Against Intellectual Monopoly

the mud" and far from being finalized.13 Interestingly, the obstacles are neither technical nor due to a particularly strong
political opposition to the establishment of a continent-wide form of intellectual monopoly. The obstacles are purely due to rent seeking by interest
groups in the various countries involved, the number of which notoriously keeps growing. Current intellectual monopolists (and their national
lawyers) would rather remain monopolists (legal specialists) for a bit longer
in their own smaller markets than risk the chance of losing everything to a
more powerful monopolist (or to a foreign firm with more skilled lawyers)
in the bigger continental market.
    It is worth pointing out that under EU patent law, programs for computers
together with scientific discoveries and theories, mathematical methods,
aesthetic creations, programs, rules and methods for performing mental
acts, playing games or doing business, and presentations of information are expressly not regarded as inventions and therefore cannot be patented.
Because there is a large degree of ambiguity as to what a scientific theory
or discovery is, the extent to which a new medicine, or a new biologically
engineered product, is or is not independent of the underlying chemical and
biological model that explains it is not clear. As a result of this ambiguity,
medical products and treatments have been increasingly patented in the
European Union in ways similar to the United States.

    Finally, in more recent years and within the framework of the World Trade
Organization's Trade-related Aspects of Intellectual Property Rights agreement (known as the WTO-TRIPS agreement) that came into effect on January 1, 1995, a steady process of worldwide harmonization of patent rules in
the pharmaceutical and other industries has been undertaken. Widespread
controversies, both political and judicial, surrounding the modification of
the Indian system of pharmaceutical patents in a direction favorable to
intellectual monopoly, or the even more recent decision by the Brazilian
government to "bypass" a number of foreign patents covering the production and distribution of AIDS-related drugs, are just two of the most visible
aspects of this ongoing process, to which we return later and in Chapter 10.
    Now, you may be wondering, why are we boring you with all these details
about specific countries, patenting of chemical processes, pharmaceutical
products, and so forth? For a very simple reason: if patents were a necessary
requirement for pharmaceutical innovation, as claimed by their supporters,
the large historical and cross-country variations in the patent protection
of medical products should have had a dramatic impact on national pharmaceutical industries. In particular, at least between 1850 and 1980, most
drugs and medical products should have been invented and produced in the
United States and the United Kingdom, and very little if anything produced
in continental Europe. Further, countries such as Italy, Switzerland, and, to
a lesser extent, Germany, should have been the poor, sick laggards of the
pharmaceutical industry until recently. Instead, the opposite was true for
longer than a century.
Chemicals without Patents
    Prior to the rise of the pharmaceutical industry, the most important form
of chemical production was the paint and coloring industry. At its inception, the dye industry was a French and British business the same way that
almost any industry was a French and British business until the second
half of the nineteenth century. In both countries, patent protection applied
for all kinds of industrial products. In 1862, British firms controlled about 50 percent of the world market and French firms another 40 percent, with
Swiss and German companies as marginal players. By 1873, German companies had 50 percent of the market, while French, Swiss, and British firms controlled between 13 percent and 17 percent each. In 1913, German firms had
a market share of more than 80 percent, the Swiss had about 8 percent, and
the rest of the world had disappeared. During this entire period, there was no
patent protection at all in Switzerland, while in Germany processes become
patentable in 1877 but products did not. In France, the United Kingdom,
and the United States, both products and processes had been patentable all
along. Indeed, the strong patent protection for this industry in France and
its absence in Switzerland was