Abstract
This chapter takes another look at Schumpeter’s theory and definition of innovation and its relationship with modern intellectual property laws. It finds that intellectual property protection regimes have historically been ‘value-neutral’ in their approach. Accordingly, they protect all innovations notwithstanding the negative externalities that might result from (widespread) adoption of the innovations. IP regimes are therefore not the most suitable instruments to promote sustainable innovations in plant varieties. Summarizing the specific negative externalities associated with present day innovations in plant varieties, the chapter further finds that the ‘market failure’ theory which is often used to justify the introduction of intellectual property rights for various fields of innovation can be better used as a justification to deny or limit intellectual property protection for plant varieties.
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Notes
- 1.
Joseph A. Schumpeter, The Theory of Economic Development (Cambridge, Harvard University Press, 1934). The book’s English version first appeared only in 1934. However, it was written originally in German under the title Theorie der Wirtschaftlichen Entwicklung (Leipzig, Duncker & Humblot 1912).
- 2.
Schumpeter identified 5 types of ‘innovation:’ (1) The introduction of a new good – that is one with which consumers are not yet familiar – or of a new quality of a good; (2) the introduction of a new method of production; (3) the opening of a new market; (4) the conquest of a new source of supply of raw materials or half-manufactured goods; and (5) the carrying out of the new organization of any industry (e.g. by creating or breaking a monopoly position). As quoted in Thomas K. McCraw Prophet of Innovation: Joseph Schumpeter and Creative Destruction, 73.
- 3.
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (first published 1796, Pennsylvania State University Electronic Classics Series Publication 2005) 364 <http://www2.hn.psu.edu/faculty/jmanis/adam-smith/wealth-nations.pdf> accessed November 2, 2014.
- 4.
Indeed, Schumpeter (known also as the ‘Prophet of Innovation’) was of the broader view, limited not just to innovations per se, that one ought not to mix value judgments with science. Particularly within the discipline of economics, he preferred a ‘value-neutral analysis that took multiple perspectives into account.’ See Thomas K. McCraw Prophet of Innovation: Joseph Schumpeter and Creative Destruction, 65.
- 5.
Recent discussions bring to the fore that well before the dawn of “welfare economics” as a dominant discipline, prominent classical economists had themselves underscored the indispensability of government intervention and regulation, albeit, in limited circumstances. See generally, Steven G. Medema, ‘The Hesitant Hand: Mill, Sidgwick, and the Evolution of the Theory of Market Failure’ (2007) 39(3) History of Political Economy 331. Also, Steven G. Medema, ‘The Economic Role of Government in the History of Economic Thought’ in Jeff Biddle, John B. Davis, and Warren J. Samuels (eds) The Blackwell Companion to the History of Economic Thought (Oxford Blackwell 2003).
- 6.
See generally, Timothy Swanson and Timo Göschl, ‘Property Rights Issues Involving Plant Genetic Resources: Implications of Ownership for Economic Efficiency.’
- 7.
See Article 27 of the TRIPs Agreement.
- 8.
Daniel J. Kevles, ‘Of Mice & Money: The Story of the World’s First Animal Patent’ (2002) 131(2) Daedalus 78.
- 9.
‘Dolly Cloning Method Patented’ BBC News, (20 January 2000) <http://news.bbc.co.uk/2/hi/science/nature/611253.stm> accessed November 2, 2014. Also Jim Giles and Jonathan Knight, ‘Dolly’s Death Leaves Researchers Woolly on Clone Ageing Issue’ (2003) 421 Nature 776.
- 10.
Dimminaco A.G. v. Controller of Patents Designs and Ors. [2001] AID No. 1 (Decision of the High Court of Kolkata, India).
- 11.
Diamond v Chakrabarty, 447 US 309 (1980).
- 12.
Bowman v. Monsanto Co. et al. Certiorari to the United States Court Of Appeals For The Federal Circuit No. 11-796. Argued February 19, 2013—Decided May 13, 2013.
- 13.
David Throsby, The Economics of Cultural Policy (New York, Cambridge University Press 2010) 200. See also David W. Barnes, The Incentives/Access Tradeoff, (2010) 9 North Western Journal of Technology & Intellectual Property 96, 99 where the author states: “[p]ublic goods are not classified as ‘public’ simply because they are supplied by the government. Rather, some goods are classified as ‘public’ because their characteristics of non-rivalrousness in consumption and non-excludability in production inevitably prevent efficient private market supply.”
