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Market Research intellectual property rights stifle innovation

Published on March 29th, 2013 | by James Ayre


Do Intellectual Property Rights Stifle Innovation?

A new study from the University of Chicago is providing compelling evidence that certain types of intellectual property rights work to stifle subsequent research on the copyrighted technology.

intellectual property rights stifle innovation

Image Credit: Light Bulb via Shutterstock

“The goal of intellectual property rights — such as the patent system — is to provide incentives for the development of new technologies. However, in recent years many have expressed concerns that patents may be impeding innovation if patents on existing technologies hinder subsequent innovation,” said Heidi Williams, author of the study. “We currently have very little empirical evidence on whether this is a problem in practice.”

For the new research, the sequencing of the human genome by the public Human Genome Project, and by the private firm Celera, were investigated, and compared. The genes that were sequenced “first by Celera were covered by a contract law-based form of intellectual property, whereas genes sequenced first by the Human Genome Project were placed in the public domain.”

Even though the intellectual property rights only lasted for a maximum of two years, they allowed Celera to charge substantial fees for the data, “and required firms to negotiate licensing agreements with Celera for any resulting commercial discoveries.”

By gathering together a number of different datasets that had remained unused by previous researchers, “Williams was able to measure when genes were sequenced, which genes were held by Celera’s intellectual property, and what subsequent investments were made in scientific research and product development on each gene.”

When all of this is taken together, it becomes clear that there was “a persistent 20-30% reduction in subsequent scientific research and product development for those genes held by Celera’s intellectual property.” That’s a considerable blow to scientific advancement.

“My take-away from this evidence is that — at least in some contexts — intellectual property can have substantial costs in terms of hindering subsequent innovation,” Williams dotted, in the University of Chicago press release. “The fact that these costs were — in this context — ‘large enough to care about’ motivates wanting to better understand whether alternative policy tools could be used to achieve a better outcome. It isn’t clear that they can, although economists such as Michael Kremer have proposed some ideas on how they might. I think this is an exciting area for future work.”

Naturally, these findings are also important for clean technologies such as solar, wind, EVs, battery technology, energy-efficient lighting, and so on. These technologies are needed to avert the worst effects of global warming, and barriers to scientific advancement certainly aren’t helpful.

The new study was published in the Journal of Political Economy.

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About the Author

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Dale Halling

    Bob, it is not possible to patent an idea without demonstrating it works. 35 USC 112 speaks to that exact point.

    What there is a problem with is people not respecting other people’s property rights – you can see it across all types of property, but particularly the property rights of inventors.

  • Wilmot McCutchen

    I’m afraid people will take this as another anti-patent hit piece. Copyright abuse should not be ammunition against inventors. There is a big difference between copyright and patent subject matter and standard of novelty. The article adds to the confusion.

  • Bob_Wallace

    There is a problem with our patent system. It is possible to patent an idea without demonstrating that it works, just stick up some general stuff and create a position.

    Then, when someone comes along with an actual product, that patent can be used to “blackmail” them into a big payoff in order to take their product forward.

    It’s kind of like grabbing internet domain names and then selling them to someone who will actually use them.

    We need to fix this problem.

    But we need the patent system to protect actual products so that people will spend the money for research. Why would I spend millions of dollars to develop a better battery, vaccine, etc. if someone could just copy it?

    Take away protection and progress will be slower. Everyone will sit back waiting for someone else to do the heavy lifting.

  • linda518

    up to I saw the bank draft 4 $6691, I did not believe …that…my mom in-law was like they say actualy bringing home money part-time on their laptop.. there friend brother has been doing this less than sixteen months and as of now cleared the morgage on there mini mansion and bought Mitsubishi Evo. I went here, jump15.comCHECK IT OUT

  • anderlan

    Good article. I was thinking the same thing. Speed is what we need. Patents are often kind of speed bumps. That doesn’t matter quite so much as when you’re trying to save the planet. Each doubling of battery performance over cost will actually save untold trillions and truly unknowable environmental damage if it can come into production a year or two earlier than it might have under inefficient IP regimes. For every tipping point we cross, you don’t know what might have prevented us crossing it had we worked faster.

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