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Tuesday, 1 December 2015

The Innovation Battle - Canadian musings on patents

"Should patents be strengthened, weakened or abolished altogether?" is the bold question posited by the Centre for International Governance Innovation (CIGI), the Blackberry-founded research centre in Waterloo, Canada.  CIGI has published a policy brief on the case for patents.  It's a handy guide to the economic arguments for patents, but likely to irk members of the IP community audaciously recommends creating clearer patent systems.

What? Clearer patents? Ones that non-legal experts can easily understood? Preposterous!  

The brief suggests that, as is the neoclassical (think 'mainstream') economic approach to IP, the case for patents lies in incentivising innovation.  The argument is:
1. the lack of incentives for innovation is a market failure (inefficiency)
2. the patent system provide incentivises innovation
3. the benefits of patents outweigh the costs
On this basis (the incentive-to-innovate, a.k.a. social contract theory), patents solve the market failure.   

The assumption that more innovation is desirable underlies these arguments. At the risk of being excommunicated by the Econohood, your Katonomist is no longer convinced of the sacred value of innovation. The constant beating of the innovation drum in patent discussions is tired.  Both the obsession with innovation, and the definition of innovation, merit further examination.   Innovation for innovation's sake aims for economic growth and development, which largely means GDP.  GDP is a flawed measurement and ignores societal happiness and envrionmental resources, amongst others. Biggger, better, faster, more at all costs? Our narrow, science-based definition of innovation neglects the knowledge economy, and the contributions of women and indigenous peoples. For example, the UK government's innovation strategy is a "science and innovation" strategy, and barely separates the two. These are not deep thoughts I had while doing a downward cat, but shared by others, here and herePro-patent, and indeed any pro-IP, arguments resting on innovation arguments deserve scrutiny. 


Despite the limitations of a pro-innovation approach, innovation creates a useful analytical framework and highlights shortcomings of the patent system.  As the CIGI brief notes, strategic use of patents can stifle cumulative innovation, and evidence patents promote innovation is limited. (The latter a point also made by Jeremy Phillips.)  As discussed in the post on the WIPR 2015, we know very little about how innovation works.  Blithely assuming the patent system promotes innovation is superficial, and leads to shortsighted approaches where more patents are equated with more innovation.   

Returning to classic economic arguments, the CIGI brief makes a number of recommendations (paraphrased):
1. Patents should be easily searchable 
2. Patents should be more easily understood by non-legal experts. 
3. Patents should be narrower and clearly demarcated
4. The requirements for obtaining a patent should be more restrictive
5. And here's the interesting one - "concomitant with the reduction in the length of the product cycle, the length of patents should also be reduced."

I love the idea of a patent length that adjusts to market relevance as it would tailor the legal monopoly of IP to its socioeconomic contribution.  I also love the idea of unicorns, but don't expect see one soon.  While criticism of our existing, one-size-fits-all system is prevalent (discussed by Stefano Barrazza at the JIPLIP 10th anniversary event), such as system can be efficient.  Tailoring patent length to fit market relevance would reward innovators in proportion to their contribution, but the costs would be prohibitive.  Can you imagine arguing over patent length decisions with patent offices? One-size-fits-all suddenly looks more palatable. 

Your Katonomist is not particularly swayed by the arguments in the brief as she finds them reductive (both of the patent system and of the economic analysis), but there is a reason such publications are called "briefs." However, if rapacious readers would like to use them as ammunition to have a go at economists, by all means feel free. 

Waterloo here, here and here

8 comments:

MaxDrei said...

What a grotesque missed opportunity, in Canada. Why didn't the Professor of Economics consult in the patent world, before writing his Report?

Two comments on that.

1. The Professor imagines a nightmare, if one were to attempt to set different patent terms in different technical fields. He cites no evidence, just supposing that his own imagination is enough. But the UPC Central Division will try chem/bio cases in London, ETech cases in Paris and Mech Eng cases in Munich. I suggest 20 years for chem/bio, 16 years for Mech Eng and 12 years for ETech. Simples.

2. If he is worried about scope, why did he not suggest a clampdown on any engineering subject matter claim that is "functional at the point of novelty". Easy as pie, established law (and old as the hills) at the EPO but somehow problematic up to now at the USPTO. But the USA can Change that can with a wave of the CAFC baton. I think in fact, it's already happening. As to chem/bio, just clamp down on "absolut Stoffschutz" and allow only purpose-limited claims. Simples.

Anonymous said...

"Our narrow, science-based definition of innovation neglects ... the contributions of women". Huh?!

Nicola said...

Anonymous 13:11 - yes, I did rather blithely throw that in. I'm planning to so some more posts on the relationship of IP to innovation. There are a lot of feminist economics (yes, it exists!) critiques of economic definitions of output and productivity (read more here: https://en.wikipedia.org/wiki/Feminist_economics#Exclusion_of_non-market_activity). It questions a lot of basic premises of economics. Similar critiques are coming from sociology and, crucially, the IP community.

THE US anon said...
This comment has been removed by a blog administrator.
Stephen Johnson said...

There are rationales for patents beyond promoting innovation. For example, they promote and facilitate commercialization of technology. For an economic analysis see Kieff and Paredes, http://hooverip2.org/working-paper/wp14004/
A fine example of this is the invention at Oxford of a pre-natal test based on the discovery that maternal blood contains paternal DNA, thus avoiding the need for amniocentesis. This invention was patented by Isis and eventually exploited in the US by Sequenom. The patent fell foul of the new Supreme Court law on patentability but in today's (Nov. 2) Federal Circuit decision on patentability, Judge Newman in her dissent makes the point "Patenting.....facilitate[s] the public benefit of provision of this method through medical diagnostic commerce, rather than remaining a laboratory curiosity."

Anonymous said...

@Stephen Johnson

That is an unfortunate example. The ISIS patent on non-invasive pre-natal testing is now being used to stifle innovation by restricting competitors from developing more sophisticated forms of analysis. It is actually to the public's detriment to have patents on this technology. Multiple interested parties are critical of the way this patent and others have been used and are being used to stifle research in this area.

@anonymous

Why is it strange that narrow, science based definitions of innovation neglect the contributions of women. Rosalind Franklin for example received precisely none of the recognition, success or one presumes financial benefits of the discovery of the structure of DNA despite being the one to suggest the double helix structure. She wasn't responsible for the discovery but it would never have taken place without her and her contribution is not acknowledged in the technology stemming from this discovery (in gene testing, digital PCR etc.)

Economics generally ignores the contributions of women (in giving birth to the next generation of children/workers, the unpaid domestic labour and childcare/care for elderly relatives) that are unpaid, unacknowledged and unrewarded but without which the economy would grind to a screeching halt.


Anonymous said...

Sorry Nicola, but feminist economics is merely the new cloak in which die-hard feminists wrap their political message.

The message does not gain in strength because now it is covered in economist sauce.

I'm all for equality, but the incessant repeating of the message of perceived wrongs against women is tiring.

Anonymous said...

In response to the Rosalind Franklin example: There are millions of examples wherein people are denied just reward, every day.

The main reason: The others involved were either ignorant or assholes (or both). Ignorance can't be blamed, assholeness is a personal trait.

I have never seen any reason to derive from this (granted: high profile) case some general principle of society's institutionalised unfairness to women.

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