Patent Registration – Does It Lead To Greater Innovation?

Patent registration is the first form of IP many businesses want to explore when they have an idea for something new. A patent is defined in the dictionary as a sole right to make, use or sell an invention for a set period.

The key word here is ‘invention’ which presumes innovation.. Therefore, patents should lead to the spread of knowledge and greater novelty. However, arguably the patent system has the effect of setting innovation back according to a recent article by the Economist.

Problems with patents

The article suggests that stronger patent systems do not result in more private research or an increase in productivity. The broadening of the patent regime in the 1980s following the USA’s recognition of the potential of crop science failed to galvanise progress in agriculture, and the article  also highlights how patent litigation is on the rise.

As a popular article recently stated: “most of the wonders of the modern age, from mule-spinning to railways, steamships to gas lamps, seemed to have emerged without the help of patents. If the Industrial Revolution didn’t need them, why have them at all?”

What is worse, as we wrote in our previous post “Patent Troll Problems – The Good, The Bad, And The Ugly”, the system has created a ‘web’ of trolls and defensive patent-holders which exist solely to exploit rights in patents often obtained from another company to block innovation.

Too expensive

The patent system is extremely expensive and even if individuals can afford to register a patent, any litigation afterwards is likely too costly to fund. This is also noted by Rubin who points out how “most inventors barely have enough money to file for a patent application. Even if the inventor can afford to get the patent to grant, patent litigation is exorbitantly costly, frequently requiring millions of dollars to fund. Individual inventors, and even small or medium-sized companies, cannot afford such fees without another company to finance the litigation or at least to license or buy the patent…The inventor may never realise any benefit from his toils.”

If patents lead to innovation and are so expensive to uphold, then it turns out innovation is expensive – probably more expensive than it should be. As innovation “fuels” the knowledge economy, it is the engine of development, and perhaps what we need is a “clear, rough-and-ready patent system” – to  encourage novel and fresh ideas. One that does not set innovation back.

Read the full Economist article