"Could You Patent the Sun?” – Jonas Salk and the Scientist as Hero

In the 1950s, Dr. Jonas Salk introduced the vaccine that would ultimately eradicate one of the world’s most pressing biological emergencies: polio. Within several decades, the disease that once brought fear to an entire generation had been virtually eliminated. Dr. Salk accomplished the answer to the world’s search for a preventative measure. What did he ask in return? The answer is very little.

Dr. Salk bestowed the polio vaccine on the globe for the benefit of humankind. He did not desire a patent for his work, and simply continued along in pursuit of science that would improve the lives of others. When asked who possessed the patent to the polio vaccine, Dr. Salk stated, “There is no patent. Could you patent the Sun?” To him, the cure for polio was as much the property of all as was the light of the Sun. In return, the world still recognizes Jonas Salk as the brilliant and benevolent scientist who freed children from the threat of a terrifying disease. He is, in nearly all respects, a scientific hero.

Unfortunately, when the pursuit of scientific solutions is primarily in the hands of competing pharmaceutical companies, rather than research institutions, the research environment ceases to function best for society. In the end, the pursuit of the final reward – the patent – causes companies to keep potential answers to problems internal, as sharing of information only helps competitors. Once again, this returns us to many of the important criticisms of existing patent law that Joseph Stiglitz identifies.

It is difficult to say whether Dr. Salk’s gift was a product of his unique personal qualities or of the scientific and societal environment in which he worked, and it would be interesting to discover which of these is the case; however, it is not difficult to conclude that the world would be better off with more individuals possessing the same innovative spirit and concern for humanity as did Jonas Salk. 

See NPR news article: http://www.npr.org/blogs/health/2012/10/10/162670836/wiping-out-polio-how-the-u-s-snuffed-out-a-killer

Nearly A Century After Triangle Shirtwaist, International Workplace Standards Fail Workers

Locked exit doors trap workers in a fiery disaster. Hundreds die. Some leap from windows multiple stories high, suffering severe injury. This is the story of the Triangle Shirtwaist Factory fire in New York City in 1911. It is also the story of the Ali Enterprises fire in Karachi, Pakistan last month. The fire and the resulting deaths demonstrate a need for more stringent and impartial regulation of international labor standards in our global economy.

As Declan Walsh and Steven Greenhouse of the New York Times write in a Sept. 19^th article, the organization charged with inspecting and certifying Ali Enterprises is Social Accountability International. SAI is largely funded by corporations, and typically certifies low-cost suppliers as meeting international workplace safety and health standards. University-funded auditing groups that perform a similar purpose contend that corporation-supported auditing organizations have a profit-driven motive that incentivizes certification of suppliers that might not actually be in compliance with basic standards. The tragedy in Karachi is one terrifying example of the consequence of the unreliable nature of their certifications.

Fortunately for American workers, the tragedy at the Triangle Shirtwaist Factory spurred legislative action that improved workplace standards and inspired the growth of a worker-led movement for better pay and conditions. Hopefully, the Karachi fire will lead to similar standard changes in the global workplace. Those who live in advanced countries that are purchasing sweatshop products need to stand up and demand the enforcement of international labor standards. It is a tragedy that, in an effort to make jeans “more efficiently,” a company eliminated safety provisions and caused three hundred men and women to lose their lives. 

Patent Law in the Digital Age

Today, on the twelve-hour drive home for reading days, I stumbled across an interesting NPR segment that explored many of the same issues with current patent law that we talked about last week. The interview with Charles Duhigg referred to his recent NYT article (which can be found here). Duhigg’s article assesses the degree to which current patent law is outdated.

In many ways, current law is unable to keep up with the demands of the digital marketplace. Over recent years, companies have been able to secure patents for increasingly broad concepts. In the agrarian and manufacturing stages of American economic development, the job of issuing patents was simpler as it applied to physical products. Today’s patents, however, are provided for less tangible inventions, such as the article’s example: a method of calculating online prices. These patents can be provided for business methods rather than functioning products. That is, companies can often secure patents for ideas that they have yet to execute.

Similar to Stiglitz, Duhigg consistently focuses on the interests of the consumer and market efficiency. When patents promote innovation, they succeed. When they stifle innovation (even for the purpose of rewarding inventors), they fail. Because digital technology develops at such a rapid pace, Duhigg and others make a compelling argument that patents in this industry could be shorter than in others. Of course, they should still exist in order to provide incentives for innovation to occur in the first place; however, 3- or 5-year patents could be sufficient depending on the product in question.

Further, the patent office should adjust its procedures in order to only issue patents for specific and fully functioning innovations. The article points out that 70% of patent applications are ultimately approved (including those that undergo adjustments). This is an alarmingly high number. Issuance of patents should be executed with caution, because each patent issued is a prohibition on a potential competitor to the “inventor.” And, if no product was truly “invented” then the patent office is unnecessarily and unjustly providing the patent applicant with a monopoly. Consumers pay the price for this lack of competition.

Of course, patents are necessary. They provide incentives for innovation and, even more importantly, for sharing the benefits of that innovation with consumers through the market; however, not all new business ideas require patents. When patents impede innovation and harm consumers, they fail to accomplish their intended task.

