Nobel laureate criticises intellectual property rights system [International]

US economist Joseph Stiglitz has warned that intellectual property rights are stifling innovation. According to the Intellectual Property Watch news service, the professor, who was awarded a 2001 Nobel Prize in Economic Sciences for his work on the relationship of information and markets, said at the opening of Manchester University's Institute for Science, Ethics and Innovation on Saturday that the intellectual property rights regime "closes down access to knowledge". It was clear, he said, that specific restrictions applied particularly in the patent system.

Stiglitz criticised the current approach of treating copyright and patent rights as "intellectual property". Intellectual property, he insisted, is public property and not something to be "owned". It is difficult to prevent others from enjoying its benefits, he said, because it is fundamentally different to, and should not be compared to, the ownership of physical property. This approach creates monopoly power over knowledge that is often abused. Stiglitz gave as an example the current "patent thicket" in software, which results in anyone who writes a successful software program being sued for alleged patent infringements.

Another problem Stiglitz highlighted was that "the social returns from innovation do not accord with the private returns associated with the patent system. The marginal benefit from innovation is that an idea may become available sooner than it might have. But the person who secures the patent on it wins a long-term monopoly, creating a gap between private and social returns". The system is widening the gap between developed countries and developing countries, claimed Stiglitz, who is also known as a critic of globalisation. Medical care in threshold countries is suffering because patent rights are preventing the production of cheaper generic medicines.

The Nobel Prize winner does not believe that the patent system should be abandoned altogether, but sees a possible solution in restricting property rights to defined, tangible areas as well as to specific countries. Tools such as prizes or government funding could be used to promote access to knowledge and spur innovation in areas where there are well-defined objectives - such as a cure for malaria. John Sulston, a Nobel Laureate in medicine, shares Stiglitz's concerns. He expressed his apprehension about the continued trend towards the private ownership of science and innovation, which was funnelling research into areas that were particularly profitable whilst areas less likely to make money were being ignored. IP is an ideological issue in quarters such as the WIPO (World Intellectual Property Organization), Sulston said. Drug companies see any improvements to the patent system as weakening it, but they forget that the system should be a “good servant” - and not elevated to a “theistic level".

In its latest annual report (PDF file), the International Chamber of Commerce (ICC) has now called for the business community to clarify the mechanisms of intellectual property rights for the benefit of the general public. The growing "politicisation" of the patent system and enforcement of copyright is bound to cause concern on the part of those who do not understand the system. The report says that business must focus greater attention on putting forward the very arguments that Stiglitz rejects, namely that commercial copyright not only encourages research and development but it also promotes transparency and the dissemination of knowledge.