Open Source Technology is
- More reliable and evolutionary as compared to closed source technologies.
- Open-source technology is peer-reviewed.
- Much of it is contributed by individuals who simply need an improvement to serve their own needs.
THE CASE AGAINST THE PATENT SYSTEM
by Pierre Desrochers
Despite this rationale, there has always been a set of thorny issues about the
patent system. For example, patent holders may capitalize on inventions by
suppressing their development, even though these inventions would benefit the
public. Furthermore, the patent system provides incentives to focus on what is
patentable and on developing certain superfluous innovations simply to avoid
what is covered by a patent.
—, « Patent Wars », The Economist 355 (8165), April 8, pp. 75-78, 2000.
Basalla, G., The Evolution of Technology, Cambridge, Cambridge University Press,1988.
Canadian Intellectual Property Office, A Guide to Patents, Ottawa, Publications Centre Communications Branch, Industry Canada, 1994.
Carter, H.D., If You Want to Invent, New York, The Vanguard Press, 1939.
Cohen, W., R.R. Nelson and J. P. Walsh, Protecting their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not), Working Paper 7552, Cambridge, National Bureau of Economic Research (available at http://www.nber.org/papers/w7552), 2000.
De Gregori, T.R., A Theory of Technology: Continuity and Change in Human Development, Ames, Iowa State University Press, 1985.
Desrochers, P., De l’influence d’une ville diversifiée sur la combinaison de techniques: Typologie et analyse de processus, Ph.D. dissertation (Geography), Université de Montréal, 2000.
Hounshell, D., From the American System to Mass Production, 1800-1932, Baltimore, Johns Hopkins University Press, 1984.
Kinsella, N.S., « Is Intellectual Property Legitimate? », Paper presented at the Austrian Scholars Conference 6, Auburn, Alabama, March 25, 2000.
Mazzolini, R. and R.R. Nelson, « The Benefits and Costs of Strong Patent Protection: A Contribution to the Current Debate », Research Policy 27 (3), p. 273-284, 1998.
Petroski, H., The Evolution of Useful Thing, New York, Random House, 1992.
Rosegger, G., The Economics of Production and Innovation: An Industrial Perspective, Oxford, Pergamon Press, 1986.
Scherer, F.M., « Comment » on R.E. Evenson « International Invention: Implications for Technology Market Analysis », In Zvi Griliches, ed. R&D, Patents, and Productivity, Chicago, University of Chicago and National Bureau of Economic Research, p. 123-126, 1987.
Intellectual Property: Protecting a Patent
Usually, once someone has obtained a patent or two, the first thing they want to do is either sell that patent or start up their own company to exploit the patent (that is, make lots of money manufacturing and selling their invention). If you're planning on selling your patent, good luck to you! It's probably the best way of getting quick cash for something you've invented. But don't be surprised if it's not a whole lot of cash. If you're planning on starting a company and doing it all yourself, again, good luck! Starting a company is a tough process. Here are two little tips on protecting your patent that might help you out.
Protecting a Patent in the Courtroom
The first thing you've got to know is that, if you're just a small company, protecting a patent can be very, very difficult. If a larger, but kind of unethical company wants to infringe on your patent, they will. And often, in a small company, the "monopoly right" that the patent offers you is just about the only thing keeping you in business.
Well, the problem is that if your patent is worth a lot (that is, if the company infringing on your patent thinks they can make millions of dollars off your idea), chances are, there's not a whole lot you can do. There are two basic strategies: Suing for breach of patent, or negotiating a licensing fee with the company infringing on your patent.
Suing for breach of patent is what's done most often. However if the patent is worth a lot of money, and you're a small company, this can be very difficult to do. A larger, patent-infringing company who's making a lot of money off your patent can usually drag courtroom proceedings out for a long time -- often for years. This causes two problems: First, while the proceedings are taking place, they often continue infringing on the patent (putting a significant dent in your company's revenues and profits). Second, because your company needs lawyers to represent it, deliberately dragging out courtroom proceedings in this way can cost you a lot of money. Your company could easily go bankrupt because of the cost of the proceedings (this often happens with small companies).
Unfortunately, there are few things you can do about this problem. The first is that, if your patent is really worth that much, you can sometimes find financing for your courtroom proceedings in the form of an equity investor. That is, someone who sees that your patent is being infringed (and a company is making tons of money doing it) may want to take the "bet" that you could make just as much if the patent wasn't infringed upon. This person may finance your courtroom costs for a percentage of your company. The second, more frequent way is by having a "big-shot" as part owner of the patent. They may want to enforce their patent rights on principle alone. An example is a large, research-based university. An institution of this nature may realize that, if they get a reputation for enforcing any and all of their patents, no one will mess with any of their patents. This reasoning is why Stanford and Harvard are often seen in court, defending their patent's rights.
The other strategy I mentioned was negotiating a licensing fee. You may ask: Why would any company, knowing the problems you're going to have defending your patent rights in a courtroom, ever pay you licensing fees? Well, remember that the courtroom battle will often cost the offending company millions of dollars as well: It may be less expensive for them to just pay you a small license fee, rather than pay a lot of money trying to make you go bankrupt.
