Do Patents do More Harm than Good?

The intellectual property debate, or the IP debate, is something that has been going on for quite some time now. Unlike normal tangible goods and property, intellectual property – new inventions and ideas – can easily be usurped and copied. To avoid this, governments all across the globe provide protection to the researchers and innovators by granting them patents. When a patent is granted to an inventor, it gives the inventor the legal right to claim the invention as his own and file a case against anyone who tries to copy or use the idea without the inventor’s consent. Thus, the inventor and the invention are both protected legally by a patent.

Patents go a long way into the past. They have been granted for some very useful inventions that practically has changed the face of the globe, like the patent for the steam engine given to James Watt, the patent for iPhone granted to the company Apple, the patent for the GPS (Global Positioning System) given to Roger Easton. These are some of the most influential patents that have been given and many more such examples can be cited from the history of patent law. But do patents actually serve the purpose that they are meant to serve in the first place? Or do they also bring along with them some negative externalities that we need to consider before giving away patents?

If we consider the current situation, the number of patents that are being given is increasing exponentially. According to statistics, the United States gives out the highest number of patents, followed by China. These countries are very closely followed by Japan. What exactly is the advantage of grating a patent? It serves as an incentive for the innovator. When an inventor knows that he will have exclusive rights of income from his invention, he will have the push to go ahead and innovate greater things as compared to if the inventor has no such guaranteed income. That is, if the inventor feels that despite him spending hours of his time and effort behind his invention, he is going to benefit from it as much as some other person who will use the same invention, then there is no additional push or incentive for the inventor to work his brain towards producing this new technology. Thus, these patents that prevent a second person from using the invention without the permission of the inventor, go a long way in encouraging new inventions.

Looking at the other side of the same issue, the question to be addressed here is what is the effect of these patents on the welfare of the entire society? How useful or beneficial are these patents for the society on the whole? If ideas and inventions are allowed to freely float in the market then a certain technology or a certain new idea will help increase production and the availability of new products in the market. This, from the society point of view, is the ideal outcome of a new invention. However, when patents are granted to such inventions, the free flow of these ideas are restricted which leads to increased cost to the society. This cost is in the form of increased prices of the new goods and services, like iPhones, Harley-Davidson bikes, etc. These products have a high demand because of their brand value, which has arisen from the fact that no other company is allowed to manufacture them. This causes the overall welfare of the society to reduce from the level of a perfect market situation.

Further, in today’s scenario, factors affecting the patents being granted are far from being fair. Patents must be given to individuals who are the first ones to innovate the new technology, instead of being granted to the first one to file the patent request. While the US follows the first rule, some countries, like India, follow the second. In addition to this, governments of today do not function like how they would in a utopian society. There is a lot of power play involved in the simplest procedures and that affects the fairness of their decisions too. As is seen in today’s context, most of the patents that are given are granted to large corporate houses and high net worth individuals, rather than being given to the small and marginal innovator. These powerful entities use patents to reduce competition in their sector and help further their own profit interests.

Patents must be given to real new inventions, but that is not what happens. Most patents are given away to inventions that are just mere revisions of an already existing technology or idea with very little innovation. This is far from that the true purpose of a patent is. Thus we can say that patents do have significant benefits, but at the same time also come with certain limitations of their own. To help inventors truly gain from the system of patents, there should be a proper regulatory body to review all the above-mentioned aspects before patenting a certain idea. This will ensure that the small and marginal inventors’ interests are protected and there is no redundancy in the patents given out. A carefully regulated patent law will then truly serve the purpose.

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