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Biotech report says IP spurs innovation

Some people say that patents on intellectual property (IP) stifle progress when they occur at early phases of research. However, history suggests the opposite, according to a report presented at the 2012 BIO International Convention in Boston, Massachusetts.

“There’s been active debate about whether stronger intellectual-property rights are a help or a hindrance to developing industries,” says Joseph Damond, vice-president for international affairs at the Biotechnology Industry Organization (BIO), which commissioned the report to add evidence to the argument.

Questions about IP’s impact on research are particularly crucial to countries that are beginning to invest in biotechnology.  So that they could advise those countries on IP regulations, BIO asked for an assessment of IP trends in nations around the world. In response to their request, Pugatch Consilium, a consultancy group based in Israel and the United Kingdom, combed through publications and databases for associations between IP rights (IPR) and measures of economic development and biotech health.

“In the literature we found that no, patenting does not stand in the way of research,” says David Torstensson, a senior consultant at Pugatch and an author on the report presented 19 June. At the talk, which was comprised of biotech fans, the audience appeared to agree with his pro-IP conclusion. 

Database evidence suggested the same. Specifically, Torstensson says that over the past decade, increases in patents have been matched by growth in the biotech and pharmaceutical sectors in India, Brazil, Singapore and other countries with emerging economies (see ‘Number of biotechnology patents filed under PCT, 1977–2009’). Patents, in general, are on the rise but the increase in biotech patents is most pronounced. For example, the rate of biotech patent applications to the European Patent Office grew by 14.3% annually in the past decade compared with 8.3% for all patent applications.

Another measure of biotech health, called technology transfer, correlated with patent increases as well (see ‘Number of biotechnology alliances for research or technology transfer’). Tech transfer rates often reflect foreign investments in biotech. “If you want a lab in Taiwan to help with a private project, you’ll need to share your intellectual property, but you want to be sure that your secret is protected, and that’s where tech transfers come in,” Torstensson explains.

The strength of patent rights can be quantified in an index ranging from 0 (no patent rights) to 5 (very strong). Over time, the countries that US biotech and pharmaceutical companies have invested in have moved up the IP barometer, indicating yet another correlation between economic improvement and IP (see ‘Patent rights index, 1960–2005’). For example, Korea’s score has nearly doubled since the 1990s.  The rising number of patents granted by IP-related laws is due in part to the boom in biotechnology firms. In 2006, there were ten times as many biotech companies in Korea as there were in 1999, according to the report. Similarly, after Taiwan instituted a rule about IP based on government-funded findings, the Bayh-Dole Act, university patenting increased by 354% between 2004 and 2009.

When it comes to stimulating innovation at early stages of research, the argument against the IP model is quite theoretical, says Torstensson. “We asked, where is the data,” he says. “Intellectual property rights won’t be a silver bullet. Of course, countries also need to think about reforms in infrastructure, human resources and education,” says Torstensson. “But when you are investing in R&D and PhDs, and when you want companies to grow, then you should have IPs.”


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    Paul Hayes said:

    “At the talk, which was comprised of biotech fans, the audience appeared to agree with his pro-IP conclusion.”

    Incredible and ironic that such spectacular illogic is tolerated in such an industry.

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