Analysis Economy Global Imperialism

Intellectual Property Right: A Brake on Innovation and Development

By Hassan Jan

Recently, over 100 Nobel laureates and 75 former world leaders wrote a letter to the US president Joe Biden urging him to suspend the Covid-19 vaccine patents to enable the developing countries to manufacture vaccines in their own countries as the poor countries can’t afford buying vaccines for their whole populations from large pharmaceutical corporations. The US president has expressed his approval for the vaccine’s patent waiver. However, Bill Gates has opposed patent waiver (he subsequently backtracked from his position). Similarly, the German, Canadian, Australian governments and EU have also expressed their disapproval for the patent waiver. This opposition to patents waiver reveals the real nature of capitalist production i.e. production for the rate of profit. At a time when the world is reeling from yet another deadly wave of novel Coronavirus, the leading economies of the world are more concerned about preserving their corporate profit in the name of so-called “intellectual property” and “patents”. These extraordinary times call for unprecedented global cooperation and information sharing in order to fight the deadly virus but the greed for ever more profits and its preservation (through intellectual property rights and patents) are proving to be the ultimate obstacle in the salvation of mankind from this fatal virus.

On the other hand, the US President’s inclination for patent waiver is not out of benevolence but the same corporate greed underlies his willingness which prompted others to oppose the patent waiver. The Covid-19 pandemic has caused a worldwide economic recession resulting in business closures, unemployment and further impoverishment of hundreds of millions of people; thus endangering the already crisis-ridden socioeconomic system. They hope a thorough and swift immunization of the whole populations can revive the ‘normality’ and put the economy back on tract which the experts believe will not be possible till the end of 2025.

Many vaccine campaigners have praised Biden’s waiver decision but they are skeptical if this waiver alone could guarantee wide-ranging vaccine accessibility to the poorer countries reeling from vaccine shortages. Besides vaccine “recipe”, the manufacturing process and technology must also be shared. The pharmaceutical industry is staunchly against patent waiver as sharing patents means sharing billions of dollars of their guaranteed profits in this time of deadly pandemic around the world. The industry is hiding its money greed under the thin veneer of the pretext that IP promotes “innovation” and “investment”. They claim that without patents and intellectual property the innovations and investment will be discouraged. Even a cursory glance at recent events would prove this claim false. A recent analysis has clearly shown that Oxford/AstraZeneca Covid vaccine research was 97 per cent public-funded. The same holds true for all important innovations of the twentieth and 21st centuries which will be discussed further on.

Intellectual Property Right (Patents, Copyright and Trademark)

Capitalism is a socioeconomic system based on commodity production and profiteering. Ever since the rise of capitalism as the dominant economic system on the globe the private property has gained new dimensions by incorporating all those things which were held in common previously. Intellectual Property (IP) Right in its modern sense has developed with the rise of capitalism.

Intellectual Property Rights are exclusive rights conferred to the creators of inventions, artworks, literature and technologies etc… for a limited period of time. There are many types of Intellectual Property Rights; however, the major ones are Patents, Copyrights, Trademarks and Trade Secrets.

Patent is a kind of Intellectual Property (IP) which is granted by a government to the inventor of an invention (the invention must be new, non-obvious and having industrial applicability) for a limited period of time. In exchange, the inventor is bound to make the important information of his invention public. The patent owner would then exercise exclusive rights to exclude others from manufacturing, using or selling the invention for a specific time, normally twenty years. Copyright is another IP which is normally related to artworks, music production, literary works etc… Trademark is any sign, symbol, brand name or expressions which symbolize a company or differentiate it from others. Similarly, trade secret is another IP which can be any formula, process or any information in a company which are kept secret in order to gain a competitive advantage over one’s rivals in the market.

As per the dominant bourgeois economic doctrine, the purpose of intellectual property right is to promote innovation and investment; the inventor must reap the harvest of his/her intellectual work, recover the costs and extract profits. So, the inventor, be it an individual or a large corporation, must be rewarded for their hard work and ingenuity. Without intellectual property right/patent, inventors would be less motivated to invent or carry out extensive researches in their respective fields because it is the IP which guarantees profits and riches. Therefore, the whole bourgeois concepts of IP bowl down to the fact that without greed for money man would not create and inventions would stop.

