4iP News

4iP Council responds to The Economist

24 August 2015

The Economist recently published an article criticising the patent system. A number of patent experts have responded publicly to The Economist voicing concerns with both the scope and nature of its analysis. The response below, from 4iP Council, has been submitted to the Economist for publication.

To The Economist

No system is perfect. But your criticism of the patent system (8 August 2015[1]) ignores two centuries of empirical evidence illustrating the innovation, job creation and economic growth underpinned by the patent system and instead offers a flawed set of theoretical benefits of gutting a fundamental property right of the industrialised world.

Patents ensure that inventors will be rewarded for their creativity, hard work and investment with the exclusive right to their invention for a limited time, so encouraging reinvestment in innovation. In return, the registered invention is disclosed to all.

Patents are recognised by economists as engines of entrepreneurship. They are not, as you suggest, for the protection of incumbents, but are to promote the inventor or entity whose patent can assure investors a return if the invention is a success. It was thus surprising to read your condemnation of inventors – like Edison – who choose to invent and license rather than build their own manufacturing, marketing and distribution capabilities.

Weak patent systems could allow free-riders, on a corporate or national scale, tilting the competitive landscape against the inventor. Free-riders can offer lower prices or earn higher margins because they do not internalise the costs of the R&D that create products. Setting aside other intellectual property rights, the weakening of patents you propose would leave inventors and inventive economies exposed to invention theft, discouraging innovation rather than promoting it.

Dr Claudia Tapia,
President, 4iP Council,

An additional view from The Daily Maverick on The Economist’s article

[1] Time to fix patents