How Patents Harm Biotech Innovation

from the scaring-people-off dept

Patent defenders often claim that patents are necessary because top venture capitalists would never invest without patents. And yet, we keep pointing to examples of some of the best venture capitalists in the business who are quite skeptical of patents. For the most part, those have been limited to software patents, but Brad Feld seems to have jumped the hurdle to recognizing it's not just software patents that are the problem, and is digging into the research on how much patents have held back innovation in lots of other fields as well (Brad: if you want a list of more such research, let us know...). He's written up a post about some upcoming research concerning patents in the biotech field, where he explains how patents are hindering innovation in that field as well by scaring off research into certain areas:
Regularly, patent advocates tell me how important patents are for the biotech and life science industries. However, there apparently is academic research in the works that shows that patents actually slow down innovation in biotech. The specific example we discussed was that there is increasing evidence that when a professor or company gets a patent in the field of genetics research, other researchers simply stop doing work in that specific area. As a result, the number of researchers on a particular topic decreases, especially if the patent is broad. It's not hard to theorize that this results in less innovation around this area over time.
I can't wait to see the final results of that study, as it would fit in well with a few other studies that have found similar results.

Filed Under: biotech, brad feld, innovation, patents, vcs


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  1. icon
    The Anti-Mike (profile), 6 Feb 2010 @ 7:23am

    Re: Re: Re:

    http://en.wikipedia.org/wiki/Maximization_%28economics%29

    There will always be exceptions to the case, but most people (in western cultures) are motivated by or have a need for money. Money allows us to do whatever we like (example, posting on chat boards instead of wearing a suit and saying "yes boss"), money frees us.

    If you have spent time and money to develop something, and you have no way to turn it back into money, that may stop you from being able to move on to the next thing.

    Think of it as supply and demand. The new developments and patents are a supply. Without a product to turn them into, there is no demand. Without demand, the supply has no price. But when Higgs came along, each of those patents now had some value. However, as there wasn't a lineup of people trying to get them, it is down to "what will you pay"?

    It is incredibly unlikely that two patent holders, both with dead patents that will expire in time, would just sit on them and let them grow mouldy rather than enter into a deal to turn them into a profit center. I know some would, but then again, some people paint their houses purple or pink. Exceptions do not craft the rules.

    To be honest, Higgs always had a third choice, which would be to go ahead, with the knowledge that he might get called out and dragged to court. In the mean time, he can take the profits and invest in his next good idea, spring boarding off the locked up patents into new areas that aren't patented. That is one of those cases where the speed of the courts (very slow) and the speed of discovery of violation (potentially also slow) is in his economic advantage.

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