On IPR Abolition 6: Blog Ownership and Drug Molecules

Below is a continuation of my debate with some libertarians who are anti-IP. Specifically with Say Peng, a friend in Singapore. Posting his comments with his permission.

Say: Nonoy, do you agree that ownership of property can only be physical ownership; if you do, then since ideas are intangible, how does one own them?

Nonoy: Say, I already said above, ideas are ownable. I own a blog, it's intangible. Would anyone say now that I cannot own it? If they persist so, then who owns httpfunwithgovernment.blogspot.com? Government? UN? the socialists? Follow up question: do the anti-IP libertarians consider molecules as intangible? Scientists and inventors create and invent new molecules or compound of molecules.

Say: I believe Blogger, which is currently owned by Google, "owns" your blog. A blog is a type of service, which explains its intangibility; it is a service which result from the workings of physical computers and whatnot. So the people who owns the computers sustaining the blog are its original "owners". And because you are using a service, you do not own anything.

Molecules are tangible, obviously. Scientists who create new molecules own the molecules that they have in their possession, but not the concept or idea of the molecule; which means, for example, if I invent a new chemical compound called Sodium Trioxide, I do not own the chemical formula NaO3, but only own the NaO3 molecules that I have in my possession.

Nonoy: Google owns blogger, true. Google owns and controls my blog, adds or removes content, allows or disallows reader comments, false. It is that private ownership of something that allows people to be creative. The Philippine govt, the Philippine "collective", owns the portal, www.gov.ph. What do I care about it? That portal has little or no creativity, only press releases of the national bureaucracy.

Now to molecules, it's good that you admit that molecules are tangibles. But such molecular inventions are governed by IPR, that's why new drug molecules are patented. The pharma or biotech companies have their own trademarks, another form of IPR. So what's wrong with granting patents to a new drug molecule that was invented by scientists? What's wrong with granting a trademark to companies? Why insist on the abolition of IPR?

Say: ‎"Google owns and controls my blog, adds or removes content, allows or disallows reader comments, false." This is only false if you've entered into a contract with Google forbidding so. Otherwise, Google holds exclusive control over the blog.

It's not the drug molecules that are patented; it's the chemical formulas of the drug molecules that are patented. What's wrong with it is that nonviolent people who use the same chemical formulas to create the drug molecules with their own chemical and technological tools are met with by violent intervention from the State. Just imagine: If the person who invented sulphuric acid had patented its chemical formula, that would mean that anyone (from chemistry students in schools to industrial scientists in chemical companies) who created the chemical, using their own stuff, would be penalized. That's what wrong.

Nonoy: Google, fb, yahoo, twitter, etc. have their own terms and conditions. Once you click "I accept", that is the contract between you and them. By having its own IPR, by having its own trademark, google, fb, youtube, yahoo, etc., they become very innovative, very efficient, and we are reaping their efficiency, like these free fb accounts. Isn't it wonderful how the IP system that protects them causes them to become efficient? About drug molecules, wrong. Check my earlier paper, "IPR and medicines part 8", I enumerated there some molecules that are patented -- abiraterone acetate, azazitidine, befetinib, cixutumumab, docetaxel liposomal, enzastaurin, intetumumab, ixabepilone, lenalidomide, nimotuzumab... these are not chemical formulas, they are drug molecules. So to treat just one disease, prostate cancer, I mentioned there 101 new molecules under various R&D stages. Anyone and everyone can create his/her own drug molecule, no copying needed, so long as they have the scientific capability and financial resources. What's worng with that system? Why insist on the abolition of the IP system that encourages more and more people and companies to become inventive and innovative?

Say: I never read the terms and conditions set by Google and Hotmail. I honestly doubt anyone reads them. But yeah, it's a contractual agreement.

Drug molecules are chemical molecules, and how would one patent them if not by patenting their chemical formulas? There is nothing wrong with people creating their own drug molecules, but what if I want to produce the drug molecule that you invented instead? In order to do so, I have to use the drug's chemical formula, which is an intangible concept which you therefore cannot own, and my own chemicals and machinery. I have taken nothing from you by force; yet you would, by enforcing IPR, set the State's violent mechanism upon me and prevent me from doing what I want, nonviolently, with my own properties. How does this system protect my propertarian liberty?

