The world would be a better place without patents.
At least, that’s what Michele Boldrin and David Levine, two economic researchers at Washington University at St. Louis, have been claiming for the past 15 years. The two researchers think patents stunt development, and they defended their unorthodox idea Wednesday on the NPR show “Planet Money.”
The show on “The Case Against Patents” came after Tesla CEO Elon Musk’s bold move in June to release all of his patents for the electric car to the public domain. He claims this decision to let anybody use Tesla’s ideas will help advance the technology, even though it eliminates the company’s sole control over it.
“I don’t really like them [patents], not my favourite thing,” he said in a conference call. “Who’s really benefiting? I think this is the right way to go.”
Boldrin and Levine told “Planet Money” that Musk’s decision wasn’t crazy at all. After all, in order to have a successful electric car, you need an entire electric car industry. You need people to work on the charging stations, to create better batteries, and most importantly, to create rival companies. By setting the patents free, Boldrin and Levine said, there’s a much better chance that supermarket parking lots of the future will be filled with Teslas.
The two researchers compared the electric car with the aeroplane, originally patented by the Wright Brothers. Orville and Wilbur Wright were staunch defenders of that patent, which may have ultimately stymied the development of aeroplanes in America.
In a paper on the case against patents, Boldrin and Levine argue that there’s no verifiable evidence that patents increase productivity. In fact, they say, patents have many negative consequences. Patents can scare companies away from innovating because they’re constantly worrying about getting sued for patent infringement, Boldrin and Levine wrote.
“While patent litigation has increased, few patents are actively used,” they wrote in the paper. “Patent litigation typically involves dying firms, that have accumulated huge stockpile of patents but are no longer able to produce marketable products, suing new and innovative firms.”
Boldrin and Levine acknowledged on “Planet Money” that patents can be useful in certain areas, like the pharmaceutical industry. Drug makers rely on patents to stop others from stealing the formulas they spent years developing and then selling the medicine at a lower cost.
In a world without patents, Levine said, the government may have to take a larger role in drug development by funding the initial development and research. The government would then take promising drugs to private companies and have them bid against each other to continue the drug’s development at the cheapest price. If the drug works out, the winning company would get a cut of the profit.
While some may be scared of such heavy government involvement in the drug industry, Levine said the government already funds the basic research at universities, and has special rules in place that steer these companies towards developing and producing certain kinds of drugs.