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The patenting of innovations is a hotly debated topic in today's world. There has long been a widespread perception that patents stimulate creativity. Recent finds, however, suggest different. The role of patents in knowledge so enters the picture at this point. The modern premise of public good is founded on the transmission of ideas from one person to another without diminishing the sources' knowledge. Due to the growing connection, knowledge sharing and trade taking place worldwide, knowledge has evolved to become a global good, and for this reason, patents can be discussed using the worldwide outlook as well.
Currently, the specific impacts of patents concerning the encouragement of innovation are not clear due to the difficulties experienced when performing its empirical measurements. However, most companies and also individuals argue that patents are the most crucial elements for success. On the contrary, other studies have indicated that patents, under certain conditions, tend to hinder innovation. One indicator that patents inhibit invention is the observation that the loss of patent protection subsequently facilitates a 50% rise in citations with reference to the patent in question. Additionally, patents that fail to be granted reduce the possibility of an invention reaching the market by a 13% margin (Nicol & Liddicoat 2012). Another study found out that on average, patents tend to reduce cumulative innovation especially when these patents are held by large firms that block democratic innovation among the smaller enterprises that are keen on making new advancements (Galasso and Schankerman 2013).
Based on the principles of knowledge as a global public good, information is the key to successful development. For this reason, the government is tasked with the responsibility to create and disseminate knowledge for development. For one, knowledge is nonrivalrous meaning that there is no marginal cost to knowledge sharing hence the innovation will be efficiently utilized. Secondly, knowledge has the property of being nonexcludable. This property translates to the fact that no one can be barred from utilizing it (Stiglitz 1999, p.309). These two aspects make knowledge an impure public good. The presence of a broad patent system today tends to raise the price of essential inputs in the innovation process. This factor eventually reduces the rate of progress towards follow-on innovations even though the innovators themselves benefit financially. The result of patenting is therefore characterized by a significant reduction in the pace of technical progress. A widely notable example of how patents hinder follow-on invention is Microsoft which due to its great dominance in the production of application software for consumers, the company has significantly reduced the pace of innovation more so in computer technology industry (Stiglitz 1999, p.312).
This is just a single example of many other cases where new advancements and follow-on innovations are hindered by patents. The acceptance of novel ideas and inventions directly translate to the dissemination of knowledge globally to the extent of eliminating the existing natural monopolies like what has been experienced in the communication industry. The open opportunity to innovate will ultimately ensure a competitive market, enhanced access and lowered prices (Stiglitz 1999, p.318). The greatest challenge remaining is concerned with whether to make the patent system voluntary or cooperative with the aim of ensuring that the collective interests of all are considered. Nevertheless, it is clear that patents have a negative impact on invention. As such, for efficient production as well as the equitable utilization of knowledge to be realized as a global public good, the government should halt the issuance of patents.
Galasso, A. & Schankerman, M., 2013. Do patents help or hinder innovation?. [Online] Available at: https://www.weforum.org/agenda/2013/05/do-patents-help-or-hinder-innovation/ [Accessed 14 May 2017].
Nicol, D. & Liddicoat, J., 2012. Do patents promote innovation?. [Online] Available at: http://theconversation.com/do-patents-promote-innovation-5443[Accessed 14 May 2017].
Stiglitz, J. E., 1999. Knowledge as a Global Public Good. In: I. Kaul, I. Grunberg & A. M. Stern, eds. Global Public Goods: International Cooperation in the 21st century. New York: Published by Oxford University Press, Inc., pp. 308-323.
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