Please note that this is BBC copyright and may not be reproduced or copied for any other purpose. CURRENT AFFAIRS ANALYSIS A PENNY FOR YOUR THOUGHTS TRANSCRIPT OF A RECORDED DOCUMENTARY Presenter: Andrew Dilnot Producer: Ingrid Hassler Editor: Nicola Meyrick BBC White City 201 Wood Lane London W12 7TS 020 8752 6252 Broadcast Date: 02.08.01 Repeat Date: 05.08.01 Tape Number: TLN125/01VT1031 Duration: 27.17'' Taking part in order of appearance: Peter Zollinger, Executive Director of SustainAbility Limited John van Reenen Professor of Economics at University College London, and partner in the internet consultancy Lexecon Economics Sir Richard Sykes Rector of Imperial College of Science, Technology and Medicine, London and Chairman of Glaxo SmithKline. Dame Marilyn Strathern Professor of Social Anthropology, University of Cambridge and Head of Girton College, Cambridge Elizabeth Harding Solicitor at the Intellectual Property and IT firm Briffa, London Professor Trevor Jones Director General of the Association of the British Pharmaceutical Industry DILNOT You can't see them, touch them or even smell them. They're called intellectual property rights and they can make you unimaginably rich. But they can get you into pretty big trouble too, as the pharmaceutical companies recently found in South Africa when they attempted to enforce their patents in HIV/AIDS drugs. Peter Zollinger of the environmental consultancy ``SustainAbility''. ZOLLINGER The HIV discussion in South Africa was a wake up call for the pharmaceutical industry and beyond. We have seen other wake up calls in other industries. It was particularly striking because many of these pharmaceutical companies have been involved in the discussion around life sciences --- genetically modified organisms and one would have thought that this experience would have triggered a certain learning and one has to question why this hasn't happened. DILNOT Pharmaceutical companies almost seemed surprised that there was such a widespread sense that what they were doing was unfair. In tonight's Analysis we ask whether the intellectual property regime, IPR, can deliver economic efficiency and meet goals of fairness and global justice. VAN REENEN We do feel that feel that it's very unfair that there are many countries in the world who are suffering under great health problems and new drugs aren't coming forward to help deal with their treatments because they haven't got enough money. DILNOT John van Reenen, Professor of Economics at University College London, and expert in the economics of innovation and pharmaceutical drugs. But if intellectual property regimes are so unfair, why do we have them? SYKES There's no question that intellectual property drives innovation and supports the whole process of research and development. There will be situations in there where people say: Eureka! I have seen something that I believe is absolutely fundamental to a discovery. Yes this is a patentable invention. DILNOT Sir Richard Sykes, Rector of Imperial College, London and Chairman of GlaxoSmithKline. Well that's of course what we'd expect the pharmaceutical industry to say. Is the link between patenting and innovation really so clear? Professor John van Reenen. VAN REENEN We've got to remember all the time in this that IPR is only one of the overall incentives that companies have to come up with new innovations. There's a general creative force that people like to invent new things --- people in the universities have been inventing new things regardless of whether or not this forms such a property. There's also a great deal of government grants given directly especially in the rich Northern countries to develop new things which we think is important for artistic reasons or for reasons of national security or for the space race. DILNOT After all, we haven't always insisted on protecting intellectual property. When the apple dropped on Newton's head it didn't occur to him that the law of gravity was somehow his property, he simply told the world. Galileo, Darwin, Einstein, even Fleming did the same with the motion of the sun round the earth, natural selection, relativity and penicillin. SYKES Penicillin was recognised in the late 1920s by Fleming but not identified, really, until the late 30s early 40s by Florey's team at Oxford. And we didn't, at that time in this country, have any patent situation --- we didn't go round patenting inventions. And, of course, the war came and we transferred all the technology to the United States where everything to do with penicillin was immediately patented and American companies benefited from that after the war and this country got nothing. And then we set up what was called the NRDC which was the National Research Development Council to make sure that this country from then on protected its intellectual property. DILNOT So the development of intellectual property rights flowed from the march of new technology, and the money to be made in these areas. A patent is a kind of bargain with the state --- a right to make money in return from spending money to create new products. But bargains made in one state may not work well in a world of many countries. The problem over HIV/Aids drugs in South Africa showed that even if you can devise a regime to deliver both fairness and efficiency in one country, it's much harder in a globalised world. And a quite specific failing of the system, is that one of its central ideas is