Nonoy: To treat breast cancer, there are probably more than 2,000 different drug molecules that have been invented -- off patent and have hundreds of various generic brands already; patented and marketed, and patented but still not marketed, in various R&D stages. If you insist to use the drug molecule that I invented, no problem, just buy my drug, period. If you think my price is very high or the effectiveness of my drug is suspect, then just go to another manufacturer and buy his drug using a different molecule. But if you insist to really use my drug molecule, the raw materials I got, say, from innards of cows or pigs, then just innovate a little, get raw materials from innards of chicken or ducks or tilapia, and produce your own molecule. The IP system really encourages endless, limitless innovation and imagination. Why insist on abolishing the system?

Say: ‎"If you insist to use the drug molecule that I invented, no problem, just buy my drug, period."

It's not about buying your drug, which means buying ownership of a physical item; but about "buying" the chemical formula of the drug which is non-physical and therefore cannot be owned, sold, and bought.

I don't really know if the IP system promotes innovation; there are disputations regarding it and I haven't made up my mind. But I am against it currently because of its immorality; it is in conflict with tangible property rights.

Nonoy: "I don't really know if the IP system promotes innovation." -- I already explained it above: millions of patented seeds, with tens of thousands of rice seeds alone; dozens and dozens of cartoon characters aside from Mickey Mouse; thousands of drug molecules invented on each of major diseases (prostate C, breast C, colon C, hypertension, cardiovascular, stroke, etc.). Millions of songs copyrighted, millions of books copyrighted. And see the important trademarks -- google, fb, youtube, yahoo, live, twitter, wordpress, baidu, naver, etc. -- and all the efficiencies and free social networking and search engines they give us for free.

To be continued...
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On another note, another friend in facebook, Sebastian, posted in my wall the book, Bourbon for Breakfast: Living Outside the Statist Quo, by Jeffrey Tucker of the Mises Institute, Alabama, USA. Sebastian wrote a short note, Some more thoughts for you to disagree with over IP protection ;)

I thanked him for that link. I told him that I already mentioned this book in Part 4 of this discussion series. I noted how the arguments of the socialists and some libertarians on IP are so similar.

Sebastian replied, “I don’t think socialists would describe IP laws as monopolies granted by and in connivance with the state, would they? As I understand it, this is not an attack on property itself, there is a big philosophical difference between physical and intellectual property. You should also discuss this book on your blog: http://www.scribd.com/doc/51833371/Against-Intellectual-Monopoly.

I replied, “Yes, socialists consider IPR like patents as monopolies granted by the state. See how the left formulate their campaign against drug patents, "Patients over patents".
I saw that book earlier, especially the part on "simultaneous invention". The authors are wrong, there is NO conflict in simultaneous invention, as I discussed here, IPR and medicines, part 8. 101 different new drug molecules being developed just to treat prostate cancer, excluding old drugs that are still patented or off-patent already. There are endless possibilities and opportunities to inventors and innovators, thanks to the IPR system.”

IPR and medicines, Part 8

In a discussion with fellow free market bloggers here in Manila, I argued that a patent (or any other type of intellectual property right (IPR)) applies only to one molecule or product and that it is possible to have hundreds of patents, say, to cure a particular disease like blindness. See my longer argument here, IPR and medicines, part 6.

One commented that it's like saying, “You’re free to produce tires, just not rubber tires. You can use wood, or leather…”

This is wrong logic. There are hundreds, if not thousands of molecules and molecular compounds, that can be invented from rubber. That is why there are dozens of different tires from Michelin alone, from Goodyear, from Bridgestone, Continental, Dunlop, Firestone, Kumho, Pirelli, Toyo, Yokohama, etc. Each tire manufacturer would have a phalanx of different tires suited for different types of roads: ordinary roads, race track, rugged terrain, snow, mud, sand and desert, and so on. Not one of those many tire manufacturers make tires from wood or leather.

There is also one concern that two or more inventors can work independently on something, but only one of them will be rewarded with a patent on a first come, first served basis.

