![The transfer of international public goods to developing countries
has been made more difficult by the expansion of intellectual property
rights systems. Privately held patents over biological materials and
research tools have made it much harder for international public research
to provide public goods to developing countries. Michael Blakeney, in
Chapter 7 on the impact of intellectual property on international agri-
cultural research, reveals a growing problem of private goods driving out
public ones.
The globalisation of intellectual property rights is not a substitute for
international public goods related to development for two reasons. First,
intellectual property rights primarily act as incentives for TNCs to pro-
duce products for wealthy Western consumers. If the poor want more
patent-based R&D for malaria they will have to hope that it overtakes
obesity and impotence as a problem in Western societies. Secondly, the
poor in developing countries cannot afford to pay TNCs the prices they
demand for their intellectual property products (see Chapter 9 by
Kumariah Balasubramaniam). No amount of clever price discrimination
by these TNCs will see their products made affordable to the 2.8 billion
people who live on $2 a day and 1.2 billion who live on less than a $1 a
day. Pharmaceutical markets made competitive by generic manufactur-
ers are the best long run guarantee of access to medicines for the poor.
There is one other deep discordance between the globalisation of
intellectual property rights and the present development policy agenda.
Developing countries need income. Yet one clear effect of TRIPS will be
trade gains for developed countries at the expense of developing coun-
tries.8
One especially troubling feature of TRIPS is that it sets up a flow
of revenue from the less developed to the more developed, thereby con-
tributing to a global structural inequality in the world. At the same time
TRIPS does not address the exploitation of the intangible assets of devel-
oping countries (which means they continue to suffer problems such as
biopiracy – the unauthorised use of indigenous knowledge and biologi-
cal materials by TNCs). It is hard not to conclude that through the rules
of intellectual property the rich have found new ways to rob the poor.
Resisting information feudalism
A major theme running through the present policy development
agenda is the empowerment of the poor: ‘[p]oor people and poor coun-
tries should have greater voice in international forums’.9
The globalisa-
tion of intellectual property is an example of the way in which the
deeds of globalisation do not match this policy aspiration. When TRIPS
6 Introduction](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-26-320.jpg)
![inventions through the patent system are widely acknowledged. There is
much less questioning of the advantage they and their innovation are
claimed to reap from the other part of the patent bargain, the informa-
tion the patent system makes available. Small firms cannot depend on
vast R&D departments to generate the information required for inven-
tion; they must look to external sources for this information and one of
the richest of these is said (by patent officials) to be patent specifications.
Patent specifications are a source of valuable technical information,
readily available and much of it free for the taking. It is a pity that so
few manufacturers, engineers and scientists seem to be aware of this.
So next time you have a technical problem, check to ensure that it
has not been solved already. Even if you don’t find a ready solution,
you may pick up some good ideas for use in your current or future
design. [original emphasis] (Australian Patent Office, 1981, p. 2)
Each patent specification is a detailed disclosure of the invention and
it is this aspect of course which is particularly valuable as a rich
source of technical information. (Blackman, 1994, p. 47)
Such assertions are in conflict with the evidence. Two postal surveys
were carried out in October 1996, one of the 615 UK small firms (employ-
ing between 10 and 250) that had been granted at least one patent in
the UK or Europe in 1990, and a control group of 2000 small manufac-
turing firms in the UK. The overall response was just under 35 per cent.
Predictably, these small firms look to customers, suppliers and competi-
tors for information about the latest developments in their industry and
market (Figures 2.1a and 2.1b). All other likely sources of external infor-
mation vie with each other in their uselessness for innovation in small
firms, which is interesting in that many of these sources take some
pride, and expend considerable public resources, in their efforts to
provide information to small firms. Most successful in this unenviable
competition are government sources and the patent system. Small firms
that have patented declare the patent system to be somewhat less use-
less than do small firms in general, but the positive side is not encour-
aging for those who feel that the patent system is obviously a major
source of information for innovation in small firms: while just 8 per
cent of the small firms in the control group think patent information of
some importance, only 12 per cent of small firms which patented, and
that therefore have some familiarity with at least the protective side
of the system, consider patents are of some importance as a source of
information for innovation.
Stuart Macdonald 17](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-37-320.jpg)
![products are acts of piracy which will be eradicated like 17th-century
piracy was] (Quoted in Cohen, 2001)
For such industries, the patent system is so compatible with their
method of innovation, so integrated with corporate strategy, that it
has to be defended at all costs. Attack has been the customary form of
defence, the aim being to secure strategic position not simply by main-
taining the patent system, but by strengthening it. The size of the phar-
maceutical industry, its potential to contribute to public welfare and
its experience with R&D make the industry a force to be reckoned with
(Miller, 1988; Porter, 1989). It is quite capable of using this power to
extort advantage for itself and to impose costs on others.
We are most interested in a strengthening rather than weakening of
the Australian patent law, especially for pharmaceuticals. Substantial
weakening might prompt us to drastically shortcut investments in
Australia. (Quoted in Mandeville and Bishop, 1982, p. 16)
The danger is that loss of patents in HIV alone could destroy the global
HIV market. The bigger danger is that the broader loss of patents in
South Africa could be the thin end of the wedge which smashes patent
protection for the industry [worldwide]. And if that happens, then
frankly the entire economic base of the pharmaceutical industry
is destroyed. (David Ebsworth, Head of Pharmaceuticals in Bayer, as
quoted in Pilling, 2001)
Before the strengthening of the patent system, society looked to high
technology for a model of how to innovate, not the only or necessarily
the best model, but a model that certainly worked. The model was based
firmly on the notion that innovation was dependent on the free flow of
information. So rapid was the pace of change in semiconductor and IT
that the patent system played little part in the transformation. Indeed,
the companies that accumulated most patents tended to go out of busi-
ness, leaving the field to companies much less distracted by patenting
(Table 2.2). This could not happen now.
A weak patent policy did not slow things down in the development
of the integrated circuit and microprocessor. In fact, it sped things up.
The legal environment of the 1970s allowed Fairchild, Intel and oth-
ers to get their start, carrying the lesson that strong patents for every
industry are not always good. (Forbes ASAP Supplement, 1993, p. 62)
26 Exploring the Hidden Costs of Patents](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-46-320.jpg)
![The way in which high technology firms innovate now is very differ-
ent and has been profoundly altered by the patent system (Simon,
1996).
Software patents are failing to achieve the Constitutional mandate of
promoting innovation and indeed are having a chilling effect on
innovative activity in our [software] industry. (Shulman, 1995)
Strengthening the system
In the early 1980s, governments turned somewhat desperately to tech-
nology to create wealth and employment. As the President of the
Pharmaceutical Research and Manufacturers of America (PhRMA), and
sometime Commissioner of Patents and Trademarks, noted:
The shift in the U.S. competitive advantage, away from basic manu-
facturing and toward high-tech information-based industries such as
pharmaceuticals, makes global intellectual property protection an
urgent policy priority for the U.S. government and for U.S. industry.
(Mossinghoff and Bombelles, 1996, p. 47)
Innovation was the key to competitiveness, but government policy
(and corporate strategy for that matter) found difficulty accommodat-
ing the undisciplined information flow fundamental to the innovation
of a freewheeling Silicon Valley. Policy and strategy were much more
comfortable with an interpretation of high technology entrepreneurial-
ism that flaunted the trappings of Silicon Valley in the science park
or the European Commission’s Esprit Programme (Macdonald, 1987;
Marschan-Piekkari et al., forthcoming) while denying the unmanaged
and uncontrolled information flow critical to innovation in high tech-
nology. The information required for innovation was to be captured
and retained, whether in a Fortress Europe defended by the national
Stuart Macdonald 27
Table 2.2 Percentage of total semiconductor patents awarded to firms
in the US, 1952–6
1952 1953 1954 1955 1956
Bell Laboratories 56 51 46 37 27
Established firms 37 40 38 42 53
New firms 7 9 16 21 20
Source: Braun and Macdonald, 1978, p. 68.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-47-320.jpg)
![products immediately, rather than allowing them to continue busi-
ness as usual until completion of the appeal. (Perry, 1986)
The result has been to increase the value of an American patent.
This increase in both the scope and the scale of patent protection has
altered the relationship between the conflicting interests inherent in
the system. A weak patent system acknowledges that invention is gener-
ally a long way from innovation and of little value in itself: a strong
patent system values invention – patented invention – perhaps even
above innovation. Texas Instruments, for instance, once liberal in its
cross-licensing arrangements with competitors, has become particularly
litigious. Its most profitable product line is now patent royalties. In
some years, the company’s licence fees exceed its operating income
(Thurow, 1997). IBM increased its licence income from $30 million in
1990 to nearly $1 billion in 2000 (Rivette and Kline, 2000). Other semi-
conductor companies have converted the cross-licensing which used to
stimulate innovation in the industry into a mechanism for excluding
new entrants and inhibiting innovation (Barton, 1997).
With cases lasting four years plus and running anywhere from
$2 million to $10 million, computer companies are spending as much
time in the courts as they are in the laboratories. (Howes, 1993, p. 7A)
The balance of the system, then, has been tilted in favour of the ben-
efit to society being expected less from the information made available
for innovation, and more from the protection given the inventor to
innovate himself. This shift is evident in a growing tendency in the US
to regard the commercial success of innovations as a major determining
factor in the granting and upholding of patents (Merges, 1988). Thus,
those organisations best equipped to innovate in a fashion compatible
with the patent system, rather than merely to invent, find most value in
the system. These are likely to be large firms. Being well equipped to
innovate themselves, there is little need for these firms to disseminate
their information to society so that society may innovate. In short,
strengthening the patent benefits the large firm whether it innovates
itself or licenses the patent to others: for the weak, able neither to inno-
vate themselves nor to protect their property, strengthening brings no
benefits.
[A]n overemphasis on successful innovation, coupled with reduced
attention to the presence or absence of a true invention, reinforces
Stuart Macdonald 29](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-49-320.jpg)
![only one of the dual policy goals of the patent system: providing
incentives to inventors. It ignores the goal of encouraging inventors
to disclose technical information. (Merges, 1988, p. 876)
When intellectual property rights are protected, innovators are able to
recover the costs incurred in research, product development and
market development. This cost recovery…is essential for stimulating
the future research and development that is necessary to maintain
America’s competitive edge. [emphasis added] (Silverman, 1990,
fn. 110)
Standing up for the weak
The patent system is much more suited to pharmaceutical and chemical
firms than to most others, and these firms gain rather more benefits
from the system than others. This would be of no great moment in a
world which does not even pretend to be fair were pharmaceutical and
chemical firms not disposed to defend their advantageous position by
presenting their own innovation as typical of all innovation. Thus,
because the pharmaceutical industry spends a fortune on R&D, the
industry feels entitled to pontificate on innovation in general and on
national competitiveness too.
Since, today, it takes an average ten years and over $100 million to
develop a new drug, only seven or eight years are left for the product
to recover its entire investment before manufacturers who made no
R&D investment at all are free to copy and compete with it. In the
United States, the 1984 Patent Restoration Act has added up to five
years of life to a pharmaceutical patent to make up for some of the
time lost in the governmental approval process …If the United States
is to avoid further erosion of its competitive position, a new frame-
work for growth must be envisioned …in which intellectual property
rights are protected and in which investment and innovation are
encouraged. (Miller, 1988, p. 88)
This is arrant nonsense: the innovation of the pharmaceutical indus-
try is not representative of innovation as a whole and the patent system
that is so conducive to pharmaceutical innovation is much less appro-
priate for other innovation. With something like 22 per cent of the
world’s patents (Johnston and Carmichael, 1981), the pharmaceutical
and chemical industries alone have just about as many patents as all
the millions of the world’s small firms in all industries put together.
30 Exploring the Hidden Costs of Patents](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-50-320.jpg)
![Yet, despite the evidence, the pharmaceutical and chemical industries
present themselves as champions of the weak, defenders of the means
by which they are able to innovate. This smacks of hypocrisy.
Indeed, it may fairly be claimed that the provisions of the new law
[the Copyright Designs and Patents Act 1988] reflect the interests of
the powerful and politically active, not those of society as a whole.
(Porter, 1989)
The costs of patents
Discussion of the costs and benefits of the patent system tends to
emphasise the benefits. The costs of the patent system are usually
ignored altogether, or are presented as trivial. Those most commonly
acknowledged are the fees paid to patent offices and to patent attorneys.
But there are other costs. There are serious costs. These would seem to
be of two sorts:
1. The costs of illusion (or perhaps disillusion). The illusion is that the
patent system really will deliver the protection and the information
it is supposed to deliver. These costs are likely to be heaviest for those
who are new to the patent system, and lightest for those who have
most experience. The costs of illusion also encompass the costs soci-
ety incurs in frustrated expectations of innovation.
2. The costs of distortion. The patent system is supposed to help meet
society’s requirements for innovation. Society is not supposed to
meet the patent system’s requirements, yet this is what happens
when resources are diverted from other purposes, including innova-
tion, to satisfy the demands of the patent system. Recall the use of
patent information in the small firm survey; it was required not for
innovation at all, but to service the patent system. Recall also that
the patent system suits the innovation process of a few specialised
industries, not the irregularity that is much more typical of innova-
tion generally. In as much as this irregularity is compromised by
being tailored to suit the patent system, there is a cost in terms of
discouraged innovation.
The costs of illusion
Macroeconomic analysis of the patent system focuses on its net value to
society.
Stuart Macdonald 31](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-51-320.jpg)
![268.
To J. B. Holroyd, Esq.
31st October, 1775.
In the midst of Avocations, Litterary, Parliamentary and Social, which
now on all sides overwhelm me, you must not expect any regular
correspondence. Sayer's[313]
business (you must know it by this time)
is foolish beyond description. He was a fool! Richardson a busy
knave, and Lord R. acting Justice of the Peace who was obliged to
take the information. You will see by the numbers that last Thursday
we had an easy, but it was a languid, victory. We have a warm
Parliament but an indolent Cabinet. The Conquest of America is a
great Work: every part of that Continent is either lost or useless. I
do not understand that we have sufficient strength at home: the
German succours are insufficient, and the Russians are no longer
hoped for.[314]
When do you come up? I dined and lay at
Twickenham, Sunday. Batt was there—Govr. Lyttleton seconded the
Address,[315]
matter good, manner ridiculous. Adieu. I delivered
yours to C.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-56-320.jpg)
![AT WORK ON HIS
HISTORY.
269.
To his Stepmother.
London, December 4th, 1775.
Dear Madam,
I am still alive, and in spite of the influenza
perfectly well. But why have you not at least
written one line in so very long a space of time? All
that I can say on the subject is to declare with the utmost sincerity
that not a single morning has arisen without my forming the
resolution to write before the evening, and that not a single evening
post-bell has rang without sounding the alarm to my conscience. In
the mean time, days, hours and weeks have imperceptibly rolled
away: a perpetual hurry and long days of Parliamentary business,
the whole world coming to town at once, and a great deal of
occupation at home relative to my History, which will come out some
time after Christmas. In a word, I do not like to write to you, but I
want very much to see you. Have you totally forgot your promise of
making me a visit in town? I can lodge you, &c., without the smallest
inconveniency, and I am sure that after getting the better of so
formidable an enemy as you have done, nothing would be so likely
to give the last polish as a change of air, of situation and of
company. Be so kind as to send me an answer and not a
compliment, on this subject.
