Patent law is supposed to promote investment and trade, and contribute to economic growth, by providing a property right in the patented item.
A new book by James Bessen and Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk
Patently-O, a blog about patent law, provides a platform for authors Bessen and Meurer to make their case online:
The rise of new market economies and strengthening of property rights around the globe in the last two decades provides economists with “natural experiments” that help us evaluate whether and how much property rights contribute to investment and growth. The empirical results are impressive. Countries that expanded the role of markets and strengthened property rights have prospered from these choices. Economic historians find the same results hold going back to the Industrial Revolution.
Comparable studies of patent systems are discouraging. The evidence certainly is consistent with the notion that patents encourage American pharmaceutical R&D. But otherwise, it is hard to find evidence suggesting patents are a major factor spurring R&D investment, that patents contribute to economic growth, or even that the patent system is a source of great wealth to important inventors and innovators (outside of a few industries like pharmaceuticals).
This post is the first in a series, and provides a short history and comparison of patent law in Britain and the United States before launching into a brief examination of the effectiveness of patent law in new market economies outside the United States.
If your business depends on patentable innovation, this is good stuff to know.
Technorati tags: Economics, Patent Law, Research and Development.
