The Future of Genomic IPRs
Harry Hillman Chartrand, March 17, 2003
Saskatchewan Economics Journal, Vol. 4, 2003
This paper was made possible by a grant from GELS Prairies.
A tidal wave is fast approaching the coast line of modern society. The wake of its bow has already arrived and the contours of the economy are slowly eroding and reshaping. When its full crest hits sometime this decade it will likely sweep deep inland altering the landscape of human life forever.
The tidal wave is genomics, the science of molecular genetics. Initiated by an earthquake in the ocean depths of fundamental science, genomics began some fifty years ago with the discovery by Watson and Cricks of the DNA double helix. Their suggestion that it could split into complementary strands established the physical basis for the encoding and transmission of genetic information within an individual organism and between generations. In this regard, the New York Times on June 13, 1953 ran an article entitled “Clue to Chemistry of Heredity is Found” calling DNA “a substance as important to biologists as uranium is to nuclear physicists.” (Overbye 2003). Gathering momentum ever since, genomics achieved critical mass in 1980 with the U.S. Supreme Court decision in Diamond v. Chakrabarty (447 U.S. 303, ). The decision led the U.S. Patent and Trademark Office (USPTO), after initial resistance, to grant genetic patents. As they say, the rest is history.
In this article I will provide a wide angled view of the genomic tidal wave. First, I will survey its impact on eight sectors of the economy. Second, I will consider its implications for intellectual property rights (IPRs) – the principal legal channel for directing knowledge towards the public good. Third, I will investigate the principal breakwaters that impede but cannot, in my opinion, stop the tidal wave advancing deep into the heartland. Breakwaters vary significantly between and within nation-states. In one State, a given breakwater – for example, culture, law or politics – may successfully resist specific tidal pressures while the same breakwater yields before the tide in another country. Fourth, I conclude with a forecast of probable and preferred futures of the interaction of genomics and IPRs.
I make no pretense to scientific competence in genomics (consult your local geneticist) or legal competence in IPRs (consult your lawyer). I am, however, an economist capable of reasoning from the facts and presenting an arguable vision of what is, and likely will be, the interaction of genomics and IPRs and their economic impact. The paper is not exhaustive but rather illustrative. It is a ‘think piece’ to serve, funding permitting, as a guide for future research.
Genomics involves manipulation of the genetic code (deoxyribose nucleic acid or DNA). The code is written in chemical units called nucleotides. Each nucleotide consists of a 5-carbon sugar (deoxyribose), a nitrogen base attached to the sugar, and an acidic phosphate group. There are four nucleotides differing only in their nitrogen base. These are adenine (A); thymine (T); guanine (G); and cytosine (C). These are always paired A -T or C-G. A sequence of three pairs is called a codon encoding an amino acid. Amino acids combine to form proteins “the molecular machines of life” (Hood 2002). DNA encodes the instructions for constructing proteins within a cell. Proteins, in turn, are responsible for the structure and functioning of the living cell and, thereby, of any higher order organism to which it is a constituent part.
Manipulation of the code, in turn, assumes one has (Chartrand 2003):
a) the tacit knowledge or ‘know-how’ required to effect a desired change;
b) the codified knowledge documenting the code’s norm state as well as the success or failure of previous manipulations; and,
c) the tooled knowledge or instrumentation required to effect change in the living code.
Different sections of code generate specific proteins, either natural or artificial, i.e., not existing in nature, or not naturally produced by a given organism. It is production of specific proteins, their higher order constructs (such as enzymes) and the pathways of production that are the instrumental objectives of genomics realized in its sister science, proteomics, i.e., the science of proteins.
Given the vast array of living things on planet Earth and the different proteins developed and coded by each in its evolutionary struggle for survival, there exists a veritable cornucopia of possible protein codes that may be transferred from one organism to another and/or between types of organisms (transgenetic). Human ingenuity may also introduce novel variations not existing in nature (Economist, February 14, 2003). This implies the ability to adapt every evolutionary success of every life form on the planet to the benefit of humanity.
To demonstrate the impact of genomics, to date, I will consider eight sectors of the economy: agriculture, art, defense, the environment, health, informatics, justice and materials technology. The survey is not exhaustive but rather illustrative. From it, I hope, a sense of the scale and scope of the tidal wave and its effects on the contemporary economic landscape will emerge.
Agriculture is the food chain for human life. It also supplies fibers, oils and other outputs that are processed into consumer goods, e.g., clothing, and producer goods, e.g., industrial lubricants. Essentially, agriculture is the original biotechnology.