Mrs. Porten is still well and young. Her sister-in-law has got and lost
a child. The former wishes to be remembered to you. You see the
honour which Mr. Eliot[316]
has acquired. I am amazed how he
condescended to accept of it. The Member of St. Germans might
lurk in the country, but the knight of Cornwall must attend the House](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-57-320.jpg)
![of Commons.—I salute from a distance all Bath friends: and
particularly the Colonel,[317]
Mrs. G[ould], Fanny, Birds, dogs, &c., &c.
I am, Dear Madam,
Ever yours,
E. Gibbon.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-58-320.jpg)
![and will hardly be decided without the interposition of Chancery. You
will not wonder that I lose time and catch at every hope, rather than
involve myself in that labyrinth of Chicane and expense.
I say nothing of public affairs. Never did they wear a more
melancholy aspect. We much fear that Quebec[318]
will not hold out
the Winter. The Provincials have everywhere displayed courage and
abilities worthy of a better cause; and those of my Ministerial friends
who are the best acquainted with the state of America, are the least
sanguine in their hopes of success for next year.
An odd discovery is just now made. At a sale in the country, an old
cabinet was going to be knocked down for twenty shillings, when the
curiosity of some people present urged them to examine it more
closely. Two private drawers were found; one of which contained
bank-notes to a very large amount, the other held an older and more
valuable curiosity; the individual ring of Queen Elizabeth, the Earl of
Essex, Lady Nottingham, &c.: you remember the story.[319]
It was in
a very fine purse embroidered with pearls; and is authenticated by a
writing, found in the same purse, of an old Lady Cook who attended
the Queen in her visit to the Countess, and picked up the ring when
her Majesty threw it from her with horror and indignation. I have
seen the purse and ring (a yellow kind of diamond) at Barlow's, a
silk-mercer in King Street, Covent Garden, who affirms that he has
read the paper, but the mystery which is made about the place of
sale, and the name of the present proprietor, leaves room for
suspicion. Horace Walpole is determined, if possible, to get to the
bottom of the affair.
I hope, dear Madam, that not only your health, but your beauty
likewise, are perfectly restored, but I must desire an explicit and
satisfactory answer about your promised visit to London. The air will,
I am sure, be of the greatest service to you, and as the Spring will
soon advance upon us, you may easily connect London with Essex,
Sussex or any other part of the Kingdom, where you have any visits
to make or promises to fulfill.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-61-320.jpg)
![273.
To J. B. Holroyd, Esq.
January 29th, 1776.
Hares &c. arrived safe; were received with thanks, and devoured
with appetite: send more, id est, of hares. I believe in my last I
forgot saying any thing of the son of Fergus; his letters reached him.
—What think you of the season? Siberia, is it not? A pleasant
campaign in America. I read and pondered your last and think that
in the place of Lord G. G.[320]
you might perhaps succeed; but I
much fear that our Leaders have not a genius which can act at the
distance of 3000 miles. By the bye the little islands of the Bermudas
have just declared in favour of the Congress. You know that a large
draught of Guards are just going to America, poor dear creatures!
We are met; but no business. Next week may be busy; Scotch Militia
&c. Roman Empire (first part) will be finished in a week or fortnight.
At last I have heard Texier;[321]
wonderful! Embrace My lady. The
weather too cold to turn over the page. Adieu.
Since this I received your last, and honour your care of the old
Women, a respectable name which in spite of My lady may suit
Judges, Bishops, Generals (Je gage que j'ai raison) &c. Several
letters directed to you and enclosed to me, have been franked.
Ferguson's might be among them. I am rejoyced to hear of Maria's
inoculation. I know not when you have done so wise a thing. You
may depend upon getting an excellent house. Adieu.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-65-320.jpg)
![PUBLICATION OF
HIS HISTORY.
274.
To J. B. Holroyd, Esq.
Bentinck-street, February 9th, 1776.
*You are mistaken about your dates. It is to-
morrow seven-night, the 17th, that my book will
decline into the World.* I will attend to Coachman
and house, though I could wish that in point of price and situation
you had been a little more explicit.
*I am glad to find that by degrees you begin to understand the
advantage of a civilized city,*—I cannot say as much as Batt and
Cantab, who dined with me, Beauclerck and Lady Di.[322]
Adieu. *No
public business; Parliament has sate every day, but we have not had
a single debate.* There is a rumour that Quebec is taken, and
Washington is said to have communicated the news to Howe, but it
is not yet absolutely believed. *I think you will have your book on
Monday. The parent is not forgot, though I had not a single one to
spare.*](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-66-320.jpg)
![275.
To his Stepmother.
House of Commons, Wednesday Evening, February, 1776.
Dear Madam,
I write two lines to return you my thanks for what you say of my
book,[323]
of which you are not indeed so good a Judge as you would
be of any written by another author. By a mistake you have received
two bound books instead of one. Be so good as to return one of
them by coach or wagon, and I will give an order that an unbound
one shall go to-morrow to Brook Street. Your soiled one (honourable
marks) you will retain. But when will you flatter me in person in
Bentinck Street? March approaches.
I am, Dear Madam,
Ever yours,
E. Gibbon.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-67-320.jpg)
![THE NECKERS IN
LONDON.
278.
To his Stepmother.
London, April 26th, 1776.
Dear Madam,
Though you may censure my silence for two or
three posts, you must allow that my taking up my
pen while your daughter-in-law is sitting close to
me is an instance of no vulgar complaisance. I am a good deal taken
up with the Neckers.[324]
We are vastly glad to see one another, but
she is no longer a Beauty. How is Colonel Gould? I am well.
I am, Dear Madam,
Ever yours,
E. Gibbon.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-71-320.jpg)
![279.
To J. B. Holroyd, Esq.
27th April, 1776.
Lest you should growl, I write, though I have nothing to say, for the
Dutchess alias Countess[325]
is not an object worthy of our attention.
I rejoyce to hear of your approaching arrival, and hope that by that
time Newton may have something to say. Your letter to Foster is not
forgot: nor was the visit to his namesake of Orchard Street. When
will you send me up the lease for Mrs. Gibbon, who will soon
complain of my delay by a thundering Epistle? At Bath all were well,
Pater not worse, I think, than last year, and Soror in much better
looks and spirits. You probably know that poor Lady Russel[326]
is
brought to bed of a dead child. Great is the desolation of all
branches of the family. I write with three or four very fine Ladies
round me. Therefore—Adieu.
E. G.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-72-320.jpg)
![280.
To J. B. Holroyd, Esq.
London, May 20th, 1776.
*I am angry, that you should impede my noble designs of visiting
foreign parts, more especially as I have an advantage which Sir
Wilful had not, that of understanding your foreign lingos. With
regard to Mrs. Gibbon, her intended visit, to which I was not totally
a stranger, will do me honour, and though it should delay my
emigration till the end of July, there will still remain the months of
August, September and October. Above all abstain from giving the
least hint to any Bath Correspondent, and perhaps, if I am not
provoked by opposition, the thing may not be absolutely certain. At
all events you may depend on a previous visit. At present I am very
busy with the Neckers. I live with her just as I used to do twenty
years ago, laugh at her Paris varnish, and oblige her to become a
simple reasonable Suissesse. The man, who might read English
husbands lessons of proper and dutiful behaviour, is a sensible good-
natured creature. In about a fortnight I again launch into the World
in the shape of a quarto Volume. The dear Cadell assures me that he
never remembered so eager and impatient a demand for a second
Edition.
The town is beginning to break up; the day after to-morrow we have
our last day in the house of Commons to inquire into the instructions
of the Commissioners;[327]
I like the man, and the motion appears
plain. Adieu. I dined with Lord Palmerston[328]
to-day; a great dinner
of Catches; Sir Farby and spouse part of the company or rather of
the family: I embrace My lady and the Maria.*](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-73-320.jpg)
![A PROBABLE
VISIT TO PARIS.
281.
To his Stepmother.
Almack's,[329]
May 24th, 1776.
Dear Madam,
Shame, shame, always shame——Yet two lines will
I write in the midst of a crowd. My mornings have
been very much taken up with preparing and
correcting (though in a minute and almost imperceptible way) my
new Edition, which will be out the 1st of June. My afternoons
(barring the House of Commons) have been a good deal devoted to
Madame Necker. Her husband and the rest of her servants leave this
country next Tuesday, entertained with the Island, and owning that
the barbarous people have been very kind to them. Do you know
that they have almost extorted a promise to make them a short visit
at Paris in the Autumn. But pray, Madam, when do you set out, the
month of June draws near, and both myself, the Portens and the
inhabitants of Sheffield Place are impatient to be informed of the
time and circumstances of your intended journey.
Poor Mallet![330]
I pity his misfortune and feel for him probably more
than he does for himself at present. His "William and Margaret," his
only good piece of poetry, is torn from him, and by the evidence of
old Manuscripts turns out to be the work of the celebrated Andrew
Marvel composed in the year 1670. Adieu, dear Madam.
I am most truly yours,
E. Gibbon.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-74-320.jpg)
![282.
To J. B. Holroyd, Esq.
June the 6th, 1776, from Almack's, where I was chose last week.
*To tell you any thing of the change or rather changes of Governors
I must have known something of them myself: but all is darkness
confusion and uncertainty; to such a degree that people do not even
know what lyes to invent. The news from America have indeed
diverted the public attention into another and far greater channel. All
that you see in the papers of the repulse at Quebec as well as the
capture of Lee[331]
rests on the authority (a very unexceptionable
one) of the Provincial papers as they have been transmitted by
Governor Tryon from New York. Howe is well and eats plentifully,
and the weather seems to clear up so fast that according to the
English custom we have passed from the lowest despondency, to a
full assurance of success.
My new birth happened last Monday, 700 of the 1500 were gone
yesterday. I now understand from pretty good authority that Dr.
Porteous,[332]
the friend and chaplain of St. Secker, is actually
sharpening his goose quill against the last two Chapters.* Mrs. G.
has not yet signified her intentions about the London and Sheffield
expedition. I have not advanced one single step with regard to
Lovegrove. Palmer will not interfere till he has seen the abstract of
the title with Duane's observations, which we cannot get them to
communicate even to their own friend. Adieu. I embrace My lady
and the Maria.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-75-320.jpg)
![SECOND EDITION
OF HIS BOOK.
283.
To J. B. Holroyd, Esq.
Almack's, June 29th, 1776.
*Yes, yes I am alive and well; but what shall I say?
Town grows empty and this house, where I have
passed very agreable hours, is the only place which
still unites the flower of the English youth. The style of living though
somewhat expensive is exceedingly pleasant and notwithstanding
the rage of play I have found more entertaining and even rational
society here than in any other Club to which I belong. Mrs. G. still
hangs in suspense and seems to consider a town expedition with
horror. I think however that she will be soon in motion, and when I
have her in Bentinck-street we shall perhaps talk of a Sheffield
excursion. I am now deeply engaged in the reign of Constantine,
and from the specimens which I have already seen, I can venture to
promise that the second Volume will not be less interesting than the
first. The 1500 Copies are moving off with decent speed, and the
obliging Cadell begins to mutter something of a third Edition for next
year. No news of Deyverdun or his French translation. What a lazy
dog! Madame Necker has been gone a great while. I gave her en
partant the most solemn assurances of following her paws in less
than two months, but the voice of indolence begins to whisper a
thousand difficulties and, unless your absurd policy should
thoroughly provoke me, the Parisian journey may possibly be
deferred. I rejoyce in the progress of * * * towards light. By Cork
Street I suppose you mean the Carters and highly approve of the
place. We are in expectation of American news. Carleton is made a
Knight of the Bath.[333]
The old report of Washington's resignation
and quarrel with the Congress seems to revive.* I shall say nothing](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-76-320.jpg)
![286.
To J. B. Holroyd, Esq.
Saturday evening, August, 1776.
*We expect you at five o'Clock Tuesday without a sore throat. You
have ere this heard of the shocking accident which takes up the
attention of the town.* Our old acquaintance poor John Damer[334]
shot himself, last Wednesday night, at the Bedford arms, his usual
place of resort, where he had passed several hours with four Ladies
and a blind fidler. By his own indolence rather than extravagance, his
circumstances were embarrassed, and he had frequently declared
himself tired of life. *No public news, nor any material expected till
the end of this or beginning of the next month when Howe will
probably have collected his whole force.[335]
A tough business
indeed; you see by their declaration that they have now passed the
Rubicon and rendered the work of a treaty infinitely more difficult:
You will perhaps say, so much the better; but I do assure you that
the thinking friends of government are by no means sanguine.* Mrs.
G. seems likely to expect your arrival. She has had no answer out of
you. I am pretty much a prisoner except about one hour in the
evening: but as she dines to-morrow with Mrs. Ashby, *I take the
opportunity of eating turtle with Garrick at Hampton.* Adieu.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-80-320.jpg)
![287.
To his Stepmother.
London, September 2nd, 1776.
Dear Madam,
Yesterday afternoon about half an hour past five a young Lady[336]
was introduced into the world, and though her sex might be
considered an objection, she was received with great politeness. She
is perfectly well, as likewise My Lady, who eat a whole chicken for
her dinner to-day. How do you like Essex ladies? Have they resisted
the attacks of two and twenty years? I hope they will not detain you
from Bentinck Street much longer, and I rather consider my having
no letter to-day as a good sign.
I am, Dear Madam,
Most truly yours,
E. Gibbon.](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-81-320.jpg)
![289.
To J. B. Holroyd, Esq.
Saturday,¾ past eleven, 19 Oct. 1776.
I have waited so long that the bell is tolling in my ear, but I know
you would swear——
By the enclosed you will see Sir Hugh's impediments, and if the rest
of his letter requires any answer you may amuse yourself with
scratching it out.
*For the present I am so deeply engaged that you must renounce
the hasty apparition at S. P.; but if you should be very impatient I
will try (after the meeting) to run down between the friday and
monday, and bring you the last Editions of things.—At present
nought but expectation. The attack on me is begun, an anonymous
eighteen-penny pamphlet, which will get the author more Glory in
the next World than in this. The Heavy troops, Watson[337]
and
another, are on their march. No news from Richard Way. Adieu.*](https://image.slidesharecdn.com/1078663-250605020844-95609fc6/85/Global-Intellectual-Property-Rights-Knowledge-Access-And-Development-1st-Edition-Peter-Drahos-83-320.jpg)
Global Intellectual Property Rights Knowledge Access And Development 1st Edition Peter Drahos
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- 6. Global Intellectual Property Rights Knowledge, Access and Development Edited by Peter Drahos and Ruth Mayne
- 7. Global Intellectual Property Rights
- 8. This page intentionally left blank
- 9. Global Intellectual Property Rights Knowledge, Access and Development Edited by Peter Drahos and Ruth Mayne
- 10. Editorial matter and selection © Peter Drahos and Oxfam GB 2002 Individual chapters © Peter Drahos, Stuart Macdonald, Carlos M. Correa, John Sulston, James Love, Kumariah Balasubramaniam, Michael Blakeney, Alan Story, Gary Lea, Peter Drahos,Willem Pretorius, Martin Khor, Suman Sahai, Sol Picciotto, Ruth Mayne 2002 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2002 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 0–333–99027–7 hardback ISBN 0–333–99028–5 paperback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Global intellectual property rights : knowledge, access, and development / edited by Peter Drahos and Ruth Mayne. p. cm. Includes bibliographical references and index. ISBN 0–333–99027–7 (hardback) – ISBN 0–333–99028–5 (pbk.) 1. Intellectual property (International law) I. Drahos, Peter, 1955– II. Mayne, Ruth. III. Oxfam GB. K1401 .G58 2002 341.7⬘58–dc21 2002074831 10 9 8 7 6 5 4 3 2 1 11 10 09 08 07 06 05 04 03 02 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham,Wiltshire This book is based on a collection of papers for a seminar organised and supported by Oxfam International. Oxfam GB is a member of Oxfam International and is associated with the publication of the papers as a con- tribution to informed debate on issues of global equity. Opinions expressed in the papers are the responsibility of the individual authors and not neces- sarily those of Oxfam GB or any institutions or organisations with which authors are affiliated.