Does Intellectual Property Really Promote Innovation?

The idea that men would not invent without the incentive of profit or greed is a most nauseating concept expounded by the proponents of free market which reflects their utter ignorance of the process of evolution of human society. While there are geniuses in human society with extraordinary capabilities who must be encouraged to further delve in creativity, it is also a self-evident fact that geniuses do not come like thunders from clear blue sky. Their genius and knowledge are built upon the experiences, observations and scientific knowledge of earlier generations of mankind. Furthermore, the food, shelter and other needs of these inventors and creators are provided through the process of social production. Therefore, all innovations and creations are the result of the collective efforts of mankind over generations.

As mentioned earlier, intellectual property is rather a recent concept which was ossified into laws in the twentieth century. Contrary to the declared aims of IP laws, it was basically developed out of greed for more profits and to block the “newcomers” from utilizing the inventions and becoming “partner” in profit-making. It has nothing to do with innovation and creativity and the basic assumption of humans being motivated by greed and avarice is unscientific because this presumes selfishness; but an extensive scientific research in 2013 has revealed that men would have gone extinct if greed was their driving force. The whole human civilization could have developed only on the basis of mutual cooperation.

Conversely, the recent history of IP and patents has shown that far from stimulating innovations they have proved to be an ultimate obstruction. On the one hand, the patents regime has triggered an “epidemic of patents”. Innumerable patents are actually stifling innovation. From trivial ideas to all kinds of innovations are being patented every year. In 2020, America alone issued 388,900 patents. Most of them are solely used to sue big or small companies in courts and earn “damages”. Some are obtained only for defense purposes in courts. As David K. Levine, author of Against Intellectual Monopoly along with Michele Boldrin has said, “Most patents are not acquired by innovators hoping to protect their innovations from competitors in order to get a short term edge over the rest of the market. Most patents are obtained by large corporations who have built portfolios of patents for defense purposes, to prevent other people from suing them over patent violations.”

Patents have converted the research and innovation into a field chockfull of landmines. If you step on any of them you would be incriminated for transgressing the patents resulting in legal actions against you. The notorious case of Jesse Jordan vs The Recording Industry Association of America (RIAA) is a perfect example of where you can end up in case of IPR infringement. In 2002, The RIAA sued four IT students of Rensselaer Polytechnic Institute (RPI) in New York for illegally downloading thousands of copyrighted songs. Jesse Jordan along with Daniel Peng, Joseph Nievelt and Aaron Sherman was held responsible for infringing copyrights and sued for a combined amount of $100 billion, $150,000 for each song. The students settled the matter outside the court but the case depicts the grim reality of Intellectual property.

Behind the pretext of advancing innovation and research, the companies obtain innumerable patents for deterrence against rival companies as observed by The Economist, “In much of the technology industry companies file large numbers of patents, but this is mostly to deter their rivals: if you sue me for infringing one of your thousands of patents, I’ll use one of my stash of patents to sue you back. Such stand-offs make life hard for newcomers: a 2001 study found that fledgling microchip makers were having to spend up to $200m licensing intellectual property that might not be much use to them just to fend off lawsuits. This sort of situation might be good for the incumbents, if not for competition and the public interest; but there is a fair chance it is not good even for them. Some studies have found “thickets” of patents that make it harder for all companies to launch new products.” (The Economist, Intellectual Property. A question of utility, Aug 8th 2015).

