Over 90% Of The Most Innovative Products From The Past Few Decades Were NOT Patented

from the patents-are-not-a-proxy-for-innovation dept

We've pointed out over and over and over again that patents are not a proxy for innovation. In fact, there's little to connect the two at all, except potentially for how patents can hinder and hold back the pace of innovation. A new study really helps to drive home how little patents have to do with innovation. Pointed out to us by James Bessen, the study looks at "R&D 100 Awards" from the academic journal, Research & Development from 1977 to 2004. As you might expect, the R&D 100 Awards are given out each year by the journal in an attempt to name the top 100 innovations of the year. If patents were instrumental in driving innovation, you'd certainly expect most of these innovations to be patented.

But you'd be wrong, as the reports authors, Roberto Fontana, Alessandro Nuvolari, Hiroshi Shimizu and Andrea Vezzulli, quickly discovered.

A stunning 91% of all of the technologies receiving the prize were not actually patented. That's covering approximately 3,000 technologies winning this award as the most innovative advancement of the year over a period of about three decades. What's interesting to me is that this actually matches very closely with one of my favorite studies on patents, from economist Petra Moser, who looked at historical patenting rates from the 19th century using data on products displayed at the Crystal Palace exhibition of 1851 and the Centennial exhibition in Philadelphia in 1876, which against showed very few of the "economically useful" inventions were patented. Over 80% were not patented. Of course, you might think that back in the 1800s there was less interest in patenting, but this new study suggests a rather similar rate to what Moser found from 150 years ago.

The R&D 100 certainly seems to be a good way to look at key innovations. It's judged by a distinguished panel of experts, looking at two key criteria: i) technological significance (i.e., whether the product can be considered a major breakthrough from a technical point of view); ii) competitive significance (i.e., how the performance of the product compares to rival solutions available on the market). Both of these would seem like significant indicators of innovation. And, as the authors note, many big innovations can easily be found on the list:
Throughout the years, key breakthroughs inventions such as Polacolor film (1963), the flashcube (1965), the automated teller machine (1973), the halogen lamp (1974), the fax machine (1975), the liquid crystal display (1980), the printer (1986), the Kodak Photo CD (1991), the Nicoderm antismoking patch (1992), Taxol anticancer drug (1993), lab on a chip (1996), and HDTV (1998) have received the prize.
Tellingly, even to apply for the award, innovators have to show just how much the innovation was an improvement on what else was available on the market, They have to submit a "competitive matrix" showing this. In other words, these prize-winning innovations tend to be actual innovations in the market that drive the state of the art forward. You could suggest that they are innovations that truly "promote the progress," as (unlike our patent system) to get this award you literally have to show how the innovation promotes further progress.

As you can see from the key findings, very, very little of the innovations that won the prize was also patented either three years before or three years after the prize was awarded:
Even when you take out "non-corporate" innovations (which have less propensity to be patented), looking at corporate only innovations over 87% were not patented.

Of course there are some differences depending on what industry the innovation happened in, as well as where the innovation was originated. The researchers broke down all of that information as well:
As you can see, the US actually has a lower patenting rate than Europe and Asia for the most part, which runs counter to the narrative often being told about how the US's leads the world with our patent system, and that Asian innovators have less respect for patents. Though, on that point, the researchers note that most of the patents in the "Asian" section are Japanese, so it's possible that other countries in Asia, mainly China (along with known tech hubs Taiwan, Hong Kong and Singapore) do, in fact have a much lower propensity to patent.

Of course the point that stood out as most interesting to me was the very low rate of patenting in the "chemistry" industry. This covers pharmaceuticals as well. And, of course, we're always told that this industry really "needs" patents because of the ease of copying as compared to the cost of innovating. That doesn't seem to be supported by the data at all. Yes, it's the highest percentage patented in the US, but still only 14% of such innovations are patented in the US.

All in all, this is a really interesting paper and a significant contribution to the discussion over whether or not patents are really a good judge of innovation. It would seem from the data available that the answer is a very loud "no." In fact, it would appear that very few of the most significant and important innovations are being patented. That should, at the very least, raise considerable questions concerning those who argue that our patent policy is necessary to encourage innovation, or those who argue that numbers from the patent system are a good judge of innovation.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    icon
    Ninja (profile), May 7th, 2013 @ 7:44am

    VHS. Revolutionized the movie industry and drove further developments in its field that made it obsolete. Cassette tape. Ditto. World Wide Web. Do I really need to state how much development it allowed? Java, Flash, HTML, FTP (natural development?), cloud services, online shopping etc etc etc. Recently there was that article about how the 'open source' genome project generated much, much more activity and research than its proprietary competitor... We can go on and on here and I'd guess we'd be unable to find many cases, if any, where patents actually did promote innovation and progress.

