The protection of intellectual property is one of the biggest challenges facing the technology industry.
Somewhat hostile foreign powers, like China, are actively stealing it. Venture capitalist Peter Thiel believes that Google, for instance, is working with China on artificial intelligence because "if the technology doesn't go out the front door, it gets stolen out the backdoor anyway."
So, what can the United States do to protect intellectual property? ACSH interviewed Patrick Kilbride, Senior Vice President of the Global Innovation Policy Center at the U.S. Chamber of Commerce, for some answers.
What are the biggest intellectual property challenges for biotech and pharma? Has theft of intellectual property been a challenge for these industries?
The U.S. has been a leader in intellectual property because we have a strong framework to protect private property. This ties in to our story of American ingenuity and inventiveness. We like to drive human progress. We are trying to spread these values to other countries.
Many believe that “information wants to be free” – we see that with expanded use of Creative Commons licenses and other free content. There have also been efforts, such as lawsuits, to weaken intellectual property rights. This is a challenge for biotech because the industry requires a lot of capital, long timespans, and is very risky. Therefore, biotech requires strong intellectual property rights.
Innovation is not a one-off “a-ha” moment. It is a series of innovations. Each stage must be protected with intellectual property rights. For example, we need more political rhetoric and enforcement policies that serve as a deterrent to prevent violations of intellectual property. This way, we ensure that investors will keep investing in biotech.
What is the proper balance between encouraging innovation (e.g., drug patents) and trying to keep products affordable through competition (e.g., generic manufacturing)?
We must first understand why drugs and other products cost so much. This is true not just of biotech and pharma but for the defense industry. (New weapons, for example, require large R&D costs.) There’s a value chain of investment that results in a product. There are also failures whose costs must be covered. These costs are not a total write-off; what was learned can be used in the development of the next product.
We do want to make sure that we can get drugs on the market as quickly and cheaply as possible. The Hatch-Waxman Act is a good model. We also want to reduce the amount of litigation. Uncertainty in regard to law results in more lawsuits, which drives up costs.
What are the Chamber’s main strategies for addressing these types of concerns?
Most of the IP problems have been at the international level. So, we perform research into intellectual property rights around the world. We generated an IP score for various countries and ranked them. The goal is to help countries empower their own entrepreneurs to invest in innovation and creativity. The strength of intellectual property law is correlated with better economic outcomes.
One concern we have at the domestic level is the America Invents Act, which created some unintended consequences, such as good patents getting locked up in bureaucracy.
Science-heavy industries need to stand up for themselves, especially in the face of lawsuits that threaten their existence. Johnson & Johnson, for instance, has lost billions of dollars because juries have decided, against all evidence, that baby powder causes cancer. How does the Chamber help industry fight back?
The Chamber’s Institute for Legal Reform fights back against abusive litigation practices like frivolous lawsuits. The Global Innovation Policy Center works for private property rights. The U.S. Chamber of Commerce Foundation (a separate organization) promotes education.