Over its ten thousand years, agriculture has selected and crossed species – animal and plant - to improve and expand the human food chain. This chain, however, is constantly at risk to other life forms competing with humanity for survival – bacteria, fungi, insects, molds, plants (weeds), reptiles and other mammals. While protective measures have historically been effective against larger complex life forms, it is the smaller – bacteria to insect as well as weeds – that present the clearest and most present danger to the human food chain today. They are small, numerous, evolve rapidly and are voracious.
Primarily, it has been plant agriculture that has felt the impact of the leading edge of the genomic tidal wave on two fronts – predation and yields. Ideally, food, fiber and oil crops have been genetically altered directly to resist predation, and indirectly, to resist chemical herbicides, fungicides and pesticides targeted at specific pests and no other living thing, e.g., Round Up Ready canola. Yields of all crop types have also been enhanced by application of genomic technology.
A lesser, more indirect but nonetheless tangible, impact has been felt in animal agriculture. Yields of animal protein have been enhanced, e.g., using hormones to enhance milk production by cows and growth hormones to ‘fatten’ cattle and other livestock. Such hormones are increasingly produced using genomic technology. Similarly, cloning has also been used to promote improved breeding stock lines.
It has been suggested that what is imagined in the mind of the artist today becomes the reality of tomorrow (Bell 1976: 33-35). That biotechnology has captured the artistic imagination is evidenced in the fine or art-for-art’s-sake (Boxer 2003) and the entertainment arts (Chartrand 2000a).
In the fine arts, one author - David Lindsay (Lindsay 1997) - has tried to copyright his DNA with the U.S. Copyright Office (without success) and mounted a web page: “The Genome Copyright Project’. Since his initial effort in 1997 a private firm - the DNA Copyright Institute – has appeared on the world-wide web (DNA Copyright Institute 2001). It claims to: “… provides a scientific and legal forum for discussion and research, as well as access to valid DNA Profiles, among other Services, as a potential legal tool for deterrence and resolution of situations where there is suspected DNA theft and misappropriation.”
Steve Tomasula speculatively writes about the rabbit Alba, the first mammal genetically engineered as a work of art in “Genetic Arts and the Aesthetics of Biology” (Tomasula 2002). He compares incipient gene artists with Marcel Deschamp (1887-1968).
While the above remain speculative, the fact is that Mike Manwaring, a graduate student at the University of Utah has created what appears to be the first real piece of genetic art: a version of the Olympic Rings entitled “the living rings” made from nerve cells (BBC News On-Line, January 15, 2002). And at least one geneticist, Willem Stemmer, vice president for research and development at Maxygen, is considering transposing code into music to create ‘DNA ditties’ (Fountain 2002)
In the entertainment arts, the plots of seven films or television programs serve to highlight the impact of genomics:
i) Andrew Niccol's 1998 film: Gattaca (Niccol 1998)
Plot: Before one is born, one’s DNA is analysed and future capabilities established. There is, however, a black market for superior DNA used to escape one’s genetic destiny and the DNA police;
ii) Bruce Sterling’s 1990 short story: “The Swarm” (Sterling 1990)
Plot: the most intelligent species in the galaxy knows that intelligence is dangerous so genetically turns it off (genetically represses the trait) until threatened by another intelligent species;
iii) Bryan Singer’s 2000 film: X-Men (Singer 2000)
Plot: Through spontaneous and genomic induced mutation, children are born with extraordinary powers. While the ‘norms’ struggle to deal with the strangers among them, a battle rages between mutants who want to co-exist and those who want to rule;
iv) John Carpenter’s motion picture, The Thing (Carpenter 1982)
Plot: the most successful species in the galaxy ‘snaps on’ the DNA of every species with which it comes into contact insuring survival in any environment by morphing into an appropriate form;
v) J. Michael Straczynski’s television series Babylon 5, (Straczynski 1993-1998)
Plot: the most ancient and intelligent species in the galaxy use quasi-sentient self-healing biotechnical devices and vessels;
vi) Patrick Lau and Richard Laxton’s British television min-series Invasion Earth (Lau and Laxton 1998)
Plot: the most intelligent species in the galaxy genetically modifies and ‘farms’ all other life forms across trans-dimensional space.