unravelling. Dame Marilyn Strathern, Head of Girton College Cambridge, a social anthropologist working on intellectual property. STRATHERN When the patenting, IPR, got off the ground, the distinction between discovery and invention --- invention being the application of knowledge to produce something that was useful and demonstrably useful, and discovery meaning uncovering something that was not the work of human kind. That distinction between invention and discovery was foundational. When you are in a situation where people are putting value on knowledge and putting an economic value on knowledge to the extent that we have been doing over the last generation - knowledge being perceived itself as a resource --- then creating knowledge starts becoming something rather like a human artefact. What has happened in culture at large is there's actually been a break down, so to speak, in this very distinction. DILNOT The central rule, that you could get a patent for an `invention' --- a cunning new gadget, but not a `discovery', a piece of truth uncovered, is breaking down because the distinction seems to crumble in our hands when we try to use it in some of the newer areas of progress. Another, related, worry is so-called `defensive' patenting. STRATHERN What we've seen, particularly in recent years I think, is people trying to anticipate what the possible uses might be further along the line of entities and substances which they can now describe and they can hint at uses for but cannot necessarily specify. That in anticipating that there might be future benefits, there has been a tendency to take out wide patents or diffusely specified which in some cases may actually have blocked further developments. It's an over eager or over enthusiastic application of the system which is leading to problems. SYKES People are worried that they might get blocked and because patents are increasing exponentially, just as science is increasing exponentially, we get fields of research that are ring fenced by patents and people can't move. It could be detrimental to progress. DILNOT Sir Richard Sykes, the research scientist and pharmaceutical company chairman agreeing with the social anthropologist that, at the very least, the current system isn't working perfectly. SYKES We've got to find a middle road. I'm sure you've noticed that the sequencing of the human genome has caused some controversy. There is a public group of people, particularly in the United States, the UK, Japan, Germany and so on, that have pooled all their resources to put this information real time onto the web so everybody can access it. And then you've got a private consortium who are doing the same thing. DILNOT Patents regimes can be abused to block new ideas, not just to encourage them. As technology races ahead, the intellectual property regime is struggling to keep up. The internet is new technology at its most rapidly changing, and here it's difficult to obey the law even if you want to, according to intellectual property lawyer Elizabeth Harding, from internet specialists Briffa. HARDING I was advising somebody yesterday on a set of photographs that were on the internet, advising him on the ability to show a person's face in these photographs because if they're on the internet and somebody, say in France is looking at them where personality rights attach to photographs, he could land in serious trouble by not having the consent of the subject of the photograph. So that international aspect makes life a lot more difficult for the practitioner. No-one in the UK really can be an expert on the laws of every single country in the world. DILNOT Photos, privacy, data protection --- all areas for intellectual property lawyers and the frequently photographed to get their teeth into. And if I weren't frightened of the lawyers there'd have to be a joke about privacy rights for those whose whole lives seem devoted to maximising their exposure. But there's no doubt that the internet makes it easier for people to ignore or challenge intellectual property rights, as the debate around music ``swapping'' sites like Napster has demonstrated. Elizabeth Harding. HARDING Part of the difficulty is trying to fit an old law to new technology. The law hasn't changed at all. There are changes and I think the changes are maybe coming from within the industries. For example, Napster and the music downloading. A number of record companies now, and artists, are saying okay, well, I will accept that my music will go onto a Napster type site, a) because it's very difficult to stop that downloading by individuals and b) because I actually see it as a way forward --- it's a progress not necessarily a harmful thing to my music. You've got, sort of, China and Thailand where it's the copying and counterfeiting, sort of, capital of the world really and trying to stop that type of action going on in those countries is incredibly difficult and it really does come down to a commercial decision at the end of the day by the owner of the copyright as to how much effort they will put into preventing copying. But in a way, for a lot of companies it's a problem that's way to big to be able to deal with and it almost has to go in as a write off on the account sheet. DILNOT If some companies are beginning just to give in, the current system looks pretty shaky. Even when companies try to enforce the law, as has happened recently in the Napster case, there's always