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Patent Medicine

The patent system is designed to give financial incentives to inventors so the rest of us benefit from their efforts. This works pretty well, and the world’s economies—at least in normal times—have flourished because of the innovation promoted by the patent system. 

There are flaws, of course. One is the different type of protection needed in the computer/electronics industry compared to biotechnology/pharmaceuticals. In the former, a typical device has a rapid development time and can contain hundreds of separately patented components. In biotech, the commercialization cycle takes many years, and a single patent often holds sway. 

The U.S. Congress is currently trying to create a single system that simultaneously meets both needs. Powerful interests are lined up on both sides, so don’t hold your breath. Another quirk is the patenting of genes and DNA sequences, which many consider to be discoveries, not inventions. It probably wouldn’t have mattered much if Joseph Priestley had patented phlogiston, but imagine if we had to pay a royalty to Antoine Lavoisier, Inc., for every breath of oxygen we drew.

My vote is to disallow patents on discoveries because to do otherwise probably provides an overall disincentive to innovation.

Complicating matters is the results of a recent study from researchers in California and Italy. Meloso et al. report experiments designed to test whether a patent-based or a market-based system is more effective in encouraging innovation (Science [March 6, 2009], pp. 1335–1339).

Guess what? A market-based approach in which participants hold tradable shares proves superior to a patent system that gives exclusive rights to the inventor. This is all theoretical, of course, and doesn’t address the near certainty that context will govern the value of any particular invention.

And even if Meloso et al. are correct in every way, any bets on whether Congress will be influenced?

Posted In: Policy

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