Charles Duhigg highlights many interesting and important dimensions of the patent debate as it stands. I recommend reading his article for a more in-depth look at the issue, complete with interesting examples and even patent legalese.

The Immigrant Equation: Entrepreneurs

In a recent blog post, Peter commented on both presidential candidates’ flawed immigration policies, showing the economic benefits of increasing visa provision. His post analyzes the wage and employment effects of immigration, but another dimension that shows immigration’s benefits is high-skilled immigrants and their entrepreneurial economic contributions. This is another important benefit of freer legal immigration that should be talked about more.

The Kauffman Foundation on Entrepreneurship recently released a report detailing immigrants’ entrepreneurial contributions over recent years. The report shows that although the growth rate of immigrant-founded companies has stagnated over the past few years, immigrants represent a very significant innovative force in the economy.

Some of the figures presented in the report are very impressive. For example, 43.9 percent of new Silicon Valley companies founded between 2006 and 2012 had “at least one key founder who was foreign-born.” Further, across the United States, companies with foreign-born founders “employed roughly 560,000 workers and generated $63 billion in sales in 2012.” The Kauffman report goes on to list many more striking economic contributions of foreign-born entrepreneurs.

It is important to keep in mind that immigration induces complex effects on the economy. Often, protectionist sentiments can portray immigrants as solely job takers. As this study shows, however, high-skilled immigrants can contribute to the development of new jobs and the employment of American men and women. 

The Alien Tort Claims Act in Practice: Will the Supreme Court Enforce International Law?

This Monday, the Supreme Court began hearing arguments in a case that may determine the future of how the federal government regulates oversees actions of multinational corporations. In Kiobel v. Royal Dutch Petroleum, the Court will decide whether twelve Nigerian plaintiffs can seek damages from Shell Oil Company (the U.S. subsidiary of Royal Dutch Petroleum) for allegedly conspiring with Nigerian officials to stifle environmental protests through violent resistance. The case promises to bring to the surface a larger debate about who should hold corporations responsible for oversees illegal activity, as well as who can be held responsible for these activities within each corporation.

One of the first questions that the case will answer is whether the Court should even hear these types of cases. In today’s reading, Stiglitz argues that one important method of improving corporate governance in a global economy comprised of large multinational corporations is in allowing “those in other countries to sue in the home country of the offending corporation,” (Stiglitz, 205). He then cites the Alien Tort Claims Law as an important example of how this aim can be reached; however, Justice Alito’s comments today revealed his disagreement with Stiglitz. Alito asks, “Why does this case belong in the courts of the United States when it has nothing to do with the Untied States other than the fact that a subsidiary of the defendant has a big operation here?” According to this Wall Street Journal article about today’s arguments, Justice Alito was not alone in his skepticism that the case should be in the Court’s jurisdiction.

The primary reason that the case is being tried within the United States, it seems, is that the Alien Tort Claims Law is an American law and activists since the 1970s have attempted to use the law to make the U.S. an international leader in promoting human rights. The attorney for the plaintiffs admitted that, “the only connection between the events in Nigeria and the United States is that the plaintiffs are now living in the United States and have asylum because of those events, and the defendants are here.” He then contended that the U.S. government has a responsibility and a stake in enforcing international law.

This case will be interesting because if the Court rules to award damages to the plaintiffs, it may open up the Alien Tort Claims Law to a wide variety of new applications. At the time that the alleged illegal activities in this case occurred, the plaintiffs were Nigerian citizens. Further, as the company’s lawyer argued today in court, “the defendants are English and Dutch companies.” Thus, in stepping in to enforce international law, the Supreme Court would be extending its reach to what are, essentially, foreign plaintiffs and defendants. This would be a new, broad international role for the Court. Some justices, such as Scalia and Kennedy, worry that this would then mean that international law could be enforced in any court around the world. Others, like Breyer, contend that it makes sense for these cases to be heard in any countries, such as the United States, that have signed international human rights agreements (like the U.N. convention banning torture).

The case will be important in deciding how far American judicial institutions will go to enforce international law. It seems to me that the 1789 Alien Torts Law is not the appropriate method of enforcing international law. Although Stiglitz appropriately views the law as one of the few available alternatives in existence to prosecute multinational corporations’ illegal activities in foreign countries, the Supreme Court remains an odd body to try a case like Kiobel v. Royal Dutch Petroleum. As even the plaintiff’s attorney admits, both sides in this case are only loosely associated with the United States. This weakens both the legitimacy of enforcement efforts as well as the ability of the Court to interpret relevant statutes and gather all available information related to the case. I agree with a European Union brief referred to by Justice Sotomayor today, which states that the Alien Tort Claims Act be used only as a last resort for the most severe human rights violations. The preferred alternative would be to place these suits under the jurisdiction of an international body with significant enforcement power. 

The arguments in this case will be interesting to watch as they progress. For two detailed articles about the case, see the links below:

http://online.wsj.com/article/SB10000872396390443862604578030790341573044.html

http://www.npr.org/2012/10/01/162110683/high-court-takes-up-human-rights-on-first-day-back