Study says Patents Hurt Innovation
According to a study published in The Columbia Science and Technology Law Review, patents may be harming our ability to innovate. Patents and the Regress of Useful Arts, written by Bill Tomlinson of UC Irvine and Andrew Torrance of University of Kansas School of Law, tested the hypothesis with a game called PatentSim. The game is an online simulation of a pure patent system, a patent-free commons system, and a mixed system. Within each environment, first year university students were asked to license, assign, infringe, and enforce patents. The study found that while a mixed patent environment and pure patent environment did not offer substantially different results, students in a commons system generated significantly higher rates of innovation, productivity and social utility. Essentially, the study supports what Lawrence Lessig and free culture advocates have been saying for years: a society free from intellectual property monopolies is a society that is better off.
In the study, Torrance and Tomlinson explain how patents have been wrongly justified as a way to encourage invention. The justification has been that by excluding others from duplicating an invention or process, the patent owner is more likely to spend time, energy and resources on their product. However, past studies have proved otherwise. Data collected from PatentSim further substantiates these findings.
PatentSim was presented as a game in which the goal is to make as much money as possible. In each environment, subjects combined objects in a "Creation Box" to simulate an invention. Whenever a subject created an invention and clicked on the "Make" button, money would appear in their virtual bank. In the pure patent and mixed patent environments, subjects could also click on a "Patent" button to increase their profit. Each patent was priced at $20 and each use of a lawyer also cost $20. At the end of the study, students had produced significantly more inventions and profit in the commons environment when they were not being penalized for patent infringement or were busy enforcing their patents.
The study suggests that innovation not only thrives in a competitive environment, but that more profit can be generated by inventors in a commons system. Because PatentSim is just a simulation, readers need to take findings with a grain of salt. While the rate of inventions would likely increase without patents, it's tough to tell if inventors would really see unlimited profit potential in an environment free of patents. After all, how many different zipper pulls does the market demand?
Nevertheless, in some cases, the demand for a product or process is all too evident. Imagine the competitive market for hearing aids and prosthetics, or the success rate of farmers who are free to use the best possible processes. And honestly, does HIV really care if it's being treated by Glaxo, Pfizer or a tested generic knockoff?
This study is important in that it might spur policy makers to question how we look at innovation. Are inventions just disparate exclusively-owned products, or should we be sharing them out of necessity to solve our bigger-picture problems?
Facebook
Comments
Subscribe to comments for this post OR Subscribe to comments for all ReadWriteWeb posts
Duh! Do you really need a report to know this.
Yes we do. I have no doubt a patent system will be with us for a very long time until it is slowly builds momentum to dissolve. We need official studies and hard questions to get people and policy makers thinking about this issue which is completely obvious to anyone in my industry (software dev)
It shouldn't be difficult to create a real-world equivalent of this simulation: compare nations with well-enforced intellectual property laws against nations with poorly-enforced intellectual property laws. Which nations are more prosperous? Which nations have higher levels of innovation? In which nations do the world's brightest minds feel they can do their best work?
I'm guessing that such a comparison would result in a pretty strong case in favor of enforcing intellectual property rights.
How did this simulation model the cost of innovation? And the price differential generated when a product is protected by patent vs. when it is not?
Would any drug company spend billions on R&D if some competitor sell pills based upon that research for pennies?
@Marcello,
I think you'll find that wealth was already concentrated in the current crop of successful countries long before there were intellectual monopolies. I don't believe that your suggested test is a valid indicator of the efficacy of patents.
As a software developer, I can say that patents are killing the software industry by making everyone beholden to rich multinational corporates who don't themselves innovate, but use the threat of patent infringement to usurp those smaller players who do.
Kind regards,
Dave
the software industry is dying?
@Dave
Then let's use an example of a nation that did not start off with substantial wealth: India. For many decades, India effectively had a laissez-faire approach to intellectual property. There was virtually no enforcement whatsoever. The economy did poorly, India was hardly a hotbed of innovation, and India's brightest minds often left the country to do their best work.
India has made many reforms over the last few decades, and protection of intellectual property is among them. They still have a long way to go, but the early results are very promising: the economy is slowly improving, the standard of living is slowly rising for all income levels, India has become an IT hotbed and many expatriate Indians are returning to the country to take advantage of these new opportunities.
Perhaps someone from India is reading this and can offer their opinion, but my guess is that they would not want to turn back the clock on these reforms.
Steven, just because we get to compete in a market doesn't mean we get access to a competitor's R&D. And even if we did, I think existing drug companies would be just fine. Competitive markets are supposed to encourage innovation, Pfizer would still own the best channels of distribution, and I'm strongly opposed to a monopoly on something we know can save millions of lives. (Besides, the sales off Viagra and Sudafed would probably offset the loss on HIV treatment drugs)
I don't believe or understand how Patent can hurt Innovation. Unlike "Tradesecret Innovation", Government publishes every patent innovation for public to innovate further. Patent brings a "compliance and contolled" way of using others innovation. It enables collaboration. Through licensing, innovation reaches every one in compliant way.
@Innovator,
Forgive me, but that's the most woolly reasoning I've ever heard. I think a bit of real world experience would show you how flawed your point is.
Dave
The empirical evidence does not support this study. The richest countries in the world have the strongest intellectual property laws. The poorest countries have weak or non-existent intellectual property laws. Unless this study can explain this, it is inherently flawed.
Should Patents be Abolished? – Scarcity
There have been a number of suggestions that patent should be scaled back or outright abolished. For instance, Stephen Kinsella has written a book, Against Intellectual Property, and Tom Palmer has written and article, “Are Patents and Copyright Morally Justified? The Philosophy of Property Rights and Ideal Objects.” Many of these critiques suggest that property rights are based on scarcity and intellectual property rights are not subject to scarcity.
The article “Scarcity – Does it Prove Intellectual Property is Unjustified?” (http://hallingblog.com/2009/06/22/scarcity-%e2%80%93-does-it-prove-intellectual-property-is-unjustified/) suggests that property rights are not based on scarcity but on the “labor theory of property” first proposed by John Locke. The labor theory of property explains criminal law, how property is to be allocated and intellectual property law. The “scarcity” theory of private property does not explain criminal law and does not explain how property should be allocated. According to its proponents it does explain why there should not be intellectual property law. Trading scarcity for the labor theory of property is like trading the theory that “what goes up must come down” for Newton’s Law of gravity. The fact of the matter is that the proponents of scarcity have confused cause with effect. A system of private property results in efficient allocation of resource, but it is not the reason for private property – it is the effect of private property.
Is the conception of ideas and inventions subject to scarcity? See http://hallingblog.com/2009/06/25/scarcity-and-intellectual-property-empirical-evidence-for-inventions/
Is the distribution of ideas and invention (technology diffusion) subject to scarcity? See http://hallingblog.com/2009/06/25/scarcity-and-intellectual-property-empirical-evidence-of-adoptiondistribution-of-technology/