Intellectual Property Rights and Research Tools in Molecular Biology Summary of a Workshop Held at the National Academy of Sciences, February 15-16, 1996 (1997) / Chapter Skim
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ECONOMIC THEORIES ABOUT THE COSTS AND BENEFITS OF PATENTS
ECONOMIC THEORIES ABOUT THE COSTS AND BENEFITS OF PATENTS
Pages 17-27
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From page 17... ...
In this paper we identify four broad theories about the principal purposes of patents: · Invention-inducement Theory: The anticipation of receiving patents provides motivation for useful invention. · Disclosure Theory: Patents facilitate wide knowledge about and use of inventions by inducing inventors to disclose their inventions when otherwise they would rely on secrecy.
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From page 18... ...
The likelihood of a group of potential inventors to work on diverse and noncompeting ideas or to be focused on a single alternative or a set of closely connected ones. The transaction costs of licensing an invention with and without patents.
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From page 19... ...
Strong patents would then also serve the purpose of providing incentives to invent for parties who are limited in the extent to which they can use the invention themselves, by facilitating the sale of rights to an invention. In most versions of the invention-inducement theory it is assumed, generally implicitly, that the social benefit of a particular invention is strictly its final use value; the social benefit of patent protection stems, therefore, from the additional invention induced by the prospect of a patent.
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From page 20... ...
It seems that a consequence of that kind of invention inefficiency induced by strong patents would be to shift the tradeoff between the benefits and costs of stronger patents so as to increase the costs. Thus, society ought to opt for stronger patents in fields in which stronger intellectual property protection yields a larger flow of valuable inventions, rather than in fields in which stronger patents lead largely to more hounds barking up the same tree.
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From page 21... ...
The latter argument against patenting seems particularly strong if potential developers are diverse in the directions that they might follow and if the licensing arrangement of preliminary ideas, whose ultimate commercial value is unclear, are not easy to work out. DISCLOSURE THEORY The primary issue raised by the disclosure theory is not so much whether strong patents encourage more inventing, but rather how inventors reap the returns from their inventions.
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From page 22... ...
The possession of a patent, rather than simple reliance on nonpatent measures to reap returns, might make a firm more willing to advertise its inventions and to contract to give technological information and assistance to a noncompeting firm to help it to adapt the invention to its own uses. This variant of the theory is a close kin to the version of the invention-inducement theory in which inventors have limited ability to exploit an invention themselves.
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From page 23... ...
Kitch's theory was that having a broad patent on an initial invention enabled the patent holder to orchestrate development of a technological prospect in various dimensions, whereas development of an initial invention that was freely available to all would be chaotic, duplicative, and wasteful. The theory that patents enable orderly development of broad technological prospects differs from the development and commercialization theory in suggesting that a wide range of developments or inventions might become possible if the initial invention is available as an input through either development or modification in different directions.
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From page 24... ...
This theory suggests that an important issue defining the benefits and costs of granting patents on broad prospects is what is assumed about the market for patent licenses. If one assumes that, in general, the transaction costs of patent licensing are small, then one may take a relatively relaxed view of the costs of granting a large prospect-controlling patent, even when one believes that potential explorers of the prospect have diverse ideas of what they would do.
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From page 25... ...
We suggest that in most fields of technology, when one or a very small number of parties essentially control the inventive effort, not much happenswith the possible exception of Bell Laboratories and AT&T in bygone days. If you look at the history of aircraft or radio in the United States, strong broad patents that were selectively enforced by the patent holder interfered with the development of the technology.
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From page 26... ...
To understand better whether our current patent policies help or hinder the achievement of our societal objectives, we need to examine those assumptions rigorously. The following three questions are put forward as possible starting points for inquiry: In what fields of technology are technical advances so strongly connected to one another, either temporally or in a system of use, that effective inventing today requires access to prior inventions?
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From page 27... ...
1962. The origins of the basic inventions underlying DuPont's major product and process innovations.
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