    A few who benefit from the system will disagree. And lobby heavily to maintain their dominion.

     

    reply to this | link to this | view in thread ]

  2.  
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    Zakida Paul (profile), May 7th, 2013 @ 9:00am

    I await the inevitable 'anomaly' comments with baited breath.

     

    reply to this | link to this | view in thread ]

  3.  
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    yaga (profile), May 7th, 2013 @ 9:28am

    Re:

    But Java does have some patents for it as does Flash. The technology underlying cloud services are patented to a great extent as is much of online shopping.

     

    reply to this | link to this | view in thread ]

  4. This comment has been flagged by the community. Click here to show it
     
    identicon
    out_of_the_blue, May 7th, 2013 @ 9:35am

    Well, most of these aren't breakthroughs:

    Polacolor film (1963) -- neat, but not much use; expensive
    the flashcube (1965) -- just puts FOUR in one package
    the automated teller machine (1973) -- not much more complicated than a Coke machine, and had to wait on secure ID systems
    the halogen lamp (1974) -- I'm the only one here knows what the improvement is (hint: re-condensing)
    the fax machine (1975) -- actually very slow-scan TV, nothing new
    the liquid crystal display (1980) -- fair enough
    the printer (1986) -- ?????? a word must be left out
    the Kodak Photo CD (1991) -- whee! pictures on a CD!
    the Nicoderm antismoking patch (1992) -- or one could quit
    Taxol anticancer drug (1993) -- pass as one area I'm not up on, but overall cancer deaths rise steadily...
    lab on a chip (1996) -- incremental, just an exposed IC, practical only when chips cheap enough to throw away
    HDTV (1998) -- not new, just settled on a standard; resolution on any TV is limited by allowed spectrum space (all debated in the 40's, kids), HD is practical only with computing power to un-compress

    So anyhoo, I'm not awed.

    The important point about patents is that -- in principle -- it tries to protect the investment of time and money that are risked to develop gadgets. Just because the system is increasingly abused by The Rich and grifters doesn't affect the good purpose at base.

    Also, try to remember that the system is necessarily more complex to sort through after so many gadgets have been made. -- That's why I say go back to requiring a working model.

     

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  5.  
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    Anonymous Coward, May 7th, 2013 @ 9:40am

    like copyright, patents are only used as a method of getting money from people without having to invent/discover anything of substance

     

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  6.  
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    Ben S (profile), May 7th, 2013 @ 9:41am

    Re: Re:

    What patents are these? A while back Oracle lost a lawsuit it filed against Google for infringing on its Java Copyright (specifically claiming the API is covered by copyright) on the Android OS. If they had patents on Java, why wouldn't they have also filed for infringement of the patents in question?

     

    reply to this | link to this | view in thread ]

  7.  
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    Zakida Paul (profile), May 7th, 2013 @ 9:43am

    Re: Well, most of these aren't breakthroughs:

    "The important point about patents is that -- in principle -- it tries to protect the investment of time and money that are risked to develop gadgets"

    Investments are risks, that is the nature of investments. They are a form of gambling.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Anonymous Coward, May 7th, 2013 @ 9:49am

    Re: Well, most of these aren't breakthroughs:

    What breakthroughs have you made that were more groundbreaking than these? You're not qualified to speak to the groundbreaking nature of others' work unless you yourself have done even more than they.

     

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  9.  
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    Arthur Treacher, May 7th, 2013 @ 9:55am

    Judgement calls

    hey, are you OOTB1 (shill and propagandist, probably with legal education) or OOTB2 (my hard work entitles me to ownership)?

    Either way, I'm fascinated that your judgement on "innovation" better than the "R&D Journal's" judgement? What standard did you adhere to in making these judgements? Can I see a copy, so that I can re-create your findings, or do I have to defer to you, The Bull Goose Innovation King to get a determination? If the former, can the US PTO get a copy, so they can avoid issuing patents to non-innovative inventions? And the Copyright Office, they should definitely get a copy.

