[R-G] [BillTottenWeblog] Patent Nonsense

[Bill Totten]

Nothing exposes the hollowness of the claims corporations now make to
intellectual property as much as their own histories

by George Monbiot

Published in the Guardian (March 12 2002)


The most surprising aspect of the steel war launched by the United
States last week is that anyone is surprised. For all the talk of
increasing freedom, the only certain and consistent trend in global
trade rules over the past ten years has been the drift towards
protectionism.

The rich nations have repeatedly promised to phase out agricultural
subsidies and to remove the tariffs on textiles imported from the poor
world, but those promises have been broken. Instead, they have battened
down the hatches, by granting to the corporations they shelter new laws
defending "intellectual property".

At the world trade talks in November, the poor nations appeared to win
some ground. They would be allowed to continue to import cheap copies of
the patented drugs required to fight epidemics. But, though few people
spotted it, there was a catch. While nations will be permitted to buy
these drugs, by 2005 the countries manufacturing them will be forbidden
to sell them, with the result that the rules defending public health
won't be worth the paper they're written on. At a meeting last week, the
European Union seemed prepared to compromise on this issue, but the US
wouldn't budge.

New global trade rules have also allowed big corporations to patent crop
varieties and, in effect, the genes of plants, animals and human beings.
This has grave implications both for food security and the accessibility
of medicines. But the corporations argue that this new protectionism is
essential to stimulate both innovation and investment. There are many
ways in which this claim could be challenged, but I think I have just
stumbled across a new and fascinating one. It is contained within the
histories of the very companies which now insist that intellectual
property rights are the pre-requisites of development.

In Industrialisation Without National Patents (Princeton University
Press), published in 1971, the economic historian Eric Schiff tells the
story of the emergence of some of Europe's biggest corporations. They
came into being in Switzerland and the Netherlands during the period
(1850-1907 in Switzerland; 1869-1912 in the Netherlands) in which
neither country recognised patents. Some of them appear to owe their
very existence to this exemption.

In the Netherlands the old patent laws were clumsy and poorly drafted.
The government decided they were unreformable, and simply scrapped them.
In Switzerland, the confederation developed without them, and decided to
keep it that way. Contrary to all current predictions of what the impact
of such abrogations would be, in both nations they appear to have
contributed to massive economic growth and innovation.

Switzerland was a poor country without many natural resources, whose
economy was largely reliant on farming. But in 1859 a small company
based in Basel "borrowed" the aniline dying process which had been
developed and patented in Britain two years before. The company, later
called Ciba, soon became a massive industrial enterprise, swiftly
outstripping competing firms in Britain. In 1995, Ciba merged with
another Swiss firm, Sandoz, to form the conglomerate Novartis. Novartis
was one of the companies which successfully lobbied for the European
convention allowing companies to patent genes. It was also one of the
firms which spent three years fighting the South African government's
attempt to buy cheap copies of its patented drugs, in order to treat
patients infected with HIV. Now, having merged with Zeneca to form an
even bigger company, Syngenta, it is extending its intellectual property
rights still further by developing seeds which don't reproduce.

But Switzerland's economic growth during this period did not rely solely
upon purloining other nations' patented processes. Industrial innovation
flourished, especially in food technology. No country, Schiff notes, has
ever contributed "as many basic inventions in this field as did
Switzerland during her patentless period". In 1875, for example, Daniel
Peter invented milk chocolate. In 1879, Rudolf Lindt developed chocolat
fondant. In 1886, Julius Maggi invented powdered soup. A few years later
he developed stock cubes. All these men founded companies which still
bear their names today. But the biggest food firm to emerge in this
period took root in 1865, when Henri Nestle developed a cereal for children.

In 1998, the International Chamber of Commerce lobbied the World Trade
Organisation in support of corporate rights over plants, animals and
genes. It argued that "the protection of intellectual property" is
"essential for economic growth". Its chairman at the time was Helmut
Maucher, who was also the chief executive of Nestle, the company which
arose and conquered the world without any intellectual property
protection whatever.

In the Netherlands too, the absence of patents appears to have done
little to arrest the growth of manufacturing industry. In the early
1870s, two companies, Jurgens and Van den Bergh, commandeered a patented
French recipe and started manufacturing a brand new product called
margarine. They soon became Europe's biggest producers. Jurgens and Van
den Bergh later merged with a British company to form the conglomerate
Unilever. Like Novartis and Nestle, Unilever is one of the most
influential members of Europabio, the lobby group now pressing for ever
stricter patent protections for big corporations.

In the 1890s, Gerard Philips, unhampered by intellectual property laws,
started manufacturing the incandesent lamps developed by Thomas Edison
in the United States. The absence of patent protection did not prevent
him either from holding off European competition or from developing
several important new designs. But, in its recent submission to the
European Commission's consultation on patent rights, Philips insists
that intellectual property "is one of its key business tools".

Switzerland and the Netherlands eventually adopted patent laws in
response to threats from other industrialised nations. This, Schiff
argues, was a political decision, not an economic one. It is, he notes,
"difficult to avoid the impression" that the absence of patent laws
"furthered, rather than hampered development". The two countries relied
for their growth not upon exclusive rights but upon high educational
standards and technical ability.

These examples do not necessarily suggest that the abandonment of patent
protection is an essential pre-condition for development. But they do
indicate that it can, in the right circumstances, be an effective tool.
This tool has been denied to poor nations, partly as a result of
energetic lobbying by the very companies which once made use of it.

Those of us who have challenged the inequalities of global trade have
pointed to the fact that some of the world's richest nations once used
tariff barriers to devastating effect in building their economies. But
the history of patent protection suggests that that is not the only
means by which the rich nations have raised the drawbridge after
entering the castle. When it suits the rich countries to impose free
trade, they do so. When it suits them to impose protectionism, they
argue that this is the only path to development. But woe betide the poor
nation which seeks to apply the lessons of the past.

Copyright (c) 2006 Monbiot.com
	
http://www.monbiot.com/archives/2002/03/12/patent-nonsense/


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