Intellectual Property Rights and Innovation: Evidence from the Human Genome
Do intellectual property (IP) rights on existing technologies hinder subsequent innovation? Using newly-collected data on the sequencing of the human genome by the public Human Genome Project and the private firm Celera, this paper estimates the impact of Celera's gene-level IP on subsequent scientific research and product development. Genes initially sequenced by Celera were held with IP for up to two years, but moved into the public domain once re-sequenced by the public effort. Across a range of empirical specifications, I find evidence that Celera's IP led to reductions in subsequent scientific research and product development on the order of 20 to 30 percent. Taken together, these results suggest that Celera's short-term IP had persistent negative effects on subsequent innovation relative to a counterfactual of Celera genes having always been in the public domain.
I am very grateful to Wes Cohen, Joe Doyle, Dan Fetter, Matt Gentzkow, Claudia Goldin, Sam Kortum, Amanda Kowalski, Fiona Murray, Jesse Shapiro, Scott Stern, three anonymous referees, numerous seminar participants, and especially my PhD advisers David Cutler, Amy Finkelstein, and Larry Katz for comments. Several individuals from Celera, the Human Genome Project, and related institutions provided invaluable guidance, including Sam Broder, Peter Hutt, and particularly Mark Adams, David Altshuler, Bob Cook-Deegan, Eric Lander, Robert Millman, and seminar participants at the Broad Institute. David Robinson provided valuable assistance with the data collection. Financial support from NIA Grant Number T32-AG000186 to the NBER, NSF Grant Number 1151497, and the Center for American Political Studies at Harvard is gratefully acknowledged. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
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Heidi L. Williams, 2013. "Intellectual Property Rights and Innovation: Evidence from the Human Genome," Journal of Political Economy, University of Chicago Press, vol. 121(1), pages 1 - 27. citation courtesy of