≡ Menu

The literature on the impact of patents on innovation must be considered emergent

Courtesy of Andrew Torrance, mentioned in his 2011 Open Science Summit talk,1 a quote from this book: Patents in the Knowledge-Based Economy, Cohen & Merrill, eds. (2003) (Google books):

There are theoretical as well as empirical reasons to question whether patent rights advance innovation in a substantial way in most industries. …The literature on the impact of patents on innovation must be considered emergent. One reason is that the effect of patent policy has many dimensions … and these continue to challenge scholars both theoretically and empirically.

Discussed by Torrance here. See also Yet Another Study Finds Patents Do Not Encourage Innovation; and Torrance and Tominlson, PATENTS AND THE REGRESS OF USEFUL ARTS.

In other words, people who say patents encourage innovation do not know what they are talking about and have no clear evidence to back it up.

This reminds of similar conclusions and comments by other researchers, as discussed here:

A hundred and fifty years after the first US patent law and the Founders’ “hunch” that copyrights and patents might “promote the Progress of Science and useful Arts,”2 there was still no evidence to back up this assumption.3

As economist Fritz Machlup concluded, in an exhaustive 1958 study prepared for the U.S. Senate Subcommittee On Patents, Trademarks & Copyrights:

No economist, on the basis of present knowledge, could possibly state with certainty that the patent system, as it now operates, confers a net benefit or a net loss upon society. The best he can do is to state assumptions and make guesses about the extent to which reality corresponds to these assumptions. … If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one.”4

And the empirical case for patents has not been shored up at all in the last fifty years. As George Priest wrote in 1986:

[I]n the current state of knowledge, economists know almost nothing about the effect on social welfare of the patent system or of other systems of intellectual property.5

Similar comments are echoed by other researchers. François Lévêque and Yann Ménière, for example, of the Ecole des mines de Paris (an engineering university), observed in 2004:

The abolition or preservation of intellectual property protection is … not just a purely theoretical question. To decide on it from an economic viewpoint, we must be able to assess all the consequences of protection and determine whether the total favorable effects for society outweigh the total negative effects. Unfortunately, this exercise [an economic analysis of the cost and benefits of intellectual property] is no more within our reach today than it was in Machlup’s day [1950s].6

More recently, Boston University Law School Professors (and economists) Michael Meurer and Jim Bessen conclude that on average, the patent system discourages innovation. As they write: “it seems unlikely that patents today are an effective policy instrument to encourage innovation overall” (p. 216). To the contrary, it seems clear that nowadays “patents place a drag on innovation” (p. 146). In short, “the patent system fails on its own terms” (p. 145).7

And in a recent study, economists Michele Boldrin and David Levine, authors of Against Intellectual Monopoly, conclude:

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless the latter is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. This is at the root of the “patent puzzle”: in spite of the [enormous] increase in the number of patents and in the strength of their legal protection we have neither seen a dramatic acceleration in the rate of technological progress nor a major increase in the levels of R&D expenditurein addition to the discussion in this paper, see Lerner [2009] and literature therein. As we shall see, there is strong evidence, instead, that patents have many negative consequences.8

See also Legal Scholars: Thumbs Down on Patent and CopyrightThe Overwhelming Empirical Case Against Patent and Copyright.

  1. See KOL101 | The Future (the End?) of Intellectual Property (Open Science Summit, 2011) . []
  2. U.S. Const., Art. I, Sec. 8, Cl. 8 []
  3. Eric E. Johnson, “Intellectual Property’s Great Fallacy” (2011): “The monopolies now understood as copyrights and patents were originally created by royal decree, bestowed as a form of favoritism and control. As the power of the monarchy dwindled, these chartered monopolies were reformed, and essentially by default, they wound up in the hands of authors and inventors.” []
  4. Fritz Machlup, An Economic Review of the Patent System 79-80 (1958), c4sif.org/resources; Machlup, An Economic Review of the Patent System 79-80 (1958); see also my post The Economist on the American Patent System. []
  5. George Priest, “What Economists Can Tell Lawyers About Intellectual Property,” 8 Res. L. & Econ. 19 (1986). []
  6. François Lévêque & Yann Ménière, The Economics of Patents and Copyrights 102 (2004). []
  7. James Bessen & Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (2008, excerpts available at researchoninnovation.org/dopatentswork/). []
  8. Michele Boldrin & David K. Levine, “The Case Against Patents”  (June 29, 2012 draft; available at http://levine.sscnet.ucla.edu). []
{ 0 comments… add one }

To the extent possible under law, Stephan Kinsella has waived all copyright and related or neighboring rights to C4SIF. This work is published from: United States. In the event the CC0 license is unenforceable a  Creative Commons License Creative Commons Attribution 3.0 License is hereby granted.