Similarly the paper further elaborated how new innovations are not related in any way to patents and that they have little to no effect on innovations and creativity. “When changes in the rate of innovation do occur, they seem to have little to do with patents. Mr Boldrin and Mr Levine observe that in industries from chemicals to carmaking to computer software, waves of innovation began with a surge in inventiveness with lots of participants. Patents only started to be filed years later, once the innovation had died down and the incumbents in the maturing industry were seeking to exclude new entrants, as well as to protect themselves from their rivals’ lawsuits. Patents were a result of successful innovation.” (Ibid)

Public Research vs Private Research

Innovation is a social phenomenon which ultimately expresses itself in the ingenuity of an individual or group of individuals. The unfounded concept of intellectual property exaggerates the individual enterprise and an individual genius is portrayed as something without any social connection. Their creativity and ingenuity are depicted as purely individual effort. However, the reality is that a major part of all innovations which has helped shape our modern world was actually government-funded and without its help would not have even existed today.

The neo-liberal economics brags about the “potential” of private sector and individual entrepreneurship. They disdainfully argue for deregulation and a limited role of the state in economy and champion an economic model based on unlimited role for the private sector which is a key to progress and innovation. Nevertheless, the Corona pandemic busted this private sector myth when the states with more public funding in health sector got away with the virus very quickly while the health system of the regimes of free enterprise and individual entrepreneurship collapsed like a house of cards.

The technological innovations of the last and current centuries stand proof to the fact that if it were not for the huge and generous government funding, these inventions could not have come into being. Some examples would suffice to prove this.

Apple’s iPhones would not have existed without the generous grants of the US government. Apple was granted $500,000 in the initial stage which enabled the company to move ahead. Besides direct funding, the indirect role of the US government in the making of iPhone is also undeniable.

Global Positioning System (GPS) was developed by the American Defense department to improve military navigation and coordination. Later it was extended for civilian purposes. However, it is still managed and constantly improved by American Air Force with an annual expenditure of $1.8 billion. From 1973-2000, the US government invested an aggregate of $5.6 billion to develop the system. Today it is an integral part of iPhones. Other important parts of today’s iPhone, like touch-screen, internet, RAM memory, hard disk drives, liquid-crystal displays (LCD), lithium batteries and microchips, are all thanks to NASA, the National Science Foundation, the CIA and US Defense Advanced Research Projects Agency (DARPA). Silicon Valley has always relied on government funding for its innovations.

Similarly, the US National Institutes of Health (NIH) is a government agency which spends around $42 billion annually on pharmaceutical, biomedical and public health research. The agency has 75 per cent of the most innovative new drugs to its credit every year. The Hepatitis B vaccine was also developed thanks to research and funding from NIH. Elon Musk’s company Tesla could not have gotten off the ground had it not been for $4.9 billion of generous government grants, subsidies and funding. It is an irony that Elon Musk lambasted the US government for direct stimulus payments to citizen while his Tesla reaped the harvest from the US government’s Corona pandemic bailout packages. Even Google was funded by the US government which enabled it to develop into a Silicon Valley giant. In short, all important inventions without which modern life is impossible to think were all government-funded.

The shortsightedness of private sector renders it incapable of long term ventures. Innovations and technology development are time consuming processes that require patient research with innumerable tinkering and trial and error. The process can sometimes go on for decades. Sometimes these ventures can go bust but such incidents are part and parcel of research and development. That’s why the private sector, with its short-termist mentality of swift returns, won’t ever enter such uncharted waters. Consequently, as demonstrated above, all major inventions were funded by the US government as the economist Mariana Mazzucato, author of The Entrepreneurial State, once said in an interview, “And government funding is increasingly required because venture capital — which was initially thought to provide the kind of early-stage high-risk finance that traditional banks won’t provide — is itself becoming risk-averse and short-termist, seeking returns in three to five years. Innovation, especially in science intensive areas, takes 15-20 years, not three!

And that’s the point: truly radical innovation needs patient, long-term, committed finance. This type of finance is hard to find in the short-termist private sector. So it’s no surprise that modern capitalism has seen the increased role of the State in providing patient capital and directly investing in innovation development.”

Nevertheless, the stalwarts of private sector continue to lobby for tax cuts citing the mythological “innovativeness” and “entrepreneurship” of private sector.

