| Patents: Capitalism versus Technological Advance |
The technological dynamism of capitalism is undeniable. But the functioning of capitalism also means the shelving of many useful inventions. |
| Capitalism has been widely
celebrated for its capacity for rapid
technological advance. Thus Marx in the Communist Manifesto of 1848:
"The bourgeoisie cannot exist without constantly revolutionizing the
instruments of production." A century later Joseph Schumpeter declared
that "creative destruction" is "the essential fact about capitalism"
(Capitalism, Socialism and Democracy, 1942). And surely this fact has
never been truer than it is today, in the age of microelectronics and
bioengineering? The technological dynamism of capitalism is undeniable, especially in comparison with earlier historical formations. This, however, is only half the story. The functioning of capitalism also entails the shelving or suppression of many useful inventions. One common cause of neglect is the limited purchasing power of those who stand to benefit from some discovery, as in the case of drugs to treat tropical diseases (see "Nonprofit Production: Wave of the Future?" in last month's issue). Another key factor behind the non-use of inventions is the patents system. A patent is a legally protected exclusive right to use a new product or process, valid for a fixed period of time (typically 20-25 years). Patent rights supposedly belong to "inventors" and promote technological advance by giving inventors a substantial material interest in the results of their work. It's a dubious rationale because most inventors are members of the working class and the patents on their inventions, like the windfall profits from them, belong not to them but to their employers. If they're lucky they might get a small bonus. They go on inventing things because it gives them satisfaction. That's human nature. Nevertheless, the patents system does encourage companies to employ research scientists and engineers and in some cases to exploit patented inventions or license other companies to exploit them. In many other cases, however, a particular invention is viewed primarily as a threat to profits from the sale of an existing product,demand for which it would undercut. It will then seem more profitable not to make the new product while using the patent to prevent anyone else from making it. According to various studies, 40-90 percent of patents are never used or licensed. But what if the patent on the unwelcome invention is already owned by a competitor who plans to exploit it? Even in this situation there is often some action that can be taken to ward off the threat. Firms interested in developing new technologies tend to be financially weak and vulnerable.They may be threatened, paid not to use their patents, or simply taken over, patents and all. The permutations are endless: there are many ways to skin a cat, as they say. Let's consider a few examples. They are taken from articles by Kurt Saunders, an expert on business law at California State University, and Linda Levine, an engineer at Carnegie Mellon University. (The articles are available at http://www.mttlr.org/voleleven/saunders.pdf and http://jolt.law.harvard.edu/articles/pdf/v15/15HarvJLTech389.pdf) |
| Quashing
a "wonderful advance" Anaemia is a worldwide scourge, with a disproportionate impact on women,children, and poor people (due to iron deficient diet). Even in the US it affects an estimated 3.5 million people. It is treated with a drug called erythropoietin (EPO), which promotes the formation of red blood cells. A big problem with EPO is that the body secretes it almost immediately, so doses have to be very high. That makes EPO very lucrative for AMGEN, the company that owns the patents, while the patient suffers distressing side effects and foots the bill. ..continued on next page 12 Page 11 Contents Page Previous page 10 Next page 12 |