- 11. Contents Notes on the Contributors vii Preface x List of Abbreviations xiii 1 Introduction 1 Peter Drahos Part I Innovation and Diffusion of Technology 2 Exploring the Hidden Costs of Patents 13 Stuart Macdonald 3 Pro-competitive Measures under TRIPS to Promote Technology Diffusion in Developing Countries 40 Carlos M. Correa Part II Development and Access to Technology: Genetics, Health, Agriculture, Education and Information Technology 4 Intellectual Property and the Human Genome 61 John Sulston 5 Access to Medicine and Compliance with the WTO TRIPS Accord: Models for State Practice in Developing Countries 74 James Love 6 Access to Medicines: Patents, Prices and Public Policy – Consumer Perspectives 90 Kumariah Balasubramaniam 7 Agricultural Research: Intellectual Property and the CGIAR System 108 Michael Blakeney 8 Don’t Ignore Copyright, the ‘Sleeping Giant’ on the TRIPS and International Educational Agenda 125 Alan Story v
- 12. 9 Digital Millennium or Digital Dominion? The Effect of IPRs in Software on Developing Countries 144 Gary Lea Part III Knowledge and Access: Who Makes the Rules? 10 Negotiating Intellectual Property Rights: Between Coercion and Dialogue 161 Peter Drahos 11 TRIPS and Developing Countries: How Level is the Playing Field? 183 Willem Pretorius Part IV Ownership of Knowledge: Changing the Rules 12 Rethinking Intellectual Property Rights and TRIPS 201 Martin Khor 13 India’s Plant Variety Protection and Farmers’ Rights Legislation 214 Suman Sahai 14 Defending the Public Interest in TRIPS and the WTO 224 Sol Picciotto 15 The Global Campaign on Patents and Access to Medicines: An Oxfam Perspective 244 Ruth Mayne Index 259 vi Contents
- 13. Notes on the Contributors Kumariah Balasubramaniam is Pharmaceutical Adviser to Consumer International’s Health and Pharmaceutical Programme in Asia and the Pacific. He has worked extensively in the area of consumer access to essential drugs. He has a PhD in clinical pharmacology and was Senior Pharmaceutical Adviser in the Technology Division of UNCTAD in Geneva between 1978 and 1983. Michael Blakeney is Herchel Smith Professor of Intellectual Property Law at Queen Mary Intellectual Property Research Institute, London. He has published widely on intellectual property law. His books include Legal Aspects of the Transfer of Technology to Developing Countries (Oxford: ESC, 1989), and Trade Related Aspects of Intellectual Property: A Concise Guide to the TRIPS Agreement (London: Sweet & Maxwell, 1996). Carlos M. Correa is Director of the Master’s Programme on Science and Technology, Policy and Management, at the University of Buenos Aires. He is an influential writer on intellectual property issues, particularly as they affect developing countries. His most recent publications include Integrating Public Health Concerns into Patent Legislation in Developing Countries (South Centre, 2000), Intellectual Property Rights, the WTO and Developing Countries: The TRIPS Agreement and Policy Options (London: Zed/TWN, 2000). Peter Drahos is Professor in the Research School of Social Sciences at the Australian National University. He has degrees in law, politics and philosophy. His publications include A Philosophy of Intellectual Property (Dartmouth, 1996) and, with John Braithwaite, Global Business Regulation (Cambridge University Press, 2000). Martin Khor is the Director of Third World Network, which brings together several development and environment NGOs in the developing world. Martin is an economist who took his degree at Cambridge University. He is the author of several books, the latest being Globalisation and the South, and has been a consultant for several UN agencies. Gary Lea is Lecturer in IP Law at Queen Mary, University of London. Gary has taught and researched in intellectual property since 1992. His interests lie in the development and exploitation of IP in the IT and telecoms sector. vii
- 14. James Love is Director of Ralph Nader’s Consumer Project on Technology, USA. He is an influential economist who has worked on the trade-related aspects of intellectual property since 1994, and on IP issues relating to medicines, information technology and technology transfer since 1990. Stuart Macdonald is Professor in the Management School at Sheffield University, UK. He has worked for 20 years in many countries as an aca- demic researcher concerned with intellectual property issues. He has advised governments, patent offices and large corporations on patent issues. His research has been supported by research councils and author- ities in many countries, including the European Commission, the Economic and Social Research Council in the UK and several govern- ment departments. Ruth Mayne is a policy adviser on trade, investment and economics at Oxfam GB and currently specialises in intellectual property issues. She is a trained economist, has worked in development for over 20 years, and has written on a range of subjects and is co-editor of Regulating International Business. Sol Picciotto is Professor at Lancaster University Law School, specialis- ing in international economic and business law and regulation. He was a founding editor of Capital & Class and of Social and Legal Studies, is the author of International Business Taxation, as well as numerous articles, and has edited books including Regulating International Business. Willem Pretorius is a barrister. He has had extensive experience in com- petition policy and law in Africa. Suman Sahai is Convenor of the Gene Campaign, India and has a PhD in genetics. The Gene Campaign is a grassroots research and advocacy group which has 35 Core Groups in 17 states. These serve as centres for public education, awareness generation and advocacy on issues of intellectual property rights, national legislation, biological resources, indigenous knowledge and farmers’ rights. Alan Story has been lecturer in intellectual property law at Kent Law School in Canterbury, Kent, UK since 1999. He is co-chair of WIPOUT (www.wipout.net), the Intellectual Property Counter Essay Contest, and is a member of the TRIPS Action Network. He has written on a range of intellectual property and property theory issues. John Sulston (FRS) is co-founder of the Human Genome Project, Cambridge. Until recently, he was director of the Sanger Centre, where viii Notes on the Contributors
- 15. one-third of the human genome is being unravelled. Prior to this he worked at the Salk Institute for Biological Studies and then at MRC Laboratory of Molecular Biology, where he helped to produce and sequence one of the earliest animal genome maps of the nematode. He was elected to the Royal Society in 1989, and was knighted in the UK’s New Year’s Honours List in 2000. Notes on the Contributors ix
- 16. Preface This book arose out of the considerable and growing controversy surrounding the new global system of intellectual property rules that govern rights over knowledge. With the shift to the new knowledge economy these rules are becoming the focus of one of the most intense struggles to reform globalisation. The outcome will determine who will control the major new technologies of the twenty-first century. Against this backdrop, Oxfam International and a group of UK-based academics organised an international seminar in Brussels in March 2001 that brought together key policy makers, academics, scientists, develop- ing country trade negotiators and NGOs. The papers in this volume reflect this diversity of training, perspective and experience. One of the aims of the seminar (and of this book) was to achieve a better policy understanding of the issues through a synthesis of the views of those NGOs at the cutting edge of the global campaigning and debates that have accompanied the globalisation of intellectual property and the views of leading academic experts. The seminar focused on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) – a key international instrument governing rights over knowledge – and sought to generate critical debate about possible reforms to these rules. Many of the seminar papers, on which this book is based, point out that while intellectual property protection can play a useful role in stimulating investment and innovation, the current system does not adequately balance this with the broader public interest in allowing the maximum number of people to use and benefit from new knowledge, particularly those living in poor countries. To date, much of the controversy over global intellectual property rules has focused on TRIPS but concern is also growing about the way in which bilateral trade and investment agreements are being used to ratchet up intellectual property standards. Together these rules will ulti- mately affect the lives of billions of people, yet they are being introduced with minimal public debate. TRIPS was, for example, pushed through by a handful of rich countries under the influence of a heavy corporate lobby without the informed participation of many developing countries. The problem for poor countries and people is that the extended monopolies granted by these rules allow powerful Northern-based x
- 17. companies to extend control over markets and raise the price of vital technology goods. Critics argue that the upshot for poorer countries will be their further exclusion from access to medicines, seeds and educa- tional materials. Nowhere has this been more graphically illustrated than in the inability of African governments to afford patented HIV/AIDS medicines. In developing countries, which are mainly net importers of modern technology, the main effects of TRIPS will be higher prices for protected technologies and goods (for example, patented med- icines and seeds) as well as restricted scope for imitating and adapting new technologies. More broadly, the application of global intellectual property rules raises at least three wider issues that go to the heart of public discontent about globalisation. First, they raise stark questions about human rights. The Universal Declaration of Human Rights establishes the rights to adequate health provision, food and education, along with the right to share in the benefits of scientific progress, as basic human rights. These rights have primacy as a matter of international law, but there is grow- ing evidence that in some areas they are being made subordinate to the investment priorities of corporate intellectual property owners. Secondly, there is growing disquiet about the way the rules are remov- ing broad scientific knowledge, particularly in genetics, medicines and plant sciences, from the intellectual commons. Not only does this reduce people’s control and access to vital resources, it skews research in favour of those who can pay and inhibits the free exchange of knowl- edge on which technological progress depends. And finally the rules raise serious questions about the democratic functioning of the World Trade Organization (WTO). The TRIPS Agree- ment was negotiated within the multilateral forum of the WTO – a body that should reflect the public interest of all its members. Yet since its inception, rich-country and corporate bias has weighed heavily in both the design and implementation of TRIPS. It is a striking anomaly that an organisation charged with developing rules for free trade is providing a legal framework for the development and enforcement of global infor- mation monopolies. It is not surprising that as the rules begin to bite there are growing demands for public debate. The chapters in this book, most of which were papers given at the Brussels seminar, seek to contribute to that debate. This book is not an argument against intellectual property pro- tection, but rather against the one-size-fits-all approach of TRIPS and some other trade agreements that block sustainable development and create avoidable suffering. It is a call for a more flexible set of rules Preface xi
- 18. which differentiates between countries at different levels of develop- ment, different sectors and products, particularly those that play a vital social role. It is also a call for a more democratic system of standard- setting that places intellectual property regulation within a framework of human rights objectives, including the right to development. We thank the speakers, as well as the authors of additional contri- butions. We also thank the co-sponsors of the seminar including the International Business Regulation Forum,* Action Aid, Consumer International, Médecins Sans Frontières, WWF International, Center for International Environmental Law, Berne Declaration, Consumer Unity and Trust Society Centre for International Trade, Economics and Envi- ronment, International Cooperation for Development and Solidarity, and Institute for Agriculture and Trade Policy. We are grateful to those who helped with the seminar including Ruchi Tripathi, Ellen t’Hoen, Cecilia Oh, Matthew Stilwell, Bob Van Dillen, Kristin Dawkins, Sol Picciotto, Geoff Tansey and Alan Story. We are also grateful to the EC and government officials who took the time to speak at and participate in the seminar, particularly Pascal Lamy, the EC Trade Commissioner, and Mr Defraigne, Head of Cabinet of Commissioner Lamy and Francisco Cannabrava, Second Secretary, Permanent Mission of Brazil to the United Nations and the World Trade Organization in Geneva. Special thanks, too, to those in Oxfam GB who helped organise the seminar – particularly Anni Long and Claire Godfrey. Peter Drahos also thanks Julie Ayling for her invaluable assistance with the editing process. PETER DRAHOS RUTH MAYNE xii Preface * The International Business Regulation Forum is an informal group of UK-based academics and NGOs that seeks to build new alliances and explore constructive and innovative approaches aimed at developing an effective international regulatory framework for investment.