Protecting Your Patent From Creditors
The second group of people you need to protect your patent from are creditors: that is, people that lend your company money. The issue here is that they may ask you for your patent rights as collateral. Also, if the company should fail, all of its assets go into receivership, and this might include your patent. Because your patent may be the most valuable part of your business, you don't want this to happen.
In order to protect yourself (to a certain degree) from having this happen, you can do what a lot of technology-based companies do: Set up two companies. Company A can own the patent and license it to company B. Because the only asset for company A is the patent, and the only purpose for company A is to earn money licensing the patent, chances are it's not going to go bankrupt: It has no costs, and no creditors. If company B goes bankrupt, well, at least you've still got your patent.
Because this is a very common practice, many creditors ask company A to co-sign loans to company B before they give them any money; however, the two-company approach gives you some protection and gives you a little more control if things turn sour.
A worldwide fight against biopiracy and patents on life
By Martin Khor
There is growing worldwide opposition to the granting of patents on biological materials such as genes, plants, animals and humans. Farmers and indigenous peoples are outraged that plants that they developed are being 'hijacked' by companies. Groups as diverse as religious leaders, parliamentarians and environment NGOs are intensifying their campaign against corporate patenting of living things.
WORLDWIDE opposition to biological piracy' is rapidly building up as more and more groups and people become aware that big corporations are reaping massive profits from using the knowledge and biological resources of Third World communities.
There is growing public outrage that these companies are being granted patents for products and technologies that make use of the genetic materials, plants and other biological resources that have long been identified, developed and used by farmers and indigenous peoples, mainly in countries of the South.
Whilst the corporations stand to make huge revenues from this process, the local communities are unrewarded and in fact face the threat in future of having to buy the products of these companies at high prices.
The transnational corporations are racing one another to manufacture pharmaceutical and agricultural products, the main ingredients of which are the genetic materials of the medicinal plants and food crops of these local communities. The firms are also collecting other living things, ranging from soil microorganisms to animals and the genes of indigenous people, which they use for research and making new products.
These companies are rushing to apply to patent the new products containing the collected genetic materials, so as to prevent competitors from using them. They can then reap larger profits from being able to hike up prices for the products, or by charging royalties to other firms wishing to use the technology.
There is much at stake in this great race of companies to patent ahead of their rivals, for the coming century is already being termed 'the age of biology', when products derived from biological materials are expected to increasingly replace those made from metals and chemicals.
The genes of living organisms are the basic 'raw materials' of the new biotechnologies. The 'Gene Rush' has thus become a new version of the old 'Gold Rush', in the scramble for future profits.
Farmers and indigenous communities, backed by citizen groups, are protesting against the companies being given patent rights, as it is these communities that have been responsible for identifying and evolving the use of the plants for food, medicines and other functions.
The knowledge and use of 'biodiversity' resides with these farmers and indigenous people, which have shared their knowledge and plants freely. Yet through patent applications, the companies are now claiming the exclusive right to produce and sell many 'modified' plants and animals, which have been manipulated to contain selected foreign genes.
Third World communities are concerned that in future they will have to pay high prices for these materials, which in the first place they (more than any other party) had after all developed.
The knowledge, innovation and efforts of these communities are not acknowledged (and indeed are discarded) when the legal 'intellectual property rights' systems grant patents on genetic and biological materials and on living organisms to corporations. This injustice is being fought at different levels by farmers, indigenous people and public interest groups. For the past few years, NGOs such as RAFI, GRAIN and the Third World Network have been networking to raise general awareness of the phenomenon of 'biopiracy'. Indigenous groups and farmers are also getting together to put forward their viewpoints. In recent months, legal challenges have been filed against patents granted on biological products. In a parallel move, new campaigns have been launched by religious leaders and NGOs against the patenting of life.
The following are some of the actions by various groups around the world.
Legal challenges to patents
Some groups have recently filed legal petitions or test cases to challenge patents already granted.
* In Washington in September 1995, more than 200 organisations from 35 countries filed a petition at the US Patent and Trademark Office calling for the revocation of a patent given to W R Grace company to use a pesticide extract from the neem tree. They argue that the company has wrongfully usurped an age-old biological process used by millions of farmers in India and other countries for generations. The legal challenge is led by the US group Foundation on Economic Trends led by Jeremy Rifkin, with other key petitioners being the Research Foundation for Science, Technology and Natural Resources Policy (RFSTNRP) and the Karnataka Farmers' Union (both from India), the International Federation of Organic Agriculture Movements (IFOAM), and the Third World Network.
* In Brussels another legal petition was filed in June 1995 at the European Patent Office against a patent it had granted to W R Grace for a method that extracts the neem oil for use in controlling fungi on plants. The three opponents, European Member of Parliament Magda Alvoet, Indian scientists Vandana Shiva of the RFSTNRP, and IFOAM President Herve la Prairie, argue that the patent was wrongly given as the claims for the technique lacked novelty, inventiveness and clarity. The petition argues that the invention is now new as the patented method for extracting neem oil is a standard method used for many decades, whilst the anti-fungi effects of neem oil have been known in India for centuries and thus cannot be considered a 'discovery' as claimed by the company.
