is expected to be "useful" and, historically, courts in the United States have recognised that the system works best when utility is defined narrowly to include only those inventions that benefit the public by bringing a new product to the marketplace.

As the U.S. Supreme Court noted in a 1966 case called Brenner v. Manson involving an allegedly novel process for making steroids, too expansive a definition of utility can undermine the patent system by creating a "monopoly of knowledge¿[which] may confer power to block off whole areas of scientific development, without compensating benefit to the public."

Today's knowledge-based economy, however, has thrown age-old notions about patent utility into question. In an economy where ideas, concepts, blueprints, and codes are becoming the most lucrative assets, it becomes much harder to distinguish between a tangible invention and a broad concept.

Some of the best legal scholars are beginning to understand this. Michael Heller and Rebecca Eisenberg, two law professors at the University of Michigan, have differentiated between patent protection that falls "upstream" or "downstream" in the often-lengthy chain between research and product development. As these experts note, patents awarded too far upstream "may lead paradoxically to fewer useful products" - an outcome we should assiduously guard against.

Knowledge differs from tangible commodities

A related problem is how "upstream" patents affect research environments. Ironically, just as advances such as the internet make it possible to share and exchange knowledge in dramatic new ways, we find the opposite trend too often taking hold: from medical research to software design, powerful groups of technological titleholders are trying to significantly tighten control over knowledge assets, creating needless new monopolies.

Any schemes that foster the commercialisation of knowledge at the expense of free sharing of information and ideas deserve our closest scrutiny. Sharing knowledge, after all, is the basis for our educational system. And the open research environments in the United States and Western Europe are widely credited as contributing to these nations' role as world technological leaders.

Sadly, researchers at many universities in the U.S. increasingly complain that open dialogue and exchange among their colleagues is being replaced by proprietary claims and secrecy. Administrators of libraries, museums, hospitals, photographic archives, universities, and research institutes all report that they are confronting unprecedented commercial pressures from companies and individuals staking private claims to material formerly considered part of the public domain.

Understanding the "Infostructure"

What can we do? First, we need to realise that intellectual property is a policy matter that requires broad input and should not be left to lawyers and patent administrators.

As a matter of policy, we need an intellectual property system that reflects the new realities of the knowledge-based economy. We need a patent system that strikes a balance: providing financial incentives for people to innovate by protecting the fruits of their labour, while also supporting enough cross-pollination and ferment in a field to spur innovation in the future.

The key is to remember that human knowledge - in all its great variety - grows by being shared and exchanged. As an increasing number of economists are coming to explain it, knowledge can support nonrival consumption, something that tangible goods can rarely, if ever, sustain.

The reality of nonrival consumption compels us to think differently about the exclusive private control of knowledge assets. It is also important to note that much of our technological know-how can reasonably be seen as part of our collective heritage as a direct result of public investment in research and higher education over the past century.

As historian Gar Alperovitz has put it, we stand today atop a "Gibraltar of technological inheritance." We all lose when we allow this public investment to exclusively serve private interests.

The solution is to build a conceptual framework that preserves some kinds of shared knowledge assets while it allows others to be privately held. As many are coming to realise, things work best in the knowledge-based economy when certain seminal information assets - particularly those needed by all players in a given high-tech sector to compete - are pooled and shared.

One can think of this kind of knowledge as a platform or framework, not unlike the network of roads that makes up the infrastructure of a given city or region. In this sense, some types of knowledge constitute a shared infrastructure - or "infostructure" - that belongs to all of us. It exists in a grey area between the marketplace and the public square, between the boardroom and the classroom. As we build a global economy for the 21st century, we need a new way to think about this conceptual commons.

The principle of the "infostructure" underlies both open-source software and the hardware standards that have come to predominate in many high-tech sectors. It allows different engineers to design distinct machines that all plug into a single type of wall socket, or send standardized software files over the internet.

Like roads, public lands or public libraries, pooled knowledge assets must be made freely accessible and protected within a framework that preserves their integrity.

"IP-Free" Zones: Learning from Land Ownership

How can a system support both shared and private control of knowledge assets? For answers, we need to look no further than our extensive experience with land ownership. Most nations that champion private property also venerate national, state and municipal park systems that preserve some special land for shared use. No analogous mechanism exists in the realm of intellectual property but one is sorely needed.