- 19. List of Abbreviations AIDS acquired immune deficiency syndrome CAFC US Court of Appeals of the Federal Circuit CAS Central Advisory Service CBD Convention on Biological Diversity CFCs chlorofluorocarbons CGIAR Consultative Group on International Agricultural Research CGRFA Commission on Genetic Resources for Food and Agriculture COP Conference of Parties (to CBD) DSU Dispute Settlement Understanding DSB Dispute Settlement Board EC European Commission ECJ European Court of Justice EDV Essentially Derived Variety EPC European Patent Convention EU European Union FAO Food and Agriculture Organization FDI Foreign Direct Investment GATS General Agreement on Trade in Services GATT General Agreement on Tariffs and Trade GDP gross domestic product GNP gross national product GRAIN Genetic Resources Action International GRULAC Group of Countries of Latin America and the Caribbean GURT gene use restricting technology HAI Health Action International HGP Human Genome Project HIV human immune deficiency virus IDMA Indian Drug Manufacturers Association IIPA International Intellectual Property Alliance ILO International Labour Organization of the UN IMF International Monetary Fund IPRs intellectual property rights ISAAA International Service for the Acquisition of Agri-biotech Applications xiii
- 20. ISNAR International Service for National Agriculture Research ISO International Standards Organization MEA Multilateral Environment Agreement MFN most favoured nation MNCs multinational drug companies MSF Médecins Sans Frontières MTA Material Transfer Agreement NAFTA North American Free Trade Agreement NAROs national agricultural research organisations NCE new chemical entity NCI National Cancer Institute NICs newly industrialized countries NGOs non-governmental organisations NPCI New Commercial Policy Instrument OAU Organization of African Unity OECD Organization for Economic Cooperation and Development PBRs plant breeders’ rights PhRMA Pharmaceutical Research and Manufacturers of America PMA Pharmaceutical Manufacturers Association (South Africa) PVP plant variety protection RAFI Rural Advancement Foundation International R&D research and development RMI rights management information SNP single nucleotide polymorphism SRIs software-related inventions TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights TWN Third World Network UCC Universal Copyright Convention UNAIDS Joint United Nations Programme on HIV/AIDS UNDP United Nations Development Programme UNCTAD United Nations Conference on Trade and Development UNHCR United Nations Commission on Human Rights UNIDO United Nations Industrial Development Organization UPOV International Union for the Protection of New Varieties USTR United States Trade Representative WCT WIPO Copyright Treaty 1996 WHO World Health Organization WIPO World Intellectual Property Organization WPPT WIPO Performances and Phonograms Treaty WRI World Resources Institute xiv List of Abbreviations
- 21. 1 Introduction Peter Drahos Intellectual property rights have gone global. States around the globe are converging upon the same set of intellectual property standards in areas of law such as copyright, patents, trademarks and industrial designs, as well as upon the remedies available for the enforcement of these rights. Moreover, in many cases states are shifting to higher stan- dards than previously prevailed in their domestic law – longer terms of protection, fewer exceptions to the scope of rights and sometimes new rights. The case for the globalisation of standards in some areas of regu- lation seems clear cut. Not many would argue the case for patchily applied or lower standards of aircraft safety or nuclear power station reg- ulation. Is the case for the globalisation of higher standards of intellec- tual property, standards which affect access to things like medicines, books and information technology, persuasive in the way that it seems to be for aircraft safety or nuclear power station operation? The chapters in this volume suggest that the case for the globalisation of intellectual property rights is anything but persuasive. More disturbingly, the chap- ters in Part II suggest that global intellectual property rules may well be an obstacle to development. Under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the 144 Members of the World Trade Organization (WTO) are obliged to give effect to a set of basic minimum principles and rules covering copyright, trademarks, geographical indications, industrial designs, patents, layout-designs of integrated circuits, protection of undis- closed information and the enforcement of intellectual property rights. The states in the world are in different stages of economic development. They are also profoundly unequal. Judging how unequal depends on the indicators one uses (the World Bank has more than 500 indicators in its development databases), but on any set of indicators that includes 1
- 22. income, health and education a picture of great economic inequality emerges (see Chapter 6 by Balasubramaniam in this volume).1 In poor countries up to 50 per cent of children under 5 are malnourished, while in rich countries the figure is less than 5 per cent. Gaps in income have doubled in the last forty years with the top twenty wealthiest countries now having an average income thirty-seven times that of the twenty poorest. The poor not only continue to be with us, but their numbers in Sub-Saharan Africa, Latin America, South Asia, Central Asia and some post-Communist European states are rising. In parts of Africa, the AIDS epidemic has created a hell in which gains in life-expectancy of the last century are about to be lost. Is there, bearing in mind these deep inequalities, a case for globalising intellectual property rights? For example, both the US and Rwanda are members of the WTO. Does it make sense to oblige both the US and Rwanda, which is a least-developed country member of the WTO, to enact a patent law that allowed for the patenting of pharmaceutical products?2 The US has the world’s largest pharmaceutical company (Pfizer), a sophisticated research pharmaceutical industry and a massive research infrastructure which includes 3676 scientists and engineers in R&D per million people.3 Rwanda does not have a research pharmaceu- tical industry and only 35 scientists and engineers in R&D per million people. On the face of it there may be a case for a pharmaceutical prod- uct patenting rule in the US, but almost certainly not in Rwanda. Rwanda by enacting such a rule is not likely to trigger a wave of indige- nous pharmaceutical innovation or foreign investment from pharma- ceutical companies. Such innovation and investment depend on many other factors aside from patent rules. Even if Rwanda enacted a 40-year patent term, for instance (TRIPS requires 20 years as a minimum), one suspects that Pfizer would not begin to invest heavily in Rwanda. Here we have the makings of a case for states being allowed to have some dis- cretion in setting the level of intellectual property protection in the case of pharmaceuticals. If national sovereignty over the rules that regulate innovation in information is important to development goals such as health, why have developing states ceded so much of that sovereignty? Has it been through choice or coercion? The chapters in Part III of this volume indi- cate that coercion has been the key mechanism in explaining the spread of intellectual property norms. Given all this, what should be done about intellectual property rights and TRIPS in particular? The chapters in Part IV address this issue. 2 Introduction
- 23. What is development about? A recent World Bank report says that development is about ‘improving the quality of people’s lives, expanding their ability to shape their own futures.’4 Those involved in development no longer think of it simply in terms of increasing household income. Development is about achieving a group of objectives for poor people including better educational and job opportunities, greater gender equality, better health and nutrition, the protection of the environment, natural resources and biodiversity.5 Drawing on 50 years of development experience a three-pronged strat- egy for development based on the promotion of opportunity, facilitat- ing empowerment and enhancing security has been proposed.6 Fundamental to achieving these objectives is international coopera- tion amongst states. Global markets, global private actors in the form of transnational corporations (TNCs), global environmental problems and global security problems mean that no one state, rich or poor, can oper- ate in isolation. Financial regulators know from experience that if a financial crisis begins in the US, Europe or Asia it must be tackled by them working together as an international group, otherwise they risk the meltdown of the world’s financial system. Globalisation is slowly bringing about the need for states to recognise reciprocal duties of care and cooperation. It is now clear that major development problems such as lack of mar- ket access for developing countries’ exports, ill health and lack of edu- cation in developing countries ‘can be solved only with cooperation from high-income countries’.7 Two of the areas identified for interna- tional action aimed at poverty reduction are directly related to the glob- alisation of intellectual property rights: the provision of international public goods and increasing the participation of poor states in global decision-making fora. Development, intellectual property and public goods A number of the chapters in this volume draw attention to the fact that in the past developed countries set intellectual property standards to suit their own stage of economic development (see Chapters 6, 11, 12 and 14 by K. Balasubramaniam, W. Pretorius, M. Khor and S. Picciotto). Roughly speaking, all countries at some point used the strategy of freeriding. A freerider is a person who takes the benefit of an econo- mic activity without contributing to the costs needed to generate that Peter Drahos 3
- 24. benefit. In the case of intellectual property the freerider takes the bene- fit of information for which the costs of discovery/creation have been met by the producer. The producer does not lose the information (for this reason information is described as a public good), but rather faces competition from the freerider who gains use of it as well. The purpose of creating intellectual property rights is to provide an incentive for pro- ducers to invest in the production of information by giving them a means (the intellectual property right) of preventing freeriding. A freerider is not a bad person in economic theory. On the contrary, the freerider performs an important economic function by diffusing infor- mation. The diffusion of information is fundamental to allowing com- petitive markets to work. The more producers, for example, who know how to make a therapeutic drug the better from society’s point of view because those producers will have to compete on price in order to sell it. Freeriding is only economically inefficient if it reaches levels that deter producers from investing in the cost of discovering information in the first place. Intellectual property rights are a form of government regula- tion of the market. When governments should intervene in informa- tion markets is a complex empirical question. There is, it might be said, a disturbing modern tendency to overintervene to protect or strengthen business monopolies based on intellectual property rights. Importantly, all intellectual property rights are designed in ways that prevent the intellectual property owner from having an absolute grip on the infor- mation (for example, limited terms, limited rights, the need to re-register, and so on). The whole point of this government regulation is to ensure that the information is diffused into the intellectual commons where other producers and creators can make use of it. (Chapter 3 by Carlos Correa discusses some of the pro-competitive features that are built into intellectual property rights.) Because intellectual property is a form of government regulation it is open to problems such as regulatory cap- ture. TRIPS in essence is the outcome of the international regulatory capture of the WTO process by concentrated producer interests in the form of pharmaceutical, film and software TNCs all holding large intellectual property portfolios and therefore with much to gain from government intervention. Freeriding has been rampant throughout economic history. Over the centuries states have either not participated in the intellectual property system (for example, Switzerland had no patent law until 1888) or they have done so, but in ways that favoured their own producers (for exam- ple, by not recognising the rights of foreign intellectual property own- ers). These freeriding strategies continued throughout the twentieth 4 Introduction
- 25. century. Intellectual property rights were narrowly defined, seen as exceptions rather than the norm and the infrastructure for their enforce- ment both within states and amongst states was poor to non-existent. This has almost certainly been a very good thing. Stuart Macdonald’s argument (see Chapter 2) that the patent system is fundamentally anti-innovation applies to most forms of intellectual property. We do not want, for exam- ple, a copyright regime that is so tight that it deters the kind of entre- preneurship that led to an innovative business model such as Napster. The act of creation depends heavily on the free flow of ideas and the exchange of information. Chapter 4 by John Sulston, describing the human genome project, shows just how dependent large modern scien- tific projects are on an international community of scientists exchanging information with each other. The creative process does not work well under the red tape of intellectual property rights systems. Indeed, intel- lectual property rights can, as John Sulston reveals in Chapter 4, have a destabilising effect on creative processes within groups. Certain large scientific projects can only be tackled by scientists work- ing together as an international community and with public funding. The human genome project is a case in point. The foundational nature of the information that emerges from such projects is too important for present and future generations to be locked up by intellectual property rights. It has to remain a public good, a part of an intellectual common from which no researcher is barred. Many developing countries achieved sovereignty after World War II. When it came to the regulation of intellectual property and their devel- opment they followed the same sorts of freeriding strategy that developed countries had. Developed states with their large stocks of technology and scientific knowledge had generated, in effect, public goods that could be accessed by developing countries if they acquired the relevant scientific capacity (as in the case of the Indian pharmaceutical industry) or could be transferred to developing countries as a public good (as in the case of the provision of new higher yielding seed varieties). The globalisation of intellectual property rights has seen access to information made more costly and difficult (the need to search for own- ers, negotiate licences, and so on). This in turn has meant that develop- ment based on access to public goods using strategies of freeriding and diffusion have been circumscribed. Chapter 8 by Alan Story dealing with copyright and education and Chapter 9 by Gary Lea dealing with copyright, patents and information technology illustrate this. Gary Lea’s chapter also points out that developing countries have been unsuccessful in obtaining international rules on technology transfer. Peter Drahos 5
- 26. The transfer of international public goods to developing countries has been made more difficult by the expansion of intellectual property rights systems. Privately held patents over biological materials and research tools have made it much harder for international public research to provide public goods to developing countries. Michael Blakeney, in Chapter 7 on the impact of intellectual property on international agri- cultural research, reveals a growing problem of private goods driving out public ones. The globalisation of intellectual property rights is not a substitute for international public goods related to development for two reasons. First, intellectual property rights primarily act as incentives for TNCs to pro- duce products for wealthy Western consumers. If the poor want more patent-based R&D for malaria they will have to hope that it overtakes obesity and impotence as a problem in Western societies. Secondly, the poor in developing countries cannot afford to pay TNCs the prices they demand for their intellectual property products (see Chapter 9 by Kumariah Balasubramaniam). No amount of clever price discrimination by these TNCs will see their products made affordable to the 2.8 billion people who live on $2 a day and 1.2 billion who live on less than a $1 a day. Pharmaceutical markets made competitive by generic manufactur- ers are the best long run guarantee of access to medicines for the poor. There is one other deep discordance between the globalisation of intellectual property rights and the present development policy agenda. Developing countries need income. Yet one clear effect of TRIPS will be trade gains for developed countries at the expense of developing coun- tries.8 One especially troubling feature of TRIPS is that it sets up a flow of revenue from the less developed to the more developed, thereby con- tributing to a global structural inequality in the world. At the same time TRIPS does not address the exploitation of the intangible assets of devel- oping countries (which means they continue to suffer problems such as biopiracy – the unauthorised use of indigenous knowledge and biologi- cal materials by TNCs). It is hard not to conclude that through the rules of intellectual property the rich have found new ways to rob the poor. Resisting information feudalism A major theme running through the present policy development agenda is the empowerment of the poor: ‘[p]oor people and poor coun- tries should have greater voice in international forums’.9 The globalisa- tion of intellectual property is an example of the way in which the deeds of globalisation do not match this policy aspiration. When TRIPS 6 Introduction
- 27. was being negotiated no African country was a player in any of the key negotiating groups that shaped its final contents (see Chapter 10 by Peter Drahos). When South Africa went down the path of passing legis- lation aimed at obtaining cheaper pharmaceutical products to deal with the AIDS crisis the response from the international pharmaceutical industry was litigation and from US and EU officials pressure and harassment to change this law (see Chapters 11 and 15 by Willem Pretorius and Ruth Mayne). The reality of standard-setting for developing countries is that they operate within an intellectual property paradigm dominated by the US and EU and international business. Developing countries are encircled in the intellectual property standard-setting process. TRIPS sets high minimum standards. Bilaterally the bar on intellectual property stan- dards is being raised even higher.10 Within the interstices of this para- digm there are steps that developing countries can take. Chapters 3, 5 and 14 by Carlos Correa, James Love and Sol Picciotto discuss the use of compulsory licences, the adjustments that can be made in intellectual property law to encourage the diffusion of information and principles of interpretation that might be used to secure better outcomes under TRIPS in terms of social welfare. However, they also reveal that in this global intellectual property paradigm developing countries face the prospect of having to pursue development strategies through lawyers’ games. There is no shortage of policy proposals by developing countries on what to do about TRIPS and the intellectual property paradigm more generally (see Chapter 12 by Martin Khor). Chapter 13 by Suman Sahai on ‘India’s Plant Variety Protection and Farmers’ Rights Legislation’ demonstrates that intellectual property laws that pay heed to the assets of the poor can be drafted and passed. It also reveals the importance of the democratic process in the design of welfare-enhancing intellectual property laws. The model law drafted by the Organization of African Unity in consultation with community groups and NGOs is another example of the way in which intellectual property principles can be fashioned to serve local communities and farmers.11 Developing countries do not lack an understanding of intellectual property. In the 1950s and 1960s India and Brazil developed critiques of Western patent regimes and African states pushed for the recognition of folklore as a proper subject matter of copyright protection. It is precisely because developing countries have shown they have the capacity to develop models that threaten the hegemony of current Anglo- American–German intellectual property models that their efforts have Peter Drahos 7
