If you think the copyright battle over music and movies is intense, just wait until "bio pirates" can hack together a life form on the kitchen table, possibly infringing the rights of some giant multinational company.
Even worse, that big company might lock up the rights to an improved food plant or medicine and hold the world's poor hostage.
Some say this has already happened with Monsanto's genetically modified canola seed, which commands premium prices. In 1997, the company sued Saskatchewan farmer Percy Schmeiser for $400,000 for having some of these plants, though he argued the seeds blew onto his land. Canada's Supreme Court ruled in favour of Monsanto, but waived punitive damages. Then, in 2005, Schmeiser sued them in small claims court for $660 in labour for uprooting even more of the offending plants. After three years, the company finally paid him in July, 2008.
Clearly something is rotten in the state of patents, especially for biotechnology.
In a new report, The Innovation Partnership (TIP,) a non-profit consultancy based in Montreal, argues that policymakers and business leaders "must give shape to a new era of intellectual property to stimulate innovation and broaden access to discoveries."
They reason that "Old IP" (current intellectual property laws) is actually starting to hurt business, because poor countries are unable to buy them. So they can't benefit from advances in health and agriculture "long available to the global elite."
To illustrate this point, the TIP report describes a biotechnology company based in Salt Lake City, Utah, called Myriad Genetics, which makes predictive medicine tests based on the human genome. In the late 1990s, Myriad was granted U.S. patents for two genes linked to breast and ovarian cancer, along with tests to identify them.
Putting aside the big ethical question about whether or not human genes should be patentable, Myriad ran into a huge controversy, partly because, the TIP report says, it filed one of its patents the day before another team published its results in the pre-eminent science journal Nature.
Myriad also had disputes with Canadian and European health-care authorities about how to apply the test and who should get it. Cease-and-desist letters were sent. Everyone knew there would be more genetic tests coming and this would set a precedent. The issue was so hot that author Michael Crichton referred to it in his thriller novel, Next.
At the end of the day, according to the expert group that wrote the TIP report, the Myriad affair was a series of strategic errors, institutional dysfunction, and a breakdown of trust and communication, and "became a cause célèbre for critics of Old IP and its misuse of patents and other intellectual property rights."
But wait a minute. BRAC Analysis, the company's breast-cancer screening system, has become the standard of care for assessing the risk of hereditary breast cancer (which only accounts for five to 10 per cent of the cases of the disease). It's covered by many health insurance plans for women who fit the criteria.
Myriad's certainly not doing badly financially. Its recently released earnings for fiscal 2008 show an increase in revenue to a record US$229.9 million, up from $145.3 million the year before. According to a Myriad news release, "the gross profit margin on molecular diagnostics rose to 86 per cent for the fourth quarter of fiscal 2008," and the company is now embarking on an "exciting new era - one of profitability" with a fiscal 2008 net profit of US$47.8 million.
The TIP report does suggest some innovative ways out of the IP thicket, essentially involving more trust and co-operation from all parties, which they claim will ensure that new ideas reach the public, but are appropriately regulated and efficiently delivered to those who need them.
Of course, as a group of academics and bureaucrats, they would look to laws, corporate and university technology transfer policies for the IP solution. Others argue that technology may come to the rescue first.
In an independent column written for TIP, freelance writer and former media lawyer Jeff Roberts suggests that the recent emergence of widespread online video content has come about without the "courtroom hurly-burly" that has become a mainstay of the music industry. Roberts says this is because the demand for broadband video has resulted in numerous big and small companies delivering content to users under a variety of business models.
Companies including Calgary-based MoboVivo are getting in on the broadband video bandwagon, selling thousands of videos online. In May 2008 the company announced that its iPhone TV was "the most popular iPhone application across all categories."
Another good example of an innovative business model is emerging in the stock-photo industry. Long the domain of professional photographers, who expected to get paid for their work, it's now opening up to amateur photographers. After all, with all those digital cameras clicking away, somebody's bound to catch a great photo that General Foods or General Motors would love to use for an ad. The problem has always been connecting the amateur photographer with the market in a mutually acceptable way.
PhoTrade, a new online service based in Cincinnati, allows all photographers to get paid for the viewing and use of their photos. They're offering free "pro" accounts for a one-year period, which allow you to upload an unlimited number of photos, up to 10Mb each. A user-changeable digital watermark is embedded in each photo, so you can track the use. If you make a sale through the site, you keep 80 per cent of the revenue.
Everybody agrees that things will change in the world of intellectual property.
The only question is whether the lawyers or the technologists will change it first.
(Tom Keenan is a professor at the University of Calgary and an expert on technology and its social implications. He can be reached at keenan@businessedge.ca)
