AUTHOR- Mirudhula A,
2nd year BA LLB (hons),
School Of Excellence in Law,
Countries across the globe are attempting to strengthen their intellectual property laws in relation to their Research & Development (R&D) outputs and other types of technological growth. The blog provides an overview about the correlation between patent and R&D Sector. While patenting has a pivotal role in the globalised world, it has different shades of applicability within different industries. It is well known that not all inventions are patentable and not all patentable inventions are actually patented, which is closely investigated by the patent propensity concept. The declining or low relevance of patent statistics and growth of research are further navigated to the challenges posed by patents to pre- and post-patent condition of a patented invention from fluctuation within patent behaviour across industries to the conundrums of patent value.
Patent system, Propensity to patent, Exclusive rights ,Patent value, patent elasticity, Technological development .
One of the justifications for patents is that they foster economic and technological growth and competition by providing a financial incentive for creativity in exchange for public disclosure. Technological growth is a product of research and development sector and it is apparent that there is a kind of interdependent influence on patents and the functioning of R&D sector. While this could be less significant to societies where patenting is still a concept to evolve, globally it is pivotal to all sectors. That being said, While the patent system’s potential, in the context of dynamic innovation activities, has been widely recognised, some critics have argued that the existing patent system is an ineffective tool to measure R & D Advances. There is a constant effort to balance the merits and demerits that patents pose to R & D industries.
PATENT – A MEASURE FOR R&D?
Patents, rather than R&D outputs, can be a stronger predictor of R&D inputs. The availability of patent statistics and inherent relationship to inventions, Research, and relatively uniform standards across countries had helped in advocating International treaties such as the 1883 Paris Convention for the Protection of Industrial Property and the 1978 Patent Cooperation Treaty, to set up legal and subjective standards.
The most commonly used measures of technology output are patent records. They’re used to determine scientific advancement and knowledge, as well as to assess the rate of technological change, gauge firms’ competitive positions, calculate industrial structure, and assess the rate of technological change.
It is well known that not all inventions are patentable and not all patentable inventions are actually patented. Patent data is difficult to interpret because there are noticeable differences in the reliance on patents across firms, industries, and countries.
Patent counts, according to academics, represent more the proclivity to patent than creative success or research productivity. The tendency to patent is a numerical term that encompasses the number of patents that corporations and individuals are likely to file. Patents do respond to firm changes in R&D spending, but to a far lesser degree than one would anticipate. Investigations at the industry level led to even more out-of-place results, with a weak or almost absent correlation between R&D and patents. Some companies are more likely to rely on the patent system than other industries with less inclination towards patents, but they file far fewer patents.
R&D – PATENT ELASTICITY
The R&D-patent relationship is influenced by a “research productivity” component and a “patent propensity” component. This can be assessed as the effect of the three types of policies on countries’ patent performances: education, science and technology.
In an attempt to understand the co relation between patenting and R&D industries, we shall use the concept of R&D elasticity of patents, i.e., the changing adaptability of patents with reference to research and Development industry. The estimated elasticity of patents with respect to R&D has been found to be large and significant in cross-sectional studies of firms, fluctuating around . However, upon analysing on a firm – time basis it is significantly low. The reasons for this are:
- There are diminishing returns to research activities: each additional cost spent on research will be less “productive” than previous expenditures.
- R&D metrics cover a lot more than just the task of coming up with new concepts and innovations. To put it another way, research and development might not be a clear predictor of creative efforts.
- Patent value issue – Any research that has looked into the value of patented inventions or patent rights has found that their statistical distribution is very oblique: although some patents have a lot of value, many others have very little (e.g., they remain unexploited). As a result, patent counts that assign all patents the same weight can be misleading: a collection of 100 patents can represent different levels of technological advancement.
WHY IS THERE THE LACUNAE?
The major issue with patents is the need for a subjective interpretation as to what is inventive step and to determine its quality, because of which patents vary greatly in technical and economic significance, with the majority appearing to reflect minor technological advancements.
