Do patents help stimulate innovation?
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Do patents help stimulate innovation?

Innovation is one of the engines of economic growth in developed countries and a key factor for access to new technologies in emerging countries

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Do patents help stimulate innovation?

The patent is one of the tools for protecting the intellectual property of innovations. The primary role of a patent is to protect innovation by granting a temporary monopoly of exploitation to its holder. The patent also promotes the dissemination of knowledge but has negative effects in terms of competition;

The sharp rise in the number of patents granted in recent years and the increasing complexity of products has led to new strategic behaviors by companies. Thus, the emergence of patent trolls, patent pools, and patent races makes it necessary to think about the future of the patent system;

Many voices criticize the current patent system and propose reforms that may involve a reorganization of national patent offices or a change in the duration and scope of patents. Some even call for a pure and simple abolition of intellectual protection by patents;

The patent protects an innovation

The patent's primary role is to foster innovation by granting the holder a temporary monopoly. The patent is often described as having positive effects through incentive mechanisms for innovation and the dissemination of knowledge, but also negative effects on competition. From an economic point of view, the patent is justified to protect innovations because they have the characteristics of public goods, namely non-rivalry and non-exclusivity. In the absence of a patent, an innovator then has very little incentive to reveal his invention and exploit it for fear of losing the benefit. The patent then makes it possible to solve this dilemma by offering a monopoly of exploitation over an innovation which makes it possible to ensure.

The patent can be a brake on innovation

The counterpart to the patent's incentive to innovate is the establishment of a temporary monopoly that leads to an underutilization of the technology and potentially higher pricing than a competitive situation in the short term. Numerous research shows that patents can slow down innovation, especially when it is said to be cumulative? That is, the inventions rest on each other?? And those patents protect fundamental inventions.

Dematerialization and complexity of products

The products are more and more complex and are based mostly on several tangled patents called "patent marquis" or patent thicket. Thus, some technological products in particular in the electronics are of hundreds or thousands of components each potentially patented. In this case, an innovator wishing to enter the market must obtain permission from the patent holders for each component which introduces a problem of "royalty stacking": the sum of license fees to pay may make the innovation unprofitable. To work around this problem, large companies develop patent portfolios and sign cross-licensing and pooling agreements. Patents are thus used defensively, for example by filing patent applications to mark territory.

Conclusion

A patent is a great tool for encouraging innovation. However, it can have negative effects on the diffusion of innovation due to corporate behavior and the cumulative nature of innovation. It is, therefore necessary to adapt the system so that patents protect quality innovations and take into account the specificities of certain sectors. Also, the patent is not always the best tool for protecting innovation and the lack of protection is sometimes preferable.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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