Diagnostic Kits/The market economy and the scientific commons
Nelson. The market economy, and the scientific commons. Research Policy (2004) vol. 33 (3) pp. 455-471
Outstanding questions
- What is the proportion of income major research universities receive from licensing research, and how has it changed over the last 50 years?
- in AUTUMN & Carol's thesis
- What proportion of research is patented? What proportion of patented research is licensed exclusively?
- What hypothetical or real accountings of the costs to society of the current patenting situation exist? (i.e. Uni maintains exclusive license on stem cell tech, preventing broad exploration of and competition in the product space downstream from that tech; consequently, products are mediocre, less lives are saved, society suffers $1B loss)
- See Mowery, D., Nelson, R., Sampat, B., Ziedonis, A., 2001. The growth of patenting and licensing by American universities. Research Policy.
- What hypothetical or real accountings exist of the economic advantages of engineering techniques and principles that are maintained in a public commons?
- see rough aeronotical "laws" of the 1920's for propeller design (pg. 465)
- see hybrid seed revolution in 1930's (pg 467)
Notes
"In principle there is a clear divide between science and technology. In practice there isn't. In principle, while practical inventions can be patented, scientific findings can't be. In practice, increasingly scientific findings are patented. The argument of this paper is that this is bad for the advance of science and for the advance of technology." The scientific commons is becoming privatized, and unless halted soon, important portions of scientific knowledge will be private property, outside of the public domain, and that would hurt both scientific and technological progress.
The conventional theory of scientific progress makes it hard to understand why privatization and markets are encroaching on the scientific commons and why this is bad.
This theory holds that science is communitarian because it optimizes scientific progress, based on the premise that practical payoffs for research are not predictable and are largely serendipitous. Therefore, "allocation of scientific resources should not be guided by anticipation of particular practical payoffs, but rather by the informed judgments of scientists regarding the most important problems to work on." Hence, researchers should be autonomous, base their research decisions on a public commons of scientific knowledge, and contribute findings back to that commons. Thus scientific knowledge is cumulative.
Policy reflecting this theory developed out of post-WWII debates and "stressed that the payoffs from science were almost completely unpredictable, and thus the allocation of funds to science should not be influences by perceptions of social needs." In other words, "public support of open science is warranted because the expected returns are high but the areas of return are so uncertain that market mechanisms will not suffice."
However: much science - applied science especially - is undertaken with practical objectives in mind, and if the products of research do not lead immediately or directly to the solution of practical problems, they often provide new and better knowledge and tools for approaching them. So "Strong Science" provides tools for problem solving, but not the immediate solutions to practical problems. That said, scientific and technological advance are similar to each other: progressis the result of collective, cultural, and evolutionary processes, in which a wide variety of efforts for progress are undertaken, built upon the work of earlier efforts, and of which many fail. Technological advance in particular is evolutionary- developers are often in competition with each other to improve upon the existing technology, and to echo the notes above, "strong science enables the process of designing and inventing to be more productive than it would be were the science base weaker... strong science [only] provides tools for problem solving," rather than actual practical solutions.
Science provides a body of understanding; technology a body of practice. Both are non-rivalrous goods.
The market forces and competition pushing many technological developers to explore many paths to solve a particular practical problem are aided immensely by open scientific knowledge. It "enables there to be at any time a significant number of individuals and firms who posses and can use the scientific knowledge they need in order to compete intelligently in this evolutionary process. The 'communitarianism' of scientific knowledge is an important factor contributing to its productivity in downstream efforts to advance technology."
So market organization of technological progress is ideal particularly when built upon a foundation of strong, open science, because open science optimizes the distribution of understanding requisite to technological progress without requiring the appropriation of that understanding, appropriation which would intrinsically limit its availability.
That said, there is no clear boundary delineating the interface between scientific progress and technological progress.
"Society depends on the market to induce R&D aimed at creating new products and production processes, and there is little dispute that granting patents on product and process inventions is reasonable social and economic policy." So the question arises: why aren't similar market incentives sufficient for inducing scientific development?
Because "the outputs of scientific research almost never themselves are final products, or even close, but have their principal use in further research, some of it aimed to advance the science farther, some to follow leade that may enable a useful product or process to be found and developed. But in both cases, the latter as well as the former, there is considerable uncertainty about the best paths to pursue. Progress calls for a number being explored. My concern is not with patents on the outputs of scientific research that are directly useful or close to that, so long as the scope of the patent is limited to that particular use. It is about not hindering the ability of the scientific community, both that part interested in advancing science farther, and that part interesting in trying to use knowledge in the search for useful product, to work freely with and from new scientific findings."
However (pg 464), although the evidence of the privatization of science is well documented, there is much less evidence demonstrating privatization is a problem. (Most detailed study was by Walsh et al in 2002.) "Scholars studying the problem have identified at least two different kinds of situations where the presence of patents can hinder research": - Patents on research tools (research techniques, materials, or key research pathways (like particular receptors), - Patent stacking, in which a large number of permissions or licenses must be obtained before proceeding with further research
Patent stacking does not empirically seem to be a problems (the unofficial research exemption at work), where as patents on research tools, often on tools developed with public funding, were exclusively licensed or even not licensed at all. See the Walsh study.
So, exclusive or non-exclusive property rights on research tools and scientific inputs are "not good from the point of view of society, seeking to maximize the benefits of publicly-funded research.
On the topic of Engineering Principles: "In each of these cases, the research outputs were (are) at once important inputs to a flow of future research, and useful inputs for those who are focused on solving practical problems. In much of this paper, I have been arguing that, because of the latter, there are major economic advantages if those understandings and techniques are part of the general tool kit available to all those working to advance practice in the area."
The obvious objection is that control over this tool kit is the incentive that causes their development. Nelson claims that this is not the case for research at universities funded by governmental grants. (pg. 466)
Executive Summary
Problems
- patent granting is encroaching on research tools and techniques that are not directly useful to society in and of themselves but rather in their application to the development of useful products.
- scope of granted patent gives it monopoly in a broad tech space; (antibody example, pg. 465)
- Bayh-Dole compels research patents
- Universities have strong financial incentive to pursue patents
- not-demonstrated. Only handful: harvard w/ mouse, columbia w/ , wisc w/ stemcells
- Financial gains by universities makes research exemption less reasonable from perspective of patent holders such an exemption might bypass
- Thus, the problem occurs when a "university is licensing exclusively or narrowly a development that is potentially of wide use, or where it is limiting the right to take a particular development further to one or a few companies in circumstances where there still is sufficient uncertainty in how to proceed to make participation by a number of companies in that endeavor socially desirable." pg. 468.
- In other words, exclusive licensing of premature technology prevents it's exploration and development in the necessary evolutionary manner.
Causes
- Ideological change in 1970's that patents are necessary
- development of molecular biology made university biomedical research much more likely to lead to pharmaceutical or useful techniques
- see Cohen-Boyer patent (pg 468)
- Key court decisions increased patentability of research like biotech and indicated possibility of substantial income from that research to university stakeholders.
- Bayh-Dole legitimated & warranted university patenting; indeed, made patenting the general rule
- Pervasive belief that non-exclusive licensing will prevent commercial investment and development of a tech
Recommendations
- Only grant patents on clearly artificial inventions (in opposition to natural, occurring things) or processes that involve "substantial transformation" (pg 466)
- Strict interpretation of meaning of 'utility'. Prevent "usefulness once removed" patents
- Control claimed scope of patent, which is often far wider than what has actually been achieved (re: antibody patent)