'In the National Interest' Is Inventiveness a Good Proxy for National Benefit?

Abstract

The objective of patent policy is to increase not reduce national economic welfare. Despite this goal, patent systems have been subject to little economic evaluation, in contrast to the continual assessment of other innovation support programs, such as the R&D tax concession, R&D grants and so on. In part this is because the available data simply does not support such assessments, despite the development of the major National Innovation Survey. In the absence of more direct data, it is possible to consider this issue by assessing the quantum of inventiveness required for grant of a patent monopoly. This key variable largely determines balance within the patent systems whether benefits are likely to exceed costs. Given the large doctrinal literature strongly criticising the very low standard of the inventive step, it seems sensible to step aside from this and ask instead whether granted patents deliver sufficient new knowledge and know-how to be more than offsetting the cost of patent monopoly grants. Using this yardstick a small set of recent Australian business method patent shave been assessed for their contribution to knowledge and know-how. None is found. Yet the reason for the grant of these patents is not the absence of documented existing knowledge, but a set of rules and procedures that effectively lead to acceptance of trivial differences as sufficiently inventiveness for grant of a monopoly. The actual operation of these rules is illustrated with material from this in-depth study, and this illustrates that many aspects of the rules have become dysfunctional. based on the evidence from this study some options are put forward to return balance to the patent system so that it operates to increase national economic welfare. Show more