- 28. been crushed. Nowhere is this clearer than in the use of the trade regime to extend Western models of intellectual property law that are deeply discordant with development policies and strategies. US and EU trade negotiators listen to the concentrated voices of organised international business, not the voices of the poor, because those concentrated voices whisper Siren-like of trade gains to be won and losses to avoid. Hard tac- tics are used by US and EU negotiators to drive hard bargains with devel- oping countries on intellectual property bilaterally and multilaterally. Developing countries can resist the globalisation of intellectual prop- erty by forging alliances with NGOs. There are now thousands of national and international NGOs working on intellectual property issues as they arise in the food, agriculture, seed, health and biotechnology sec- tors. Other NGOs work on intellectual property issues as they affect edu- cation, software programming, libraries, privacy and free speech. These many weaker actors offer the possibility of a new global politics of intel- lectual property. Putting together a coalition of weak actors to counter the sovereignty of business over the rules of information requires vision and energy. The last chapter in this volume, by Ruth Mayne, which describes the way in which NGOs forced the US, the EU and big busi- ness into a dialogue over intellectual property and health in the context of the health crisis in developing countries, suggests the possibility of such a global politics. It was this politics which achieved a significant victory in the form of the Declaration on the TRIPS Agreement and Public Health at the WTO Ministerial Conference in November 2001. Such a politics offers the best chance of gaining global intellectual property standards that genuinely promote welfare. Notes 1. The facts in this paragraph come from the World Bank’s World Development Report 2000/2001: Attacking Poverty (OUP: New York, 2001). 2. As a least-developed country Rwanda does get the benefit of a ten-year transi- tional period under TRIPS before it has to apply most TRIPS standards. Para. 7 of the Declaration on the TRIPS Agreement and Public Health (Doha, WTO Ministerial, November 2001) extends the time of implementation for least- developed countries to 1 January 2016 on some aspects of product patents. A least-developed country may, however, bilaterally agree to implement these standards before that date. 3. World Development Report 2000/2001: Attacking Poverty (OUP, New York, 2001), p. 311. 4. World Bank, The Quality of Growth (New York: OUP, 2000), p. xxiii. 5. See Deepa Narayan et al., Voices of the Poor: Can Anyone Hear Us?, World Bank (New York: OUP, 2000), ch. 2. 8 Introduction
- 29. 6. World Development Report 2000/2001: Attacking Poverty (OUP, New York, 2001), pp. 6–7. 7. Ibid., p. 188. 8. See, for example, K.E. Maskus, ‘Intellectual Property Rights and Economic Development’ (2000) Case Western Journal of International Law, vol. 32, pp. 471, 493. 9. World Development Report 2000/2001: Attacking Poverty (New York: OUP, 2001), p. 12. See also, Deepa Narayan et al., Voices of the Poor, ch. 7. 10. See P. Drahos, ‘BITS and BIPS: Bilateralism in Intellectual Property’ (2001) Journal of World Intellectual Property, vol. 4, p. 791. 11. See, The OAU’s Model Law: The Protection of the Rights of Local Communities, Farmers and Breeders, and for the Regulation of Access to Biological Resources, Organization of African Unity, Scientific, Technical Research and Research Commission, Professor J.A. Ekpere, Project Coordinator, PMB 2359 (Lagos, Nigeria, November 2000). Peter Drahos 9
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- 31. Part I Innovation and Diffusion of Technology
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- 33. 2 Exploring the Hidden Costs of Patents Stuart Macdonald Introduction The popular conception of the patent system is one of mad inventors with ludicrous inventions and equally absurd expectations that the product of their years of pottering in the garden shed will change the world. Precisely the same system is the bulwark of strategy in some of the world’s most powerful companies, and is fundamental to the way the drugs of modern medicine are discovered and developed. Can the one instrument serve such diverse purposes (see Thurow, 1997)? Certainly those for whom the patent system is of critical strategic importance think so for they frequently declare that it benefits the independent inventor and the small firm. They insist that the patent system encour- ages the innovation by the weak as well as the strong, and that society is much the richer for this innovation. This chapter considers just who does benefit from the patent system and then turns to the other side of the coin: the costs of the patent system. Most discussion of the system seems not so much to deny the existence of costs as to ignore them. Yet, the costs would seem to be considerable and their distribution as uneven as that of the benefits. Those who reap most benefits from the patent system are not those who incur most costs, and while benefits are finely focused, costs are much more widely distrib- uted. The greatest cost of all would seem to be borne by society as a whole in terms of damage done to innovation, which is curious given that the fundamental purpose of the patent system is to encourage innovation for the benefit of society as a whole. 13
- 34. The conventional view of patents The patent is the instrument of the intellectual property system best known and most closely associated with innovation. The patent is the outcome of a bargain between the inventor and society by which soci- ety grants the inventor certain rights to his or her invention in return for the inventor’s disclosure of whatever it is he or she has invented (see Taylor and Silberston, 1973). Without these rights, it is conventionally argued, the inventor would be unable to reveal his or her invention for fear that others would steal it. Consequently, the inventor would have little incentive to invent, and society would forgo the invention and all its benefits. Thus, the patent system neatly offers the inventor the opportunity to reap some reward from his or her invention, and pro- vides society with an invention it would not otherwise have had. Everyone benefits, or so it is said. The patent system bestows its benefits by giving intangible resources – the information of invention – the legal status of property. It is hardly surprising that this mixture of law and wealth should attract the atten- tion of lawyers and economists. These two groups have long dominated discussion of the patent system with the consequence that discussion rapidly descends to sub-paragraphs of legislation and the minutiae of economic theory. This is daunting stuff for those from other fields and there are many other fields with an interest in innovation: in the sci- ences, any branch of engineering; in the arts and humanities, anything to do with creativity; and in the social sciences, any of a wide range of subjects from management studies to technology policy, from sociology to politics. Indeed, it is hard to think of an area in which innovation (broadly defined as change) is not a major interest, and innovation, be it remembered, is supposed to be the whole purpose of the patent sys- tem. It is innovation – not invention – that society wants, and it is for innovation that society has devised the patent system. Engrossed in the niceties of the patent system, lawyers and econo- mists have compiled a voluminous literature that excludes those not of their persuasions, no matter how great their interest in innovation. The consequence is twofold: their own perception of the patent system has remained untainted by the influence of other fields, and the perception of the patent system outside economics and the law has been sullied by neither. Indeed, the complications and implications of the system pass virtually unnoticed in the world at large, masked by the simple assump- tion that the patent stimulates innovation, and – equally innocent – that something would surely be done about the system if it did not. 14 Exploring the Hidden Costs of Patents
- 35. The patent system is taken on trust, vaguely perceived as beneficial and, if not beneficial, at least benign. The patent system is the province of the unworldly, themselves the butt of good-natured jokes. The patent system is not a danger, not a threat. Patents in practice The patent has a long and dishonourable history, used as much to reward political loyalty as invention. It has provided the means to award profitable monopolies to friends and cronies as much as to entre- preneurs. Enterprise has flourished during periods when the patent sys- tem has fallen into neglect, and has overcome even its complete absence. Invention has survived the perversion of the system to fit the requirements of communist ideology, and still survives peculiarities in the regulations of various national patent regimes. In short, the purity of the patent system is a modern construct, perhaps even a product of economists and lawyers casting limelight on to theory and leaving prac- tice in decent obscurity. The basic patent bargain works only in theory. In practice, both sides cheat. Most obviously, the patent affords protection only when the patentee can afford to enforce his or her rights, which may mean that the poor have no protection at all (see Mansfield et al., 1981). As the journal Nature (1929) noted long ago: the consideration for which patent rights may be enjoyed is nowa- days not so much the introduction of a new invention as the posses- sion of exceptional wealth. And if society cheats in not providing the protection the inventor has a right to expect from the patent system, the inventor cheats too. Only in theory does the inventor provide society with the information of invention: in practice, he or she discloses the information required by the patent system, not the information required by society to replicate and develop his or her invention. A company’s patent lawyers can protect the company’s proprietary position without giving away too much in the application process. (Labich, 1988, p. 30) The patent specification is primarily a legal document, not a source of information for innovation. One respondent to a survey of professional Stuart Macdonald 15
- 36. engineers who had taken out patents encapsulated the situation nicely, ‘I could barely recognise my own invention in legalese’ (Mandeville, 1982, p. 12). Basically, the information contained in patent specifica- tions is available only to those who consult them directly, or who pay others more adept at arcane classifications and the language of lawyers to do so (Liebesny, 1972). Moreover, the delay between the filing of an application and the publication of a specification may be far greater than the pace of change in some industries. In high technology – an activity often associated with the patent system – time rapidly erodes the value of information. In addition, the criteria by which patents are granted pay no heed at all to the contribution patent information might make to innovation. Details of inventions which can make no conceiv- able contribution are frequently published, as are those of patents designed to mislead or obstruct (Schmookler, 1957). In short, the patent system is ripe for abuse, and has long been abused. It should not be surprising that the patent system is still being abused. The wonder is that anyone should think otherwise, and this chapter will speculate on just why this might be. The chapter will argue that the strong are most able to exploit the patent system and that they have a great deal to gain from this exploitation. The chapter will also argue that this exploitation is hidden – deliberately hidden – from those who bear its costs. Basically, the strong disguise their own interest in the patent system by emphasising society’s interests in the system and the benefits for the weak. Thus, the chairman of both Reed Elsevier and the European Round Table, a grouping of European leaders of busi- ness, declares that: Protecting intellectual property is crucial, not so much for large companies but for small and medium sized enterprises. (Morris Tabaksblat as quoted in Betts and Groom, 2001, p. 1) Benefits for the weak – some empirical evidence In theory at least, the system is particularly appropriate for encour- aging the invention of small firms and independent inventors. Large organisations are more likely than small to have the internal resources to develop their own inventions, and so can keep the information of invention to themselves. Smaller organisations must generally seek these resources outside and so must reveal all. In practice, though, the protection the patent system affords the weak against the strong is often illusory, and the problems small firms encounter in protecting their 16 Exploring the Hidden Costs of Patents
- 37. inventions through the patent system are widely acknowledged. There is much less questioning of the advantage they and their innovation are claimed to reap from the other part of the patent bargain, the informa- tion the patent system makes available. Small firms cannot depend on vast R&D departments to generate the information required for inven- tion; they must look to external sources for this information and one of the richest of these is said (by patent officials) to be patent specifications. Patent specifications are a source of valuable technical information, readily available and much of it free for the taking. It is a pity that so few manufacturers, engineers and scientists seem to be aware of this. So next time you have a technical problem, check to ensure that it has not been solved already. Even if you don’t find a ready solution, you may pick up some good ideas for use in your current or future design. [original emphasis] (Australian Patent Office, 1981, p. 2) Each patent specification is a detailed disclosure of the invention and it is this aspect of course which is particularly valuable as a rich source of technical information. (Blackman, 1994, p. 47) Such assertions are in conflict with the evidence. Two postal surveys were carried out in October 1996, one of the 615 UK small firms (employ- ing between 10 and 250) that had been granted at least one patent in the UK or Europe in 1990, and a control group of 2000 small manufac- turing firms in the UK. The overall response was just under 35 per cent. Predictably, these small firms look to customers, suppliers and competi- tors for information about the latest developments in their industry and market (Figures 2.1a and 2.1b). All other likely sources of external infor- mation vie with each other in their uselessness for innovation in small firms, which is interesting in that many of these sources take some pride, and expend considerable public resources, in their efforts to provide information to small firms. Most successful in this unenviable competition are government sources and the patent system. Small firms that have patented declare the patent system to be somewhat less use- less than do small firms in general, but the positive side is not encour- aging for those who feel that the patent system is obviously a major source of information for innovation in small firms: while just 8 per cent of the small firms in the control group think patent information of some importance, only 12 per cent of small firms which patented, and that therefore have some familiarity with at least the protective side of the system, consider patents are of some importance as a source of information for innovation. Stuart Macdonald 17
- 38. 18 Exploring the Hidden Costs of Patents 0 10 20 30 40 50 60 70 gov’t depts PATENT SPECS research assocs prof. assocs consultants universities trade assocs competitors suppliers customers % of respondents Figure 2.1a External sources of information rated important for innovation in small firms 0 10 20 30 40 50 60 70 prof. assocs trade assocs gov’t depts research assocs PATENT SPECS consultants universities suppliers competitors customers % of respondents Figure 2.1b External sources of information rated important for innovation in patenting small firms It is often argued that the other forms of intellectual property protec- tion – registered designs, copyright and trademarks – being simpler devices, are of more practical use to small firms than patents. This would seem to be questionable. These small firms do not see any form
- 39. of intellectual property protection as important to their innova- tion (Figures 2.2a and 2.2b). What is most remarkable is that even those that have patented, and therefore have some knowledge of intellectual property rights, are only slightly more likely to see the other forms of intellectual property protection as benefiting their innovation. In both cases, trademarks and trade secrets are a little more valued than copy- right and registered designs, but the difference is marginal and is over- whelmed by the vast majority of small firms considering that all forms of intellectual property protection are of little importance for their innovation. Most of the firms surveyed because they had been granted a patent in 1990 had since acquired other patents – but not many. On average they had been granted but one other patent, and only 13 per cent had more than ten patents. About half did not apply for patents even on inven- tions they thought were patentable. Two-thirds had developed their invention since patenting it in 1990, but 87 per cent would have devel- oped the invention even without a patent. Predictably, development is almost exclusively in-house rather than in partnership. Licensing patents to others is not a popular course; 81 per cent of small firms granted a patent in 1990 have not licensed it. Nor has the vast majority licensed patents from anyone else over the last ten years. Not a single firm could boast that it frequently licensed patents from others. Of the few firms that did occasionally license, most gained know-how as part Stuart Macdonald 19 0 10 20 30 40 50 60 70 80 90 trade secrets trademarks copyright reg. design % of respondents great some little/none Figure 2.2a Benefits to the innovation of small firms from other forms of intellectual property protection
- 40. 20 Exploring the Hidden Costs of Patents of the agreement, but the licence also imposed restrictions on what they could do with the technology. Most common among these restrictions were agreements not to sell outside a geographical area, not to dispute patents, not to sell competing products, and agreements to buy parts from the licensor and to license back improvements. About half of these small firms regularly conduct patent searches and almost all of these pay a patent attorney to search on their behalf. The most important reason for doing this is to keep track of competitors, but the next most important reasons are to check on potential patent infringements and to prepare patent applications (Figures 2.3a and 2.3b). It has been noted by others that some of the most significant uses to which the patent system is put are demanded by the patent system itself (Australian Patent Office, 1980). When this happens, the patent system is serving not the requirements of innovation, but its own require- ments. Even the small firms that search to keep track of competitors are more interested in keeping track of their competitors’ patenting than their competitors’ technology. These two surveys paint a somewhat depressing picture of small firms isolated from the external sources of information for innovation that 0 10 20 30 40 50 60 70 80 % of respondents trade secrets trademarks copyright reg. design great some little/none Figure 2.2b Benefits to the innovation of patenting small firms from other forms of intellectual property protection
- 41. larger firms and firms in rapidly innovating sectors find so important. These small firms seem to rely very heavily on their own resources. There is a range of likely reasons for this, but basically they come down to employees of small firms, and especially senior management, having few resources available to search for information in the outside world and to use the information acquired there. In a small firm, everyone is needed for day-to-day operations, to man the pumps. It should come as no surprise that small firms are highly innovative; their innovation is a necessary response to competition and the fluidity of their markets. Patent protection is little valued and innovation is rife in its absence Stuart Macdonald 21 0 10 20 30 40 50 60 70 % of respondents stimulate creativity uncover new products acq. info to solve probs. avoid duplicating R&D keep abreast tech. dev. acq. info for opportunity keep track competitor check on infringements prepare pat. application Figure 2.3a Why patent searches are conducted by small firms 0 10 20 30 40 50 60 70 % of respondents stimulate creativity acq. info to solve probs. uncover new products avoid duplicating R&D acq. info for opportunity keep abreast tech. dev. prepare pat. application check on infringements keep track competitors Figure 2.3b Why patent searches are conducted by patenting small firms
- 42. (Kahaner, 1983). And among a host of information sources that small firms might use for innovation and rarely do, the patent system is distinctive in being used least of all. Who does benefit? It is now more than a decade since Mansfield published his classic table illustrating the importance of the patent system to the innovation of various industries (Table 2.1). The table shows some industries to be very much more reliant on the patent system than others. Basically this is because the invention of these industries is readily codifiable (Levin et al., 1987). This means both that competitors can easily acquire and use the information of invention and that the invention can be thoroughly described in a patent specification. Put another way, the precision of a chemical or pharmaceutical patent specification makes the patent particularly easy to defend and thus enhances the value of the intellec- tual property (Tapon, 1989). Hardly surprising then that Taylor and Silberston (1973, p. 231) could conclude that the ‘pharmaceutical industry stands alone in the extent of its involvement with the patent system’. The pharmaceutical industry has done much to ensure that the patent system meets its own requirements, basically the requirements of large companies, operating with highly codified information on a route to innovation made linear by government regulation and social expectation. 22 Exploring the Hidden Costs of Patents Table 2.1 Inventions that would not have been developed in the absence of patent protection (%) Pharmaceuticals 60 Chemicals 38 Petroleum 25 Machinery 17 Fabricated metal products 12 Electrical equipment 11 Primary metals 1 Instruments 1 Office equipment 0 Motor vehicles 0 Rubber 0 Textiles 0 Source: Mansfield, 1986.