the risk of simply driving the copying to a country where enforcement doesn't work. Laws that are hard to comply with and easy to evade don't seem likely to last. But what does the internet mean for intellectual property? Economics Professor John van Reenen is a partner in the internet consultancy Lexecon. VAN REENEN As more of the economy moves towards , towards tangible things --- pieces of information, bits and bites stored on computers - the internet facilitates that movement around the world a lot more quickly. So it does provide dangers. It means that it may be hard to protect your knowledge. On the other hand it's an incredible opportunity. In a world, you know, one great idea can be transmitted round the globe at the touch of a button --- that means that idea suddenly gets, you know, an incredible amount of power. DILNOT So does that mean we can afford to reduce the strength of intellectual property protection and still get plenty of creativity? VAN REENEN That's possible, that's certainly possible. Given that you have some degree of intellectual property protection the fact that you can then send out a piece of software much more quickly all over the world --- if that property is a strong bit of property --- gives you a better reward. So I think that if that was the only thing to take into account, then you would say that you could reduce, to some degree, your intellectual property rights. DILNOT If property rights are simply flouted, some producers will give way, recognising the huge power of the internet as a marketing tool, and in the long run, trying to stop copying over the internet might make intellectual property lawyers look like King Canute. But just as notions of intellectual property are being challenged in the west, Dame Marilyn Strathern sees them being used for the first time elsewhere. STRATHERN The very notion of intellectual property has been seized on by many activist from indigenous people's groups who see that for the first time there is an arena in international law where they can say things they were never able to say before. And this is to do with the value they would like to put on traditional knowledge, custom and so forth. It's as though the law had suddenly opened up a window of opportunity. There are many third world countries who are now putting into place legislation for the protection of what they would call cultural property. The very notion of cultural property is a kind of counterpart to intellectual property which deals with intangibles in the sense that it includes everything you might want to know about traditional knowledge practices because the idea that there might be something of value in what people know and what people have in their heads has become very much to the full. DILNOT Are there wider consequences, wider changes going on in those kinds of societies as a consequence of these new ways of thinking about value? STRATHERN Yes. People have grasped the notion that knowledge in the abstract might be useful and this has had onward consequences. This interest in indigenous knowledge isn't simply spontaneous, it is sparked off first by phenomena that really, I think, belong to the 1990's which is bioprospecting, the idea that knowledge about medicinal plants and so forth could actually be turned directly into pharmaceutical products. DILNOT Concepts of intellectual property, imported from the west are now being used by indigenous peoples to seek to extract money from the developed world in return for their knowledge about, for example, plants. Multinationals want to get their hands on traditional knowledge to help in the search for new crops and drugs. And there's an irony that the drugs aren't always getting to those who could benefit from them in the parts of the world the expertise first came from. Peter Zollinger of SustainAbility. ZOLLINGER At first glance those who say this is unfair have a point and what has happened to the industry who is mostly involved in this case is that they had to realise society increasingly wants to have big business aligned with their values and that triggers a whole series of questions and forces a company to think how can we be more transparent? How can we engage more with more people in society in an area, in an industry which has traditionally been quite secretive and very competitive. If you try to deal with a complex issue in the way one might have dealt in the past and try to apply PR tools primarily and insist on legal arguments, in today's world this might not be sufficient to win the argument. But I think what is needed is a more public and a more transparent dialogue between stakeholders to asses how business models and society's capacities to fund certain drugs can be aligned in a way that in different regions a majority of the people involved can say that's looking like a fair deal. JONES We seem to be accused recently of not having any social responsibility but we cannot be the Health Service of the world. DILNOT Trevor Jones, Director of the Association of British Pharmaceutical Industries. JONES Well, there's no question that the industries have suffered in terms of PR from the court case in Pretoria and I think we have a lot of work to do to dialogue with people not just in the developing world but the developed world about the issues involved. The issues are very serious. Twenty five million people in sub-Saharan Africa, millions in India and elsewhere suffer from a disease