Sunday 20 January 2019

Does patent protection encourage or discourage innovation?

From the BBC:

Deep in a water treatment plant in Ramstein, near Kaiserslautern in south-west Germany, one woman believes she's found the answer [to fatbergs]. Dr Andrea Junker-Buchheit works for a start-up called Lipobak.

"We treat fatbergs with a special micro-organism solution. We grow bacteria which have been developed specifically to eat fat. They digest all the fat, all the grease, all the oil."
...
Work in this area started under a US patent nearly 30 years ago, but has come back to the fore since it expired.

10 comments:

Physiocrat said...

A friend of mine who was the Chief Engineer at a major UK car manufacture was dead against patents and expressed the view that they were not worth the effort. Attention, in his view, needed to be focussed on developing and improving the product and getting it on the market at the earliest possible moment. Patents were an expensive and unnecessary distraction.

My experience in chemical manufacturing was similar. There was a key element in the process which involved stirring with a lavatory brush, a new one being used at each batch. You could patent the chemical process, and it would work in theory, but in practice it would have quickly bunged up all the equipment and then taken days to clean.

Another product ended up as a bit of a witch's brew before it would perform as intended.

Protection needed no patent.

Sobers said...

Doesn't patent protection also have an upside - namely that the information has to be public? Therefore society gets the benefit of all the expired patents, as public knowledge anyone can use, as in this case? I suspect what would happen in the absence of patents would be that inventors (and companies) would seek to keep everything as secret as possible, even if they weren't planning to develop the product/invention at that point (or couldn't for some reason). Because patents are very lucrative (in the right circumstances) they tend to be applied for early in the process, so the clock starts ticking right away. The individual has 20 years to make his killing, then society gets the benefit.

I think its a fair trade off. And if you get rid of patents, are you going to get rid of all IP? It seems unfair that an artist would get protection for many decades for his books/music etc, but the inventor would get nothing.

Lola said...

I thought that part of the problem was the length of time a patent can be granted for? From memory the US extended this greatly at some point.
The 'libertarian' view is that patents are like 'rent'.
Mises has lots on patents. e.g. https://mises.org/library/rethinking-patent-law

Bayard said...

Patents. like a lot of principles in law, work fine when applied wisely, but suffer from being exploited by the unscrupulous and greedy, especially when those exploitative techniques are then written into the law. Crap patent law is not a reason to get rid of patents, it is a reason to get rid of crap law.

Dinero said...

> Sobers
The patent does not have to be expired. Whilst it is in place The Information is shared in return for a right to receive patent licence fees.

Mark Wadsworth said...

Phys, good anecdotal. How did you fix the witches' brew?

S, I'm not that fussed about patents and copyrights (as long as they accept a higher tax rate in exchange for govt protection). But they are clearly not an unalloyed good, as the example shows.

L, ta. There lots of questions to be answered - what can you patent, how long does it last, what is the tax rate on it..?

B, agreed. How about, if you have a patent and don't make the product for ten years, it lapses?

Din, is it? I thought you still needed permission to use it, failing that, you decides the royalty amount? If the patent owner can set his own rate as high as he likes, then the nominal right to use it is worthless.

Mark Wadsworth said...

L, I've read the article. Short and to the point. Sort of overlaps with B's comment.

Physiocrat said...

Yeast extract and sodium pyruvate!

Dinero said...

No you do not need permission. The Patent is the permission. The royalty is decided by a judge. Accoring to pubic statements of for example Dyson.

benj said...

There's no tragedy of the commons with ideas. The incentives to put a toll booth in a development path must distort incentives and resource allocation, resulting in higher costs and waste. Obviously this benefits/protects companies that can sustain a large R&D/lawyer budget.

Natural evolution shows the power of small incremental steps. Patents not needed.