Patents kill Innovation

The world economy doesn’t like trade-barriers, protective tariffs and other obstacles of free trade. They only benefit domestic monopolies, but hurt nations and the world economy as a whole. But the biggest, all-encumbering of those are not even disputed, they are sought to be enforced globally on a ever wider-reaching scale. They’re patents.

Patents serve the holders to get a monopoly on the production of a good, but they don’t grant it, they just grant that others are unable to produce it (without paying the holder, that is). The original idea was that they should foster innovation; but this has proven to be wrong. History tells a different story. From the swiss pharmaceuthical industry, which developed until 1954 (where patents on processes were legalized) without patents at all, and only got patents on products in 1977, to the thriving italian pharmaceutical industry which was in fact annihilated in 1978 when italy allowed patents on products. No patents definitly don’t mean no innovation: in the mid-ninteenth century, switzerland held the second highest number of exhibits per capita on the World Fairs. Plus received disproportionate shares of medals for outstanding innovations.

In the last few decades, patent-protection was ever made stronger, and the effect is that patent-litigation has overtaken patent-licensing by a factor of five in every field but pharmacy and chemistry. Innovation at Risk: The empirical case that today’s patent system discourages innovators—and how it might be fixed documents this. This means, in clear language: Every field of endeavour apart from pharmacy and chemistry would be much better off without patents at all. Still, lawyers and people obviously against globalization continue to try to make patents even stronger, lobby hard to get even more rents and even more rights for patent-holders.

Though the patent-system works in pharmacy and chemistry, it’s only the system that works — but it’s not that the patents “promote science and innovation”, as set down in the reasons why patents should exist in the first place. In this case, patents are to blame for about 50% of our health-care costs. And the swiss federal counsel allowing the “patenting of gene-sequences” on pressure of the few biggest pharma-companies, and against any and all small biotech-companies, obviously only serves to increase the rent those big companies already get, and reads thus as “federal counsel decides on increasing the cost of health-care”. Either someone here was bought and paid, or we’re ruled by neanderthals.

Why can organisations such as the WTO, which claims to stand for “free trade” sanction something like the TRIPS-agreement which tries to plaster the world with monopolies? The absolute anti-thesis of free trade?

Patents are simply an anachronism which has to be abolished better sooner than later; otherwise they will continue doing damage, no matter how much we fight the symptoms of “submarine patents” or “patent trolls”. For pharmacy and chemicals, we need to change some of the rules for the tests of the drugs first, in order to take some (state-mandated) burden off the companies; but for all other fields, we can abolish them immediately.

If you think this article lacks substance, anecdotes or hard data, please read Against Intellectual Monopoly which covers all the mentionned topics in detail. It even goes further than that, it also argues that the other intellectual monopoly — copyright — should be abolished as well. I’m not quite sure whether this is a good idea, but copyright has grown like fungus in the last few decades, and there is certainly something very wrong with it as well. Forever Minus a Day? argues that copyright should last 14 years after creation, no more. And I’d be happy with these 14 years and throw in a
“renewable once for another 14 years” as a tradeoff, but I won’t agree to more than that. With patents, I won’t give in to anything else besides complete abolishment.

Comments are closed.