Wouldn’t it be a great world if investors, the top 1% and the richest corporations would invest hundreds of millions of dollars, even multiple billions of dollars, and fund the many years of arduous work from large teams of scientists and engineers necessary to achieve paradigm shifting innovation?
In such an idealized world innovation would happen just because— well because it would just happen.
Innovation would be would be free. It would be plentiful. There would be no costs associated with the resulting inventions, and those with the skills to achieve hall of fame level innovations and those with the capital necessary to achieve those paradigm shifting innovations would simply donate their time and money for the betterment of humanity.
Hakuna Matada isn’t a patent strategy. And it isn’t a national innovation strategy either.
Of course, that idealized world where everything is free, inventors donate all their time, and investors give money away without any expectations of returns only exists in the imaginations of a few anti-patent loons. The rest of us understand that if those with the skill to innovate simply spent all their time innovating for free they would be broke, their families would be destitute, and the end result would be no innovation, not more innovation. Similarly, if those with the capital cannot achieve an acceptable rate of return on their money eventually they would run out of that money. So even if a benevolent billionaire or two wished to pursue this model a few times it is hardly repeatable, and absolutely not sustainable.
But there I go introducing fact into what is an emotional, nearly religious conversation.
In certain circles if you support strong patent rights you are looked at as if you just confidently proclaimed the earth is flat. Yet, the mountain of evidence is on the side of a strong patent system being a precursor to fostering innovation, and innovation leading to the uplifting of economies. Indeed, never in modern history has there ever been a single economy that has succeeded without offering strong protections to intangible assets.
If you want to find the economies with failing economies just look for those without protections for intangible assets, year after year after year there is a direct correlation. See Global Innovation Index for 2017. The countries at the bottom of the list year after year are Yemen, Mali, Pakistan, Ethiopia, Rwanda, Zimbabwe, Niger, and Burundi, to name but a few.
Of course, the anti-patent crowd loves to proclaim “correlation is not causation,” as if saying that supports their position. But the evidence (see here, here, here, here, here, here, here, here and here) tells a different tale, or at the very least raises serious questions about why anyone would consciously consider the path of weak patent rights favored by those countries with virtually non-existent economies.
First, when correlation is 100% those challenging the correlation ought to bear a very heavy burden, and a catchy retort hardly meets that heavy burden. Second, there is a reason why there is perfect correlation – it is because without a functioning patent system innovations cannot be domestically protected and that means innovators cannot operate within that country because it is too easy for any employees to steal proprietary information and technologies. That, in turn, means in countries without a strong patent system foreign direct investment is artificially decreased. Third, we have numerous real life social experiments to witness that demonstrate when country after country has adopted stronger patent protections and protections for other intangible assets investment has increased, jobs are created and the economy begins to flourish. So while it probably feels good to say “correlation is not causation,” all the evidence is on the side of a strong patent system and absolutely no objective evidence is on the side of a weak patent system leading to a strong economy.
Furthermore, if a weak patent system is the answer to economic woes then why aren’t those countries with non-existent or extraordinarily weak patent systems not dominating the global economic landscape? Seriously, if patents just get in the way of innovation it stands to reason that in places where there are no patents or very weak patent rights the economy should be outrageously successful. Of course, that isn’t the real world experience, but it doesn’t stop academics and critics of the patent system from spewing such nonsense. Seriously, if anything they claim had ever worked in any nation one might be tempted to listen, but nowhere has a weak patent system ever delivered a robust economy. There are simply no examples.
Rather than pining for a fantasy world that does not exist, an idealism where inventors and investors give everything away for free, we should be acknowledging the human condition. Congress does this all the time with the tax code because it is widely known that tax incentives modify behavior. So why not actually incentivize innovation — the way America used to incentivize innovation and encourage inventors and startups to engage in risk taking calculated to lead to paradigm shifting innovation?
Simply put, you cannot modify behavior if your plan is to ask people to do something unnatural. No matter the incentive provided human beings will never fly by flapping their arms. Similarly, expecting innovation just to happen and those in the innovation ecosystem to donate everything without expectation of success and profit is not just a losing strategy, but a strategy of such epic stupidity it insults the intelligence anyone with a modicum of common sense.
Abraham Lincoln was exactly correct. The American patent system must provide the incentive that fuels creative genius. It did that for most of the 225+ year history of the patent system. Whether it will do that moving forward remains to be seen, but things are heading in a an increasingly negative direction in America, while they are looking up in both Europe and China. An unbelievable and truly sad commentary.