Friday, December 4, 2009

EU moves toward common patent system

BBC's article, titled "EU moves toward common patent system," (December 4th, 2009) cites some benefits of making patents cheaper for companies to obtain, but fails to discuss one important way in which patents can stifle, rather than encourage innovation.  Though patents give companies opportunities to profit from innovation, the current web of patents through which new inventors have to pass (a costly venture) discourages innovation.
Sweden's Trade Minister Ewa Bjoerling said the EU patent would "make it much easier and cheaper to protect innovations in the EU".

"This will give European industry better opportunities to compete on the global market," she added.
As Michael Heller stresses in his book, The Gridlock Economy, it is important to realize that when product creation necessitates the bundling of numerous existing patents (as is the case with virtually any technological innovation), an entrepreneur with a new idea may decide not to bring a product to market for fear of thousands of potential patent infringement suits, or due to the cost of hiring the legal help necessary to clear patent hurdles [for more information, click here].  It may be true that the patents cost all producers (including the ones who would have entered markets if not for the web of patents) more than they are worth and in net, patents may suppress innovation.

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