Opinion

Strengthen IP Protections or Risk Being Left Behind

By Philip Thompson
May 1, 2019 at 5:00 am ET

On the eve of World IP Day, several scientific breakthroughs are rocking the health world.

Ja’Ceon Golden and seven other toddlers who took part in a joint St. Jude Research Hospital and University of California study are now able to live happy, adventurous childhoods full of warm hugs and kisses from their loved ones. Previously, due to Severe Combined Immunodeficiency (SCID-X1), more commonly known as ‘bubble boy disease,’ they had only limited human contact with family and the rest of the world.

The treatment, called a cure by the researchers, uses a hijacked HIV virus to deliver healthy genes to the patient’s cells in order to get their immune system running. The advanced gene therapy was made possible, in part, by funding from the National Institutes of Health.

The fact that the miracle came from the United States should be no surprise. U.S. research universities consistently dominate the global top 100 list of universities receiving utility patents. Likewise, virtually all private sector pharmaceuticals are based in the U.S. or Europe.

A key ingredient that so far allows only a few countries to be key players in medical innovation are robust protections for intellectual property. According to the International Property Rights Index, the IP gap between high-income countries and the rest has only moderately closed, from 41 percent in 2009 to 34 percent in 2018.

Without IP protections, few innovators would dare to compete in the riskiest business. New drugs take about 12 years to go through trials to the market, cost on average $2.8 billion, and less than 10 percent actually make it all the way through. Clearly, the exclusive period of patent protection isn’t granted only to recoup R&D costs, but to ensure a steady pipeline of next-gen medicines.

The good news is knowledge and the ability to protect isn’t limited by geographic location or resources found in the ground. Often weak enforcement of international, minimum-standard IP protections are due to poor appreciation of the law, or worse, a mistaken belief that withdrawing protections may actually induce innovation and reduce consumer prices.

In fact, a report from the World Health Organization criticized the 1980 Bayh-Dole act that allowed universities to patent and license NIH-funded research, which would include the gene-editing breakthrough mentioned above. Without the ability to own its research, the University of California might have decided to pursue something else, or foregone announcing a discovery.

Countries that don’t protect IP, like Venezuela, aren’t exactly known as innovators.

The reality is that across the globe, protecting IP is more important than ever. Unless policymakers make bold moves, countries in lower-income brackets risk being left behind — again.

Trade-in services are taking up a growing share of GDP across the world. Things like tourism, fast-food enterprises, access to TV shows, and medical research are becoming more valuable than tangible champions of yesterday like agriculture or machines.

The new global services economy thrives on intangible property like name recognition, business processes and artistic works. Of course, these goods are mainly protected by IP laws — trademarks, patents and copyrights. Already in the U.S., the UK and across Europe, investment in intangible property has outpaced investment in tangible goods

A new report from McKinsey highlights this fact, saying that the new knowledge-intensive global value chain “favors countries with highly skilled workforces, innovation ecosystems, and robust intellectual property protections” and that “the challenges are getting steeper for countries that missed out on the last wave of globalization … the window is narrowing for low-income countries to use labor-intensive exports as a development strategy.”

All is not lost; the ability to invent and create art is universal. Jumping on to the new knowledge-intensive value chains doesn’t require steep International Monetary Fund loans or finding hidden research deposits underground – it requires enforcement of robust IP protections.

 

Philip Thompson is the Policy Analyst for Intellectual Property and Trade at Property Rights Alliance, an international advocacy firm dedicated to the protection of all property rights.

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