If you like new and improved products, better ways to get things done, or discoveries that bring game-changing benefits to people’s lives, then you must believe in the underlying principle that stimulates such creativity: the right to private property.
Property rights — including intellectual property — lie at the heart of America’s free enterprise economy and our nation’s tremendous success. The centrality of private property has been American — and modern conservative — principle from the beginning.
The self-evident truths referenced in the Declaration of Independence cite individual human beings’ unalienable right to life, liberty and property. The Declaration calls it self-evident truth that the Creator endows these fundamental rights to each person.
This right to private property is made manifest in the tablets at Sinai, “Thou shalt not steal.”
What makes intellectual property a primary type of property is that we each rightfully own our ideas. We secure the rights to this type of property through a patent for an invention or a copyright for our writings. The property is inherently the originator’s — the inventor or the writer — it’s not the government’s property.
In the Constitution, the Founders brilliantly provided for nearly the strongest property right possible: complete exclusivity over one’s invention for an initial period of time.
Just as with real property, inventors may use, sell, or lease the patented property. They can manufacture the invention themselves or license someone else to make the product. Or they’re free to do nothing with it. It’s their property.
Exclusivity enables the IP owner to establish a new market. It takes time to build a business and commercialize a product. But a patent can allow an inventor to create and corner a brand-new market.
Market exclusivity from a patent isn’t a “monopoly.” Rather, it’s a rights-based temporary advantage. It’s a reward for the risks the inventor bore in research and development, dead ends, and other calculated chances and setbacks — all of which eventually led to the new creation now protected by the patent as private property.
A patent amounts to a deed to property. This new pharmaceutical, manufacturing equipment, electronics component, software function, process, or other invention — intellectual property — didn’t exist before.
But it will improve people’s quality of life, create new wealth, stimulate jobs and economic output, and spark competition in the newly established market. In other words, inventions protected with a deed to the newly created property grow the economic pie while making people’s lives better.
Patents as private property may hold incredible value — for example, remarkable new medicines that keep patients out of the hospital or cure a disease, new ways of extracting oil and gas, smart phones packed with a computer, and cutting-edge automobile safety and efficiency technology.
The highest-value inventions — the innovations that represent real progress in science or useful arts — typically come from capital-intensive, research-and-development-oriented, IP-centric businesses. Think automobiles, advanced manufacturing, pharmaceuticals, telecommunications, medical devices, and biotechnology.
The extremely valuable output of these sectors command high profit margins. That’s because they come at the end of exceptionally high up-front costs and extensive processes and the value of the benefit they provide — longer life, healthier living, significant labor- and cost-saving goods.
For example, it now averages 10 years of R&D and a cost of $2.6 billion to bring a single new pharmaceutical product to market. The vast majority of discoveries fail to pan out as they go through lab tests, refinements, and four phases of clinical testing. Then there’s regulatory approval. The same thing holds for medical devices.
But the value of such patent-dependent inventions is beyond question.
The Washington Post recently reported on lung cancer patients who are surviving cancer for years, even becoming cancer-free, thanks to the IP and R&D behind genomics, biotechnology and pharmaceuticals. We now can identify common gene mutations that cause cancer and treat them with therapies that may have fewer side effects.
Yet, without the absolute property right of patent protection, there are few investors willing to take such high-risk, high-reward chances.
With Congress considering far-reaching legislation to make it much more difficult and riskier to defend one’s patent against infringers, the high-value innovation we seem to take for granted could well dry up.
It would be most foolish to enact H.R. 9 or S. 1137. These bills paint the devaluation of patents and the empowerment of patent infringers as “tort reform.” Instead, as former chief judge of the Federal Circuit Paul Michel has said, this antipatent legislation will kill the goose that’s laid America’s golden eggs.
James Edwards advises Eagle Forum on patent policy. The views expressed here are his own.