Why Do We Need A Patent System? Or Do We?

Simply put, a patent is an “exclusive right granted for an invention” to the patent holder, usually the inventor. If an invention is patented, it cannot be “made, used, distributed, imported or sold” without the patent holder’s permission.

There are theories that explain why a patent system is needed. Amongst them are the following:

  1. According to the reward theory, the inventor has a natural right to be rewarded for his invention and that the society is morally obligated to respect this right and enforce it.
  2. The patent-induced theory is more straightforward and less social justice-oriented. According to this theory, monopolies granted by patents are both sufficient and necessary for innovation. Without these rights, there will be no innovation.
  3. The contract theory explains that the disclosure of the invention to the public in a patent application by the inventor is the consideration for the rights conferred to him or her.

While these theories provide us with possible theoretical and philosophical justifications
for having a patent system in place, a short discussion on the history behind the patent system sheds light on why these protection systems were instated in the first place.

In the ancient Greek colony of Sybaris, monopoly rights were granted, for the duration of one year, to those who had prepared the most inventive cuisine. Sybaris was known for luxurious living and having outstanding cuisine definitely would have benefited the community. The Romans exempted inventors from paying taxes and other civic duties.

In 1331 John Kemp obtained a royal discretion to import foreign technology into England. Letters were issued to him that allowed him to bring his apprentices to England to practice the new art of weaving. Although introducing an already established industry could hardly be seen as inventing it still, these letters resemble the rights of a patentee in the modern sense.

In 1474 Parliament of Venice enacted a statute that could be seen as the first real patent system. With 116 members voting for and 10 against, the legislation defined the scope of the subject matter of patents, the patent application process and a limited patent term of 10 years. From the text of the statute, it is apparent that one of the main objectives of the legislation was to protect the interests, “honor”, of the inventors and thereby encourage innovation in the community. The statute provided that: “[T]here are in this city, and also there come temporarily by reason of its greatness and goodness, men from different places and most clever minds, capable of devising and inventing all manner of ingenious contrivances. And should it be provided, that the works and contrivances invented by them, others having seen them could not make them and take their honor, men of such kind would exert their minds, invent and make things which would be of no small utility and benefit to our State.”

For a detailed history of the origins of Patents please refer to “The Juridical Origins of the International Patent System: Towards Historiography of the Role of Patents in Industrialization” by Professor Ikechi Mgbeoji of Osgoode Hall Law School.

History suggests that the patent system was instated to protect and to compensate inventors for their invention. As Thomas Jefferson once said, “ingenuity should receive a liberal encouragement.” The ultimate goal of such a system seems to be to encourage inventive activities which would benefit the society as a whole.

But do patents really encourage innovation? In his study, sponsored by the US Congress in 1958, Professor Fritz Machlup states that “none of the empirical evidence at our disposal and none of the theoretical arguments either confirms or confutes the belief that the patent system has promoted the progress of the technical arts and the productivity of the economy.” This situation is similar to Bertrand Russell’s teapot analogy, “that if he were to assert, without offering proof, that a teapot orbits the Sun somewhere in space between the Earth and Mars, he could not expect anyone to believe him solely because his assertion could not be proven wrong.”

Considering the long history behind patents and that they were devices invented to achieve a certain goal, namely encouraging innovation, isn’t it odd that their effectiveness is still strongly debated?

PS: This article looks at the same question, posed above, from a more niche perspective.

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