Although this might be theoretically possible, I do not know if this ever happened. Let me expand on the search for new drugs to kill different diseases, say prostate cancer. Photo credit here and the next picture from Mens Hormonal Health.

I often cite prostate cancer for the simple reason that it's the disease that killed my elder brother about 4 years ago, also my mother's cousin just 2 years ago. And just this afternoon, I talked to a friend here in Manila, said she's working 7 days non-stop to earn more to help her father who has prostate cancer, stage 4.

I checked the web and searched if there are new drugs that can potentially control if not kill prostate cancer cells someday. I was delighted to know that in the US alone, there are 101 different molecules - patented, granted IPR -- that are potential drug candidates. Drug molecules with weird names like abiraterone acetate, azazitidine, befetinib, cixutumumab, docetaxel liposomal, enzastaurin, intetumumab, ixabepilone, lenalidomide, nimotuzumab,... my tongue is tied just trying to pronounce those weird names. There are also acronym-numbers like MLN 8237, ISIS EIF4ERx, GDC 0449,...

If I write blog articles like this, I did not hire molecular biologists or biochemists or zoologists or botanists or other natural scientists. I also did not construct a laboratory and will not require dozens of animals, then people, sick and non-sick, for different types of clinal trials. Thus, if other people will confiscate my blog articles and say that they are the ones who really wrote such papers, then no problem with me if they can steal and claim authorship of 1, 2, or a dozen article from this blog. There was little cost on my part to write each blog article.

But can the same comparison apply to the inventors and developers of those weird-sounding drug molecules? And those inventors are not even sure if after hurdling 10 years of continued research on each molecule, it will become successful and hurdle the 2nd to the last and the last clinal trials. Meanwhile the clock is ticking. Their 20 years patent on the molecule has only 10 or 8 or 6 years to go and they have not marketed and sold the drug yet.

Let each IP owner or holder decide whether they want their IP invention (a song, a poem, a blog article, a book, etc.) be shared for all, zero IPR, or be made exclusive for them, even for a few months or years. A call to "abolish all IPR" is coercion by itself, when free marketers are supposed to be fighting coercion in the first place.

As to whether it should be the government or some private entity that should grant an IPR, I have discussed it earlier in IPR and medicines, part 7.

IPR and medicines, Part 6

This is the continuation of my debate with some friends who are also advocates of free market and individual liberty, but do not believe in intellectual property rights (IPR). Here are among their arguments.

1. Ideas are non-scarce goods. Nothing is lost by me using another person's idea. Copying is not theft.

2. IP is pointless. IP does the opposite of motivating Innovators, it scares them. For the protected, since his idea is protected, he has monopoly over it and isn't motivated to innovate more since there's no more competition.

3. The other potential innovator, even though he knows the innovation better to the point that he can upgrade it 100000x better than the original, he can not. Why? Because it is government enforced IP.

4. It is taken for granted that a patent is necessary to be profitable, that competitors should be restricted so as to allow innovators to recoup their expenditures. That’s misrepresenting capitalism. If high costs were a hindrance to innovation, no railroads or shopping malls or anything could have been made at all; the opposite is true in fact.

5. If IP didn’t exist, there would still be a competition of ideas, but no group is restricted from applying ideas to their products and seeing if customers patronize them. The IP process, while seemingly protecting innovations by rewarding patent holders, actually aborts many innovations that would have otherwise sped up developments in the particular field, because of restrictions in market application, if not in lab testing itself.

6. During the time a drug/invention is reverse engineered, the 'original' creator has a temporary monopoly on its sale. IPR stops the means of innovation by outlawing derivative works. The market process is about competition between old and new ideas. The entrepreneurs must copy the old ideas first before they can improve upon them.

7. IP actually concentrates resources among fewer pharma players rather than allows smaller competitors to come in. Big pharma’s lobbying makes them buddies with politicians; they have greater pull in getting and renewing patents.

I think the answers to a number fo the arguments above I have already articulated in Part 5 yesterday. Let me restate them again and will expand the argument further.

1. Limitless raw materials to invent a new drug molecule

An IPR like patent is granted on each specific invention.

