Patents Create Incentives For More Patents, Not Innovation
from the the-two-are-not-the-same dept
If you want a clear example of this, just look to China. Just recently, we noted that patenting was on the rise by Chinese companies, but a closer look at what's happening in China suggests that it's very much about incentives to increase patents, rather than incentives for greater innovation. In fact, it's quite direct:
The Chinese government has created an ecosystem of incentives for its people to file patents.And, as in the US at times, the incentives for the patent examiners is also skewed towards simply approving more patents (which has a snowball effect, in encouraging more people to file weaker and weaker patents):
Professors who do so are more likely to win tenure. Workers and students who file patents are more likely to earn a hukou (residence permit) to live in a desirable city. For some patents the government pays cash bonuses; for others it covers the substantial cost of filing. Corporate income tax can be cut from 25% to 15% for firms that file many patents. They are also more likely to win lucrative government contracts. Many companies therefore offer incentives to their employees to come up with patentable ideas.
The bureaucrats in Chinese patent offices are paid more if they approve more patents, say local lawyers. That must tempt them to say yes to ideas of dubious originality.Incentives are funny things. If you actually believe that patents are correlated to innovation, then such strategies make sense. But if the reality is that patents are simply correlated to patents, then it's a huge dead weight loss to focus so much on patenting, rather than actual innovation.