vii) Ridley Scott’s motion picture Blade Runner (Scott 1982)
Plot: dangerous jobs including in the military are filled by specially cloned and genetically modified human beings known as ‘Replicants’ who have false life memories, short lives and a dangerous desire to survive; and,
If what is imagined in the mind of the artist today becomes the reality of tomorrow, then the military technology of tomorrow is in the planning stage today. With respect to genomic-related technologies this is evident in a U.S. study by the Committee on Opportunities in Biotechnology for Future Army Applications (COBFAA 2001). Fourteen development areas were identified: assay analysis, biocomputing, bioinspired & hybrid materials, biological sources of energy, biomolecular hybrid devices, detection methods, drug delivery, functional foods, genomics & proteomics, miniaturization technologies, protein-based devices, renewable resources, tissue engineering and therapeutic drugs & vaccines. In these areas, forty-five specific biotechnologies were identified and ranked according to investment priority by the Army. A separate ranking was also made of potential commercial application - high/medium/low.
For military purposes, the highest ranked technologies included:
· genomics-based vaccine developments;
· protein-based three-dimensional volumetric memories;
· tissue engineered self-replicating systems; and,
· vaccine stratification by genomics and toxicogenomics
In commercial application, the highest ranked opportunities included:
· affinity reagents;
· biocapsules for drug delivery
· genomics-based vaccine development;
· genetically engineered food;
· miniaturization technologies based on biochip architectures and biological nanotechnology;
· optical detectors & detector arrays using DNA chips and protein chips;
· renewable fuels;
· small-molecule and protein therapeutics;
· somatic gene therapy
· tissue engineered cartilage; and,
· vaccine stratification by genomics and toxicogenomics;
As noted above, genomics achieved critical mass in 1980 with the U.S. Supreme Court decision in the case of Diamond v. Chakrabarty (447 U.S. 303, ). The case involved a genetically engineered microorganism designed to clean up oil spills. It was the Court decision to grant a patent for this organism that opened the flood gates of genomic technology.
Developments since have extended the range of genomic products and processes used in environmental clean up. According to Biotechnology Industry Organization, a U.S. trade association, industries currently using environmental genomic-related technologies include:
· The chemical industry: using biocatalysts to produce novel compounds, reduce waste byproducts and improve chemical purity;
· The plastics industry: to decrease the use of petroleum for plastic production by making “green plastics” from renewable crops such as corn or soybeans;
· The paper industry: to improve manufacturing processes, including the use of enzymes to lower toxic byproducts from pulp processes;
· The textiles industry: to lessen toxic byproducts of fabric dying and finishing processes. Fabric detergents are becoming more effective with the addition of enzymes to their active ingredients;
· The food industry: for improved baking processes, fermentation-derived preservatives and analysis techniques for food safety; and,
· The livestock industry: adding enzymes to increase nutrient uptake and decrease phosphate byproducts).
Perhaps the most significant impact of genomics has been on the health of humanity itself. Well known contributions already made, or in the process of being made, include: diagnostic tests for traditional disease and genetic defect; drugs to treat traditional disease and infection; gene therapies to treat formerly incurable pre-existing and environmentally induced genetic conditions; and, transplant organs grown from stem cells (fetal or adult) or extracted from transgenetic hosts, e.g., genetically altered pigs.
The information capacity of DNA exceeds all known forms of information storage by an order of magnitude, e.g., computers. The economic impact is two-fold – indirect and direct. Indirectly, the shear volume of information generated by genomic research is such that the information technology industry is investing heavily in the development of customized hardware and software (Reuters, January 11, 2002). Directly, research is currently underway to develop so-called DNA computers to capitalize on its enormous information storage and processing capacity applied to traditional forms of information (Reaney 2001). The indirect linkage between genomics and informatics can be characterized as ‘dryware’ based on silicon chips, circuits and computers. The direct link can be characterized as ‘wetware’ using carbon-based DNA and other biological components.
It is important to appreciate the symbiotic link between dryware and genomics. Genomic progress is accelerating in an instrumental slip stream laid down in the 1950s by developments in solid state physics starting with the transistor. Entangled with emergence of computer science, solid state physics has ushered in a new era in scientific instrumentation. Through devices such as the gene decoder (Hood 2002) and the Hubble space telescope, human senses have been extended outward towards the theoretical limits of macrocosmic time and space and descended into the microscopic building blocks of the physical universe and of life itself. It was, in fact, the combination of this new order of instrumentation married to the initial Cricks/Watson model of DNA that gave birth to genomics as an applied science. It is, accordingly, somehow appropriate that the enormous informational demands of genomics feedbacks on and encourages development of improved dryware while, at the same time, promising an entirely new and different form of informatics technology – wetware.
