My Lords, Clause 20 requires the Secretary of State to report to Parliament annually on how the activities of the Intellectual Property
Office and legislation have supported innovation and economic growth in the United Kingdom. I very much welcome the Minister’s commitment to the production of an annual report, but the requirement in Clause 20 is too narrow. The responsibilities of government range more widely than the wording suggests. Amendment 26A would require the report to cover how,
“legislation, the policy of the government and the activities of the Patent Office have balanced the interests of the owners of intellectual property and the wider interests of society”.
By “society” I mean not only in this country but across the world.
New inventions and techniques have improved lives again and again, particularly since the Industrial Revolution. Intellectual property laws and their intelligent enforcement are essential for the stimulation of innovation. As my noble friend Lord Stevenson said, we need a robust system of intellectual property legislation. However, I contend that it is not always the case that strong intellectual property rights—and their strong assertion—improve economic performance or are an unmixed benefit to society. Incentives and rewards to inventors, innovators, creative people and investors need to be balanced against the public benefit of wider and quicker diffusion of knowledge, and the lower prices that may result from early competition.
We should seek in policy to balance the interests of businesses with those of consumers and academics. A judgment always has to be made about the costs and benefits of monopoly, and, where monopoly is mitigated, of licensing. It has to be made on the appropriate length and breadth of a particular patent. It has to be made on whether the price in economic inefficiency of restricting the diffusion and use of knowledge is outweighed by the benefit of increased innovation. The appropriate balance will vary according to the context.
A longer duration of intellectual property rights seems more appropriate in literature and the arts than in manufacturing. There may be differences, too, with luxuries as opposed to necessities, and in the advanced world as against the developing world. We should also ask what proportion of patents in any field a business should be permitted: for example, in the field of genetic modification. I believe that there are enormous benefits to GM, but it is legitimate to ask whether Monsanto should hold patents for the vast majority of seeds planted in the world.
There are risks and disbenefits in granting patents too easily, and there are reasons to be sceptical when we look at applications for patents. There are definitional problems. What is new? What is original? The great Jewish sage Maimonides said that there was nothing new under the sun. Delacroix said of Raphael:
“Nowhere did he reveal his originality so forcefully as in the ideas he borrowed”.
True originality is indeed rare.
Much research is publicly funded. Should the first private interest to exploit that research gain a large advantage over the rest? It has been suggested, rather colourfully, that the application of intellectual property law in the 20th and 21st centuries should be compared
to the movement of agricultural enclosures in the 18th century. Do we want intellectual enclosures or do we want commons?
A monopoly-holder protected from competition will be under less pressure to innovate again. That result is surely perverse. Monopoly-holders may move aggressively to squash budding competitors by taking lawsuits against them or taking them over. Microsoft has practised those techniques over many years. The consequence of those practices is that research and innovation have been discouraged. Research efforts can be distorted where patents exist. A competitor business may be more attracted to coming as close as it can to copying an existing patent that is seen to be a money-spinner than to developing a new product or embarking on innovation in a new area. We have seen that in the pharmaceutical field. Where there are dense patent thickets, it is particularly discouraging to new entrants and competitors.
I will say a word about genes. I was Minister for Science between 1990 and 1992. The most difficult decision I had to take as a Minister in government was whether we should allow gene patenting in this country. All my instincts and values were against it, but I was driven to take the view that we had to do it. We had unfortunately had poor funding settlements for science from the Treasury in recent years and it was difficult to see how British scientists would be able to stay in the game of the human genome project. At the same time, the US Supreme Court and subsequently the US Patent and Trademark Office had made it clear that they would grant patents for discovery of genes in certain conditions.
However, what was “discovery of genes”? It was not the invention of genes; it was precisely discovery. It seemed to me wrong that natural genes should be patentable. Knowledge of that kind ought to be disseminated as rapidly as possible for the benefit of humanity. There were vast potential benefits, obviously, in the field of health. Of course, when patenting became established, there was a headlong rush to patent. Among the companies that were successful in that competition, Myriad Genetics patented two human gene mutations that affect the susceptibility of people to breast cancer and ovarian cancer. Having secured those patents, they demanded licence fees even from not-for-profit laboratories. In that way, the existence of patents discouraged screening and discouraged the search for improved screening technologies. The medical benefits arising from the human genome project were restricted.
