Recognizing How Much Of The World Is A Patent Free Zone

from the but-is-it-enough-to-matter? dept

Vivek Wadhwa has an interesting post at TechCrunch, pointing out that much of the world beyond the US, Europe and BRIC (Brazil, Russia, India, China) are effectively a patent free zone. Even if many of these places do have patent laws, very few companies find it worth the trouble to file for patents in those places -- and, technically, that means that anyone producing products in those areas can legally copy from the patents filed elsewhere.
Take the iPhone as an example: it has over 1000 patents; yet Apple does not apply for patent protection in countries like Peru, Ghana, or Ecuador, or, for that matter, in most of the developing world. So entrepreneurs could use these patent filings to gain information to make an iPhone-like device that solves the unique problems of these countries. Apple has so far received 3287 U.S.-issued patents and has 1767 applications pending: a total of 5054 (for all of its products). Yet it has filed for only about 300 patents in China and has been issued 19. In India, it has filed only 38 patent applications and has received four patents. In Mexico it has filed for 109 and received 59 patents. So even India, China, and Mexico are wide-open fields.
Of course, if you were to make an iPhone in Peru or Ghana, you wouldn't be able to export it to the US, as then it would again be considered infringing. So, the market size for a "legal" knockoff iPhone might be pretty limited. On top of that, there's a pretty good reason why companies like Apple don't bother filing for patents in these places: the economy and the local infrastructure really aren't advanced enough to make a difference. So, even if these are "patent free zones," the lack of other institutions to make innovation and economic growth important mean that this really doesn't matter very much.

Still, it does raise some questions about if there are "opportunities" within those patent free zones. Certainly, it would not be a historical anomaly to see part of the patent free zone step up and use that fact to help it industrialize. As we've seen in the past, countries like Switzerland and the Netherlands used the fact that they were patent free zones for parts of the 19th century to speed up their industrialization process. But, of course, as we saw with both of those, once their industries got big enough, foreign competitors started to freak out and put tremendous pressure on those countries to put in place patent laws.

However, there are some areas where the ability to ignore patents could be quite helpful, especially for areas that could massively help those developing nations:
Take desalination, in which GE is one of the largest players. GE has spent more than $4.1 billion to acquire its part of the desalination business. Yet a decade after commencing, they're still nowhere close to making desalination affordable and sustainable. GE's progress depends on the patents it owns. As of 2009, GE invented 47 of the 832 U.S. patents in this field--just 5.6%, or a little more than one-twentieth. Consider the progress that GE could make if it could also use any of the patents that it doesn't own--of which there are many.

How much better would the world be if we didn't have to spend another ten years waiting for innovation in the desalination space? There are many areas of collaboration in the Patent-Free Zone that could produce innovative solutions for our world. Solar power, electric cars, mobile technologies for the poor, disease eradication, medical devices, food processing--to name a few. Wouldn't it be ironic if poor countries ended up solving the problems of the rich?
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Filed Under: developing nations, opportunities, patent free zone, patents


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  1. identicon
    Acacio, 3 Aug 2010 @ 8:04pm

    Re:

    The problem is not exactly piracy.. Piracy in Brazil is caused mainly by the stupid and huge taxes that are applied to games and other electronics..

    A PS3 console, for example: In US, you can take it for $299.99. The same PS3 in Brazil, with the taxes, costs $739.99 (more than twice the price!)

    An original game in US, for the same PS3 (Metal Gear Solid 4) costs $17.99. In Brazil, it costs $52... 3 times the price! It's a complete unfair comparison..

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