Study says Patents Hurt Innovation

According to a study published in The Columbia Science and Technology Law Review, patents may be harming our ability to innovate. Patents and the Regress of Useful Arts, written by Bill Tomlinson of UC Irvine and Andrew Torrance of University of Kansas School of Law, tested the hypothesis with a game called PatentSim. The game is an online simulation of a pure patent system, a patent-free commons system, and a mixed system. Within each environment, first year university students were asked to license, assign, infringe, and enforce patents. The study found that while a mixed patent environment and pure patent environment did not offer substantially different results, students in a commons system generated significantly higher rates of innovation, productivity and social utility. Essentially, the study supports what Lawrence Lessig and free culture advocates have been saying for years: a society free from intellectual property monopolies is a society that is better off.

In the study, Torrance and Tomlinson explain how patents have been wrongly justified as a way to encourage invention. The justification has been that by excluding others from duplicating an invention or process, the patent owner is more likely to spend time, energy and resources on their product. However, past studies have proved otherwise. Data collected from PatentSim further substantiates these findings.

PatentSim was presented as a game in which the goal is to make as much money as possible. In each environment, subjects combined objects in a “Creation Box” to simulate an invention. Whenever a subject created an invention and clicked on the “Make” button, money would appear in their virtual bank. In the pure patent and mixed patent environments, subjects could also click on a “Patent” button to increase their profit. Each patent was priced at $20 and each use of a lawyer also cost $20. At the end of the study, students had produced significantly more inventions and profit in the commons environment when they were not being penalized for patent infringement or were busy enforcing their patents.

The study suggests that innovation not only thrives in a competitive environment, but that more profit can be generated by inventors in a commons system. Because PatentSim is just a simulation, readers need to take findings with a grain of salt. While the rate of inventions would likely increase without patents, it’s tough to tell if inventors would really see unlimited profit potential in an environment free of patents. After all, how many different zipper pulls does the market demand?

Nevertheless, in some cases, the demand for a product or process is all too evident. Imagine the competitive market for hearing aids and prosthetics, or the success rate of farmers who are free to use the best possible processes. And honestly, does HIV really care if it’s being treated by Glaxo, Pfizer or a tested generic knockoff?

This study is important in that it might spur policy makers to question how we look at innovation. Are inventions just disparate exclusively-owned products, or should we be sharing them out of necessity to solve our bigger-picture problems?

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