Innovation Is An Ongoing Process — Not A Single Event
from the things-to-think-about dept
It’s no secret that we believe the existing patent system has some serious faults that have resulted in holding back aspects of innovation, rather than putting in place incentives for it (which is the entire point of the system, as put forth in the Constitution). There have been a few people who vehemently disagree with us — and it’s always interesting to us to try to figure out where the views diverge. There are two main points that we see. First, is a disagreement over what innovation is. As we’ve noted in the past, there’s an important difference between innovation and invention. Invention is just about coming up with the concept. Innovation is about successfully taking a product to market. Traditionally, our culture has celebrated the “invention” — but the innovation is what makes the invention worth celebrating. Given that it’s that innovation part that actually helps grow the economy, it makes sense that innovation is more important than invention. Unfortunately, though, the current patent system is designed to reward invention, not innovation.
However, there’s another, related, point where the conversation often breaks down: the idea that innovation is an ongoing process, rather than a single event. Supporters of the current patent system seem to assume that innovation is a single event — and that event needs to be protected with the patent. The reality, however, is that innovation is an ongoing process. That’s why we’ve said in the past that the idea of a sustainable competitive advantage is a myth. Companies compete by a series of fleeting competitive advantages. That’s what innovation is. Even if your competitors can copy you, you keep on innovating and keep the lead in your market. The claims from strong patent system supporters always comes back to the idea that, without patent protection, others would just “steal” their idea. But, that’s only true if the original innovator stops innovating and tries to rest on its laurels. That’s not good for anyone — but it’s exactly what patents allow. In fact, there’s increasing evidence of this exact problem with the patent system. David Levine points us to a new peer reviewed paper on “sequential innovation”, which looks into this very issue and finds that, since innovation is such an ongoing process, patents tend to harm inventors more than help them. The report shows that if (as patent system supporters believe) innovation is a static event, then the patent system does make sense. However, since it’s an ongoing process, patents tend to hurt more than help. In fact, they find that inventors tend to profit more without patent protection, but by focusing on the increased competition and the ongoing innovation. While they may not have been able to profit as much from the single event of invention, the increased innovation as an ongoing process means they end up profiting more in the long run by supplying increasingly better products to a growing market. Meanwhile, in cases where patent protection was increased, the research shows that investment in innovation actually decreased. This makes sense to us, but it’s good to see it supported with research (which, if history is any guide, patent system supporters will ignore). However, it does help highlight how much of the disagreement may simply be due to a lack of understanding concerning the difference between the event of invention and the ongoing process of innovation.