“Perhaps Nutriset could have saved more lives by freeing the license on Plumpy’Nut. But how does one actually measure something like this? Is it even true?”
It makes sense to look at patent disasters from the point of view of “accident investigations”. Trying to assign blame makes no sense; it is more important to figure out what went wrong, how, and why; and even more importantly, what could be done to prevent scenarios like this in the future, if they need to be prevented.
The case of Plumpy’Nut (see web page) has been covered in earlier postings. Almost everyone who has commented on the case has held that the patent system is broken. Perhaps. But just how is it broken?
Part 1 presented the facts of the case — Nutriset has a patent on Plumpy’Nut, which is by far the best food to use for people who are starving. Nutriset has used the patent to prevent anyone else from manufacturing the product. Part 2 showed what Nutriset’s actions have been, and how complicated it is to estimate whether they have acted right or wrong. Part 3 suggested that Nutriset’s monopoly is actually less destructive than having the patent in the hands of a patent troll.
At least one thing is clear: Nutriset is not a patent troll. They did serious R&D work on the product, it is an excellent products, and it is not trivial to produce (a high quality is required).
What is the real effect of Nutriset’s monopoly?
The generally accepted wisdom is that competition always brings down prices. But in this particular case, it is not 100% certain that that would happen. As discussed by the Nutriset representatives in some of the articles, freeing the market would bring in players who have strong brand names to protect, and strong negotiators to deal with the NGO’s. If the rations were to be provided by strong brand names, there is no real guarantee that prices would fall significantly.
In any case, an NGO cannot look at price only; it has to look at the whole logistics chain. A higher price in return for a reliable production chain can sometimes be acceptable. The only thing that can be said for certain is that reliance on just one factory is a high risk. However, with the 2010 licensing decision, Nutriset decreased this risk by allowing local manufacturers to produce Plumpy’Nut without a license (or only a small license fee).
Could Nutriset do differently?
In principle, a corporation is required to maximize shareholder profit by all and any legal means possible. There is nothing illegal about what Nutriset is doing. It appears that Nutriset is family-owned, so in principle it is not legally bound so tightly.
Here is interesting food for thought: if Nutriset were a publicly owned company, would it even have been allowed to make the licensing compromise? By law, a corporation has responsibilities to its stockholders, and its stockholders only. If there is a legitimate way to make money, the corporation is obliged to use it. Otherwise, stockholders can sue the executives.
Is Nutriset doing more bad than good?
Many seem to instinctively feel that Nutriset is evil, since it is “letting people die”. But it is not that simplistic. In fact Nutriset has literally saved lives. It produces an excellent product. Perhaps at a high price, and perhaps there have been glitches in the supply chain. But the product is excellent.
Perhaps Nutriset could have saved more lives by freeing the license on Plumpy’Nut. But how does one actually measure something like this? Is it even true?
What does this say about the patent system?
It would be easy to say that this patent should never have been granted. However, it is then necessary to define why it should have been rejected. On the face of it, the Plumpy’Nut patent is not fundamentally much different from any nutrition-related patent.
Should all such patents be banned? Where is the line drawn? Should all patents be prohibited which could restrict fundamental human rights, such as the right of a starving person to survive? In principle, this might be doable by defining in advance areas which are not patentable.
What is not possible is to invalidate patents after the fact. That is, if a patent is meant for one purpose, and later turns out to be crucial for humanitarian reasons, it is not really possible to invalidate the patent just because it is crucial for humanitarian reasons. That would not only create a disincentive to innovate in this area; it would create an incentive for the patent owner to actively prevent humanitarian use. In other words, the only prize for success would be punishment.
There are no clear moral lessons from the Plumpy’Nut case — on the contrary, it’s more complex than it seemed at first. There may be some technical lessons; those will be covered in the next part of the series.
Image source: The Motivation Zone
Acknowledgment: The research for this series has been done between 2012 and 2014. The series has benefited greatly from discussions with Kalle Pietilä, Viv Collins, Niko Porjo, and Timo Tokkonen.