WHY HAVE PATENTS? - Patent law

Before delving further into the who, what, where, and when of U.S. patent law, as we will begin shortly, a more basic question worth considering is:Why have patents in the first place? Aren’t they monopolies? Aren’t monopolies bad? These are reasonable questions to ask and reflect the natural tension that has co-existed with patents ever since the Middle Ages when it appears that something akin to patents first hit the scene.

The strongest arguments for robust patent policy make the case that it encourages individuals to innovate by allowing them to maximally profit from their inventions.At the same time, patents provide the public disclosure of inventions, which allows others to further innovate based on those disclosures. Since we wish to encourage innovation and invention, it makes sense that we would want to reward the inventor.For the innovation that results in an invention, exclusivity makes a logical reward because what better way to value the invention than the market itself? If an invention has a high value then many will wish to pay for it, thus rewarding the inventor in a manner directly proportional to its value to the public.

If however, an inventor were given nothing in return for publicly disclosing her invention, there would be little to encourage innovation and even less to encourage disclosure of the innovation. Rather it might behoove people to wait for others to bring an invention to the public so they could quickly duplicate and market it. With everybody waiting and nobody inventing, not too much ends up getting accomplished in the way of innovation. Even when inventions were made in the no-patents-allowed scenario, deliberate efforts to hide the invention might take place so that others would be hindered from copying the innovation. In contrast, the patent system encourages the opposite result. By requiring a thorough disclosure of the invention in exchange for a patent, the public is effectively given a tour of the palace (only they aren’tall owed to occupy it for some time, at least without paying rent). Although the public is limited in terms of what they can do regarding the invention during the patent’s period of exclusivity, they are free to innovate further and improve on the patented invention. Under this paradigm, the patent represents less a monopoly and more an invitation for further innovation.

But there are competing interests. For example, some have argued that patents can actually stifle innovation by preventing individuals from working in certain areas due to the presence of broad “blocking” patents in that area. Where such broad patent shave been issued or when there are so many patents in a given area that a figurative minefield has been created, it can be hard for the eager inventor to find a way forward.Even licensing can become extraordinarily difficult if not impossible when there are multiple stacked patents resulting in complex and/or overly costly royalty structures.

It has also been argued that certain patents, particularly in the pharmaceutical and agricultural areas, have allowed companies to price their wares in such a way that they have hurt society. For example, it has been argued that patent rights have resulted in monopoly pricing, which has left poorer nations unable to medically treat or even feed their citizens.

While the substance of these arguments can/have been dealt with in a number of ways, one should not underestimate their political and/or moral appeal, especially in the hands of erstwhile populists bent on highlighting alleged problems of patents while ignoring or obfuscating their longer term benefits. Weakening patent laws for short-term benefits can be appealing but needs to be actively guarded against.Ultimately, strong patent rights are granted by society, and they can be taken away by society; it is incumbent upon both governments and industry/inventors to continue.


Figure : Patent policy as a balance of competing interests.

to work together in such a way to ensure that the current patent system reflects a proper balancing of the different policy interests. One might think of these competing interests as weights on opposite ends of the seesaw shown in Figure below, where the fulcrum represents the balance of interests at any given time.

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