Fortune is an American magazine focused on national business, finance and industry news. It is part of the group of magazine publications owned by Time Inc. (NYSE:TIME), a network that includes TIME, People and Sports Illustrated. Fortune is well known for its annual listing of the Fortune 500, the 500 largest U.S. companies by gross revenue. It looks at the business world from a multitude of angles and seemingly prides itself as being one of the premier sources of global analysis on business and capitalism.
So why then does Fortune seem to have a noticeable bias against patents and innovators?
The pages of Fortune, as we have also seen in the pages of other publications that supposedly advocate pro-business stances, have been used to promote sloppy, inaccurate and misleading treatment of patents. Fortune’s treatment of patents can only be described as surprising given how the U.S. economy is undeniably an innovation economy. U.S. manufacturing is long gone as the mainstay of American businesses, but at the same time the U.S. economy continues to dominate global commerce thanks to innovation. In an economy built on innovation how could a business publication be so uninformed on patent issues?
A case in point is this recent article that parrots all of the talking points of a deceitful anti-patent article published in The Economist. The article in question, published August 10th, includes a lot of tripe about how “clear” and “commonsense” the Economist article was in explaining how to fix our ostensibly broken patent system. The only clearly discernible answer given by The Economist, and thus also by its ventriloquist puppet Fortune, is that patents are undesirable for the economy: “Apple should not be granted patents on rectangular tablets with rounded corners; Twitter does not deserve a patent on its pull-to-refresh feed.” To call this view ignorant doesn’t begin to scratch the surface.
Perhaps even more interestingly, Fortune calls the Economist article “a terrific piece of writing.” It would be more accurate to call the Economist article a terrific piece of fiction. The entire premise of the Economist article is built around a lie, namely that patents were not necessary or used in the Industrial Revolution. Had the author of the Economist article, who is not identified in the publication, had done any research whatsoever it would have been uncovered that the premise was flat wrong.
There are volumes of economic works, including by Nobel Laureates, which explain just how vital the patent system was for the advancement of innovation during the Industrial Revolution. See What the Economist doesn’t get about patents. When your entire premise is built on a rotten foundation it is impossible to take anything at all seriously. If Fortune and the Economist can get something so fundamental and easy wrong what else are they getting wrong on topics that are far more complicated?
Like a lemming running off a cliff, Fortune author Jeff John Roberts ignores easily verifiable historical truths in what can really only be accurately described as a hit piece on the patent system and patents in general. The lack of intellectual integrity, or even intellectual curiosity, is astonishing. The lack of basic research is remarkable. Is this what journalism has become? Rather than reporting facts accurately you make up stories out of whole cloth to forward some predetermined agenda?
These two hit pieces on patents, which are so closely linked by content and publication date, made us wonder whether there was some sort of link between The Economist and Fortune. As we started digging we realized this isn’t the only time that Fortune and The Economist fired a collusive salvo of anti-patent fervor in relatively quick succession. In late 2005, both of those publications took aim at a piece of legislation that for has enabled federally funded research to be commercialized by small businesses: the Bayh-Dole Act.
On September 19, 2005, Fortune ran a piece entitled The Law of Unintended Consequences which argued that the commercialization of technologies enabled by the passage of Bayh-Dole was diverting scientists from their original research missions because of the legal frenzy created when an invention is commercialized. In late December of 2005, The Economist followed up with its own critique of Bayh-Dole, taking a stance very similar to Fortune by arguing that capitalizing upon invention somehow besmirches the noble research goals that universities continue to pursue. Again, had either Fortune or the Economist bothered to conduct even basic research they would have easily learned that the premise was false. I disturbing trend in the treatment of patents from Fortune and the Economist.
Perhaps Fortune should have focused on the intended consequences of Bayh-Dole rather than chasing windmills and making up unfounded, inaccurate and disingenuous charges. While Fortune would have you believe that universities have abandoned the pursuit of scientific research, it is well established that fears over Universities abandoning basic research in favor of applied research are wholly unfounded and based only on erroneous anecdotal evidence. A study of 3,400 faculty at six major research institutions by Professors Jerry Thursby and Marie Thursby found that “the basic/applied split in research did not change over the period 1983-1999 even though licensing had increased by a factor greater than 10.” University Licensing and the Bayh-Dole Act. Furthermore, data collected by the National Science Foundation support this assessment. According to the National Science Foundation, in 1980 basic research comprised 66.6% of academic R&D endeavors while applied research and development were 33.4% of the total. In 2009, the percent of academic R&D expenditures devoted to basic research increased to 74.6% while applied research and development declined to 25.4% of the total. For more Bayh-Dole truths see here and here.