Intellectual Property and the Expropriation of the Commons

As mentioned earlier, capitalist greed has destroyed all those things which were held in common in previous socioeconomic systems. The Common were one of them. Commons were actually agricultural lands, grazing fields, forests and other natural resources i.e. water etc… which were collectively owned by the community. The word “Common” takes its origin from England where the subsequent capitalist development destroyed the commons and converted them into private properties. The new bourgeois property relations had to fight a vicious battle against these property relations to root them out as they were alien to the narrow selfish interests of a new growing class of bourgeoisie. This process was called “the enclosure movement” whereby the communities were rooted out and disinherited from their previously collectively owned lands and other resources. The enclosure movement in the Scottish highlands was described in the following words by Karl Marx, “The Highland Celts were organized in clans, each of which was the owner of the land on which it was settled. The representative of the clan, its chief or ‘great man’ was only the titular owner of this property, just as the Queen of England is the titular owner of all the national soil.”

“… In the eighteenth century, the Gaels were both driven from the land and forbidden to emigrate, with a view to driving them forcibly to Glasgow and other manufacturing towns. As an example of the method used in the nineteenth century, the ‘clearings’ made by the Duchess of Sutherland will suffice here. This person, who had been well instructed in economics, resolved, when she succeeded to the headship of the clan, to undertake a radical economic cure, and to turn the whole county of Sutherland, the population of which had already been reduced to 15,000 by similar processes, into a sheep-walk. Between 1814 and 1820 these 15,000 inhabitants, about 3,000 families, were systematically hunted and rooted out. All their villages were destroyed and burnt, all their fields turned into pasturage.” (Capital vol I, Marx/Engels collected works Vol-35)

Through a similar process, the British imperialists dismantled the ancient Asiatic Mode of Production in Indian subcontinent. In ancient Indian society and even under the pre-modern India of Mughals there was no private ownership of land. It was collectively owned by autonomous village communities. These village communities were bound to pay a certain amount of their production as tributes to the central government. As Marx had explained, “In the Asiatic form (at least, predominantly), the individual has no property but only possession; the real proprietor, proper, is the commune – hence property only as communal property in land.” (Grundrisse, Chapter 9)

The subsequent British colonization of Indian society destroyed the ancient property relations and artificially grafted feudal property relations through the Permanent Settlement Act of 1793 in Bengal. A new class of loyal landlords was created and large swathes of land were allotted to them thus breaking up the ancient collective ownership of land.

These expropriations of common lands by private or individual owners were actually the precursors to modern day intellectual property rights. These expropriations of collective lands were supported by nonsensical economic concepts of the “tragedy of the common” forwarded by nineteenth-century economist William Forster Lloyd. He claimed that the unregulated grazing or overuse of the common land would ultimately lead to its collapse. If he had done a little research he would have come to know that those communities were more self-regulated and well planned than today’s multinational corporations who are voraciously plundering the natural resources of earth.

Capitalism: Wastage of Human Potential

Despite all the claims of the apologists of capitalism that this system is the paragon of incarnation of human potential, capitalism is proving to be an ultimate brake on the realization of human capabilities. The greed for ever more profit is not only proving to be an ultimate fetter on human potential, but it is also draining resources and society’s wealth. As explained by The Economist, “America’s health systems… spent $210 billion on prescription drugs that year [2005]. Based on how much cheaper generic drugs were than patented ones, Mr Baker calculated that a competitive patent-free market might have provided the same drugs for no more than $50 billion. That represented a saving of $160 billion.” (The Economist, Intellectual property. A question of utility, 8th August 2015)

Contrary to the “official” claims of global bourgeois institutions promulgating international trade law (WHO, TRIPS agreement etc.), these laws are actually strangling geniuses and depriving the society at large from benefiting from their innovations and instead a small clique of corporations are reaping the harvest. The scientists and experts working in global corporations are legally bound not to share their researches and innovations outside the company.

