The patent system historically has been the Economic Incentive for inventors to come forward and share their ideas. Having an exclusive period of time where one doesn’t have to worry about competition has brought upon an abundance of innovation.
The advent of the Internet however has caused significant issues in the Patent System. Having the ability for any individual to share their ideas instantly and for free over a global system of interconnected computer networks has led to an immense amount of “Prior Art”, any evidence that your invention is already known.
Prior Art does not need to exist physically or be commercially available. It is enough that someone, somewhere, sometime previously has described or shown or made something that contains a use of technology that is very similar to your invention.
We are at a point where Publications are being used to invalidate patents. This has become such a problem that well over 50% of all patents are invalidated after they’re granted.
One of the more widely known cases that highlights this issue is the landmark case Merck v. Gilead: Cure to hepatitis C. In November 2011 Gilead acquired the relatively unknown pharmaceutical company Pharmasset for $11.2 billion. Pharmasset had discovered the molecule, sofosbuvir, a cure to Hepatitis C which also makes it the FIRST EVER cure to a virus. An absolutely incredible feat and being that a cure to a Virus had never occurred, one would imagine to be a bulletproof patent, right? Well unfortunately for Gilead, no. Many patent challenges came about claiming that the structure of sofosbuvir is based on already known molecules and Gilead ultimately lost a $2.5 billion judgement in favor to its competitor Merck.
I don’t know about you but, as an individual, I would be far less incentivized to go through the current system. If a multi-billion-dollar company with top notch legal department can’t successfully protect the patent to the first cure of a virus, it’s going to be much harder for a lone individual.
This disconnect has major implications in the Medical world, a world where there are 10,000 known diseases and yet only 600 treatments, a world where Incentives accrue to executives and shareholders and NOT to the Scientists and Patients. We are in a market failure in need of a radical transformation.
A little History on Open Source
Open source is a philosophy, a movement, and what makes open source thrive is the community that grows up around it.
Open Source = Freedom
This image from the Placeholder VC thesis perfectly details the power of open source and how it has historically broken monopolies and led to incredible advancements for humanity. thanks to Placeholder VC for image
Just as the open PC hardware standard allowed Microsoft to develop an OS (operating system) and unseat IBM’s dominance, it wasn’t long after that their OS was unseated by the Open Source Linux Foundation and the free distribution of the World Wide Web. Now, the majority of value today is captured on the platform level (e.g. Google and Facebook) and here we are right on time at the foot of a decentralized revolution.
Open Source & Biotech
The reason I make this parallel is because just as open source has greatly accelerated the traditional Tech Industry, open source will have similar effects in BioTech.
We’re already seeing incredible projects like SciHub pave the way in the industry. … to remove all barriers in the way of science
SciHub is a website that provides free access to millions of research papers and books by mirroring official sources, often bypassing publishers’ paywalls in various ways. Sci-Hub provides many of the papers by ignoring copyrights regulations. Founded by Kazakhstani computer programmer, Alexandra Elbakyan in 2011, this open source initiative is in response to the high cost of research papers behind paywalls. The site is widely used in both developed and developing countries serving over 200,000 requests per day!
While this has been an incredible open source initiative, one key problem is evident.
How do we in the medical field economically align around this to scale research?
Well for starters it’s going to be radically different from the historic incentive, patents.
Incentives accruing to executives rather than the scientific community (who are actually coming up with the idea) can NOT scale. In order to succeed we need to do away with the closed off and siloed systems and open it up to those who initially released the ideas in the first place.
The answer lies within a well-known but often misunderstood technology that can unlock coordination at an unprecedented scale. That technology being Blockchain. Blockchains allow one to directly monetize biomedical research through Proof of Existence, in which the research itself is a freely traded commodity. (I’ll explain further later)
My colleague and IKU Founder Greg put it best… “Blockchains are publicly verifiable copyright machines. Copyright is a form of Intellectual Property, but it’s an objective standard across the globe — putting unique information (e.g. bitcoin bitstring) in a tangible medium (e.g. Github) and publishing it, as opposed to patents which are a subjective standard and can be invalidated. In addition, a party must own the copyright to research and be the first to publish in order to obtain a patent on it. The shift to Blockchain Enforcement will be significantly more efficient then patent enforcement.”
Ok so now you must be wondering, I get it… its on a blockchain and open to everyone but I thought there was supposed to be an economic incentive, where does the incentive come in, if everything is available to everyone for free?
Well as the name implies, a copyright has many rights attached. One of those rights can be open sourcing research freely for educational purposes like our friends at SciHub but at the same time requiring a license when used for commercial purposes.
That exact situation arises with the Dutch information and analytics company Elsevier, one of the world’s largest providers of scientific, technical, and medical information.
So to make clear, there’s a company (Elsevier) that brings in BILLIONS of dollars a year, and is offering the SAME exact information you can get for free from SciHub… Why?
Because when a corporation (not an individual) wants to use that information they must negotiate a commercial license. This is similar to the music industry where one can freely listen to music but if the song is featured in a commercial setting like a movie then one must pay royalties.
At this point you may be experiencing an aha/eureka moment. I had one too, it’s a good feeling… But let’s get into how blockchains can turn the research itself into a freely traded commodity. There’s an old saying, “Money makes the world go round” … but what is money? Some may say Gold is money or Government Paper is money or more recently Bitcoin is money. Well all would be correct. Money is merely the representation of value. All it takes is 2 people to deem something of value to have money.
Now let’s take a look at Biomedical Research. Its an area that has affected and will continue to affect every Human on Earth. It has an unquantifiable value. If bitcoin is a property ownership of a random bitstring of data, why can’t we replace that bitstring with the most advanced biomedical research in the world? Biomedical Research where everyone regardless of race, gender, orientation, geographic location, and socio-economic background can own, collaborate, and fund.
Anyone with Internet Access can submit a research proposal or back another’s research target… Imagine an open market where tokenized intellectual property licenses are easily exchangeable and the research is open to everyone. Through the power of open source we can break through the obstacles that are holding back the industry and see an explosion of innovation.
We’re launching the first decentralized research organization (“DRO”) this year based around a new biomarker called “plasmalogen” with the goal of stopping Alzheimer’s disease. This is a breakthrough in neuroscience as the research is supported by major institutions including the U.S. National Institute of Health, National Institute of Aging, University of Pennsylvania, Prodrome Sciences, Duke University, and the Alzheimer’s Association.
Thanks for reading!
Special thanks to my colleague and IKU founder Greg Rigano for inspiration on content. Check out Greg’s presentation at UK Spine Conference in collaboration with Oxford University
Also thanks to our friends at SciHub, Oxford University, UPENN, Prodrome Sciences, and Alzheimer’s Association