But he reserved his strongest comments for economists,
particularly those (such as Michele
Boldrin and David K Levine) who have questioned the
economic value of the patent system, and even argued for the
abolition of patents. Jacob said there is "a very real need for
a study of the limits of what economics can tell us about IP"
and added that properly evaluating IP value "may be beyond the
analytical tools of economists" as it involves assessing
complex matters such as patent validity as well as agreements
that are by nature confidential.
More alarmingly, he argued that economists do not have just
a theoretical influence but also shape competition policy,
particularly in Europe where authorities have previously
investigated the pharmaceutical industry and are rumoured to be
looking at abuse in the mobile phone industry too. As Jacob
reasonably said, it’s hard to think of an industry
where innovation has been more astonishing and rapid than
mobile telecoms, where fierce competition between companies has
led to many new, improved products and lower costs. Patents and
other IP rights may be part of the reason for that.
Yet, despite Jacob’s concerns, the influence of
economists on IP policy seems to be growing. Many national IP
offices now have chief economists – a trend we
discussed when naming
Carsten Fink of WIPO as one of the 50 most influential
people in IP last year (economists might note the EPO is also
advertising for a new one). WIPO is at the forefront of
integrating economics research into IP with a
lecture series and publications.
Should IP practitioners be alarmed by this?
With respect to Sir Robin, it seems to me we should welcome
these contributions, provided they are more serious than
polemical. There are undoubtedly economists for whom, as Jacob
said, "patents do not fit their world view" as they see them as
monopolistic. But there are others such as Meir Pugatch
who argue that IP rights promote competition.
Let’s have the best of both.
Jacob mentioned in his speech that reviews such as those
written by Gowers and Hargreaves typically call for
"evidence-based" policy – only for governments to
press ahead with policies on the basis of little or no evidence
anyway. Regrettably, that’s true. As we look
around the world at political debates over issues such as the
EU unitary patent, the Shield Act in the US, FRAND, compulsory
licensing, copyright reform and enforcement – many of
which are already before senior lawmakers – feelings
run high and are often based on rhetoric more than evidence.
(See Gene Quinn’s excellent recent blog post
Mark Cuban is an Idiot, Patents Do NOT Impede Innovation,
and the comments it generated, for more detail on this.)
In this environment, it seems to me we need more not less
economic research on the impact of IP rights – work
planned by the UK IPO for example is promising. Or are IP
owners scared of what the economists might say?