Coronavirus reveals holes in American innovation policy — and how to fix them
During the last few weeks of the worldwide coronavirus outbreak, the level of innovation in ventilators alone has been astounding. A Facebook group of 300-some engineers built a 3D-printable prototype of the lifesaving breathing apparatus in just a week, an Italian company turned a snorkeling mask into an oxygen apparatus, the University of Florida is offering specifications for an open-source ventilator, Medtronic released its own ventilator design for temporary open-source use, and Massachusetts General Hospital is planning an eight-week “CoVent-19” engineering hackathon to build an easily distributable ventilator model.
Ventilator creativity in the face of the novel coronavirus tragedy is admirable for many reasons, but it also says something remarkable about the inventive process: We need to rethink our default policy for innovation.
The default U.S. innovation policy is granting patents. By giving inventors a 20-year-long exclusive right to make and market their inventions, patents reward inventors with monopoly profits. That can be a powerful incentive, but one that comes at a substantial cost. Consumers must pay monopoly prices for the lifetime of the patent, and future innovators can only improve or build upon the patented invention at the grace of the patent holder. The theory is that the incentive value of the patent to inventors outweighs the two decades of temporary pain.
Patents are not the only way of rewarding or encouraging invention, of course.
Prizes, awards, research grants, tax breaks, and subsidies are well-respected ways to entice inventors to invent. But over the last few decades, particularly starting with the passage of the Bayh–Dole Act in 1980, which allowed universities to win patents on government-funded research, patents have outstripped those alternatives as policymakers’ favorite tool for innovation policy. Both policymakers and commentators have repeatedly trumpeted patents as the superior incentive for invention over prizes and grants.
What is notable about coronavirus-related innovation, then, is how absent patents have been.
Patents are basically ineffective for a rapidly developing pandemic, which would likely abate well before the average 24 months it takes to get a patent, so current vaccine and treatment efforts cannot be motivated much by future patent awards. Furthermore, some of the fastest-moving projects disregard any possibility of patenting: The 300 engineers on Facebook almost certainly did not negotiate patent ownership agreements, and the CoVent-19 project explicitly makes “open access” a cornerstone of the project.
Meanwhile, prizes, grants, and subsidies, all those incentives that took a backseat to patents, have suddenly made a comeback. Million-dollar prizes are being called for and offered. Foundations and governments are making enormous sums of research money available. Congress itself has authorized $3 billion for research into coronavirus treatments.
Patents seem only to have come up as hindrances to the pandemic response.
A patent assertion entity tried to shut down a coronavirus testing company, only to claim ignorance when it was publicly shamed. And Gilead has been slammed in the press for winning a patent-like exclusivity right on treating the coronavirus with the antiviral remdesivir, based on a law reserved for “rare diseases.” Gilead has since rescinded the exclusivity.
Indeed, there is reason to believe that patents have placed a longer-term, more insidious damper on stopping the present disease. Because patents “skew research toward treatments that require repeated use,” they encourage pharmaceutical companies to invent ongoing treatments that patients have to refill month after month, at the expense of one-time-use cures and, yes, vaccines. That likely leaves the industry with comparatively less know-how on vaccine development and means that the regulatory pathways for vaccine approval are underused, unrefined, and outdated.
None of this is to discount the place of patents in today’s innovation economy. Importantly, they can elicit unpredictable inventions in emerging fields. And we should be thankful that, to date, the pharmaceutical and medical industries have largely not tried to profiteer off the coronavirus, in contrast to, for example, Bayer’s attempt to squeeze the federal government on anthrax treatments during the post-9/11 bioterrorism scare.
But when we emerge from this crisis, we should remember its lessons for innovation.