which will eventually take their lives. There has to be an incentive for a company to invest very large sums of money over very long times in R&D. I mean, typically now, it takes about 10 years to bring a new drug to the market. It costs about 350 million pounds. So unless you can get a return on that investment you simply would go out of business. Well there's quite clearly a number of diseases of the developing world which the large drug companies simply are not going to work on because they'd never make a return on their investment so they just couldn't refund research. Chief amongst those is malaria and tuberculosis, so what we've been doing is to form a partnership a public/private partnership if you will, where agencies such as the World Health Organisation, Rockefeller, the Gates --- Bill Gates, Bill and Linda Gates --- Foundation put up the cash, industry provides the expertise and eventually the intellectual property of the new anti-malarial or the new anti-tubercular drug is held by that venture. DILNOT So even those in the industry recognise that the current regime on its own simply can't deliver in some areas. If we want new ways of tackling disease in poor countries, money has to be provided from somewhere, and these new public/private partnerships seem to hold out some hope here. Does Peter Zollinger think the kind of arrangements being put in place to tackle anti-malarial drugs can provide an answer? ZOLLINGER In the short term I personally think it's a good way to highlight the issue. I don't think in the long term that will be sufficient or that will work. And it's too easy to discredit an effort such as this one as a philanthropic exercise because in this particular area the company's more than simply a commercial entity. In the long term it needs to change its understanding of its role. It needs to see that in addition to supplying drugs it is required that it helps, constructively, in educating in providing services to other players. DILNOT This is a strong call for the pharmaceutical industry to take on a role beyond maximising shareholder value. That means not just providing cheap drugs but also organising the infrastructure to deliver them. How does Sir Richard Sykes, Chairman of Glaxo SmithKline feel about such a possibility? SYKES I think first of all it's important to recognise that the global pharmaceutical companies, our industry, they do not have a mandate, they do not have the resources and they do not have the expertise for running health care in these countries. What we have a role to play in is research and development so we're bringing forward new drugs for treating diseases or at least dealing with diseases in these developing countries, we can have community-driven programmes which I think are very, very important. The industry is very much involved in this area. Glaxo SmithKline, for example, have a lot of community- based projects in something like 90 countries around the world. Many, many big companies have these programmes. But remember at the end of the day it's the governments that are critically important and at the same time we must make sure that we have differential pricing so that we're making drugs affordable to those people who have access to them and who can benefit from them through a proper infrastructure system. DILNOT And recent UN initiatives are designed to deliver the funds to pay for these drugs in poor countries. You might think it's only to be expected that Sir Richard Sykes thinks looking after people is a job for governments not companies. But what about economist John van Reenen? VAN REENEN Trying to say that multinationals should behave in a much more ethical way and in a way which is very different from maximising the returns of the shareholder is , it's too easy for governments to say that. It really does let them off the hook and it also raises the question about well how would you actually come up with a system of ethics which you think that multinational companies should stick to. I think it's extremely difficult for multinational companies or any type of companies to start trying to import the moral judgements and ethical judgements of different countries and different national leaders. I think, at the end of the day, if this is what national leaders and people want to do, then they should actually put the money directly into that instead of doing it indirectly through trying to work it through the patent system. DILNOT Implementing justice, deciding what is and isn't fair, is surely a job for governments as representatives of communities. If we want more to be spent on the developing world's sick, then it's no good leaving it to multinationals or even governments in poor countries. In the UK, we raise in tax and then spend nearly £60bn a year on the National Health Service, and we don't expect the multinationals to do that for us. Our total overseas aid budget only amounts to about 5% of what we spend on the NHS. If we and others like us want to address health problems in the poorer countries now, we've got to spend our own money, not someone else's. But Trevor Jones of the Association of British Pharmaceutical Industries points out, that that would raise difficult questions in the UK, too. JONES Currently around the country there are people with Multiple Sclerosis, with Alzheimer's and, if I may say, with breast cancer, not getting the drugs that they're entitled to from government agreements. So