Two Federal Reserve economists have published a paper that argues for the abolition of patent law. Patents—along with copyright, trademark, trade secret, and right of publicity protections—are supposed to provide the economic incentive necessary for production. Together these laws constitute what is commonly referred to as intellectual property. However, the metaphor of property is a poor one at best. Systems of property are designed to manage scarce resources. Yet the immaterial goods which are subject to patent and copyright restrictions do not exhibit scarcity. In fact, intellectual property systems are designed specifically to produce scarcity where none exists. Therefore, it would be more appropriate to refer to these systems as intellectual monopolies. They are artificially induced shortages of economic inputs and there is every reason to believe they create considerable inefficiency. Early 20th century economist Arnold Plant argued as much and later members of the law and economics school of thought like Richard Posner and William Landes make similar assertions. The major claim of the authors of the current paper—economists Michele Boldrin and David K. Levine—is that there is no empirical evidence of a link between patent protections and greater levels of innovation and productivity—unless you measure productivity in terms of additional patents (which has no correlation with productivity). This paper strengthens the position of those who argue that the increasing levels of intellectual property protections, both in terms of scope and duration, stymie technological innovation, research and development, cultural production, and the free flow of ideas. To read the paper click the link below:
Canada’s Patent Act gives patent holders who filed after October of 1989 a 20 year monopoly and includes a disclosure obligation requiring patentees to make available information regarding the production process. This was done so that other parties may copy the process once the patent expires. In this particular case Teva Canada challenged the legitimacy of Pfizer’s patent based on Pfizer’s alleged obfuscation of the key ingredient(s) in the drug Viagra. See the link below for more.