- 43. Set against the benefits society reaps from innovation in those indus- tries where innovation is encouraged by patents must be the monopoly costs these industries insist provide the necessary incentive to innovate. Less obvious is the cost to all those other industries where innovation is not dependent on patent protection, but that must still cope with a patent system that is virtually irrelevant to their requirements. Of course, it can be argued – it is argued – that firms everywhere benefit from the information disclosed and disseminated by the patent system. The argument is much more convincing in theory than in practice. Just as small firms have little use for patent information, large firms in all but those few industries where invention can be neatly encapsulated in a patent specification, attach little value to patent information. It has been calculated that patent information is worth about 0.75 per cent of firms’ research and development (R&D) expenditure, and thus an infin- itesimal proportion of total innovation costs (Taylor and Silberston, 1973, p. 212). This may help explain why there is such toleration of the poor dissemination of patent information; it is just not worth the spreading. Invention or innovation? An invention is a discovery: an innovation is a product or service that is new to the market, or simply new to the adopter (see Schott, 1981). It is important to remember that of the total resources required for innova- tion, only a small proportion comes from invention; the majority comes from design, production, marketing and the rest of the myriad of acti- vities that contribute to the making of things. This assumes, of course, that every invention contributes something. It does not. Many inven- tions make no input to any innovation. Although most innovations can be traced to some conquest in the realm of either theoretical or practical knowledge that has occurred in the immediate or remote past, there are many which cannot. Innovation is possible without anything we should identify as inven- tion, and invention does not necessarily induce innovation, but pro- duces of itself …no economically relevant effect at all. (Schumpeter, 1939) This failure to achieve the ultimate goal of successful innovation is often blamed upon what is seen as a rocky road from invention to inno- vation. Alternative models avoid the notion of a journey, of linearity Stuart Macdonald 23
- 44. (Teece, 1988). These maze models of innovation depict no obvious route from invention to innovation; the journey may start anywhere in the system and may lead anywhere, perhaps to invention more than once, before innovation is reached – if it is ever reached at all. Innovation remains the goal, but getting there is the real challenge: innovation is not simply the last stop on the line (Rothwell, 1992, 1994). In the midst of both linear models and maze models is the patent system – seen as a convenient stretch of fast highway in the former and as a further complication in the latter. Society may want innovation from its patent system very much indeed, but the patent system is really concerned only with invention (Kingston, 1987). This desire for innovation has produced two arguments in justification of the patent system. Though they are not incompatible, they are seldom presented together (Merges, 1988). Both are rooted in the supposition that invention would not take place if it could be purloined by anyone so inclined. The first argument emphasises development: the patent system gives an incentive to invent because it allows the inventor to reap a reward from his or her invention, either through developing it him- or herself or by selling it to others for them to develop. Development is the inventor’s responsibility, not society’s. The sec- ond argument is less contingent on development and emphasises infor- mation: it is that a bargain has been struck between the inventor and society by which society grants property rights, with which the inventor may do what he or she will in return for giving society the information of his or her invention (Merges, 1988). Society must then use this infor- mation to create innovation, and development, with all its uncertainty and irregularity, becomes society’s responsibility, not the inventor’s. In the first case, society is to get innovation, which is what society really wants: in the second, only information. In the first case, society allows the inventor to make his or her information public: in the second, soci- ety demands that he or she make his or her information public. The first case supposes patent information leads directly to innovation and that innovation is society’s reward: this is compatible with linear models of innovation. The second fits better with maze models of innovation in that it depicts patent information adding to a social store of informa- tion in which information for innovation may be found, and – with the owner’s consent – used. In this case, information is society’s reward. Participants in process While maze models come closer to the reality of innovation than linear models, there are those who prefer to see innovation as the culmination 24 Exploring the Hidden Costs of Patents
- 45. of a linear process. Society generally – and naturally – prefers this simple and direct model of innovation, and the passive role it is required to play. Often, though, this perception is encouraged by the observer’s situation, and often it is in his own interest. For example, scientists involved in basic research like to think of their activities as seminal to innovation. And so do the universities and the research laborato- ries that house the scientists. Similarly, managers who allocate organi- sational resources for innovation like to feel they are fuelling a process that will produce the innovation they have planned and none of the uncertainties often associated with change; they need to justify resource input in terms of innovation output (see Greiner and Barnes, 1970). And thus it is with public servants anxious to encourage innovation and expected to account for the expenditure of public funds on research in terms of the innovation it will yield (Griliches, 1989). Patent attorneys and those who work for patent offices also have vested interests in the system. More generally, so do those who find the prospect of rampant, uncontrolled and unpredictable innovation disconcerting. For them – and there are many of them – the patent system provides an illusion of certainty in an uncertain world. Amidst the turbulence and tumbrels of even high technology revolution, it is comforting to feel that, even in innovation, there is a proper and established way of doing things: the very idea of a patent law is something of an oxymoron: it is a hybrid of two opposing principles, change and order, that live always in tension with each other. (Kass, 1982, p. 43) To this considerable body of interest in perceiving a linear innovation process must be added those for whom innovation actually is a linear process. There are whole industries whose innovation is strongly influ- enced, if not actually determined, by what happens in research. In these cases, innovation is indeed a process, almost a routine in which output is basically a product of input. It behoves such industries to spend heav- ily on research and to protect as best they can not only their innova- tion, but also the systems on which their innovation, and hence their competitiveness, are dependent. The lengths to which these industries will go to protect the patent system are a measure of how crucial it is to their existence. Their position is not negotiable. Consider the recent unequivocal declaration from the president of one large pharmaceutical group. Les produits génériques sont des actes de piraterie qui seront éradiqués comme l’avait été la piraterie au XVII siècle. [Generic Stuart Macdonald 25
- 46. products are acts of piracy which will be eradicated like 17th-century piracy was] (Quoted in Cohen, 2001) For such industries, the patent system is so compatible with their method of innovation, so integrated with corporate strategy, that it has to be defended at all costs. Attack has been the customary form of defence, the aim being to secure strategic position not simply by main- taining the patent system, but by strengthening it. The size of the phar- maceutical industry, its potential to contribute to public welfare and its experience with R&D make the industry a force to be reckoned with (Miller, 1988; Porter, 1989). It is quite capable of using this power to extort advantage for itself and to impose costs on others. We are most interested in a strengthening rather than weakening of the Australian patent law, especially for pharmaceuticals. Substantial weakening might prompt us to drastically shortcut investments in Australia. (Quoted in Mandeville and Bishop, 1982, p. 16) The danger is that loss of patents in HIV alone could destroy the global HIV market. The bigger danger is that the broader loss of patents in South Africa could be the thin end of the wedge which smashes patent protection for the industry [worldwide]. And if that happens, then frankly the entire economic base of the pharmaceutical industry is destroyed. (David Ebsworth, Head of Pharmaceuticals in Bayer, as quoted in Pilling, 2001) Before the strengthening of the patent system, society looked to high technology for a model of how to innovate, not the only or necessarily the best model, but a model that certainly worked. The model was based firmly on the notion that innovation was dependent on the free flow of information. So rapid was the pace of change in semiconductor and IT that the patent system played little part in the transformation. Indeed, the companies that accumulated most patents tended to go out of busi- ness, leaving the field to companies much less distracted by patenting (Table 2.2). This could not happen now. A weak patent policy did not slow things down in the development of the integrated circuit and microprocessor. In fact, it sped things up. The legal environment of the 1970s allowed Fairchild, Intel and oth- ers to get their start, carrying the lesson that strong patents for every industry are not always good. (Forbes ASAP Supplement, 1993, p. 62) 26 Exploring the Hidden Costs of Patents
- 47. The way in which high technology firms innovate now is very differ- ent and has been profoundly altered by the patent system (Simon, 1996). Software patents are failing to achieve the Constitutional mandate of promoting innovation and indeed are having a chilling effect on innovative activity in our [software] industry. (Shulman, 1995) Strengthening the system In the early 1980s, governments turned somewhat desperately to tech- nology to create wealth and employment. As the President of the Pharmaceutical Research and Manufacturers of America (PhRMA), and sometime Commissioner of Patents and Trademarks, noted: The shift in the U.S. competitive advantage, away from basic manu- facturing and toward high-tech information-based industries such as pharmaceuticals, makes global intellectual property protection an urgent policy priority for the U.S. government and for U.S. industry. (Mossinghoff and Bombelles, 1996, p. 47) Innovation was the key to competitiveness, but government policy (and corporate strategy for that matter) found difficulty accommodat- ing the undisciplined information flow fundamental to the innovation of a freewheeling Silicon Valley. Policy and strategy were much more comfortable with an interpretation of high technology entrepreneurial- ism that flaunted the trappings of Silicon Valley in the science park or the European Commission’s Esprit Programme (Macdonald, 1987; Marschan-Piekkari et al., forthcoming) while denying the unmanaged and uncontrolled information flow critical to innovation in high tech- nology. The information required for innovation was to be captured and retained, whether in a Fortress Europe defended by the national Stuart Macdonald 27 Table 2.2 Percentage of total semiconductor patents awarded to firms in the US, 1952–6 1952 1953 1954 1955 1956 Bell Laboratories 56 51 46 37 27 Established firms 37 40 38 42 53 New firms 7 9 16 21 20 Source: Braun and Macdonald, 1978, p. 68.
- 48. champions of the electronics industry, or a Fortress America, where alarm at the Japanese and even European threat to competitiveness led to the imposition of national security export controls designed to pre- vent the loss of high technology information (Macdonald, 1990). At the corporate level, information mercantilism also prevailed with innova- tion strategy based on the acquisition and retention of information (Macdonald, 1998). Clearly, this climate was hostile to the patent sys- tem as an instrument for disseminating information widely so that others can use it, and much more comfortable with the patent system providing a temporary monopoly so that inventors can innovate. The climate was conducive to the strengthening of the patent system. Pressure to extend the scope of patents was fuelled by the observation that much modern invention did not fit easily within the system’s arcane classification. The scope of patents had to be extended if the sys- tem were to stimulate the innovation a modern economy requires. The patenting of genetic material is one result, the extension of the patent system to computer software and to business methods in the United States two more. The value of the patent monopoly is related not just to the scope of the patent, but also to the ease with which the patent can be defended. The US Court of Appeals of the Federal Circuit (CAFC) was established in 1982, a response to the need for a specialist body to cope with the growing complexity of some of the new areas into which patents were entering. The Court was also a product of powerful groups looking after their own interests: a very small group of large high technology firms and trade associa- tions in the telecommunications, computer and pharmaceutical industries was essentially responsible for the creation of the CAFC. The group believed that a court devoted to patent cases would better represent its interests. (Silverman, 1990, fn. 62) It is argued that the actions of the CAFC have very much strength- ened the US patent system. Between 1982 and 1987, the CAFC upheld 89 per cent of district court decisions that patents were valid: between 30 per cent and 40 per cent had been upheld previously (Silverman, 1990). Penalties for infringement have become very severe: Defendants that have been judged guilty of ‘wilful and wanton’ infringement can be assessed treble damages, interest that accrues while they appeal, and the plaintiff’s legal fees. Worse, judges are ordering companies found guilty of infringing to stop selling copycat 28 Exploring the Hidden Costs of Patents
- 49. products immediately, rather than allowing them to continue busi- ness as usual until completion of the appeal. (Perry, 1986) The result has been to increase the value of an American patent. This increase in both the scope and the scale of patent protection has altered the relationship between the conflicting interests inherent in the system. A weak patent system acknowledges that invention is gener- ally a long way from innovation and of little value in itself: a strong patent system values invention – patented invention – perhaps even above innovation. Texas Instruments, for instance, once liberal in its cross-licensing arrangements with competitors, has become particularly litigious. Its most profitable product line is now patent royalties. In some years, the company’s licence fees exceed its operating income (Thurow, 1997). IBM increased its licence income from $30 million in 1990 to nearly $1 billion in 2000 (Rivette and Kline, 2000). Other semi- conductor companies have converted the cross-licensing which used to stimulate innovation in the industry into a mechanism for excluding new entrants and inhibiting innovation (Barton, 1997). With cases lasting four years plus and running anywhere from $2 million to $10 million, computer companies are spending as much time in the courts as they are in the laboratories. (Howes, 1993, p. 7A) The balance of the system, then, has been tilted in favour of the ben- efit to society being expected less from the information made available for innovation, and more from the protection given the inventor to innovate himself. This shift is evident in a growing tendency in the US to regard the commercial success of innovations as a major determining factor in the granting and upholding of patents (Merges, 1988). Thus, those organisations best equipped to innovate in a fashion compatible with the patent system, rather than merely to invent, find most value in the system. These are likely to be large firms. Being well equipped to innovate themselves, there is little need for these firms to disseminate their information to society so that society may innovate. In short, strengthening the patent benefits the large firm whether it innovates itself or licenses the patent to others: for the weak, able neither to inno- vate themselves nor to protect their property, strengthening brings no benefits. [A]n overemphasis on successful innovation, coupled with reduced attention to the presence or absence of a true invention, reinforces Stuart Macdonald 29
- 50. only one of the dual policy goals of the patent system: providing incentives to inventors. It ignores the goal of encouraging inventors to disclose technical information. (Merges, 1988, p. 876) When intellectual property rights are protected, innovators are able to recover the costs incurred in research, product development and market development. This cost recovery…is essential for stimulating the future research and development that is necessary to maintain America’s competitive edge. [emphasis added] (Silverman, 1990, fn. 110) Standing up for the weak The patent system is much more suited to pharmaceutical and chemical firms than to most others, and these firms gain rather more benefits from the system than others. This would be of no great moment in a world which does not even pretend to be fair were pharmaceutical and chemical firms not disposed to defend their advantageous position by presenting their own innovation as typical of all innovation. Thus, because the pharmaceutical industry spends a fortune on R&D, the industry feels entitled to pontificate on innovation in general and on national competitiveness too. Since, today, it takes an average ten years and over $100 million to develop a new drug, only seven or eight years are left for the product to recover its entire investment before manufacturers who made no R&D investment at all are free to copy and compete with it. In the United States, the 1984 Patent Restoration Act has added up to five years of life to a pharmaceutical patent to make up for some of the time lost in the governmental approval process …If the United States is to avoid further erosion of its competitive position, a new frame- work for growth must be envisioned …in which intellectual property rights are protected and in which investment and innovation are encouraged. (Miller, 1988, p. 88) This is arrant nonsense: the innovation of the pharmaceutical indus- try is not representative of innovation as a whole and the patent system that is so conducive to pharmaceutical innovation is much less appro- priate for other innovation. With something like 22 per cent of the world’s patents (Johnston and Carmichael, 1981), the pharmaceutical and chemical industries alone have just about as many patents as all the millions of the world’s small firms in all industries put together. 30 Exploring the Hidden Costs of Patents
