Knowledge as a Public Good: remarks at the World Forum on Science and Democracy, held in Belém, Brasil

The following are KEI's January 26, 2009 remarks at the World Forum on Science and Democracy, held in Belém, Brasil, an event that is affiliated with the World Social Forum, which is also taking place in Belém the same week.

Knowledge as a Public Good – Two mechanisms


Belém, Parã, 26 de janerior de 2009

Panel B: Acesso ao conhecimento: construindo os "commons"

My name is James Love. I work for Knowledge Ecology International, or KEI for short. KEI is an NGO that works on issues relating to the creation and control of knowledge, as well as access to knowledge and knowledge embedded goods, such as medicines.

Today I will initially speak about two positive initiatives to provide sustainable platforms for innovation, and access to that innovation.  

Medical Innovation Inducement Prizes

The first concerns a proposal for a radical change in the system of incentives for the development of new medicines technologies, including new medicines, vaccines and diagnostic devices.

At present the primary incentive for the development of a new medicine is a system of intellectual property rights that grant temporary monopolies. These include not only patents, which convey 20 years of exclusive rights to use inventions, but a growing system of other ''ad hoc'' intellectual property rights and regulatory privileges that taken together, are designed to ensure that the developers of new medicines enjoy a commercial monopoly for several years.

This audience can easily appreciate the hardships and inequalities of access that are caused by the monopoly pricing of new medicines. But access is not the only issue. There are also great failures of the current system of incentives to promote R&D for areas of the greatest medical need, including medicines that offer true therapeutic improvements over existing medicines, or medicines that are useful to address the medical needs of poor persons living in developing countries.

There are many initiatives to challenge these intellectual property right regimes, such as demands that governments issue compulsory licenses to break the monopolies, and expand access to low cost generic products.

Today there is growing interest in a more fundamental change. The short explanation is this. The system of monopolies on products would be eliminated entirely, to be replaced with a system of large cash prizes to reward successful development.

The more sophisticated designs for innovation inducement prizes would use, to some degree, a proportional reward system, where drug developers would compete for shares of a prize fund, based upon the impact of their products on actual health outcomes over time, benchmarked against the state of technology that existed before the introduction of the new product. It could be described as an alternative reward system, for people who are confused by the term prizes. (Independently, similar reward systems have been proposed for agriculture).  

By creating this alternative system of rewards, it is possible to solve many problems. By de-linking R&D incentives from high prices and product monopolies, innovation and access are no longer in conflict, and indeed, greater access to products is associated with higher prize rewards. The rewards can more rationally be tied to improvements in health outcomes. When rewards are related to health outcomes, the value of a poor person is the same as a rich person, leading to important changes in research priorities. It is also easier to allocate the costs of the prize fund among countries and persons of different incomes, than it is to regulate a global system of differential pricing.

There are also new proposals to combine the prize fund idea with a feature that will encourage more openness, collaboration and sharing of knowledge. Barbados and Bolivia and several NGOs including KEI have proposed models for prizes funds to the W.H.O. that include a novel “open source dividend.” A proportion of the prize fund rewards would be given to persons or organizations that openly share, without remuneration, access to knowledge, data, technologies and materials.

The debate over prizes includes an argument over intellectual property rights. The initial proposals for a new drug development paradigm would substitute prizes for monopolies. Some defenders of strong intellectual property rights and monopolies want to use prizes, but keep the monopolies intact, and negotiate prices from monopoly suppliers of products, or even give product developers the freedom to set whatever prices they like.

The debate over prizes will be very important. There is a possibility of a radical transformation of the market for new medicines. The most ambitious plans would change the business model for new drug development as profoundly as the Internet has changed the way we price and use telecommunications markets and knowledge goods distributed over the Internet. If we can dramatically change the way we finance new medicines – separating the market for innovation from the market for the products themselves, and encouraging opennesses and sharing of knowledge, the template may be useful in other areas.

WTO Agreement on the Supply of Public Goods

A quite different initiative has been proposed to for the World Trade Organization, or the WTO. This idea is to create an agreement within the WTO on the supply of public goods. Some persons have referred to this as a proposal to “hack” the WTO. How would it work?

The world is confronted with a vast under-supply of public goods. Part of the problem is that the current trade system lacks the sufficient incentives and structures to address the free riding problems associated with the supply of public goods. There are increasing calls for a larger supply of public goods and a variety of proposals that involve government commitments to increase the supply of global public goods in specific areas, including but not limited to major projects such as the Kyoto Protocol to the International Framework Convention on Climate Change, the International Treaty on Plant Genetic Resources, the proposed WIPO Treaty on Access to Knowledge, and the proposed WHO Biomedical R&D Treaty.

Our goal is to create a new option that will allow governments to make binding offers and commitments for the supply of heterogeneous global public goods, involving in particular knowledge goods.

One of the objectives is to shift from the current WTO focus on trade liberation for private goods and the private enclosure of knowledge through mandatory standards for intellectual property and its enforcement (an area some believe has been over emphasized), to a more balanced agenda that also includes public goods and attention to pressing social needs.

One proposal is to model such an agreement in part on the WTO agreement on services – the General Agreement on Trade in Services (GATS). The GATS in the WTO is designed to privatize and liberalize trade in service, in part though a system of binding “offers.” These offers are not uniform among countries. Offers by one country depend upon their specific willingness to liberalize a specific sector, and the interest of other countries that they do so. Liberalization commitments are traded in a WTO environment where “asks” and “offers” cover a wide range to topics, including changes in tariffs or agricultural subsides, or requests for support of new intellectual property norms. What is key to the services agreement is its ability to accommodate a diverse set of offers, in a multilateral negotiation, where consensus on uniform norms is unlikely.

There is much criticism of the GATS itself, much of it we share. However, as a model for creating binding commitments for a diverse set of obligations, it is quite interesting. Hence, the earlier reference to the “hack” of the WTO. We are interested in borrowing from the GATS the structure of accepting binding heterogeneous offers to supply -- in this case, not liberation of services, but the supply of public goods.

If such an agreement existed with the WTO, several countries could propose a collaboration to fund open source research on malaria. Countries could bind government agencies to require government funded research to be made available, for free, on the Internet, as was recently done by the U.S. NIH and in some other government research agencies. Like-minded countries could agree to make binding commitments to support the development of open source software, fund new databases, share the costs of hosting Wikipedia servers, pay for translations of scientific works into other languages, or for the creation of more accessible formats of books and articles for persons who are blind or have other reading disabilities. The lists of things that could be expanded and supported under such an agreement are endless.

In theory, all of these things could be done without a WTO agreement. The benefits of the WTO agreement would be several, however. First, it is quite costly to set up a separate treaty or agreement, particularly one that can so effectively enforce commitments, as can the WTO. Second, by introducing public goods into the WTO environment - the culture of the WTO would be profoundly changed. “Asks” and “offers” in the WTO negotiations would not longer be exclusively about the private goods market, or about the privatization and enclosure of knowledge itself. There would be an immediate shift to consider the competing benefits of greater openness, and a larger global commons. Knowledge that was produced to be “free” would have a new value, as a trading chip in the WTO environment.