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    Battles over patents can be productive

    A few years ago, at a famous Swiss ski resort, I attended a private meeting of the CEO to discuss heretical ideas. Should the patent be abolished?

    The debate went in an unexpected direction after a predictable protest from pharmaceutical company executives on how this would destroy incentives for research. Some have challenged the accepted wisdom by arguing that a patent-free world may promote innovation rather than frustrate it. For example, a company that has some parts of a new anti-cancer jigsaw puzzle may suddenly find that it has a part that its rivals are lacking. It will make it cheaper and faster to bring the drug to market.

    Universities may become more and more active in the intellectual property of researchers and return to their original purpose of increasing the accumulation of public knowledge. Companies can still make a lot of money by selling reliable medicines. Would you like to buy a potentially life-saving drug from an unknown manufacturer?

    It’s an intriguing thought experiment, perhaps more and more resonating as follows: Criticism of dysfunction The number of costly, time-consuming and ineffective patent schemes is increasing. But in a patent-free world, it’s unclear whether lower-level inventors will benefit, while corporate giants can thrive when promoted. The patent was developed for a reason.

    In the new series of essays, The battle for patents, Ten economists, historians, and lawyers make a compelling claim that even if the patent is incomplete, it remains the best way to reward the inventor and disseminate knowledge. “Extensive empirical evidence shows that patents expand the scale and scope of creativity, promote diversity and inclusiveness, create more knowledge spillover effects, and enhance social welfare for a wider population. “I am,” Zolina Khan, a professor of economics at Bowdoin College, tells me.

    One of the recurring themes of this book is that the fierce battle for patents is not a temporary bug that needs to be fixed, but an inevitable feature of the system. In essence, patents create a dispute over the “producer surplus” created by new products. The inventor always demands as much of its monetary surplus as possible, but the producer’s purpose is clearly to minimize it.

    Most complaints today Last 230 years.. The author actively tracks people in the late 19th century America, for example, where a small army of “patent trolls” (predecessors of modern patent trolls) violated rubber prostheses, sewing machines, and thorny intellectual property rights. Find out how to do it. wire. Then, as it is now, all the tricks in the book were used to extract a larger share of the producer surplus. Depending on the life cycle of a particular technology and lobbying and the strength of the law, decades of weak enforcement have followed a period of strong patent enforcement.

    Professor Stephen Haber of Stanford University states that one of the most important advantages of patents is that it allows for a productive division of labor. Disposing of them forces companies to conduct technical research in-house, which greatly reduces efficiency. “In a patent-free world, it’s impossible for a company to specialize in technology development and another company to specialize in technology implementation because there are no property rights that companies can contract,” he says. “It will knock out tens of thousands of professional companies.”

    Even if you accept the author’s conclusion that patents still work in theory, you can actually make them work better. If fighting is a permanent feature of the patent system, so must adaptability. This summer Germany amended patent system Implement the wise principle of proportionality. Others are urging us to tighten the definition of “innovative, not trivial, and useful” inventions and shorten the life of patents. However, as a general rule, the balance of power should lean towards the inventor, not the producer.

    It is a business model that shares or denies intellectual property rights, and there is room for further experimentation. Perhaps the most compelling example is open source software that runs much of our digital world. Developers share code to help each other rather than generate immediate financial rewards.Some economists Claim a publicly funded research company Open their discoveries to everyone.

    However, when money enters the equation, a battle inevitably breaks out over its distribution. As a philosopher, “The state of reward is the last asylum of arbitrary power.” Jeremy Bentham once wrote.

    john.thornhill@ft.com

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