The impact of genomics on the justice system has been profound – both with respect to effectiveness and cost. The criminal justice system relies on physical evidence as a primary component in its deliberations. In addition to other genomic-based forensic technologies, the advent of “DNA finger printing” has dramatically increased both the quantity and quality of such evidence. The presence and identity of a person – perpetrator or victim - at a crime scene can be conclusively determined by the presence of his or her DNA contained in minute quantities of bodily fluids, hair follicles and other biological detritus. It significantly reduces the probability that the innocent will be charged and the guilty escape justice. From a strictly economic perspective the definitiveness of genomic evidence reduces the enormous costs associated with wrongful convictions – investigative, prosecutorial, incarceration and legal damages sought by wrongly convicted persons.
As noted above, genomics can effectively access code for the production of proteins and its derivatives of any living organism. In most cases, such materials exceed the strengths, tolerances and other characteristics of comparable man-made materials because they are built up from the molecular level. For example, spider silk is stronger and more flexible than steel. By transferring the relevant code to goats, spider silk is currently being produced in goat milk in quantities that may support a commercially viable specialized textile industry (Noble 2002). In theory, the genetic code that generates inorganic materials in some organisms such as biosilicates may be used to make silicon chips. The range of materials that can be produced using genomic technology is limited only by the genetic codes of living things and the human imagination.
Formal intellectual property rights (IPRs) such as copyrights, patents, registered industrial designs and trademarks, are created by the State as a protection of, and incentive to, creativity which otherwise could be used freely by others. In economic terms, without such legislated rights, knowledge suffers the free-rider problem. In return, the State expects creators to make their work available and that a market will be created in which such work can be bought and sold. But while the State wishes to encourage creativity, it does not want to foster harmful market power. Accordingly, it builds in limitations to the rights granted to the creator. Such limitations embrace both time and space. Rights are granted:
Eventually all intellectual property (all knowledge) enters the public domain where it may be used by anyone - without charge or limitation. This public domain or ‘intellectual commons’ exhibits characteristics different from the physical commons, e.g., the atmosphere and oceans. By nature and law, the public knowledge domain grows and increases. In law, IPRs are justified as a way of increasing the public knowledge domain. Even while rights are in force, there are exceptions such as ‘fair use’ or ‘fair dealing’ with copyright. In the case of patents, national statutes and international conventions generally permit ‘research’ using patented products and processes by profit, nonprofit and public agents. Governments also retain the authority to waive all rights in “situations of national emergency or other circumstances of extreme urgency…” (WTO/TRIPS 1994, Article 31b).
To demonstrate the interaction of genomics and IPRs I will outline the nature of each IPR type and demonstrate how genomics qualifies for protection – in fact or theory.
Before doing so, however, a question needs to be answered: Why does an “idea” not receive protection? In the case of copyright, it is not the idea but its expression fixed in a physical matrix that receives protection; in the case of patents, it is the form not the function of an invention that receives protection. The answer lays in the opinion of Justice Yates in the critically important 1769 copyright case of Millar v. Taylor (Chartrand 2000b):
Mr. Justice Yates had very clear and definite notions as to the limits of property, but a reference which he makes to the civil law throws a stronger light on his view of the whole subject than any of his direct reasoning. What the Institutes have to say relating to “wild animals,” he observes, “is very applicable to this case.” And he then proceeds to draw a comparison between these two singularly related subjects. Animals ferae naturae are yours “while they continue in your possession, but no longer. “ So those wild and volatile objects which we call ideas are yours as long as they are properly kenneled in the mind. Once unchain or publish them, and they “become incapable of being any longer a subject of property; all mankind are equally entitled to read them; and every reader becomes as fully possessed of all the ideas as the author himself ever was.” (Sedgwick 1879)
Ideas are not protected because they are like wild animals that once free belong to no one and everyone at the same time, i.e., they are in the public domain. It is only their specific expression fixed in material form – commonly known as a work or an invention – that qualifies for protection. I must also stress the nature of IPRs as 'bundles of rights' (Exhibit 1).
Copyrights are rights traditionally granted to creators of artistic and literary works. They have, however, been extended over time to include:
· artistic works such as choreography; drawings, motion pictures, musical compositions, paintings, photographs, sculptures and works of architecture;
· literary works such as novels, poems, plays and reference works, and,
· commercial or utilitarian works such as advertisements, computer programs, databases, maps and newspapers.