- 51. Yet, despite the evidence, the pharmaceutical and chemical industries present themselves as champions of the weak, defenders of the means by which they are able to innovate. This smacks of hypocrisy. Indeed, it may fairly be claimed that the provisions of the new law [the Copyright Designs and Patents Act 1988] reflect the interests of the powerful and politically active, not those of society as a whole. (Porter, 1989) The costs of patents Discussion of the costs and benefits of the patent system tends to emphasise the benefits. The costs of the patent system are usually ignored altogether, or are presented as trivial. Those most commonly acknowledged are the fees paid to patent offices and to patent attorneys. But there are other costs. There are serious costs. These would seem to be of two sorts: 1. The costs of illusion (or perhaps disillusion). The illusion is that the patent system really will deliver the protection and the information it is supposed to deliver. These costs are likely to be heaviest for those who are new to the patent system, and lightest for those who have most experience. The costs of illusion also encompass the costs soci- ety incurs in frustrated expectations of innovation. 2. The costs of distortion. The patent system is supposed to help meet society’s requirements for innovation. Society is not supposed to meet the patent system’s requirements, yet this is what happens when resources are diverted from other purposes, including innova- tion, to satisfy the demands of the patent system. Recall the use of patent information in the small firm survey; it was required not for innovation at all, but to service the patent system. Recall also that the patent system suits the innovation process of a few specialised industries, not the irregularity that is much more typical of innova- tion generally. In as much as this irregularity is compromised by being tailored to suit the patent system, there is a cost in terms of discouraged innovation. The costs of illusion Macroeconomic analysis of the patent system focuses on its net value to society. Stuart Macdonald 31
- 52. If the system accounts for a net increase in inventions having a value to society exceeding the costs society pays for them, the patent sys- tem is justifiable in economic terms. (Markham, 1962, p. 597) A positive net social value does not require costs and benefits to be evenly distributed, but great benefits for some must entail equally great costs for others. The more stringent the system, the more these benefits would seem to be concentrated among those whose innovation accords with the system, and the greater the costs for those whose innovation does not. Most obviously, the costs of avoiding infringement rise (Moss and Evans, 1987). Any lengthening of the patent term obviously bene- fits those awarded patents, but less obviously increases both the risk of infringement and the search costs of others seeking to reduce this risk (Gilbert and Shapiro, 1990, p. 112). From this perspective, the informa- tion the patent system has accumulated is less a contribution to innova- tion than an obstacle to innovation. It becomes the responsibility of the patent attorney to help his or her clients avoid such obstacles. Corporate patent attorneys have started scrutinizing their compa- nies’ patent portfolios and have become more reluctant to give R&D managers the go-ahead on a new idea or business for fear of duplicat- ing a patented product. (Perry, 1986, p. 80) Genetics Institute’s patent counsel say the strength of the potential patent position is ‘a leading factor’ in deciding what research to pursue. (Rivette and Kline, 2000, p. 58) Society’s approach to innovation – which is what the patent system exemplifies – has gone very seriously wrong when lawyers decide research priorities, or when property is so valuable because it is pro- tected by patent that industry strategy focuses on defending this prop- erty, even at the expense of creating new wealth. A whole vocabulary has developed to describe the role of patents in corporate strategy; amidst patent clustering, patent bracketing, patent walling and patent blitzkrieg there may be little place for innovation. The pharmaceutical industry can be quite ruthless in its defence of what has become critical to its existence (Miller, 1988; Porter, 1989). Because patent statistics are now taken so seriously, there is pressure on employees in many organisations to create the patents to be counted, and – as in Japanese companies – employees may be offered incentives to patent as much as possible (Shapiro, 1990). A minor industry has developed to tally patents, a practice justified by the observation that 32 Exploring the Hidden Costs of Patents
- 53. patents are one of the few indicators of output from expenditure on innovation. Undeterred by the fact that patents, if they measure any- thing at all, measure invention rather than innovation (see Rosenberg, 1974; Wyatt, 1977–8; Sciberras, 1986), this minor industry counts patents to compare the technological and competitive strength of companies, industries and whole nations. Share prices rise on news that a patent has been granted, and fall on news that it has been challenged. So secure are profits from pharmaceutical patents that plans are afoot to use them as financial instruments by issuing notes on them to investors (Rivette and Kline, 2000). The wonder is that all this activity can all take place in the complete absence of innovation. Innovation has in many ways been supplanted by the patent, which, in itself, creates no wealth at all. I’m convinced that the management of intellectual property is how value added is going to be created at Xerox. And not just here, either. Increasingly, companies that are good at managing IP will win. The ones that aren’t will lose. (Richard Thoman as quoted in Rivette and Kline, 2000, p. 54) The costs of distortion Whenever resources are diverted from one purpose to another to satisfy the requirements of the patent system, and when the incentive to patent becomes distinct from the incentive to innovate, there is likely to be a cost in terms of discouraged innovation (Takalo and Kanniainen, 1997). Universities, certainly in the UK but elsewhere as well, are anx- ious to increase their revenue not only because they are expected to cover costs, but also so they can demonstrate demand for their services and, therefore, just how useful these services are. Patenting is seen as an appropriate route to riches, and academics are encouraged to patent whatever can be patented. Resources are diverted from areas with little patenting potential to those with more, and publishing is discouraged if it might interfere with patenting prospects (Feller, 1990). The British Technology Group, which specialises in exploiting university patents, is especially keen to suppress academic discussion. Our biggest competitors are not other agencies like ours. They are researchers talking to industry or giving their ideas away at confer- ences and so on. (Harvey, 1989) Academics are unlikely to be innovative unless they are free to discuss and exchange ideas. If information flow is being restricted in universities Stuart Macdonald 33
- 54. by the requirements of the patent system, then it is unlikely to be flow- ing freely in other organisations. The patent system also sets precedent for the appropriation of infor- mation by the organisation. The patent system is highly compatible with management methods that focus on the control of information as an organisational resource: with knowledge management, manage- ment information systems and the codification of information in IT, for example. There is no place here for personal exchange networks; these are now regarded as organisational property. The Silicon Valleys of the industrial world, and the invisible colleges of the academic, cannot function under such a regime; they wither and die. Concluding thoughts Nonsensical as it may sound, the patent system is essentially anti-inno- vative. This is not just because it assists a very specialised sort of inno- vation and discourages other sorts. Much more important is that the patent system satisfies the requirements of those who need to feel that innovation is controlled and contained, that innovation is in its place, part of process. Most innovation is not like this at all. This is not to say that the patent system should be changed. Small business counsellors, enterprise consultants and patent office officials proffer advice on how to use the system better, and on how it might be adapted to offer even better service to users. They argue that, while the fundamentals of the patent system are sound, there is always scope for improvements that would increase the benefits for everyone. For example, there has been much discussion of the merits of rewarding employee inventors (Littler and Pearson, 1979; Orkin, 1984). Such triv- ial tinkering distracts attention from matters of moment (Polanyi, 1943). The system is inherently imperfect, and fundamental improve- ment is just not possible. This is why enthusiasm for the system among economists is often so muted. If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to rec- ommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it. (Machlup, 1958, p. 80) In other words, this is as good as it gets. This does not mean that there is no possibility of increasing the pub- lic benefit from the patent system. Appreciating the limitations of the 34 Exploring the Hidden Costs of Patents
- 55. Other documents randomly have different content
- 56. 268. To J. B. Holroyd, Esq. 31st October, 1775. In the midst of Avocations, Litterary, Parliamentary and Social, which now on all sides overwhelm me, you must not expect any regular correspondence. Sayer's[313] business (you must know it by this time) is foolish beyond description. He was a fool! Richardson a busy knave, and Lord R. acting Justice of the Peace who was obliged to take the information. You will see by the numbers that last Thursday we had an easy, but it was a languid, victory. We have a warm Parliament but an indolent Cabinet. The Conquest of America is a great Work: every part of that Continent is either lost or useless. I do not understand that we have sufficient strength at home: the German succours are insufficient, and the Russians are no longer hoped for.[314] When do you come up? I dined and lay at Twickenham, Sunday. Batt was there—Govr. Lyttleton seconded the Address,[315] matter good, manner ridiculous. Adieu. I delivered yours to C.
- 57. AT WORK ON HIS HISTORY. 269. To his Stepmother. London, December 4th, 1775. Dear Madam, I am still alive, and in spite of the influenza perfectly well. But why have you not at least written one line in so very long a space of time? All that I can say on the subject is to declare with the utmost sincerity that not a single morning has arisen without my forming the resolution to write before the evening, and that not a single evening post-bell has rang without sounding the alarm to my conscience. In the mean time, days, hours and weeks have imperceptibly rolled away: a perpetual hurry and long days of Parliamentary business, the whole world coming to town at once, and a great deal of occupation at home relative to my History, which will come out some time after Christmas. In a word, I do not like to write to you, but I want very much to see you. Have you totally forgot your promise of making me a visit in town? I can lodge you, &c., without the smallest inconveniency, and I am sure that after getting the better of so formidable an enemy as you have done, nothing would be so likely to give the last polish as a change of air, of situation and of company. Be so kind as to send me an answer and not a compliment, on this subject. Mrs. Porten is still well and young. Her sister-in-law has got and lost a child. The former wishes to be remembered to you. You see the honour which Mr. Eliot[316] has acquired. I am amazed how he condescended to accept of it. The Member of St. Germans might lurk in the country, but the knight of Cornwall must attend the House
- 58. of Commons.—I salute from a distance all Bath friends: and particularly the Colonel,[317] Mrs. G[ould], Fanny, Birds, dogs, &c., &c. I am, Dear Madam, Ever yours, E. Gibbon.
- 59. 270. To his Stepmother. December 24th, 1775. MY dear Madam, Inclosed I send the ordinary draft. As you have never had reason to doubt my sincerity, you will believe me, when I say that I feel myself ashamed of my real and apparent negligence, and deeply concerned at the subject of your last letter. That subject is of such melancholy and weighty import, that though I fear I cannot say anything very satisfactory, I must beg leave to defer, two or three posts longer, the taking any farther notice of it. Allow me only to explain, what I mean by my apparent negligence. Your former letter was delivered to me while I was abroad at dinner, and when I returned home very late at night, I locked it up without having examined the contents. The next morning it was impossible for me to find it or to recollect how I had disposed of it: and I vainly and indolently delayed writing from post to post, in hopes that I might accidentally stumble upon it.—Mr. H. is probably at or near Bath. I am sorry to hear so indifferent an account of Mrs. H. I am, Dear Madam, Most truly yours, E. Gibbon. If there was anything in your former which you have not said in your last letter, may I beg you to repeat it. I am perfectly well, and shall pass my holidays in town.
- 60. HIS BOOK ALMOST READY. 271. To his Stepmother. Bentinck Street, 3rd January, 1776. Dear Madam, Had I not been engaged in hastening and finishing the Impression, I would with great pleasure have made you a Christmas visit. I may truly say to you and not to Bath, for I have never much relished the style and amusements of that seat of idleness which so many people are fond of; and I am much inclined to think that if you fixed your residence in any other part of the Kingdom, I might pass the remainder of my life without ever seeing Bath again. Since I have mentioned my book, let me add that it will probably make its appearance about the middle or end of February: and that one of the very first copies of it shall be carefully transmitted to Charles Street. The Public, I know not why, except from the happy choice of the subject, have already conceived expectations, which it will not be easy to satisfy: the more especially as lively ignorance is apt to expect much more than the nature and extent of historical materials can enable an author to produce. However, if the first volume is decently received in the world, I shall be encouraged to proceed; and shall find before me a stock of labour and of amusement sufficient to engage my attention for many years. The prosecution of some scheme is in my opinion the circumstance the most conducive to the happiness of life, and, of all schemes, the best is surely that, the success of which chiefly depends on ourselves. Parliamentary business, and agreeable society fill the eye, the intervals of my time, and my situation would in every respect be a comfortable one, if I could only put an end to my Buckinghamshire sale, which is still attended with many difficulties,
- 61. and will hardly be decided without the interposition of Chancery. You will not wonder that I lose time and catch at every hope, rather than involve myself in that labyrinth of Chicane and expense. I say nothing of public affairs. Never did they wear a more melancholy aspect. We much fear that Quebec[318] will not hold out the Winter. The Provincials have everywhere displayed courage and abilities worthy of a better cause; and those of my Ministerial friends who are the best acquainted with the state of America, are the least sanguine in their hopes of success for next year. An odd discovery is just now made. At a sale in the country, an old cabinet was going to be knocked down for twenty shillings, when the curiosity of some people present urged them to examine it more closely. Two private drawers were found; one of which contained bank-notes to a very large amount, the other held an older and more valuable curiosity; the individual ring of Queen Elizabeth, the Earl of Essex, Lady Nottingham, &c.: you remember the story.[319] It was in a very fine purse embroidered with pearls; and is authenticated by a writing, found in the same purse, of an old Lady Cook who attended the Queen in her visit to the Countess, and picked up the ring when her Majesty threw it from her with horror and indignation. I have seen the purse and ring (a yellow kind of diamond) at Barlow's, a silk-mercer in King Street, Covent Garden, who affirms that he has read the paper, but the mystery which is made about the place of sale, and the name of the present proprietor, leaves room for suspicion. Horace Walpole is determined, if possible, to get to the bottom of the affair. I hope, dear Madam, that not only your health, but your beauty likewise, are perfectly restored, but I must desire an explicit and satisfactory answer about your promised visit to London. The air will, I am sure, be of the greatest service to you, and as the Spring will soon advance upon us, you may easily connect London with Essex, Sussex or any other part of the Kingdom, where you have any visits to make or promises to fulfill.
- 62. I am, Dear Madam, Most truly yours, E. Gibbon. Bentinck Street, January 3rd of the New Year 1776. May you find it an agreeable introduction to many happy ones. P.S.—Messrs. Gosling and Clive will honour your order whenever you chuse to draw for the last half year, and on every future occasion I will take care that it shall be ready for your draught, which I think, once for all, will be the best way of settling it.
- 63. GLOOMY ASPECT OF AMERICAN AFFAIRS. 272. To J. B. Holroyd, Esq. London, January 18th, 1776. *How do you do? Are you alive? Are you buried under mountains of snow? I write merely to triumph in the superiority of my own situation, and to rejoice in my own prudence, in not going down to S. P., as I seriously but foolishly intended to do last week.* Hugonin by appointment came to town, but we soon agreed that the expedition (on his side at least) must be deferred till next summer; for which time he made a very solemn and, as I believe, a very serious engagement. We talked over Horn farm, which will be let next month by auction, and I am only afraid of getting too much money for it. Chalk woods, &c., settled to admiration, and every thing goes well except the d——d Lovegrove. However I have had the arrears of rent paid into Fleet street: which leaves a very moderate balance of interest against me. *We proceed triumphantly with the Roman Empire, and shall certainly make our appearance, before the end of next month. I have nothing public. You know we have got 18,000 Germans from Hesse Brunswick and Hesse Darmstadt. I think our meeting will be lively; a spirited Minority, and a desponding Majority. The higher people are placed, the more gloomy are their countenances, the more melancholy their language. You may call this cowardice, but I fear it arises from their knowledge (a late knowledge) of the difficulty and magnitude of the business. Quebec is not yet taken. I hear that Carleton is determined never to capitulate with Rebels. A glorious resolution if it were supported with 50,000 men. Adieu. I embrace
- 64. My Lady and Maria. Make my excuses to the latter for having neglected her birthday.*
- 65. 273. To J. B. Holroyd, Esq. January 29th, 1776. Hares &c. arrived safe; were received with thanks, and devoured with appetite: send more, id est, of hares. I believe in my last I forgot saying any thing of the son of Fergus; his letters reached him. —What think you of the season? Siberia, is it not? A pleasant campaign in America. I read and pondered your last and think that in the place of Lord G. G.[320] you might perhaps succeed; but I much fear that our Leaders have not a genius which can act at the distance of 3000 miles. By the bye the little islands of the Bermudas have just declared in favour of the Congress. You know that a large draught of Guards are just going to America, poor dear creatures! We are met; but no business. Next week may be busy; Scotch Militia &c. Roman Empire (first part) will be finished in a week or fortnight. At last I have heard Texier;[321] wonderful! Embrace My lady. The weather too cold to turn over the page. Adieu. Since this I received your last, and honour your care of the old Women, a respectable name which in spite of My lady may suit Judges, Bishops, Generals (Je gage que j'ai raison) &c. Several letters directed to you and enclosed to me, have been franked. Ferguson's might be among them. I am rejoyced to hear of Maria's inoculation. I know not when you have done so wise a thing. You may depend upon getting an excellent house. Adieu.