Of particular gall in the Fortune piece on Bayh-Dole is found in the introduction, which spends the first few paragraphs of the article recounting what was at that time one of the biggest success cases in university tech transfer. Emtriva, an antiviral treatment developed for adults suffering from HIV, was created by researchers at Emory University and sold by that institution for $540 billion in 2005. From there, the article tries to use the Emtriva case as proof of a “profound system failure.” How utter ridiculous, callous and ignorant. Prior to Bayh-Dole, the research that went into Emtriva would have sat on the shelf at Emory, never doing anyone any good because the federal government couldn’t be bothered with commercializing its own funded research. It is nothing more than capitalist shaming to have a problem with any organization earning money from something it developed itself. For it to happen in the pages of a publication hat bills itself as a premiere business publication boggles the mind. It is as if the fact that someone made money means that it should never have happened, and all those poor little people with HIV who benefited from Emtriva should be ashamed for playing a role in some vast capitalist conspiracy. Asinine!
In those pieces on Bayh-Dole, the authors would have you believe that the law was somehow corporatizing the hallowed halls of academia, siphoning away resources from the scientific research arms of these institutions to focus more on legal and marketing concerns. To wit: “What used to be a scientific community of free and open debate now often seems like a litigious scrum of data-hoarding and suspicion.” How relieved Fortune would have been to find out that most of the money derived from the sale of Emtriva was spent on scientific research and education at Emory; at most, the central administration received about a quarter of the Emtriva sale proceeds. Surely they would be doubly encouraged when they find out that the terms of Bayh-Dole requires an institution to allocate funds from all tech transfers in this way. Unbeknownst to Fortune, Bayh-Dole actually has the mechanisms in place to ensure that college campuses continue focusing on their research goals. Further, if Fortune were seriously on the side of the consumer and wanted life-saving innovations to be spread throughout the world, it would have taken greater note of the fact that prior to Bayh-Dole, about 30,000 federally funded innovations were sitting on the shelves of academia without any plans for development.
Perhaps the single most positive fact about Bayh-Dole is that prior to the law passing exactly zero drugs discovered in universities were commercialized, while since enactment of Bayh-Dole over 150 such drugs have gone to market. Getting rid of Bayh-Dole, which is exactly what Fortune seems to want, would keep inventions out of the consumer marketplace, including many hundreds of life-saving medical inventions, treatments, vaccines and drugs, not to mention countless environmental technologies. More specifically, here is a small list of important innovations that were invented and then commercialized as the result of the Bayh-Dole act: (1) drugs to treat breast cancer; (2) Hepatitis B vaccine; (3) synthetic penicillin; (4) cysplatin and carboplatin (cancer therapies); (5) human growth hormone; (6) treatment for Crohn’s disease; (7) avian flu vaccine; and (8) countless clean water technologies.
Is Fortune really arguing against live saving innovations actually being available to consumers? Is Fortune really arguing against green technologies that make for a better planet? Is Fortune really so myopically hateful of the patent system that they are indifferent to the objective successes of Bayh-Dole? Truthfully, anyone arguing to end Bayh-Dole and return to the way it used to be needs to be carefully examined and their true motivations exposed. A return to the practices before Bayh-Dole would mean revolutionary university innovations stock piled on shelves and never licensed. Consciously choosing a path that would lead to innovations not helping individuals is as bizarre as it is cruel.
Some may want to point out that these Bayh-Dole hit pieces were published 10 years ago as a way to give Fortune and the Economist a pass. Sadly times haven’t changed. Fortune and the Economist are still harping in a collusive way on patents in a way that can only mislead. Furthermore, 10 years ago what Fortune and The Economist wrote was well known to be false based on the increasing, not decreasing, amount of research at universities. Still, they made the fallacious accusations all in an effort to mislead policy makers and the public. The trend of patent fiction is troubling.
Before leaving this topic we must make one final critique about this misguided article in Fortune. It is absolutely necessary to quash any suggestion that here is a “short supply” of medical miracles today. Medical research is still turning up incredible findings. A quick scan of health news shows plenty of academic innovation leading to tomorrow’s medical miracles. That the author could make such an utterly absurd statement has to call into question the broader motivations. Of course, authors do unfortunately sometimes exaggerate, misrepresent and even lie. What is truly astonishing is how the Editors of Fortune allowed such a falsehood to be published. Do they do no fact checking at all at Fortune?
While we could write an entire treatise about medical miracles, allow us to point out a few. At the University of Iowa researchers recently discovered compounds in apple peels and tomatoes that can counteract some of the effects of aging, especially where muscle wasting is involved. Scientists at the University of Michigan have just pioneered a sponge-like implantable device that attracts cancer cells that might cause a cancer relapse. A study produced by Midwestern University of Downers Grove, IL, identified a new compound for interacting with ETB receptors and slowing the progression of Alzheimer’s disease. Another study authored by scientists at Johns Hopkins University shows a link between the migraines a woman suffers and the levels of fat in her blood. These discoveries, and more, were all newly reported on a single day (September 10th). To suggest that somehow these research institutions have lost their way and are operating as de facto corporations not working for the betterment of scientific understanding is downright ludicrous and insulting to human intelligence.
Fortune owes its readers a sincere apology for publishing such a foolish, inaccurate and poorly researched article. We won’t be holding our breath for such an apology, nor do we expect this to be the last fallacious anti-patent article that Fortune will publish.