    I congratulate you on your supreme Intellectual Property Achievement. Likely, The R&D Journal will be in touch with you. Give them our best!

     

    reply to this | link to this | view in thread ]

  10.  
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    Anonymous Coward, May 7th, 2013 @ 9:59am

    Re: Re: Well, most of these aren't breakthroughs:

    Umm....then by that note some of the panel members aren't able to do speak...Not that they're unqualified, but that's the point, they are qualified even though they haven't done things as groundbreaking as some of the items on the list.

    I agree with your premise that he's wrong in dismissing these items...but don't resort to such a simple argument as that. Try instead to enumerate how each of these were actually breakthroughs.

    You could speak of how the ATM required extensive security and is much more complicated than a coke machine and he's being glib on that note. Or how Taxol used a novel delivery method that has become standard or pushed us forward because it approached anticancer drugs in a different direction, etc...

    Or you could ask about the 9.9% of patented items and how were they significant or not just an incremental step forward.

    Or you could argue that all innovation is incremental steps (something he was really pointing out without realizing) and that's why patents get in the way of quite a bit of work. If the lab on a chip had been patented by someone it wouldn't have been as influential because it may not have been cheap enough due to licensing required (despite chips being cheap enough to throw away).

    But for the love of god don't trot out tired and useless arguments like "you have to be better than someone else to judge them".

     

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  11.  
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    Atkray (profile), May 7th, 2013 @ 10:00am

    Missing the point

    The takeaway from this is obvious.
    Too many great inventions are slipping through without being patented, therefore the system is too hard.

    We need to make patents more like copyright. Automatically applied to every invention and make them last until the last of the inventors offspring have died.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Ira Feldman, May 7th, 2013 @ 10:06am

    Patents

    Actually the fax machine was patented by Bain in 1936, just didn't play a real use until the 1980s

     

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  13.  
    identicon
    Ira Feldman, May 7th, 2013 @ 10:14am

    Re: Patents

    OOPS... meant 1836 !

     

    reply to this | link to this | view in thread ]

  14.  
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    Ninja (profile), May 7th, 2013 @ 10:39am

    Re: Re:

    No, you misunderstand me. I'm saying these are either direct or indirect results of the web being widespread and patent free.

     

    reply to this | link to this | view in thread ]

  15.  
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    Anonymous Coward, May 7th, 2013 @ 10:41am

    Re: Well, most of these aren't breakthroughs:

    I like how you say "most" but then go on to list about twenty examples out of the literally thousands of inventions.

    Statistically, this is like me saying "Most of OOTB's family appears to suffer from some kind of mental condition, let me list the afflicted members:

    Out of The Blue

    My what a nest of cuckoos they must be."

    It's misleading and dishonest on your part, furthermore; I always find it hilarious how many people think that incremental scientific progress is bad. I'm not surprised you're among them, OOTB.

    I could picture OOTB on ye ol techfilth saying the following:

    "Electric Transistors? It's nothing the handy vacuum tube couldn't do to begin with. The patents on these things have expired so I'm sure no one found any real use for them anyway"

     

    reply to this | link to this | view in thread ]

  16.  
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    Ninja (profile), May 7th, 2013 @ 10:50am

    Re: Well, most of these aren't breakthroughs:

    Was that an attempt at comedy? Anyway I marked funny for you cause it was hilarious.

    The taxol comment was gold! You are not on any area really (unless again this was an attempt at comedy).

     

    reply to this | link to this | view in thread ]

  17.  
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    raindog469 (profile), May 7th, 2013 @ 10:59am

    Re:

    FTP (natural development?),


    FTP actually appeared about two decades before Tim Berners-Lee wrote the first HTML page. I was using it myself about 6 years before the Web was invented. I even downloaded music with it, in huge but tinny-sounding .au files (a Sun workstation format) starting around 1990. Believe it or not, people were leaking advance copies of albums that way; one concrete example I remember was "Roll the Bones" by Rush. Took all night to download from some Italian server at 9600 baud. Hey, it sold a record for them when it finally came out.

    FTP was also not patented, of course. I think it influenced the design of HTTP by providing TBL with an example of what not to do.

     

    reply to this | link to this | view in thread ]

  18.  
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    raindog469 (profile), May 7th, 2013 @ 11:02am

    HDTV?