People want a drug against prostate cancer or any other type of cancer. Pharma A invented a drug using a molecule extracted from tropical herbs; Pharma B invented a drug using a molecule from temperate herbs; Pharma C invented a drug using a molecule from sea shells; Pharma D invented a drug using a molecule from big fishes like barracuda and sharks; Pharma E invented a drug using a molecule from deer or monitor lizards... Pharma X invented a drug using a molecule from mangos and avocado; Pharma Y invented a drug using a molecule from rambutan and mangosteen....

Assume further that each newly-invented drug molecule is able to treat patients with prostate cancer but at various degrees of success. Pharma A's, B's and C's drugs do not really kill the disease but they somehow prolong a patient's life by 1 to 5 years and their prices are different. Pharma D's and E's drugs are effective but they cannot be used for prostate cancer patients with hypertension as they can trigger some adverse effects. Pharma F's and G's drugs are also effective but cannot be used for cancer patients with diabetes, and so on.

In this case, no one has an industry monopoly on anti-prostate cancer treatment. Anyone and everyone who desires to neutralize if not kill prostate cancer can do so, as there is limitless raw materials and processes available as human imagination is limitless.

So it is possible to have 30 or more "mini-monopoly" drugs representing the 30 or more patented drug molecules to control if not kill prostate cancer cells.

2. Patent life

Such mini-monopolies in the form of patent on each molecule are not permanent. The international practice is 20 years patent life starting from the discovery of a molecule. It is not clear to me too why they randomly chose 20 years. Why not 12 or 35 or any other number of years.

The IPR of 20 years patent includes complying with all the strict and costly regulations by the drug regulatory agencies (currently governments like the US FDA, but it can be a private agency someday). Those multiple clinical trials on animals, then different groups of people with different health conditions, eat up around 10 to 10 years of the original 20 years patent life.

And that leaves the patent holder -- assuming their drug molecule becomes successful in hurdling all the regulatory requirements by governments to ensure substance efficacy while ensuring safety of patients -- with only about 8 to 10 years of commercial, patent monopoly period. And from what I read, not all patented and highly-advertised drugs are successful and profitable.

When the patent of a successful drug molecule expires, then copying by all other interested generic manufacturers is possible and allowed by law. It becomes a free for all to manufacture and create their own product brands. This is what happened to paracetamol molecule. Innovator drug then was Tylenol. Upon its expiration, every Tom-Dick-Harry pharma, Filipino or Indian or Pakistani or Chinese or American, etc. produced their own brand of paracetamol. Currently, the most popular brand in the Philippines is “Biogesic” produced by one local pharma.

3. Launch delay or non-lunch of patented drugs in anti-IPR countries

It is possible to disrespect all inventions with IPR protection. Copyrighted songs and softwares, pirate them. Patented drugs, copy them. But patients who buy the copycats that turn out to be counterfeit or substandard drugs will have a hard time suing or running after their manufacturers.

(Phtocredit: 3CPNet) The existing Cheaper Medicines Law or RA 9502 contains many provisions that allow such tweaking of IPR, like compulsory licensing (CL), parallel importation, early working on a patented drug, government use of a patented drug, drug price control, and mandatory production of generics equivalent by the patent holder.

Here is one possibility, a reality for other countries already. Some of the more revolutionary, more disease-killer but patented drugs, are available in Hong Kong, Singapore, S. Korea, Japan, US, etc. but not in the Philippines. Why? There are no CL, no price control and similar measures awaiting those expensively-researched drugs there. In the Philippines, all the threats to introduce a revolutionary but patented drugs are present. So Filipino patients who are desperate to get such new drugs will have to buy those from abroad, and this will make treatment even more expensive. And this defeats the purpose of having “cheaper medicines” as envisioned by the law.

An alternative to non-launch of a new but patented drug is launch delay. After all regulatory requirements (with US FDA, etc.) are hurdled, out of the remaining 8 to 10 years of patent life, innovator companies can bring into the country such drug when there are only about 2 years before the patent will expire.