- 14.
David W. Barnes, ‘Congestible Intellectual Property and Impure Public Goods’ (2011) 9 North Western Journal of Technology & Intellectual Property 533.
- 15.
David Throsby, The Economics of Cultural Policy, 200.
- 16.
Ibid. See also, generally, Wendy J Gordon, ‘Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and its Predecessors’ (1982) 82 Columbia Law Review 1600, and also, Wendy J Gordon, ‘Market Failure and Intellectual Property: A response to Prof. Lunney’ (1984) 82 Boston University Law Review 1031.
- 17.
See also, generally, Peter J. Goss, ‘Guiding the Hand That Feeds: Toward Socially Optimal Appropriability in Agricultural Biotechnology Innovation.’
- 18.
See also, generally, Timothy Swanson and Timo Göschl, ‘Property Rights Issues Involving Plant Genetic Resources: Implications of Ownership for Economic Efficiency.’
- 19.
Paul Krugman et al., Economics, (European ed, New York, Worth Publishers 2008) 3.
- 20.
Wendy J Gordon, ‘Market Failure and Intellectual Property: A response to Prof. Lunney’ 82 Boston University Law Review 1031, 1035.
- 21.
ibid., 1038.
- 22.
Wendy J Gordon, ‘Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and its Predecessors’ (1982) 82 Columbia Law Review 1600, 1610–12.
- 23.
See Chap. 3 above.
- 24.
See Chap. 4 above.
- 25.
Wendy J. Gordon, ‘Asymmetric Market Failure and Prisoner’s Dilemma in Intellectual Property’ 17 University of Dayton Law Review 853, 856–857.
- 26.
Ibid., 854.
- 27.
ibid., 857.
- 28.
See Chap. 4 above. See also Peter J. Goss, ‘Guiding the Hand That Feeds: Toward Socially Optimal Appropriability in Agricultural Biotechnology Innovation.’ The author argues that UPOV 1978 type models fail to address the market failure, namely, of the private sector not participating in R&D for self-pollinating crops.
- 29.
Furthermore, the empirical research discussed in Chap. 5 above also suggests that the promotion of the policy of seed replacement is adequate incentive for the private sector to engage in production and distribution and perhaps eventually also R&D in self-pollinating crops.
- 30.
This suggestion has in fact been made: See generally, Peter J. Goss, ‘Guiding the Hand That Feeds: Toward Socially Optimal Appropriability in Agricultural Biotechnology Innovation.’
- 31.
Interview with Anita Babbar, Senior Scientist (Chickpea Breeding), Department of Plant Breeding & Genetics, Jawaharlal Nehru Krishi Vishwavidyalaya (Jabalpur 21 February 2012), available with author.
- 32.
It must be noted here again, however, that the freedom or right to save hybrid seeds or seeds incorporating GURTs is meaningless from the perspective of downstream farmer level seed improvements or innovations. See generally, Mrinalini Kochupillai, ‘The Indian PPV&FR Act, 2001: Historical and Implementation Perspectives.’
- 33.
Wendy J Gordon, ‘Market Failure and Intellectual Property: A response to Prof. Lunney.’
- 34.
Wendy J Gordon, ‘Market Failure and Intellectual Property: A response to Prof. Lunney,’ 1038–1039.
- 35.
‘Dadaji Khobragade, The Creator of HMT Rice: A School Dropout Beats Trained Agriculturists’ <http://www.ftfoundation.com/English/pdf/DadajiKhobragade.pdf> accessed September 14, 2014. The HMT rice was found to be more high yielding in small farmholdings than other formally released varieties.
- 36.
Wendy J Gordon, ‘Market Failure and Intellectual Property: A response to Prof. Lunney,’ 1039.
- 37.
Wendy J. Gordon, ‘Asymmetric Market Failure and Prisoner’s Dilemma in Intellectual Property,’ 857.
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Kochupillai, M. (2016). Addressing Market Failures for Sustainable Innovations in Plant Varieties. In: Promoting Sustainable Innovations in Plant Varieties. Munich Studies on Innovation and Competition, vol 5. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-52796-2_6
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