    Is it really possible to produce a functioning HDTV, which will pick up and display broadcast and/or cable HD programming, without licensing or infringing someone's patent?

     

    reply to this | link to this | view in thread ]

  19.  
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    yaga (profile), May 7th, 2013 @ 11:05am

    Re: Re: Re:

    http://www.pcworld.com/article/242046/sun_was_close_to_licensing_java_patents_to_google_for_28m.html

    According to that article there are over 2000 patents on Java. Just takes a little effort to find information. There's something called the Internet that has a ton of it. Just be careful because not everything that is said on the Internet is true. Especially in the comments sections of stories and blogs.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    Anonymous Coward, May 7th, 2013 @ 11:18am

    Re:

    Slightly corrected: Patents are only used as a method of getting money from people when you have exactly 1 idea.

    It is a propagation of the understanding that you don't need to be rich or clever to get a company sold, but being clever and self-sustaining economically gives you more than a single chance to get sold for vast sums of money.
    Disregarding trolls, patents deter further innovation in an area for a time-period unless a big company is involved in which case it is an ace in limit hold 'em poker.

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    Anonymous Coward, May 7th, 2013 @ 11:18am

    Re:

    Ooh. Nope. The word for this article seems to be "grifters" (see below).

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    Anonymous Coward, May 7th, 2013 @ 11:53am

    Re: Re: Re: Well, most of these aren't breakthroughs:

    (Just for the record, I was being facetious.)

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    Anonymous Coward, May 7th, 2013 @ 12:33pm

    Re: Well, most of these aren't breakthroughs:

    You are literally a joke.

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    Nicci Stevens, May 7th, 2013 @ 12:35pm

    The printer?

    I hate to pick nits but ... I used printers before 1986.

     

    reply to this | link to this | view in thread ]

  25.  
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    Vincent Clement (profile), May 7th, 2013 @ 12:53pm

    Re: Well, most of these aren't breakthroughs:

    Cancer deaths in the US are falling steadily.

     

    reply to this | link to this | view in thread ]

  26.  
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    JMT (profile), May 7th, 2013 @ 5:34pm

    Re: HDTV?

    It may have been possible in 1998. Today, not a chance.

     

    reply to this | link to this | view in thread ]

  27.  
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    horse with no name, May 7th, 2013 @ 6:34pm

    Better answer is:

    I think the better answer here is that the selection committee may have particularly avoided patent ideas and advances, or may have not considered them as "new" if they were patent in one year and then actually used in the next.

    I also think that much of what was selected wasn't innovative, as much as splashy. As Nicci mentioned, there were printers before 1986. Splashy design advances are not really innovative.

     

    reply to this | link to this | view in thread ]

  28.  
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    JP Jones (profile), May 7th, 2013 @ 8:05pm

    Very few things can be considered "truely innovative." Most innovation is a result of collaborative idea exchange. Typically, it goes like this:
    1) Someone, or a group of someones, encounter a problem that they want to fix.
    2) They come up with an idea to fix it. It doesn't work or works poorly.
    3) Someone else sees them trying to fix the problem, and comes up with a better idea.
    4) ...
    5) Innovation!

    I can't think of a single thing that wasn't created accidentally that was a result of one person spontaneously coming up with a great idea that everyone wanted to use. Everything comes from people building on the works of others, whether it's inventions, art, politics...all these things are inherently part of society and not part of individuals.

    I personally believe the U.S.'s insane copyright laws (and they are insane, as in not based on logic or reason) is at least partially due to our extreme idealism of individualism. The U.S. believes that the individual surpasses everything else, and that individuals are responsible for these creations. It's a romantic idea, but it's completely false. No piece of art, science, or technology exists without the influence of the society that created it, period.

    That's reality. What we have is the ideal (copyright, you have the right to *your* idea/art/invention) conflicting with reality (your idea/art/invention isn't really yours, it's created from the culture you live in). And it's creating extremely wonky results.

    Unfortunately, copyright is as strongly ingrained into U.S. ideology as other myths, such as eating fats will make you fat and that the world is facing overpopulation.

    Oh no, if that doesn't get people riled up I don't know what will. If even one person gets angry, goes online to look it up and prove me wrong then I've suceeded in opening a mind.

    But I'm not going to hold my breath.

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    Anonymous Coward, May 8th, 2013 @ 12:36am

    Re: Better answer is:

    Splashy design advances are not really innovative.