Pioneered in the United States, the National Park System has become a cherished institution. Even before it was begun, however, the formation of Central Park in New York City offers an important case in point. In the mid-1800s, the small group of merchants and landowners who favoured the creation of Central Park argued that such a park would help establish the city's reputation and be a boon to all.

Needless to say, however, the idea of bringing more than 700 acres of land in the centre of Manhattan under municipal control was not immediately recognised as a sound idea. In the United States, a frontier mentality still predominated and the real estate proposed for Central Park held immense monetary value. It took foresight to recognise that the vast plot could be worth incalculably more to the city by preserving it as a shared asset.

Along similar lines, the idea of a conceptual commons, or IP-free zone, is gaining credence in the realm of intellectual property. For example, some 80 countries have seen fit to exempt medical procedures from patent protection.

Even the U.S. Congress came close to adopting such an exemption when, in the mid-1990s, several high-profile lawsuits between doctors over rights to new procedures were widely seen as unseemly and unacceptable. The U.S. Congress ultimately adopted only a weakened compromise measure that limits medical practitioners right to sue one another.

But an important, emerging global norm is evident with regard to medical procedures. Legislators and the public alike see the overriding benefit afforded by an environment in which the techniques and procedures for improving human health are freely shared and propagated among practitioners.

Overriding concern for human health puts the issues in clear relief in the area of medical procedures but, the fact is, the core principles hold elsewhere as well. The task before us, in high-tech sectors from software design to genomics, is to identify the infostructure: to define when shared interests should override private claims on the knowledge frontier.

Unless the issue is tackled head on, the escalating privatisation of knowledge assets will choke productivity, magnify inequalities, and erode our democratic institutions.

The Case of the Human Genome

The recent announcement of a working draft of the human genome map offers a compelling litmus test for the idea of an IP-free zone. The international Human Genome Project, begun in 1988 to decode all human genes, is a classic case of a public-private partnership. It has received billions of dollars of public investment. And its stated goal is to create a shared resource of knowledge that will be the foundation of 21st Century medicine.

The raw sequence data of the human genome makes an ideal candidate for the world's first intellectual property sanctuary, or " IP-free Zone."

Handled with the same foresight the citizens of New York brought to the creation of Central Park, we can support biotechnology and pharmaceutical firms to develop new drugs and treatments while still insisting that the infostructure in this area - the raw sequence data of all human genes - remains resolutely in the public domain.

Specifically, the U.S. Congress should unilaterally mandate that the genome's raw sequence data cannot be privately owned and it should urge the United Nations and other countries to do the same.

President Bill Clinton and British Prime Minister Tony Blair notably took a small step in this direction earlier this year with a joint announcement that urged open access to this raw sequence data for all the world's researchers.

Meanwhile, however, the U.S. Patent Office has fuelled uncertainty and confusion in its equivocation over genomic patents. With a backlog of tens of thousands of genomic applications, the agency seems unclear where or how to draw the line. The irony is that the research community largely accepts the notion that the raw sequence data of the genome must be shared.

And, in a practical sense, we are already well on our way to this goal. Over the past several years, the Human Genome Project's network of laboratories have published on the GenBank website (http://www.ncbi.nlm.nih.gov/Genbank/) a steady stream of decoded nucleotide base pairs within 24 hours of sequencing them.

The policy insures that the data will be freely available to researchers around the world, and also discourages secrecy or proprietary claims over this valuable raw data.

And yet, even despite the Human Genome Project's laudable commitment to open publication - thereby de facto disqualifying the raw data from patent claims - the creation of a legally mandated "IP-free" zone still is merited. Why?

Because the human genome deserves special protection as a key piece of our human inheritance. Because the idea that the genome's raw sequence data should remain in the public domain already has widespread support in the research community and among the public. Because a carefully crafted IP-free zone over the raw sequence data of the human genome can prevent a lot of bitter litigation and acrimony - not to mention helping to speed the next generation of drugs and treatments to the market.

And finally, because the formal establishment of an IP-free zone will set a vital precedent that some kinds of precious information resources must be off limits for private ownership. As we grapple with the emerging realities of a knowledge-based economy, it will prove to be a precedent of enormous value.

Seth Shulman, a U.S.-based journalist specialising in science and technology, is the author of Owning the Future (NY: Houghton Mifflin, 1999). He also participated in Derwent's February 2000 debate on Intellectual Property in a Web-based economy.