Yet I do not think that those businesses made more money internationally, because poor countries could not pay the higher costs that arose from the existence of patents. I therefore welcome wholeheartedly the recent judgment of the US Supreme Court written by Judge Clarence Thomas which, as I understand it, reverses the position that the court took in 1980. Sandra Park of the American Civil Liberties Union has said about the judgment:
“Because of this ruling, patients will have greater access to genetic testing, and scientists can engage in research on these genes without fear of being sued”.
The annual report will, I hope, reflect on issues such as that. I hope that it will reflect on what policy ought to be in the life sciences now and in the future. We face the possibility of new techniques of so-called “human enhancement”—adjustments to the brain and other parts of the human anatomy—which there will no doubt be attempts to patent. The Chinese are investing enormous resources in the field of life sciences. We will want to know what the Government’s view is on appropriate policy in this field. I hope that the annual review will provide an opportunity for the Government to share their thinking with us.
What will the annual report say about graphene? Graphene is said to be the new miracle material: single-atom-layer carbon. It is the thinnest, strongest material with high conductivity and flexibility. It has potential uses in desalination, solar power, waste cleaning, packaging, super-fast computers, and super-strong and super-light composite materials. Graphene is hardly yet commercially viable, but the race is on to patent in the area of graphene. I understand that, in May, UK businesses and universities held 54 patents in relation to graphene; US businesses and universities held 1,754; and Chinese businesses and universities held 2,204. What intellectual property regime in relation to graphene will be in Britain’s and in the world’s interests? I hope that the annual report will expound the Government’s policy in this kind of area and the principles upon which they make their judgment. The business department and the IPO do not assume, I hope, that the more UK patents there are, the better. When Jonas Salk, the discoverer of the polio vaccine, was asked in a television interview who held the patent, he said:
“The American people, I guess”.
He chose not to exploit that massively important and beneficial discovery. Tim Berners-Lee did not seek to patent the world wide web and, indeed, considers that software patents stifle innovation.
Inequality of access to knowledge often compounds the evils of inequality of access to income. We should not, in this country, take a narrow view of our national interest and should not ignore the interests of the developing world, particularly where medicines are concerned. To do so would be short-sighted, even in our own interest. We do not know whether the population of the globe at the end of this century will be 10 billion or 11 billion people, although these are the sorts of projections. We should not deprive the developing world of the knowledge that will enable its economies to grow and allow them to be rescued from poverty. If billions and billions of people are to live in poverty unnecessarily, because of the restriction of knowledge to the advanced, wealthy, western countries, that would be wrong in itself and very perverse in terms of our own interest. At the World Trade Organisation, I hope that the United Kingdom will seek to remodel and liberalise TRIPS. Clause 20 should not just be about the Intellectual Property Office and legislation—the requirements of the report should relate to wider policy.
Cost-benefit analysis in this area is never easy. It needs economic far-sightedness, ethical judgment and wisdom. We need a regime that is flexible and pragmatic, not schematic, and yet clear and comprehensible. As my
noble friend Lord Stevenson said, the annual report ought to reflect a broad view from government as a whole—not just from the business department and the IPO but very much from the DCMS, with its particular responsibilities to promote creativity, and also from the ODA, because we have responsibilities, which I have mentioned, in relation to poverty and the advancement of human interests across the world. I hope that the annual report will share the Government’s vision and analysis in these respects. That is why we need to amend Clause 20.
I will very briefly set out the reasons for Amendment 28ZA, also in my name, which are obvious. The ears of the Intellectual Property Office must be deafened by the clamour of lobbyists. The office must be pushed and tugged this way and that and be continually under massive pressures, although I am certain that it does its best to arrive at a sensible, appropriate and balanced policy amid all this melee. In a democracy, everybody is entitled to put their point of view to the IPO but everybody also ought to be entitled to know who is seeking influence. We need to be sure that policy does not echo who shouts loudest. I believe that Amendment 28ZA would strengthen the IPO and the business department in their search for a balanced policy, would encourage confidence in the intellectual property regime and would assist the Government in the very difficult task they have of arriving at an appropriate policy in relation to lobbying.