    Rounded Corners!!!!

     

    reply to this | link to this | view in thread ]

  30.  
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    Raymond Van Dyke, May 8th, 2013 @ 9:03am

    Here we go again

    Yet another screed against the patent system. What else is new? The correlation of a robust patent system to economic prosperity of a nation have been demonstrated, most recently in Ron Cass' and Keith Hylton's book, Laws of Creation.

    My personal views on this study in this article agree with some of the conclusions, but by no means all. "Innovation" is often hard to pin down for patenting, and patent rights are often lost due to the innovators' ignorance of the patent process or other market forces. Jonas Salk, for example, lost out on patenting his vaccine because of prior art - yet, he spun a nice tale afterward. I suspect that behind many of these "innovations" is a similar tale.

    Also, patents are but one factor in "innovation," which here seems to mean solely critical or popular innovations. This article and its ilk demonstrate that those anti-patent have little understanding of the value of a patent system.

    This being said, I fully recognize that corporations have warped the intent of the Founders toward patents somewhat, and we must be sensitive to this. Still, we cannot throw the baby out with the bathwater here. Our patent system is vital to our society, and we are in the midst of a vast recalibration. Perhaps, we should wait awhile before attacking the patent system anew.

    Ray Van Dyke
    Patent Practitioner and Educator

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    staff, May 8th, 2013 @ 9:55am

    another biased article

    'Pointed out to us by James Bessen'

    The word on the street is Bessen is a paid puppet of some of the worlds biggest invention thieves.

    Masnick and his monkeys have an unreported conflict of interest-
    https://www.insightcommunity.com/cases.php?n=10&pg=1

    They sell blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world’s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are hacks representing themselves as legitimate journalists receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don’t have any.

    http://truereform.piausa.org/default.html#pt.

     

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  32.  
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    Sean, May 8th, 2013 @ 4:22pm

    The only thing that drives innovation more than patenting is statistical analysis

     

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  33.  
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    Karl (profile), May 8th, 2013 @ 8:52pm

    Re: another biased article

    For the record: Bessen's bio is here, and his CV is here. Unless you count MIT, Harvard, and BU as "some of the worlds biggest invention thieves," you're full of it.

    It's also noteworthy that Bessen had absolutely nothing to do with the report. He only alerted Mike to its existence.

    The posts that are sponsored through the Insight Community are always clearly labeled as such. No conflict of interest here.

    Furthermore, those same companies are not just patent defendants, but instigate patent infringement lawsuits as well. (And I notice you didn't mention Oracle, who is involved in pretty famous patent litigation against Google.) Some of them (UPS) haven't been involved in patent litigation at all, as far as I know. Calling them "huge corporate infringers" is pretty much a lie.

    Of course, as we've all seen, lying is your only strong suit. One would think you'd have realized by now that everyone knows you're a fraud.

     

    reply to this | link to this | view in thread ]

  34.  
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    jcvillar (profile), May 9th, 2013 @ 7:00am

    There's not much use for patents when you can get cheap labor and underprice your competition. Now that Asia has opened up as a manufacturing center, companies like Jarden are shifting manufacturing operations there and pink-slipping their patent lawyers. Same deal in the 19th century, where the big companies didn't need the patent monopoly. they already WERE monopolies!

    As far as "promoting innovation," I could care less. In my world a patent or copyright is to grant to someone what he has created, but if that's not good enough for you then why not take this collectivist theory further. It is well known that title to real-estate doesn't promote housing construction, so how about we take away all home ownership? In fact, let's not have ownership of anything? "Property is theft," right?

     

    reply to this | link to this | view in thread ]

  35.  
    identicon
    Doug, Jul 1st, 2013 @ 9:42am

    Re: Re: Well, most of these aren't breakthroughs:

    Glad someone already got to this. According to "common wisdom", crime is on the rise, cancer is killing all the babies, and the dissolution of traditional morals are destroying the world. Well, except for all that meddling data that shows vehemently otherwise.

     

    reply to this | link to this | view in thread ]

  36.  
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    jcvillar (profile), Jul 1st, 2013 @ 4:57pm

    Why is stimulation of innovation even needed? We don't deny authors the rights to their books. We don't deny artists the rights to their paintings. An inventor is entitled to the rights to his invention solely because he created it.

     

    reply to this | link to this | view in thread ]


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