Copyrights are granted to natural and legal persons. When granted to a natural person they endure for the life of the artist/creator plus a fixed number of years that varies between countries, e.g., in Canada for fifty years and in the United States for seventy-five years. Copyrights granted to legal persons are for a fixed number of years that also varies between countries. Furthermore, in the Civil Code tradition, natural persons including employees receive certain imprescriptable rights not available or transferable to legal persons, e.g., droit de suite or rights of following sales in the visual arts and moral rights. Some Civil Code rights introduced in Anglo-American countries but such rights remain transferable to legal persons extinguishing rights of the original creator. This reflects the Common Law tradition of extending all rights available to natural to legal persons. No formal registration is required. Copyright adheres to a work on creation. Copyright cannot be renewed.
Indirectly, it is arguable that copyright adheres to genomic databases and other documentation - hard-copy, electronic or in any future matrix. The question of what constitutes a matrix, however, is problematic, changing as it does through time. Directly, it is arguable that copyright adheres to gene segments themselves. The question in law appears to be originality. Naturally occurring sequences, according to some, are ‘facts of nature’ and hence copyright cannot adhere. In the case of ‘original’ sequences, however, i.e., those created through human ingenuity - a.k.a. artificial, there appears no reason for copyright not to adhere as in software computer programs.
Industrial design involves the arrangement of elements or details that contribute a distinctive aesthetic appearance rather than a function to a good or service. In this sense there is a relationship between copyright protecting a work of art and industrial design. Both involve aesthetics but in the case of a copyright the aesthetic element is fixed in a matrix that has no utilitarian value. By contrast the aesthetic element of industrial design is fixed in a utilitarian matrix, e.g., a coffee cup without a design retains its function. In addition, am original work of art tends to be unique while an industrial design is usually produced in large numbers. Industrial design protection can be obtained by both natural and legal persons. Industrial design emerges from the Arts. It is important to note, however, that industrial design evolved from copyright in the British Commonwealth but from patents in the United States. Design protection is granted for a fixed time period (for, example, 14 years in the United States) after which the design enters the public domain. Registration and payment of fees are required. Industrial design cannot be renewed.
It is arguable that the ‘living rings’ (see above: Art) is the precursor of a family of aesthetic, rather than functional, genomic applications. Indirectly, such logos could include marking the growth, development and diversification of an institutional host – public, profit and nonprofit. Directly, it is arguable that genomics in industrial design is just a matter of time, i.e., until the industry becomes crowded and product diversification generates ‘genomic boutiques’ selling the genomic equivalent of the Chia planter.
Patents are granted for new and useful compositions of matter (e.g., chemical compounds, foods, and medicinal products), machines, manufactured products and industrial processes as well as to improvements to existing ones. In some jurisdictions, patents can also be granted to new plant and new animal forms developed through genetic engineering.
Through case law and amendment, U.S. patents have, over time, extended to three basic types: patents of invention, design patents and plant patents. In all cases, registration is required and fees must be paid. To be patentable, an invention, design or plant must be novel, useful and, non-obvious “to one of ordinary skill in the art.”
A description of the invention must be deposited, in writing and drawings, sufficiently detailed to allow one of ordinary skill in the art to replicate the invention. This insures that new knowledge enters the public domain while the rights of the inventor are protected. In the case of microorganisms, description can take the form of a deposit of a sample with an authorized depository. Patent protection is for a fixed period of time (in the U.S., currently 20 years from the date of filing) after which it enters the public domain. It can be obtained by both natural and legal persons. In general, these terms and conditions hold in all countries in the Anglo-American tradition. Patents cannot be renewed.
Directly, with Diamond v. Chakrabarty in 1980 genomics became patentable. From the growth of the biotechnology industry since that decision, one can reasonably infer the effect of this ‘change in the rules’. The financial incentive of a temporary monopoly was established. The question of how far up the chain of life patents will extend remains problematic. In the United States and the European Union, for example, a patent has been granted on the ‘Harvard mouse’; in Canada, by contrast, a patent was recently rejected by the Supreme Court. Most First World countries are actively engaged in debate about human cloning, perhaps to foreclose the ‘Blade Runner’ scenario (see above: Art). In most Second and Third World nation-states, the debate has not been engaged because of more pressing socio-economic problems.