* In March 1995, the Swiss Supreme Court, in a landmark decision, ruled that the manzana variety of the camomile plant may not be patented. It revoked the patent that the Swiss patent office had granted in 1988 to the German pharmaceutical company Degussa/Asta Medica on its manzana variety. The case had been brought to court by a Swiss farmer Peter Lendi, president of the Bio-Herb Growers' Association.
* In February 1995, the European Patent Office withdrew key parts of a patent granted to a Belgian company (Plant Genetic Systems) and a US company (Biogen Inc.) for genetically engineered herbicide resistant plants. The patent was for plant cells made resistant to glutamine synthetase inhibitors by genetic engineering, and originally covered not only the gene which had been moved from a bacteria to various plants but also all plant cells and plants which contain the gene. After a challenge by Greenpeace, the Patent Office's Appeal Board ruled the patent may only cover genetically engineered genes and plant cells but cannot extend to a whole plant, its seeds and future generations of plants grown from the cells. The decision seems to imply that in Europe, patenting of genes and cells is permissible but not of seeds and plants. The limits thus set on patenting will have serious implications for the biotechnology industry.
Farmers and indigenous people against life patenting
Meanwhile, there have been activities by many different groups, including farmers, indigenous people, parliamentarians, religious leaders, and NGOs opposing the patenting of all life-forms, or living things.
In India, farmers' movements led by M D Nanjundaswamy of the Karnataka Farmers' Union, are campaigning against the patenting of seeds and plants and the operation of foreign grain companies in the country. In 1993, half a million farmers rallied in Bangalore to protest against the implications of the Uruguay Round treaty on intellectual property rights, which opens the door to patenting of genetic materials, seeds and plants.
Indigenous peoples' groups have held regional meetings in South America, Asia and the Pacific, to voice their opposition to the granting of patents to companies on plants and their genes. Also, at the UN Women's Conference in Beijing, 118 indigenous groups from 27 countries signed a declaration demanding 'a stop to the patenting of all life forms' which is 'the ultimate commodification of life which we hold sacred.' They also demanded that the Human Genome Diversity Project be stopped and a rejection of patent applications for human genetic materials.
Parliaments vote against life patents
Parliaments have joined in the fight by opposing proposed laws that would legalise patents on life. In March 1995, India's Upper House of Parliament forced the government to defer indefinitely a patent amendment bill to bring the Indian Patent Act in line with the World Trade Organisation's treaty on intellectual property rights. The bill would have allowed for the patenting of life forms.
Also in March, the European Parliament voted against the European Commission's proposed directive on 'legal protection of biotechnological inventions'. The directive would have allowed for patenting of biological materials and microbiological processes, with only some restrictions. The European Parliament vote was a major victory for NGOs such as GRAIN and for Green groups in the Parliament that had lobbied on this issue for many years.
Religious leaders and NGOs widen the campaign
In May 1995, leaders of 80 religious faiths and denominations (including the Protestant, Catholic, Muslim, Hindu, Buddhist and Jewish faiths) held a joint press conference in Washington announcing their opposition to the patenting of genetically engineered animals and human genes, cells and organs. 'We believe that humans and animals are creations of God, not humans, and as such should not be patented as human inventions,' they said in a signed statement. The leaders have launched an educational campaign to raise theological concerns over the patenting of life. Religious groups in other countries are also taking up the issue.
Environment and development NGOs have also been increasingly active. Groups like the Third World Network, RAFI and GRAIN have been carrying out educational activities and also carrying out lobbying in the Biodiversity Convention. A coalition of 14 United States groups in May signed a joint statement after a conference at Blue Mountain. 'As part of a world movement to protect our common living heritage, we call upon the world and the US Congress to enact legislation to exclude living organisms and their component parts from the patent system,' says part of the Blue Mountain Declaration.
Crucial global battles ahead
The campaign against life patenting is likely to spread, with more actions taken up by public interest groups at national level, and increased networking among these groups.
At international level, the World Trade Organisation and the Biodiversity Convention are two critical fora for setting principles and legal frameworks on the patenting of biological materials and life forms.
The WTO's trade-related intellectual property rights (TRIPs) agreement will have the most decisive influence over national laws. TRIPs has ambiguous language in its clause on living organisms: patenting of microorganisms is compulsory, plants and animals can be excluded, but protection of one kind or another is required for plant varieties. This clause is up for review after four years, and is already on the agenda of the WTO's trade and environment committee. The outcome of the review process will be of crucial importance.
The Biodiversity Convention is presently more 'friendly', in recognising 'farmers' rights' to their knowledge over the use of biodiversity. The rights of indigenous people are also likely to enter the Convention's future agenda. The treaty's references to intellectual property rights is finely balanced between recognising the need to implement IPRs and the need to ensure that IPRs do not block the sustainable use of biodiversity.
The challenge for those campaigning against life patents is to ensure that the WTO does not make it compulsory for member countries to patent living organisms, and to develop within the Biodiversity Convention the case against biopiracy and concrete measures to counter it.
Martin Khor is the Director of Third World Network.