Do patents hurt or hinder research?

It’s an argument frequently made by businesses: intellectual property protection is essential to spur the sort of innovation that results in new drugs and technologies. Last Monday, the Supreme Court heard arguments in a high-profile case that hinges on the question of whether genes can be patented, with biotechnology companies asserting that the loss of patent protection could endanger the business model that incentivizes the costly process of developing and testing new products.

But is it true?

A study of two sets of genes sequenced during the Human Genome Project a decade ago suggests that intellectual property rights protecting gene sequences reduced scientific research and product development by 20 to 30 percent.

Advertisement - Continue Reading Below

Scientists studying intellectual property and its effect on innovation would ideally like to do a real experiment, setting up two very different legal frameworks for patent protection and watching what sort of research and product development results. But since such experiments aren’t feasible, the study, published in the Journal of Political Economy by economist Heidi L. Williams at the Massachusetts Institute of Technology, took advantage of an unusual twist in recent history.

The effort to sequence the blueprint of a human being famously turned into a race between a large, publicly-funded team and the private company Celera, led by biologist Craig Venter. Celera used a form of intellectual property protection that allowed academic researchers to use its data, but restricted redistribution of data. That arrangement led to million-dollar sales of Celera’s data to companies and more modest fees collected from nonprofit research institutions, Williams research found. Licensing agreements were also required if products were developed.

Williams studied about 1,600 genes that were sequenced first by Celera and compared those with genes that were sequenced first by the public project, and made openly and freely available. A rough, back-of-the-envelope analysis shows stark differences in subsequent use of the two sets of genes: Celera’s genes were examined in an average of 1.2 scientific papers by 2009, compared with 2.1 papers for genes from the public project over the same time period. Three percent of the Celera genes were used in diagnostic tests by 2009, compared with 5.4 percent of the publicly available genes.

Then, Williams delved more deeply into the data, to avoid the biases that could emerge if the public sequencing effort simply happened to generate data on more interesting or biomedically important genes. As a result of how the public data were generated, some of Celera’s genes went into the public domain in 2002, and others went into the public domain in 2003.

The paper found that even a year delay in having Celera’s information put into the public domain had long-term effects on how the data were used. About 1,000 genes went public in 2002, and 600 went public in 2003. Over time, one would expect the gap in the research and commercialization of the genes to narrow, since both sets of genes would be publicly available. However, Williams found that did not happen.

“One additional year of Celera’s intellectual property translates to a persistent and permanent difference in whether we figure out whether it is linked to disease,” Williams said.

The reasons for what appears to be a chilling effect on research and commercialization aren’t clear, but Williams said that scientists gave her a number of reasons for their hesitancy to use the data. Some researchers indicated that some may have been put off by the idea that they would need to negotiate licensing agreements later on, if the research happened to lead to a possible commercial application. Others may have just been worried about misinterpreting the terms of the contract. For example, one scientist mentioned in the paper was concerned that restrictions on the data “implied that she could not share Celera’s data with her graduate students,” Williams wrote.

Open access to data has become the norm in genomic research, stirring new worries about whether personally identifiable information may now be lurking in public databases. But with a new major national science initiative looming, with President Obama’s announcement of the initiative to map the activity of the human brain, the new paper suggests that such an endeavor would be more valuable—both to academic researchers and to companies seeking to build products—if the information is made freely available.