The Constraints of IP

Abstract

Economics Debates about intellectual property (IP) protections for genes remain unsettled. New analysis of landmark human genome sequencing efforts suggests that IP protections hindered use of some early findings in follow-on research and development (R&D). The publicly funded Human Genome Project (HGP) required that its results be immediately placed in the public domain. The private firm Celera, which published its draft genome at the same time as the HGP draft in 2001, maintained IP rights on its sequenced genes not yet sequenced by the HGP, allowing it to negotiate licensing agreements to sell data until those genes were made public by subsequent HGP resequencing, completed in 2003. Incorporating a range of counterfactuals and controls, Williams shows that scientific publications and the development of diagnostic tests based on genes covered by Celera's IP were reduced by 20 to 30%. Comparing Celera genes made public by the HGP in 2002 versus 2003, a gap remains in the overall stock of knowledge (measured by genes having a known phenotype), suggesting that even brief periods of IP can have persistent impacts on subsequent R&D. J. Polit. Econ. 121 , 1 (2013).