Indirectly, it can be argued that as genomics matures the equivalent of ‘business process patents’ will emerge similar to those granted by the USPTO. Professional researchers can already call commercial labs and have specific sequences delivered to their door. How such labs organize their future business processes may permit patenting.
Sui generis in Latin means “of its own kind”. There are two internationally recognized types of sui generis genomic-related intellectual property rights. These are:
· breeders’ rights for ‘lines’ of plants and animals generated using pre-genomic ‘selective breeding’ technology; and,
· a special depository right for microorganisms in lieu of traditional patent requirements of a written description and drawings.
Given such special legal recognition, it can be argued that a whole new class of legal hybridomas (sui generis) rights made up of elements drawn from copyright, design, patent, trademark and trade secret & know-how rights may be in order. Such rights would more effectively legally treat and financially encourage specific lines (and by default, discourage others) of genomic intellectual property. What types is problematic because it is political in nature (see below: Politics).
Trademarks (and marks of origin) are devices such as a word, logo or other mark pointing to the origin or ownership of a good or service that is reserved for the exclusive use of its owner as maker or seller. Today, its application has, de facto, extended to ‘domain names’ on the internet or world-wide web. The World Intellectual Property Organization (WIPO) has established dispute settlement mechanisms to resolve ‘cyber squatting’, i.e. registering a domain name using the name or trademark of an established business enterprise or celebrity, e.g. Julie Roberts, with the intention of selling that registration to its recognized trademark holder for a profit. At the international level, however, only the Common Industrial Property Regime of the Andean Community of 2000 makes explicit reference to web domain names (Chartrand 2001).
Registration and the payment of fees are required. A trademark is granted only for new marks so as not to confuse the public. It is available to both natural and legal persons. Unlike other forms of IPRs, however, trademarks can be renewed and can potentially be extended in perpetuity.
Indirectly, (as previously argued above: Designs) the ‘living rings’ may be the precursor of a family of aesthetic, rather than functional, genomic applications including corporate logos. Such logos could mark the growth, development and diversification of any institutional host. Directly, it is arguable that ‘lines’ of patented genomic sequences will bear an invisible ‘housemark’ (Kayton 1984, 214n) that will serve as trademark, a mark of quality assurance; its absence or forgery a sign of copyright, design, patent and/or trademark infringement.
Trade secrets and know-how are the least protected of any form of intellectual property right. Know-how refers literally to knowing how to do something, e.g., how to run a construction project. It includes knowledge and experience of an administrative, commercial, financial or technical nature used in running a business or performing a profession. It is experiential in nature, i.e., it is acquired through practice and experience. It also tends to be ‘tacit’ rather than ‘codified’ (OECD 1996) and embodied in an individual rather than in an external matrix. In most countries, know-how is protected by contract binding employees and other agents to confidentiality. When a natural or legal person (including a government) discovers that know-how has been revealed by an agent without permission, legal recourse is available through breach of contract before the courts. No registration is required. Know-how can be protected without time limit.
Trade secrets can be defined as information of a technical or commercial nature that is not in the public domain nor generally available. It may be a formula, pattern, physical device, idea, process, compilation of information or other information that provides a competitive advantage in the marketplace. It is generally protected by contract binding employees and other agents to confidentiality. Normally the courts require that a trade secret be treated by its owner in such a manner that it can reasonably be expected to prevent the public or competitors from learning about it except by improper acquisition or theft. In the case of electronic data this includes using encryption and “password” technologies. The most famous trade secret is the formula for Coca-Cola. A trade secret may be embodied in written or other codified form or it may be tacit. No registration is required. There is no time limit on a trade secret as long as it remains secret.
While know-how and trade secrets are often used as synonyms they need not be so. In the case of management and franchises, for example, know-how is usually accessible to third parties when being used. Single elements may be kept secret but the overall concept cannot be.
Indirectly, trade secrets such as the formula for Coca-Cola and know-how are protected in genomics by private contract enforceable in the courts. Where in a nation’s judicial hierarchy such cases will be heard, however, varies, e.g., in the United States it is at the State level. Some international conventions, e.g., TRIPS and the Andean Pact Industrial Property Convention recognize infringement of both. In effect, when a senior executive moves from one ‘major’ in one country to one in another, an international form of ‘legal’ lobotomy is enforce; the executive and new employer may both be held liable. In William Gibson's future world of Neuromancer, corporations protect their know-how and trade secrets by implanting genomically designed “neural bombs" (Gibson 1984). If an employee’s loyalty slips, the bomb goes off killing or mentally maiming: the bottom line, the knowledge is protected.
