How Do Patents Encourage Innovation

The Basic Argument

Imagine a world where ideas weren't protected. You'd find a host of problems that came from it such as people never getting to profit from their ideas. The problem with that? No one would feel the drive to innovate if there were no reward from doing it. Patents were invented as a way of protecting intellectual property. If you spent decades working on a project, you'd want some rightful compensation for it.

Protecting Ideas

The concept of protecting ideas goes back to July 31, 1790, when Samuel Hopkins was granted a patent for a unique method of producing potash, but some people believe that the idea of protecting ideas could actually hinder innovation—whether that's true or not depends on opinion. While it makes sense in theory that patents protect innovation and innovation is good for society, the inventor often gets rights over a broad subject matter, which can stifle innovation. The person who has the patent rights will normally have control over it for a 20-year period where they basically have a monopoly on the idea. For example, let's say that someone was given the rights for a steam-powered train. Only the individual who had the rights to the steam-powered train could innovate with it, or they could face lawsuits in the court. At the end of the patent period, anyone can innovate with the idea.

Difficult to Prove

Almost any CEO working in a business will tell people that his patents are crucial to protecting his business. Economists, on the other hand, have questioned this idea for years. Another problem comes from how the lack of a patent can take the steam out of someone's engine. For example, a patent gives an individual a reason to develop his ideas further. However, if the patent application gets rejected for whatever reason, the chance of the invention going to the market decrease by as much as 13 percent. The individual could have a great idea, but they give up if they fail to get the idea through the patent process, they sometimes give up earlier than what they should have. 

Does This Question Matter?

Asking whether patents are harmful is a kind of idle question because almost every country in the world uses the patent system. In addition, no one has any plans of dismantling the system because it has been highly useful and protected the rights of business owners. However, it is a useful question to wonder what the world might be like without patents. Would it encourage innovation or hinder it? 

The Concern in Technology

One of the chief concerns of it coming from the technology sector is the fact that it could block off entire areas for development and research. Let's say that you have a breast cancer gene patent. It could stop further research from other people developing it. As the saying goes, two heads are better than one. People negotiating to be allowed to further develop the idea could hinder the innovation in the field under the wrong circumstances. 

Some of the strategies that you will find that people have used as a workaround in the field of biomedicine include:

  • Ignore a broad patent too broad to challenge.
  • Combine the technologies.
  • Redirecting the efforts towards research.
  • Get engaged with licensing.

The one thing that we have to understand is how these ideas aren't without their share of difficulties. 

Adjusting the System

We shouldn't throw out the baby with the bathwater because the patent system does a great job at protecting people and rewarding those who come up with innovative ideas. However, in the future, we should look at figuring out ways that could help with enhancing innovation through patents.

The patent has become an effective tool for sharing knowledge. In fact, many places like the US, Europe and Japan depend on patent information because it allows them to understand how far technology has come. The idea is that hopefully, it will assist with sparking more valuable ideas. Thomas Edison gives us one historic example of a figure who would visit the patent office as a way of giving him ideas for his own inventions. This could, fact, be a good thing because otherwise, inventors would rightfully guard their inventions secretively, and this could harm innovation.

Author: Jeff Williams

Jeff Williams is an experienced mechanical engineer and lawyer that consults closely with clients in a strait forward and clear manner.  He brings a particular set of strengths and unique perspectives to the firm.   

 

Jeff received a B.S. in Mechanical Engineering from Arizona State University in 2005.  He was an engineer for a number of years at a number of large corporations before pursuing his law degree.  He graduated from Texas A&M University School of Law (formerly Texas Wesleyan University School of Law) with a J.D. in 2010.  By combining his education and prior work experience into the field of intellectual property law, Jeff has developed key skills to fully assist clients. 

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