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Innovation Perspectives

Innovation Perspectives offers an evidence-based approach to innovation policy. This contrasts sharply with most writing on patents and copyright. Most of the literature on these two types of monopolies is based on opinion. There is almost no material based on empirical evidence about the actual operation of these monopolies.

The current core focus of Innovation Perspectives is patent monopolies. Innovation Perspectives challenges important assumptions on which patent policy is based, in particular whether there is a net benefit to the nation.

This website is currently under construction and so far only contains an initial set of evidence on the impact of patent policy and a beginning set of links to other researchers using evidence as the basis for their writing on patents and copyright.

Future pages will summarise key knowledge and main resources on particular aspects of innovation policy, commencing with a focus on patent policy. Issues to be covered include:

  • whether there is any general failure in innovation markets;
  • the cost and time needed for copying;
  • the relative importance of patents in obtaining returns from investment in innovation;
  • how (un)inventive granted patents are;
  • accessing data on patents;
  • the interaction between patents and trademarks in pharmaceutical monopolies;
  • and why “intellectual property” is misleading and each form of monopoly should be treated separately.

Feedback on the value of this site is welcomed, as are requests for links to your own site.

Hazel V J Moir
Innovation Perspectives
August 2010

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There are a small number of researchers who produce good empirical work looking at policy-relevant aspects of patent systems. An incomplete list of these is below. I am happy to add links to other people and sites provided the work is evidence-based and does not assume patents are needed for any industrial innovation to occur.

Michele Boldrin and David K. Levine point out a fundamental flaw in the assumption that patents are necessary for achieving a return on industrial innovation-in the 'first in the market" period a price above marginal cost can be charged, thus recouping investment costs except for very expensive products which can be imitated relatively quickly. Their book Against Intellectual Monopoly is published by Cambridge University press. A free version is available online. This book includes an excellent chapter on copyright. It also marshals a range of empirical evidence to challenge whether patents are even needed for pharmaceutical products.

James Bessen and Michael J Meurer have done excellent work on the issue of the clarity of patent boundaries. Their work is published in Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk. They also provide estimates of the very large share of the global return to patent systems taken by a small number of pharmaceutical companies. Their analysis concludes that if pharmaceutical companies are excluded then the net returns to publicly listed US companies from the patent system are probably negative. Published by Princeton University Press, selected chapters are available from the web.

Adam Jaffe and Josh Lerner also look at the economic impact of the patent system as it is currently shaped. Their Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It is an excellent introduction to the economic impact of modern patent systems. Both authors have undertaken a range of useful empirical work on the patent system.

Peter Drahos is, of course, best known for his Information Feudalism, an excellent account of the influence of a very small number of corporate players in imposing the TRIPS Treaty on all nations who wish to be part of the international free trade community. Peter is a professor of law with a substantial body of work looking at how regulations are made and maintained. His latest contribution, a fascinating account of how patent offices operate, concludes that the patent system is effectively a system of private taxation.

Stuart Macdonald has done a range of empirical work on patent systems, starting with input to the 1984 review of Australia's patent system and moving on more recently to empirical work on the use small and medium sized enterprises make (or, more often, don't make) of the patent system. His research leads him to the conclusion that deeply held myths about the importance of patents systems are based on faith rather than evidence, and indeed seem to be impervious to evidence.

Luigi Palombi is an experienced lawyer who specialises in patent and biotechnology law. His work on patent policy focuses on the distinction between a discovery and an invention. His PhD thesis traces the demarcation in the US, European and Australian jurisdictions. His recent book Gene Cartels traces the development of, and problems with, patent policy as applied to genetic material. He has been actively involved in generating interest in the gene patenting issue in Australia and has made submissions to the Australian Senate inquiry into gene patents.