IPR and medicines, Part 5

There is a discussion in one of my facebook groups, on intellectual property rights (IPR) in the pharmaceuticals sector. One argument goes like this:

When a person invents a useful “1st-gadget” people will want to buy it and the inventor will Profit. Inevitably someone else will make a cheaper or an improved “gadget mark 2”. Now Everyone will want to buy the “mark 2” version and the person who invented the “1st-gadget will lose a portion of his expected profits unless he makes a more attractive gadget. Of course, there is nothing to stop “1st-gadget” inventor from improving on “gadget mark 2” and start selling “gadget mark 3”. In this way the world progresses and life gets better and easier for us all.

Progress depends on what happens after the“1st-gadget” is invented. The “1st-gadget” inventor is not obliged to share this invention to “improve the world”. No one can force him/her to share the idea. He could rightfully keep it to himself. However, if he reveals this knowledge to the world, then others may act upon that knowledge. Will people be willing to share knowledge if others are able to make a bigger profit from an Invention than they made? That depends on the motives of the inventor....

The “1st-gadget” inventor might wish to call on the government to use the law to prevent anyone else from copying or improving on his“1st-gadget”. He then has a patent on “1st-gadget” and nobody else may sell it or make improvements to it without paying him. One problem is that it is impossible to invent something without using ideas of others who Came before. Every inventor is building on ideas that came from an idea, sight, book, or invention that touched him. If this is so, how can the “1st gadget” inventor are permitted to restrict other people’s freedom to use his invention for further inventions? What about intellectual rights – the right to own the use of ideas? Do the rules for inventing “1st-gadget” apply to “1st-song”, “1st-fi lm” and “1st-computer program”? Haven’t these originated from other people’s ideas and inventions of music, musical instruments, photography, computers, and programs? Would there be more harmony and less Aggression, more co-operative spirit and fewer disputes, without patents?

A number of good ideas and points above. But there are a number of faulty logic as well. Let me enumerate them.

1. An IPR like patent is granted on each specific invention. There are 1,000 composers of 1,000 different rock songs, so there are 1,000 copyright holders here. No one can claim that another band's rock song is also their invention, and no one has a monopoly on the rock songs category; instead, there are 1,000 "mini-monopolies" here.

2. People want a cheap but comfortable sedan, so Toyota invented Vios, Hyundai invented Getz, Honda invented City, and many other car manufacturers (Ford, Isuzu, Daewoo, Mazda, GM, Cherry, Tata, etc.) have their own invention of a cheap but comfortable car. There is no monopoly of a "people's car." Rather, there are dozens of mini-monopolies on the cheap and comfortable car category. Then there are dozens of mini-monopolies too, on the 2.0 to 2.5 engine displacement car category, on the SUV category, and so on. There is no industry monopoly.

3. People want a drug against prostate cancer (or breast cancer and all other cancer types). Pharma A invented a drug using molecules from tropical herbs, Pharma B invented a drug using molecules from temperate herbs, Pharma C invented a drug using molecules from sea shells, Pharma D invented a drug using molecules from big fishes like barracuda, sharks and blue marlin, Pharma E invented a drug using molecules from wild animals, and so on. No one has a monopoly on anti-prostate cancer drug. Rather, there are dozens of mini-monopolies and patents on anti-prostate cancer drugs.

4. Private property is private property, it can never be national or collective property, unless the inventor will voluntarily share his invention (a drug molecule, a song, a poem, a business software, etc.) to others. Or if he thinks that the cost of enforcement is much larger than the benefit of going through it. If we say that al IPR shd be confiscated, that's coercion. Let inventors decide whether they want their invention to be shared to all or be protected by IPR laws (patent, trademark, copyright, etc.).

5. Not all lawyers and players in the pharma sector are pro-IPR. Those working in innovator pharma companies (the multinationals) are generally pro-IPR. Those who work in generic pharma are, to some extent, anti-IPR, citing TRIPS flexibilities. Then there are also other NGOs, media and academics who argue on "patients over patents", "people over profit", "health is a right" arguments. The Cheaper Medicines Law (RA 9502) is generally an anti-IPR law for institutionalizing IPR confiscation via compulsory licensing, parallel importation, government use, and so on, with riders like drug price control provisions.
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Here are Part 4, Part 3, Part 2, in this "IPR and medicines" series.

Further references, just type "IPR and health" and related keywords in this blog or the major search engines.