Supporting the Schema Through Selective Consideration

Those who adhere to the strong patent schema argue that stronger patent protection resulted in more domestic innovation in certain countries; however, the evidence is in fact more ambiguous.246 An article by economist Henry Grabowski provides a good example. He claims that in both Japan and Canada, stronger patent protection resulted in more pharmaceutical research.247 _{However, there are studies that provide a}

243. Roberto Mazzoleni & Richard R. Nelson, The Benefits and Costs of Strong Patent Protection: A Contribution to the Current Debate, 27 RES. POL’Y 273, 273 (1998).

244. Id. at 274.

245. See id. at 279–81. Of course, I could be influenced by my own confirmation bias in citing this article, which focuses more on the problem that increased patents have on cumulative innovation, which is largely inapplicable to pharmaceuticals. Nonetheless, as discussed in the next subpart, even if cumulative innovation does not apply to pharmaceuticals, there are other negative social implications that are generally minimized or discounted entirely by those who hold the strong patent schema.

246. This discussion focuses primarily on countries that were at a level of economic development where patents might potentially impact innovation. However, there is also confirmation bias by those who fail to acknowledge studies showing that patent protection is irrelevant for countries that are not at a state of development to innovate. See, e.g., Frederick M. Abbott, The WTO Medicines Decision: World Pharmaceutical Trade and the Protection of Public Health, 99 AM. J. INT’L L. 317, 325 (2005) (“Stronger patent protection in developing countries will increase total research and development.”). Studies actually show that stronger patents do not induce more domestic innovation—they may simply result in increased patents by foreigners. Josh Lerner, Patent Protection and Innovation Over 150 Years 19–20 (Nat’l Bureau of Econ. Research, Working Paper No. 8977, 2002); see also

Shamnad Basheer & Annalisa Primi, The WIPO Development Agenda: Factoring in the “Technologically Proficient” Developing Countries, in IMPLEMENTING WIPO’S

DEVELOPMENT AGENDA 100–01 (Jeremy De Beer ed., 2009) (noting that patent protection is ineffective in promoting innovation unless a country is at a certain level of economic development).

247. Henry Grabowski, Patents, Innovation and Access to New Pharmaceuticals, 5 J. INT’L ECON. L. 849, 854–55 (2002). In both cases, full patent protection for drugs was provided and Canada also eliminated compulsory licensing. Id.

contrary conclusion.248 Moreover, although Canada did increase research after changes in its patent laws in 1987, the industry actually promised to spend more on pharmaceutical development in Canada.249

Similarly, Brian Ferguson, a professor of economics, contests the work of economists Michelle Boldrin and David Levine that suggests that many countries that did not provide patents on pharmaceuticals nonetheless had pharmaceutical activity.250 Ferguson exhibits confirmation bias in contesting their methodology, claiming that Boldrin and Levine fail to address that the pharmaceutical industry advanced from one of secrecy to protect intellectual property into one where reverse engineering was possible, such that patents were needed.251 However, Ferguson’s critique does not reconcile with the historical fact that not all countries adopted patent protection of drugs at the same time; scientific advancement is insufficient to explain why countries like Italy did not adopt patents on drugs until 1978 while other countries did so earlier.252

Admittedly, stronger domestic patent protection may not have much of an impact on an individual country’s overall research given that most companies today are multinational.253 _{Nonetheless, even if that is the}

case, the above discussion still shows confirmation bias in that this issue

248. E.g., Lee Branstetter, Do Stronger Patents Induce More Local Innovation?, 7 J. INT’L. ECON. L. 359, 361–63 (2004); Mariko Sakakibara & Lee G. Branstetter, Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms, 32 RAND J. ECON. 77, 78, 88, 98 (2001).

249. Although Grabowski acknowledges in a footnote that the industry promised to locate research in Canada proportional to Canada’s share of world sales, there is no cite for this fact. Instead, he cites articles about the different issue of Canadian price regulation that appeared after stronger patent protection was introduced. See Grabowski, supra

note 247, at 855 n.18 (citing PATRICIA M. DANZON, PHARMACEUTICAL PRICE REGULATION: NATIONAL POLICIES VERSUS GLOBAL INTERESTS (1997); Sheila R. Shulman, The Canadian Patented Medicine Review Board: New Rules and New Status, PHARMACOECONOMICS, Nov. 1994, at 71).

250. See Brian Ferguson, The Role of Patents in the Pharmaceutical Sector: A Primer, in PILLS PATENTS & PROFITS II 12 (2012).

251. Id.

252. MICHELLE BOLDRIN & DAVID K. LEVINE, AGAINST INTELLECTUAL MONOPOLY

244–45 (2008).

253. This point is well made by Lisa Ouellette, who argues that studies of a single country’s patent laws will understate the impact of the change. Lisa Larrimore Ouellette,

Patent Experimentalism, 101 VA. L. REV. (forthcoming 2015) (manuscript at 7–16) (on file with SSRN), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2294774.

is ignored and there is selective citation of studies or statements without any relevant cites. In addition, consistent with the studies on confirmation bias, when there is ambiguity—in this case, studies with differing conclusions—scholars may find it easier to cite articles that support their desired position.254

The pharmaceutical industry can be expected to be even less vigorous in making such claims and being prone to confirmation bias. For example, although studies indicate that Italy did not increase its level of innovation after patent laws were strengthened,255 PhRMA claimed that it had a four-fold increase in R&D.256 Not surprisingly, PhRMA did not cite the contrary studies and only relied on its own industry profile.257 Similarly, the United States Trade Representatives Office, which often echoes the interests of the industry, also seems to display confirmation bias in how it considers comparative data; it has claimed that Jordan’s domestic research was stimulated after entering into a free trade agreement with the United States that required stronger patent protection.258 However, although Jordan had improved economic growth, there was no increase in pharmaceutical investment or patent filings by local manufacturers.259

3. Supporting the Schema Through Selective Reliance on Supposed