Do Patents Disrupt or Decelerate Innovation?

Posted by InnoCentive on Jul 17, 2018 3:54:00 PM

 

The protection of Intellectual Property has deep roots in U.S. law, and it has long been one of the main inspirations for people to create new products and innovations. This is because, while there is a certain romanticism to innovation and invention, there is also substantial financial motivation on the behalf of the creator, which is backed by their ability to retain the rights to what they create.

Patents Has Roots in the Constitution

Intellectual property was so important to the U.S. founders that they outlined specific abilities in the constitution that give the government power to protect it. According to Article I Section 8 | Clause 8 of the U.S. Constitution, the Congress possess the power “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

In a past era of rapid technological advancement and innovation, combined with little to no records of filed patents, this was a logical and necessary method of protection for the U.S. to create. Flash forward to today, where over 6 million patents have been granted in the years since 1790, the question has been asked if patents are still good for innovation.  Do patents accelerate, decelerate or somehow harm innovation?

The Case Against Patents

The case against patents stems from the idea that they stifle innovation and instead invite lawsuits. In 2017, there were over 3,000 lawsuits filed in the U.S. that asserted copyright infringement, and the idea of patent trolls — entities who own and continuously acquire hundreds of patents for the sake of suing anyone who comes close to infringing on them — has put a damper on many organizations’ ability to properly innovate.

Experts also point out that larger companies routinely cross-license patents in order to block their competition from gaining an advantage in the industry. A notable side effect of this is that these patents usually block smaller entities and inventors from breaking into the industry or introducing new products.  These examples could make a case for innovation decelerating while trying to protect real innovation. The question is if patent law has a negative effect on innovators for fear of being sued thus harming real innovation.

The Case for Patents

Those who support patents point out that intellectual property rights act as incentive for inventors to innovate. Without patents, innovators must relinquish their creations to any organization with the means to utilize them, all without financially rewarding the person who made the invention/discovery. Patents encourage innovators to go out of their way to innovate so that they can reap the rewards of creating something new.

Innovation also costs time and money. It is a substantial investment that businesses and individuals make. Without protecting intellectual property with patents, there will be very few philanthropists willing to invest their time and money in innovation. All true and great reasons for why Patents are important.

Somewhere in the Middle

Perhaps the question and arguments should not be framed as a black and white issue. Rather than asking, “should patents exist,” we would be better served asking, “should the current patent system be revamped?”

The answer is a resounding, “yes.”

Patents are crucial to open innovation, and they open the pathway for even the smallest innovators to invest in and protect their innovations. The good news is that fewer patent lawsuits are being filed each year, which means that issue of litigation is becoming smaller, but the problem of patent trolls acquiring patents for innovations that they really entitled to still remains.

It’s clear that “innovation” needs to be brought to intellectual property rights, the question is, “how can we change the laws without stifling innovation”, slowing down or stifling innovation without punishing innovators and Patent holders.

Topics: Innovation Insights

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