One issue with using patent data is that patents are relatively unimportant for obtaining returns from R&D investments in most industries. Other mechanisms, such as lead time, confidentiality, and complementary properties, are widely used by companies to generate returns. It is however evident that connecting patents to goods and results of interest is still difficult.
In my general perception the motto to file or not file a patent are more diverse and are subsequently unique from case to case.
Patents provide incentive to the creator which motivates the creator to do more qualitative and appealing research. That being said, patents are a slow income generating element, along term income earning which might not exactly compensate the short-term research expenditure of an individual inventor. Further there is a high risk in maintaining the status quo of the inventor in the current technology world, where something new is invented every now and then and the problem of getting delayed in the goose chase of patent filing procedures. The incentive element of patents, in an over emphasised perspective this leads to “Inventions for patents” over “patents for inventions”
While pre – patenting issues are important, a significant problem occurs after providing the patent to the patent owner. Upon getting the patent right, the patent owner gets a kind of monopoly with regards to usage, alienation and delegation of the patented product. Such Monopoly might obstruct the future researches on the product or process.
While Research in itself is a costly art, getting a patent owner to share his research details is no cheap, both procedurally and monetarily. This can be observed particularly in pharmaceutical industries, whereby developing upon an existing drug research often leads to a suit by the patent owner and the determination of its novelty, new inventive step and other procedural aspects of trial make it hard to establish a new invention.
” The different regulatory exclusivity provisions of the Biologics Price Competition and Innovation Act and the Hatch-Waxman Act have stimulated discussions regarding the potential implications of different incentives for R&D investments for small-molecule versus large-molecule projects.”
That being said, there is also an issue of unequal research activities of different industries. The exclusive monopoly and advantage given to the patent holder, attracts as aa easy source of revenue even to small researches while the research in essential sectors is statically low in comparison
Affordability is a factor, that’s on debate when it comes to patenting essential-to-mankind inventions such as pharmaceuticals and the concept of generic medicines. Exclusive rights to a proprietary drug are beneficial to the manufacturer as long as there is a willingness to pay the high monopoly price. As a result, the patent system incentivizes R&D investment in medicines that meet the demand of developing nations, where patients have a reasonable level of income or where private or public insurance programmes cover the expense of pharmaceuticals. As a result, many pharmaceutical developments are out of reach for low-income people in developed countries who lack access to public or private insurance, as well as the vast majority of people in developing countries. Furthermore, the pharmaceutical industry lacks motivation to invest money in developing treatments for rare diseases (due to a lack of a broad enough market) and for poor nations (due to un affordability).
In light of rapid technological progress as well as social and economic challenges, the patent system’s work, importance, and effect must be continually updated and applied in order to achieve the best possible balance between the right holder, new market entrants, and the general public. To encourage R&D in new technology, the patent system must be redesigned to adapt quickly and strategically to the challenges posed by those new technologies.
- Danguy, Jérôme; de Rassenfosse, Gaétan; van Pottelsberghe de la Potterie, Bruno (2009) : The R&D-patent relationship: An industry perspective, EIB Papers, ISSN 0257-7755, European Investment Bank (EIB), Luxembourg, Vol. 14, Iss. 1, pp. 170-195
- Cornelli, Francesca, and Mark Schankerman. “Patent Renewals and R&D Incentives.” The RAND Journal of Economics 30, no. 2 (1999): 197-213.
 see Hall et al. 1986, Hausman et al. 1984, Jaffe 1986, Duguet and Kabla 1998, Crépon et al. 1998, Brouwer and Kleinknecht 1999 or Cincera 1997.
 For example, a model that extended the data exclusivity period for all small-molecule drugs to twelve years found long-term benefits in terms of increased innovation that would benefit future generations. Goldman DP , Lakdawalla DN , Malkin JD , Romley J , Philipson T . The benefits from giving makers of conventional “small molecule” drugs longer exclusivity over clinical trial data . Health Aff (Millwood) . 2011 ; 30 ( 1 ): 84 – 89