Directly, know-how or ‘lab bench knowledge’ and team work in genomics is similar to that in the Arts. A group of highly talented and creative individuals generate what in economics is called ‘economies of team production’. Division and specialization of labour combined with experience and growing trust generates know-how that leads to excellence. Such excellence, in turn, becomes embodied in the trademark of the team or firm together with the financial goodwill associated with it. In this sense, business goodwill is also a form of intellectual property (Commons 1924).
While IPRs act like channels directing knowledge towards the public good, there are breakwaters to slow, stop or deflect the floodtides of change. These act like a counterpart to Schumpeter’s ‘creative destruction’ (Schumpeter 1950). The major breakwaters are culture, law and politics.
Culture refers inclusively to, but not exhaustively of: art, custom, economics, habit, language, law, life ways, religion, science and technology. All organically interact and collectively leave a footprint in time called the history of a nation-state. Passage and integration of significant new bodies of knowledge and technologies through the living tissue of a society has always confronted institutional, legal and other impediments. Consider three historical examples.
First, the ancient Indus Valley culture (about 3,000 to 1,500 B.C.E.) appears to have rejected a new technology of war - the socket-headed axe - then fell under the blows of invaders who adopted it. Second, medieval China had gunpowder and transoceanic sailing ships but repressed them until European gunboats humiliated and partitioned the Middle Kingdom in the 19th century. Third, medieval Islamic medicine was the best of its time. But the human body, created in God's image, is, in Moslem tradition, a temple not to be violated. When surgery emerged as the next step in medical progress, Islam inhibited its use and rapidly fell behind the West. The breakwaters of these societies succeeded in stopping change but at the price of decline and fall.
Unlike these historical examples, however, genomics is not a single technology but rather a new technological complex affecting every sector of the economy. Resistance, accordingly, is sectoral rather than global. This is evident in the clashing positions of nation–states regarding fetal tissue research. Sweden has embraced it; Britain regulates it; the United States rejects it; and, figuratively, Canada can’t make up its mind. The breakwater appears to be religion as is the case with xenogenetic transplants, particularly from pigs. It is unlikely that Islamic or orthodox Jewish cultures will accept, let alone support, this line of genomic research. The fact that the European Union is more resistant to genetically modified foodstuffs but more accepting of medical genomics than the United States highlights the sectoral and selective nature of the cultural breakwater.
In short, every culture has its own distinct sense of what the Greeks called kosmos – the right ordering of the multiple parts of the world. This sense is grounded in aesthetics. What to some is beautiful and inviting to others is ugly and disgusting. What is the best of food to one is frankenfood to another. Taste thus plays a critical role in the sectoral resistance of nation-states to genomics. In effect, the tidal wave of genomics cannot be stopped but the breakwater of culture slows and/or deflects it according to national taste.
In the Anglo-American Common Law tradition there are two principal types of law: statutory and case law. The first is established by the legislature in its role as lawmaker; the second is determined by the courts in its role as interpreter. The dynamic between the two is critically important as is evidenced by Diamond v. Chakrabarty wherein the U.S. Supreme Court concluded because the legislature had not explicitly excluded genetic patents in the statute – the Patent Act – they were legal. Precedent plays a critical role in case law but it extends beyond prior legal decision to customary business practice. J.R. Commons identified the practice of common law courts accepting and then enforcing customary business practices as emanating from the Statute of Monopolies of 1624:
The next hundred years, until the Act of Settlement in 1700, was substantially the struggle of farmers and business men to become members of the Commonwealth, whereby they might have courts of law willing and able to convert their customary bargains into a common law of property and liberty. The court which abolished the power of the gilds began to take over the work of the gilds. Their private jurisdiction became a public jurisdiction. And the very customs which the gilds endeavored to enforce within their ranks became the customs which the courts enforced for the nation. The monopoly, the closed shop, and the private jurisdiction were gone, but the economics and ethics remained. Much later, in the modern commonwealth, other functions of the gilds, such as protection of the quality of the product and the qualifications of practitioners, have also been taken over by courts or legislatures. (Commons 1924: 230)
As genomics matures, this process of absorbing customary business practice into law will likely continue. With respect to genomics, as a new genre of business, the courts may well be pressed to interpret what will likely become a flood of statutory law. This probability is higher because of the tender state of tort law, i.e., non-contractual benefit and damage. It is here, as well as in intellectual property rights, that differences between the Anglo-American tradition of decision by precedent and the European Civil Code tradition of decision by ‘principle’ becomes most evident. Product liability attains a higher order when the product becomes ‘genetic’. The law of torts appears, to me at least, the most resistant legal breakwater to the genomic tidal wave. Intellectual property rights, on the other hand, have, to date, been one of the most accommodating.