- 66. PUBLICATION OF HIS HISTORY. 274. To J. B. Holroyd, Esq. Bentinck-street, February 9th, 1776. *You are mistaken about your dates. It is to- morrow seven-night, the 17th, that my book will decline into the World.* I will attend to Coachman and house, though I could wish that in point of price and situation you had been a little more explicit. *I am glad to find that by degrees you begin to understand the advantage of a civilized city,*—I cannot say as much as Batt and Cantab, who dined with me, Beauclerck and Lady Di.[322] Adieu. *No public business; Parliament has sate every day, but we have not had a single debate.* There is a rumour that Quebec is taken, and Washington is said to have communicated the news to Howe, but it is not yet absolutely believed. *I think you will have your book on Monday. The parent is not forgot, though I had not a single one to spare.*
- 67. 275. To his Stepmother. House of Commons, Wednesday Evening, February, 1776. Dear Madam, I write two lines to return you my thanks for what you say of my book,[323] of which you are not indeed so good a Judge as you would be of any written by another author. By a mistake you have received two bound books instead of one. Be so good as to return one of them by coach or wagon, and I will give an order that an unbound one shall go to-morrow to Brook Street. Your soiled one (honourable marks) you will retain. But when will you flatter me in person in Bentinck Street? March approaches. I am, Dear Madam, Ever yours, E. Gibbon.
- 68. 276. To his Stepmother. London, March 26th, 1776. Dear Madam, Lazyness is ingenious; but on this occasion mine was provided with too good an excuse, I mean your own silence. From post to post I have expected a letter to fix the time and manner of your Journey to London. I now begin to despair, and am almost inclined to think that your sedentary life has rivetted your chains, and cut off your wings. I must therefore try (though a very sedentary animal myself) whether I cannot visit you at Bath, and as the Easter vacation seems to promise me the most convenient leisure that I am likely to enjoy in the whole year, I entertain some thoughts of running down to you for a few days. The Eliots, who with great difficulty have existed in town about two months, seem to intend moving towards that place about the same time. The Holroyds are likewise in town: they have inoculated their girl, and I understand with the greatest pleasure that there are some hopes of an increase of family.—As to myself, I have the satisfaction of telling you that my book has been very well received by men of letters, men of the world, and even by fine feathered Ladies, in short by every set of people except perhaps by the Clergy, who seem (I know not why) to shew their teeth on the occasion. A thousand Copies are sold, and we are preparing a second Edition, which in so short a time is, for a book of that price, a very uncommon event. I am, Dear Madam, Ever yours, E. Gibbon.
- 70. 277. To J. B. Holroyd, Esq. Bath, April 11th, 1776. I write two lines to signify my arrival at this place. Beauclerck's heart failed him, and he left me in the lurch; but he had made me take such steps of giving notice, &c., that the journey was become unavoidable. I propose staying till this Day sen'night and shall return for the Budget. This morning I saw Pater, and do not think him worse than he has been for these two or three years past. Soror is actually above stairs with Mrs. G. and other Ladies. Though I had not the opportunity of a whisper, I suppose she desires Compliments. The place appears full, and they say is lively, but you know how little its kind of pleasures have the happiness of charming me. I long to get back to the Library in Bentinck Street, where I shall speedily but not hastily undertake the second Volume. The Ladies here do me the honour of admiring me.
- 71. THE NECKERS IN LONDON. 278. To his Stepmother. London, April 26th, 1776. Dear Madam, Though you may censure my silence for two or three posts, you must allow that my taking up my pen while your daughter-in-law is sitting close to me is an instance of no vulgar complaisance. I am a good deal taken up with the Neckers.[324] We are vastly glad to see one another, but she is no longer a Beauty. How is Colonel Gould? I am well. I am, Dear Madam, Ever yours, E. Gibbon.
- 72. 279. To J. B. Holroyd, Esq. 27th April, 1776. Lest you should growl, I write, though I have nothing to say, for the Dutchess alias Countess[325] is not an object worthy of our attention. I rejoyce to hear of your approaching arrival, and hope that by that time Newton may have something to say. Your letter to Foster is not forgot: nor was the visit to his namesake of Orchard Street. When will you send me up the lease for Mrs. Gibbon, who will soon complain of my delay by a thundering Epistle? At Bath all were well, Pater not worse, I think, than last year, and Soror in much better looks and spirits. You probably know that poor Lady Russel[326] is brought to bed of a dead child. Great is the desolation of all branches of the family. I write with three or four very fine Ladies round me. Therefore—Adieu. E. G.
- 73. 280. To J. B. Holroyd, Esq. London, May 20th, 1776. *I am angry, that you should impede my noble designs of visiting foreign parts, more especially as I have an advantage which Sir Wilful had not, that of understanding your foreign lingos. With regard to Mrs. Gibbon, her intended visit, to which I was not totally a stranger, will do me honour, and though it should delay my emigration till the end of July, there will still remain the months of August, September and October. Above all abstain from giving the least hint to any Bath Correspondent, and perhaps, if I am not provoked by opposition, the thing may not be absolutely certain. At all events you may depend on a previous visit. At present I am very busy with the Neckers. I live with her just as I used to do twenty years ago, laugh at her Paris varnish, and oblige her to become a simple reasonable Suissesse. The man, who might read English husbands lessons of proper and dutiful behaviour, is a sensible good- natured creature. In about a fortnight I again launch into the World in the shape of a quarto Volume. The dear Cadell assures me that he never remembered so eager and impatient a demand for a second Edition. The town is beginning to break up; the day after to-morrow we have our last day in the house of Commons to inquire into the instructions of the Commissioners;[327] I like the man, and the motion appears plain. Adieu. I dined with Lord Palmerston[328] to-day; a great dinner of Catches; Sir Farby and spouse part of the company or rather of the family: I embrace My lady and the Maria.*
- 74. A PROBABLE VISIT TO PARIS. 281. To his Stepmother. Almack's,[329] May 24th, 1776. Dear Madam, Shame, shame, always shame——Yet two lines will I write in the midst of a crowd. My mornings have been very much taken up with preparing and correcting (though in a minute and almost imperceptible way) my new Edition, which will be out the 1st of June. My afternoons (barring the House of Commons) have been a good deal devoted to Madame Necker. Her husband and the rest of her servants leave this country next Tuesday, entertained with the Island, and owning that the barbarous people have been very kind to them. Do you know that they have almost extorted a promise to make them a short visit at Paris in the Autumn. But pray, Madam, when do you set out, the month of June draws near, and both myself, the Portens and the inhabitants of Sheffield Place are impatient to be informed of the time and circumstances of your intended journey. Poor Mallet![330] I pity his misfortune and feel for him probably more than he does for himself at present. His "William and Margaret," his only good piece of poetry, is torn from him, and by the evidence of old Manuscripts turns out to be the work of the celebrated Andrew Marvel composed in the year 1670. Adieu, dear Madam. I am most truly yours, E. Gibbon.
- 75. 282. To J. B. Holroyd, Esq. June the 6th, 1776, from Almack's, where I was chose last week. *To tell you any thing of the change or rather changes of Governors I must have known something of them myself: but all is darkness confusion and uncertainty; to such a degree that people do not even know what lyes to invent. The news from America have indeed diverted the public attention into another and far greater channel. All that you see in the papers of the repulse at Quebec as well as the capture of Lee[331] rests on the authority (a very unexceptionable one) of the Provincial papers as they have been transmitted by Governor Tryon from New York. Howe is well and eats plentifully, and the weather seems to clear up so fast that according to the English custom we have passed from the lowest despondency, to a full assurance of success. My new birth happened last Monday, 700 of the 1500 were gone yesterday. I now understand from pretty good authority that Dr. Porteous,[332] the friend and chaplain of St. Secker, is actually sharpening his goose quill against the last two Chapters.* Mrs. G. has not yet signified her intentions about the London and Sheffield expedition. I have not advanced one single step with regard to Lovegrove. Palmer will not interfere till he has seen the abstract of the title with Duane's observations, which we cannot get them to communicate even to their own friend. Adieu. I embrace My lady and the Maria.
- 76. SECOND EDITION OF HIS BOOK. 283. To J. B. Holroyd, Esq. Almack's, June 29th, 1776. *Yes, yes I am alive and well; but what shall I say? Town grows empty and this house, where I have passed very agreable hours, is the only place which still unites the flower of the English youth. The style of living though somewhat expensive is exceedingly pleasant and notwithstanding the rage of play I have found more entertaining and even rational society here than in any other Club to which I belong. Mrs. G. still hangs in suspense and seems to consider a town expedition with horror. I think however that she will be soon in motion, and when I have her in Bentinck-street we shall perhaps talk of a Sheffield excursion. I am now deeply engaged in the reign of Constantine, and from the specimens which I have already seen, I can venture to promise that the second Volume will not be less interesting than the first. The 1500 Copies are moving off with decent speed, and the obliging Cadell begins to mutter something of a third Edition for next year. No news of Deyverdun or his French translation. What a lazy dog! Madame Necker has been gone a great while. I gave her en partant the most solemn assurances of following her paws in less than two months, but the voice of indolence begins to whisper a thousand difficulties and, unless your absurd policy should thoroughly provoke me, the Parisian journey may possibly be deferred. I rejoyce in the progress of * * * towards light. By Cork Street I suppose you mean the Carters and highly approve of the place. We are in expectation of American news. Carleton is made a Knight of the Bath.[333] The old report of Washington's resignation and quarrel with the Congress seems to revive.* I shall say nothing
- 77. of Lovegrove, the beast makes me very uneasy, as I cannot devise any expedient to force, persuade, or bribe him out of his obstinate silence. Adieu.
- 78. 284. To his Stepmother. Almack's, July 4th, 1776. Dear Madam, I can freely and sincerely tell you, that there is no journey which will give me half the pleasure of staying in Bentinck Street to receive you the latter end of next week, which I shall expect with impatience. I am, Ever yours, E. Gibbon.
- 79. 285. To J. B. Holroyd, Esq. Saturday Night, Bentinck Street, 13th July, 1776. Mrs. G. at last arrived. I enclose her letter. Our plan seems to be to visit Sheffield Place towards the end of next week. À vue de pays, Friday appears the most likely day. I have no news public or private, and loose conversation may be deferred till our meeting. I was deeply engaged in the decline, but this visit and journey put a heavy spoke in the wheel. Adieu.
- 80. 286. To J. B. Holroyd, Esq. Saturday evening, August, 1776. *We expect you at five o'Clock Tuesday without a sore throat. You have ere this heard of the shocking accident which takes up the attention of the town.* Our old acquaintance poor John Damer[334] shot himself, last Wednesday night, at the Bedford arms, his usual place of resort, where he had passed several hours with four Ladies and a blind fidler. By his own indolence rather than extravagance, his circumstances were embarrassed, and he had frequently declared himself tired of life. *No public news, nor any material expected till the end of this or beginning of the next month when Howe will probably have collected his whole force.[335] A tough business indeed; you see by their declaration that they have now passed the Rubicon and rendered the work of a treaty infinitely more difficult: You will perhaps say, so much the better; but I do assure you that the thinking friends of government are by no means sanguine.* Mrs. G. seems likely to expect your arrival. She has had no answer out of you. I am pretty much a prisoner except about one hour in the evening: but as she dines to-morrow with Mrs. Ashby, *I take the opportunity of eating turtle with Garrick at Hampton.* Adieu.
- 81. 287. To his Stepmother. London, September 2nd, 1776. Dear Madam, Yesterday afternoon about half an hour past five a young Lady[336] was introduced into the world, and though her sex might be considered an objection, she was received with great politeness. She is perfectly well, as likewise My Lady, who eat a whole chicken for her dinner to-day. How do you like Essex ladies? Have they resisted the attacks of two and twenty years? I hope they will not detain you from Bentinck Street much longer, and I rather consider my having no letter to-day as a good sign. I am, Dear Madam, Most truly yours, E. Gibbon.
- 82. 288. To his Stepmother. 25th September, '76. At a large Meeting of the most considerable Wits of the two Islands, it was agreed that Rouen Ducks have white feathers, but this is not the whole business of this letter. The Gibbon has so often declared an intention of letting Mrs. Gibbon know that he is well without so doing, that it is just determined to acquaint her he exists. Moreover Mrs. H. and the Brat are quite well, and Mrs. H. wishes for an opportunity of promoting eloquence in Mrs. Gibbon on Gothic Architecture. It is a certain fact that the Gibbon exists, and that his resolutions have been as usual much better than his intentions. He looks back with pleasure and regret on the time with Mrs. Gibbon, and most sincerely hopes that as she has now conquered all the Lyons upon the road, she will no longer entertain any apprehensions of the Journey. Mrs. Porten is well, and I believe has written. The other day I told her that there was an Irish edition of the Decline. Her question amused me. "Do you understand it?" She supposed it was published in the Irish language. The natives have printed it very well, and the notes at the bottom take up much less space than I could have imagined. Ever yours, E. Gibbon.
- 83. 289. To J. B. Holroyd, Esq. Saturday,¾ past eleven, 19 Oct. 1776. I have waited so long that the bell is tolling in my ear, but I know you would swear—— By the enclosed you will see Sir Hugh's impediments, and if the rest of his letter requires any answer you may amuse yourself with scratching it out. *For the present I am so deeply engaged that you must renounce the hasty apparition at S. P.; but if you should be very impatient I will try (after the meeting) to run down between the friday and monday, and bring you the last Editions of things.—At present nought but expectation. The attack on me is begun, an anonymous eighteen-penny pamphlet, which will get the author more Glory in the next World than in this. The Heavy troops, Watson[337] and another, are on their march. No news from Richard Way. Adieu.*
- 84. FEARS OF WAR WITH FRANCE. 290. To his Stepmother. Ampthill Park, Oct. 24th, 1776. Dear Madam, I hardly dare recollect how long I have been without writing to you, but you know my sentiment and my laziness; so I will say no more on that threadbare subject. I have been some days at this place and have spent them very agreeably. Luckily the weather has been bad, which in a great measure has secured me from excursions, and confined us to an excellent house, conducted on an easy plan, and filled with a comfortable society in which the principal part was performed by Mr. Garrick. I return to town to-morrow. By-the-bye, you will be so good as not to mention this Bedfordshire journey to Miss Holroyd: it might get round to Sheffield Place which I have cheated of a promised visit. In a few days our Parliamentary campaign will open, and the beginning of success which we have tasted in America will enliven our countenances, if they should not be clouded again by the apprehensions of a French war, which seem to increase every day. With regard to another great object of hostilities,—myself,—the attack has been already begun by an anonymous Pamphleteer, but the heavy artillery of Dr. Watson and another adversary are not yet brought into the field. I was afraid that I should be hurt by them, but if I may presume of my future feelings from the first tryal of them, I shall be in every sense of the word invulnerable. My long depending and troublesome business with Lovegrove is at length, by the strenuous interposition of Holroyd, not concluded, but broke off. The fellow wanted either power or inclination to compleat his agreement, and after weighing all the difficulties and delays of
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