it's a bit harsh to say to that community: But your need isn't as great as those in the developing world. And that's the balance, I think, as a nation we have to have. The conscience we have as a nation which includes our industry has to take into account those who truly are totally compromised in the developing world. But I think a lot of people may say well charity must begin at home, too. DILNOT Who gets what spent on their health is a question of fairness. These are hard questions within a country, but across borders even harder. We can only expect drugs companies to deliver cheap drugs to poor countries if those drugs don't end up on the grey market in richer countries, as is certainly happening now. Intellectual property rights regimes might deliver efficiency in innovation, but not global fairness. Questions of justice seem less vital in the other big area of controversy, the internet. Would we improve things here simply by accepting that enforcing copyright laws is becoming almost impossible? The intellectual property lawyer Elizabeth Harding. HARDING Part of having copyright laws is to encourage people to create things really --- to create copyright works so to create books, to create art, photographs and a lot of money is put into these and funding is given to these, these people. Now if you suddenly wipe out the copyright laws altogether and say oh it's a big free for all, a) the creative people who are doing this will stop because there's no incentive, but b) the money that goes into funding them which may well be from aid, from foreign aid to encourage a better standard of cultural life of people in developing countries, to give more quality of life, that aid may well fizzle out for those purposes because what's the point in having funding for budding artists if their work can be copied. So I think if that happens it's very much a case of cutting off the nose to spite the face, really. DILNOT Not much enthusiasm there for a world free of intellectual property rules --- we've got to have some way of rewarding creativity. But just as in pharmaceuticals the fact that we don't want to allow a complete free for all doesn't mean that we're happy with things as they are --- there's widespread recognition of the need to change. Only a few months ago Secretary of State for International Development Clare Short set up a Commission to recommend changes in international intellectual property law. Dame Marilyn Strathern believes that with the current regime we're doing the legal equivalent of trying to capture the wind. STRATHERN The notion of property has, so to speak, run away. One has the impression, sometimes, that people all over the world are sitting there simply inventing new things. And there seems no doubt that some of the current debate is in response to a sense that the world is filling up with new entities, new things which can be owned, possessed, transacted and all the rest of it. But, of course, these new things aren't just the kinds of items that can be listed in a catalogue. They are also totally new creations like internet and ICT, software and so forth --- entities which aren't stable, don't conform to what we think of things ownable as property but quite clearly pose problems for people. DILNOT And what happens here really matters. Drugs, crops, and information technology are crucial to the wellbeing of the whole world. At a recent meeting in Spoleto, Italy, almost all of the world's governments agreed a list of essential crops. These were effectively declared to be the property of humanity, with the aim of ruling out patenting them. This may be one small part of a new settlement. But we have to go further --- trying to enforce a system of intellectual property laws that is out of date simply won't succeed. Peter Zollinger. ZOLLINGER It's a question of re-inventing it. To have a system which gives incentives to innovate. We need innovation, we need new solutions, new drugs. It seems to be as clear that the system as it is existing now won't survive because it won't be accepted by the public in large areas of this world. In practical terms patents will need to be protected. How many years is one of those discussions you should have. I don't think it needs to be 20 years and it doesn't need to be 20 years for every country on this planet. DILNOT And this is just a classic example isn't it of the difficulties of globalisation, the multi-jurisdictional world we live in now? ZOLLINGER I would say that's exactly right and there are ways forward. If we can persuade the leaders of civil society, the leaders in political organisations, in multilateral organisations and the private sector to really spend time and engage, I think we can make progress. DILNOT In developing a new intellectual property regime we need to agree what sorts of claims of ownership can be made, for how long, and in what circumstances. But the crucial arena is an international one. Ideas don't need a passport or even a customs form to cross national boundaries, so pretending any country can go it alone would be absurd. Any new system will itself have to change as the world changes. And whatever the system is, it cannot be expected to deliver global fairness. Providing cheap drugs for poor people is not principally the multinationals' responsibility. It's a job for governments, aid agencies, and ultimately for us. If we think that's important, it's time to put our money where our mouth is.