Politics is about power: Economics is about profit. When political power arises from economic profit and profit arises from political power, then one has political economy as Adam Smith understood it. Setting enterprise free from government interference was to be matched by its divorce from political power. To the degree that the law is political in origin and to the degree that customary business practice becomes accepted and enforced as Common Law, the divorce has not been finalized.
Smith had Continental competitors – the Physiocrats. They too believed in:
… laissez faire, laissez passer, meaning thereby freedom to do, or freedom to make, and freedom to pass; or, as Marshall put it, “let people make whatever they like and move wherever they like.” (Samuels 1962, 157).
Unlike Smith, however, they believed in government interference, not with the market, but with definition of property rights. They wanted private self-interest and gain to drive the economy towards socially desirable goals. In fact they believed that the economy, by definition of property rights, was fundamentally legal in nature. It was by changing the rewards, rather than rules of the game, that the Physiocrats hoped to make France the most competitive of nations. In many ways the current situation with genomic IPRs poses the same challenge to all modern nation-states. What is the right ‘rights’ regime? In this regard consider the nature of the Physiocratic policy paradigm
The Neo Physiocratic Policy Paradigm
Unlike the tragic inhabitants of the island nation of Naru, we need not simply stand on the beach watching the wave front approach (in their case a typhoon) or bury ourselves deep to wait for the wave to pass. In effect, genomics provides our species with the means to consciously re-shape itself and all life on the planet literally from the ground up. The evolutionary implications are approximated in Edgar Zilsel’s comparison of geological and historical time:
Dividing lines between different sciences have barred scientific progress so often, that it certainly is useful and even necessary to consider history from a naturalist’s point of view. But if this is done, it must be done correctly. Since the crust of the earth became solid 1 or 2 x 10 9 years have passed, whereas the whole history of mankind since the period of the first Egyptian and Sumerian kings until present times has lasted about 5000 years. So “geological” to “historical” time is as 300,000 to 1. History, therefore, even from the naturalist’s point of view is scarcely one section among other sections of the evolution of life. To think e.g. that the biological rise of mammals during the tertiary period and the political rise of Germany since 1933 belong to one line of evolution is the same as to consider the transition from winter to summer a continuation of the dying away of the glacial period (Zilsel 1940, 121-122).
In one generation genomics can accomplish what evolution would have taken forever to achieve! Time has changed - not chronological time – rather the evolutionary rate of humankind. In a manner of speaking, humanity has attained if not exceeded the evolutionary rate of insects and microbes. What is its probable and preferred future?
One preferred future is, perhaps, a New Renaissance in which the geneticist, like the 15th century artist/engineer/humanist/scientist, claims godlike powers of creation, i.e., creating out of nothing - ex nihilo (Nahm 1947, 1950). In turn, the geneticist may wash the ‘dirty hands’ of physicists whose atomic bomb was dedicated to the destruction of life, while genomics is dedicated to its proliferation and diversification under the guiding hand of humanity.
Another is that the overarching questions raised by genomics are consciously answered in a holistic system of statutes. This would include enunciation of ethical and moral standards reflecting national taste. It would provide explicit definition of statutory genomic property rights that are, and are not, recognized and for which a temporary monopoly is offered as reward for change and innovation. Tort protection would be changed to recognize customary business practices in genomics – what constitutes primae facia evidence of due diligence. Explicit recognition would be given to opportunities foregone and an acceptance of the challenge of competitiveness represented by nation-states that choose to go down such forbidden trails. Like the Physiocrats we would define property rights and let the games begin – laissez faire, laissez passer.
What is the probable future? Probably, unrelated and fragmentary sectoral reactions will take place in response to specific manifestations of the technological imperative and the forces of international competitiveness. Assuming genomics has reached the stage of ‘normal science’ (Kuhn 1996) then puzzle solving can be expected to generate a plethora of innovations, breakthroughs and/or perceived threats to the existing social order keeping the legislature and the courts busy for some time to come. There will be piecemeal responses until one morning, like Smith in Orwell’s 1984, we will wake up to the fact that the revolution happened more than a decade ago and we didn’t even know it! Que sera sera: What will be, will be!
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