Patents: Solution or Problem?

Recently I have had two different experiences that have caused me to think really hard about patents and whether they are really a solution or a problem (or maybe a little of BOTH) in this new age of information that we are hurtling into.

The first event was a lecture by Prof Anil K.Gupta at Guelph a few nights ago. It was inspiring and uplifting to hear this great man tell how he has walked the land in India (and apparently in several other countries around the world) LEARNING the wisdom that the local peoples of those lands have to offer. Many have done this in the past but his is a completely non-exploitative approach. He looks for opportunities that might solve a problem for someone else and that can be commercialized. When and if he succeeds in taking the knowledge and commercializing it he shares the rewards back with the folks who had given him the knowledge in the first place. The network is called the Honeybee Network (an unfortunate choice since it has almost nothing to do with real beekeeping). He proudly mentioned in his talk that he has many patents for different technologies. That started the thought in my head. The cost to obtain these in all the countries his network works in (35 at last count I think), to enforce them and to license them seemed to me to be contrary to the "brand" that he was trying to establish - share the wealth of knowledge that is languishing in the traditions of indigenous peoples around the world for the betterment of everyone.

To be fair, he did mention that he gets a lot of help (from law firms amongst others) in reducing the costs of getting the patent in the first place. But that is where the problem started for me. It has been said that "It is amazing how everything looks like a nail when all you have in your toolbox is a hammer." (I did mention that there were TWO recent events. The second was a discussion with a patent-lawyer friend of mine who really unknowingly convinced me that patents were NOT always the way to go). Patents, like unions, certainly had their place in the early years of the industrial revolution. To be able to manufacture something and sell it at a profit one had to do a lot of expensive research. To recover these costs and to make the knowledge eventually available to the general public, it seemed appropriate to grant one some monopolistic rights for a limited time.

Today there is so much knowledge available to everyone and so many technologies that will aid the production of quick prototypes etc. and so much state (read your tax dollar and mine) sponsored research that one might well argue that the tremendous investments of time and costs to just find out if something has a chance to work is reduced not extended.

Surely there will be those who will point to the increasing costs of developing a drug in the pharmaceutical world and the increased time to get it approved etc. There are indeed fields where it may yet make sense to patent inventions. We are not 100% there yet. But do we see a trend where the number of such fields is increasing or decreasing? Even the pharmaceuticals industry has argued that the idea of the limited time to be able to recover their investments is insufficient. They would of course like MORE exclusivity but the fact remains that even for this industry (the bastion of patenting in a way) patenting in the old traditional sense is not working. We are entering an age of information and knowledge. The more we share it the better off we are all in terms of being able to maximally leverage it to improve our own lots and those of others.

Lest you are thinking that I may break out into a verse or two of KumBaYaa soon let me assure you that I am at heart a capitalist. I want to see free competition and a vigorous marketplace. But do we need monopolies to do that? Doesn't it sound protectionist to be granting people monopolies even for a limited time? Shouldn't we be relying on market forces to bring about the better products rather than the smug feeling that one can do whatever one wants for some time before one has to answer for it? This is what has happened in the IT world for example. The pace of improvements is so fast now that patenting is NOT considered a serious alternative. Increasingly, folks in that field rely on staying ahead of the market, on trade secrets, and on the ingenuity of their employees (whom, by the way, they have to CONSTANTLY woo to stay where they are) They have found other means like copyrights etc to protect their longer lasting inventions. And the pace of growth in this industry is second to none in my opinion. The developing world (I really hate that term. I wish someone could come up with a better descriptor) has also shown us that patenting may not be relevant there. The costs to inventors, and the rapid pace of incremental invention (to say nothing of the slow and sometimes complicated legal system in their countries) almost makes it uneconomical to patent anything. One simply has to rely on tried and true things like reputation, market acceptance, grass roots desirability etc. to succeed. Is this an altogether bad thing? I think not.

As the pace of change accelerates in all walks of life we will one day face the challenge that the time and cost to obtain a patent will be greater than the expected lifetime of the object in the marketplace before it is superseded by the next better, cheaper, faster thing. I contend that there are still ways to make money in this sort of marketplace but I question whether patenting is one of them. Those who embrace change early have a chance to ride the wave of experience.