from the another-one-to-add-to-the-pile dept
This paper provides empirical evidence on how intellectual property (IP) on a given technology affects subsequent innovation. To shed light on this question, I analyze the sequencing of the human genome by the public Human Genome Project and the private firm Celera, and estimate the impact of Celera's gene-level IP on subsequent scientific research and product development outcomes. Celera's IP applied to genes sequenced first by Celera, and was removed when the public effort re-sequenced those genes. I test whether genes that ever had Celera's IP differ in subsequent innovation, as of 2009, from genes sequenced by the public effort over the same time period, a comparison group that appears balanced on ex ante gene-level observables. A complementary panel analysis traces the effects of removal of Celera's IP on within-gene flow measures of subsequent innovation. Both analyses suggest Celera's IP led to reductions in subsequent scientific research and product development outcomes on the order of 30 percent. Celera's short-term IP thus appears to have had persistent negative effects on subsequent innovation relative to a counterfactual of Celera genes having always been in the public domain.Levine laments that the NBER version of the paper he links to is not available for free, but a quick Google search turns up a few publicly available versions of the paper (though, they appear to be earlier drafts) such as this one (pdf)). There's also the following powerpoint presentation (pdf) embedded below, which highlights the key findings and data from Williams' research:
Celera IP on genes has strong negative impact on future research and product developmentNow, it's important to note that both the paper and the slide presentation note that you can't necessarily conclude from this paper that IP slowed down the overall human genome sequencing efforts. It notes, for example, that the presence of Celera in the market, getting IP, may have created competitive pressure that sped up the Human Genome Project's effort to sequence. However, it does note that given the competition between Celera and the Human Genome Project, it seems clear that Celera's use of IP was clearly not the best way to create the greatest level of social benefit.
Also, Celera genes have not "caught up" with ex-ante similar genes sequenced by HGP as of 2009
- 35% fewer publications since 2001
- 16% points reduction in chance of gene having known uncertain genotype-phenotype link
- 2% points reduction in chance of gene having known and certain genotype-phenotype link
- 1.5% points less likely to be used in genetic tests
While the paper doesn't delve into it, this is really another way of pointing to the difference between invention and innovation as a process. Innovation tends to be an ongoing process of continual improvements. And that's where IP almost always seems to hinder activities, rather than help it. That's because IP puts a giant brake or tollbooth into the process of all of that important follow on innovation. There may be some argument that IP can help in one-off situations where there is no ongoing innovation, but those situations are excessively rare in the real world, if they exist at all.