Patents: The Public Interest versus the Private Privilege

The protective privilege ends where the public peril begins.

Justice Tobriner, Tarasoff v. Regents of University of California

Pharmaceutical companies have become a favorite whipping boy of physician groups, consumer activists, and certain politicians. These companies spend a great deal on the advertising and marketing of their products, but they also make a lot of money and have one of the highest profit margins of any industry. Yet, as David Resnik and Kenneth De Ville (2002) carefully argue, making a lot of money is no crime.¹ In fact, this strong financial incentive is what drives drug makers to spend millions of dollars in research and development, looking for that breakthrough drug that will give their investors impressive returns. Why should the government ever have the moral authority to abrogate a pharmaceutical company's patent, thereby jeopardizing this implicit incentive scheme?

Resnik and De Ville provide a useful analytical framework in determining whether the federal government should ever have the moral authority to override the intellectual property rights of pharmaceutical companies. They offer a utilitarian justification for deferring to these property rights. They concede, however, "that these rights are not absolute and can be violated to promote social values or state interests under certain conditions." Their argument is carefully constructed in that they are not just defending the intellectual property rights of pharmaceutical companies but are also concerned about the potential fruits of pharmaceutical research and development that can potentially help the public. This prompts us to ask a few questions: what is the nature of a patent right? Are pharmaceutical products different from other patented products? Does existing law already provide adequate compensation for governmental takings? Considering that even civil liberties may be curtailed during times of national emergency, do property rights merit more protection?

Patents are complex legal entities. Black's Law Dictionary defines a patent as "[t]he exclusive right to make, use, or sell an invention for a specified period (usu. 17 years), granted by the federal government to the inventor if the device or process is novel, useful, and nonobvious" (Garner 1999). As Resnik and De Ville discuss, the rationale behind granting a patent is not primarily to reward the inventor, but rather to encourage public disclosure of an invention so that when the patent expires, the public can have free access to the invention (Kintner and Lahr 1975). The ultimate goal of the patent process is to serve the public interest. One commentator has dubbed the tension here as the "incentives-access paradigm" that is at the heart of the intellectual property debate (Lunney 1996). A tension arises between the goal of incentivizing people to create useful products for the public while assuring that the public has access to these products. This balancing act becomes even more controversial and political when the products are not just luxury consumer goods but pharmaceutical products that can potentially save lives.

This brings us to our second question: are pharmaceuticals in a different moral category from the majority of patented products? Resnik and De Ville lump pharmaceuticals with other "vital" products, such as computer software, computer hardware, research databases, and automobiles. One would be hard-pressed, however, to equate a potentially life-saving drug with a car or even a computer. The fact that pharmaceutical products may have an inherent and immediate impact upon the health and safety of the public puts them in a different moral category. If anything, the onus should be placed upon the patent holder of a potentially life-saving product to show why the product's patent should not be overridden if the government wishes to override the patent during a public emergency.

Aside from the overriding importance of public health and safety, current patent law and remedies adequately protect intellectual property interests when the government chooses to...