Similarly, the World Trade Organization’s subsidiary law governing the protection of IPR i.e. TRIPS agreement is another sword of Damocles hanging over the developing countries. The TRIPS (Trade Related Aspects of Intellectual Property rights) agreement is actually an extension of internal IPR laws of developed countries now incorporating almost all countries of the world. WTO member states have been obliged to bring necessary constitutional amendments to comply with the TRIPS agreement. Most of the patents for modern technologies are owned by developed countries. As demonstrated above, this set of international law, too, will further ossify the backwardness of these countries and retard their development.

The apologists of intellectual property rights argue that such laws are necessary to stop technology or knowledge theft. But the question arises as to why such theft takes place in the first place? Such thefts and fakeries are embedded in the capitalist socioeconomic system because it is based on the theft of human labour. Counterfeiting, forgery, trickery and theft are all inevitable outcomes of this system of profiteering. The maddening race for money-making is taking its toll on the whole of human society where the vast majority of humanity has been compelled just to survive. A society based upon the sharing of all human achievements of technology would have witnessed these vices wiped out in a jiffy.

Abolition of Private Property

In their race for more profit and plunder of resources of the earth, the capitalists have mutilated the face of earth. All natural resources are being mercilessly plundered. Thousands of animal and plant species have gone extinct in the last one hundred years of capitalist depredation. Corporate agribusinesses have caused colossal deforestation. These factors along with mindless testing of radioactive weapons have badly damaged the earth’s ecosystem. While capitalists jealously guard their intellectual property rights on technologies and innovations and abhor the idea of sharing them, at the same time they are always ready to share only one thing i.e. the guilt; they share their own guilt for the destruction of earth with the whole of mankind. They hypocritically claim, “Our human greed has destroyed the earth”. This is the only instance they willingly share something with “all humans”.

It is hypocrisy of the first order. Their hired “experts” want us to believe that we humans are selfish and greedy by nature and that “we” have caused this environmental mayhem and therefore “we” humans are responsible for this disastrous situation. They cunningly shift the burden of responsibility of the destruction of earth’s ecosystem, for which they are solely responsible, on the shoulders of all human. It is here where they try to blur the class difference and hypocritically try to make all humans shareholder in this destruction of the environment by their greedy class. The working classes and poverty-stricken masses are in no way responsible for this mayhem. It is not “us” humans to blame for global warming and destruction of the ecosystem. It is the capitalist class who are ravaging every corner of the earth for plundering and profiteering. It is they who are deforesting the Amazon forests. It is they who are responsible for the melting of arctic glaciers. It is they who are to blame for the Coronavirus pandemic.

Karl Marx and Frederick Engels wrote in The Communist Manifesto;

The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and appropriating products, that is based on class antagonism, on the exploitation of the many by the few.

In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property.”

Today private ownership of the means of production has not only become a fetter on human development, but it has also transformed into an ultimate danger to all the achievements of all human civilizations. Intellectual property, patents and copyrights are based upon the false assumptions of promoting and encouraging “extraordinary” individual ingenuities and capabilities. From time immemorial, human societies could develop and move forward only thanks to cooperation and coordination. Today capitalist selfishness and greediness have caused this Covid-19 pandemic to linger on. Had it not been for profit greed and patents, this pandemic would have been overcome long ago. But the mindless and shortsighted race for plunder and looting is taking its toll on millions of lives across the globe.

Instead of promoting innovations and creativity, capitalist greed is killing them. The capitalist assumption that greed is the ultimate driving force behind human creativity is one-sided, unscientific and a disgrace to mankind. Though life for millions under capitalism is constantly in survival mode and humans are compelled to think only about their self interests; despite this, there are many examples where people in different fields of science, art and literature etc… worked selflessly and devoted their whole lives without caring about money or self interest. During revolutions, the working classes dare the guns and tanks and sacrifice their lives. Here the capitalist explanation of “greedy” human nature fails to explain these human traits. These capitalist fetters on human creativity must be removed to let all humans lose their untapped potential for innovation. Only a socialist overthrow of capitalism can pave the way for such a society. As the founder of scientific socialism had put forward in The Communist Manifesto, “In place of the old bourgeois society, with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all.