Do Patents Kill Innovation?

When working on something potentially groundbreaking, investors and scientists must have the protection of their ideas foremost in their minds. Applying for a patent, or the exclusive right granted by a country to an inventor, is one of the critical steps that inventors have to complete no later than a year after a description of their invention has been publicly disclosed or has been made available for commercial use.

Image source: pcworld.com
Image source: pcworld.com

This is also the case for many technology companies where patents are the core of the competitiveness of products and services. With an arsenal of patents at their disposal, tech companies can protect their proprietary products and rule the market. The only recourse of competitors is to develop innovations of their own.

But some argue that certain sectors such as tech are better off without patents. As Kevin Maney put it in this Newsweek article, “patents have turned into a bigger CEO time-waster than golf.” The thousands of dollars spent in filing a patent actually stifle innovation than support it. A paper published in 2013 in The Journal of Economic Perspectives further posits that “there is no empirical evidence that they [patents] serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity.” The biggest move against patenting, however, was Tesla Motors’ decision to give away its patent. As CEO Elon Musk pointed out, protecting Tesla’s patents stifles progress in electric vehicle technology.

“To patent or not to patent”: that is now the question for today’s inventors, scientists, and innovators. While the naysayers may have assembled a solid argument, the fact remains that patents, ever since they were introduced centuries ago, promote not only innovation but also economic growth. And the technologies, products, and services people enjoy today are the result of proprietary ideas that all flourished under the patent system.

Image source: volvoce.com
Image source: volvoce.com

A partner at Stroock & Stroock & Lavan LLP, Irah Donner focuses on the counseling, acquisition, and enforcement of all forms of intellectual property rights, with emphasis on the patenting of computer software and hardware applications. More discussions on the U.S. patent system are featured on this blog.

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Intellectual property rights: Monetizing creation and innovation

Image Source: shandp.com

Ideas and knowledge have become a vital part of trade. Many products are now being sold because of the information and creativity from which they were made. Enterprises have arisen and flourished as a result of a novel idea that was appreciated and well-received by the market.

Intellectual property rights, meanwhile, have become more important as the value of ideas and knowledge increases in trade. Without certain protections, creators face difficulty profiting from the ideas that they put forward. President Lincoln once said that the patent system, a form of intellectual property right, adds “the fuel of interest to the fire of genius.”

Image Source: albertschweitzerfoundation.org

With intellectual property rules, creators can be granted rights that prevent others from stealing their ideas, creations, designs, and other inventions. Following this, they can also use that right over their idea to negotiate for payment in return for the use of those rights. With the right balance between the interests of creators and the wider public interest, the intellectual property system aims to maintain an environment that encourages creativity and innovation.

Enterprises establishing a sustainable long-term strategy should protect their intellectual property in timely fashion. Without filing for protections afforded by copyrights, patents, trademarks, and the like, companies are exposed to various business risks, including missed funding opportunities and a lack of control over their most valuable assets.

Image Source: information-age.com

Irah Donner, a partner at Stroock & Stroock & Lavan LLP, conducts intellectual property (IP) audits and advises companies on strategies for protecting their IP, including preparing and prosecuting patent applications. For more information, subscribe to this Facebook page.