Patent Policy and Innovation

Patent Policy and Innovation

Do Legal Rules Deliver Effective Economic Outcomes?

Hazel V.J. Moir

This empirical study uses a scientifically selected sample of patents to assess patent quality. The careful evaluation of the assumptions in alternative economic theories about the generation and diffusion of new knowledge demonstrates that the height of the inventive step is critical to effective and efficient patent policy.

Chapter 8: Rebalancing the patent system

Hazel V.J. Moir

Subjects: economics and finance, economics of innovation, intellectual property, innovation and technology, economics of innovation, intellectual property, law - academic, intellectual property law


Earlier chapters have presented evidence on inventiveness from a scientifically selected sample of granted business method cases. If inventiveness is defined as a contribution to new knowledge or know-how, none was found in any of these cases. There were two possible new ideas, though they did not contribute knowledge in themselves or in their implementation. These results suggest that the patent law definition of inventiveness has become irrelevant to the purpose of patent policy – encouraging innovation to the benefit of society. The reasons for the grant of so many obvious patents are to be found in the detailed prescriptive rules that have developed through case law in Australia, the UK and the USA and through administrative practice at the EPO. These rules seek to objectify what is essentially a subjective judgement. The objectification completely disregards the goals of the patent system and the economic reasons why such monopolies might provide a national benefit. This disconnect has resulted in both examiners and courts asking the wrong question. They do not ask if there is a genuine contribution to knowledge which might create spillover benefits and justify a monopoly grant. Instead they ask whether they are justified in refusing a monopoly on the basis of a sub-set of documented knowledge and a definition of inventive as narrow difference. Older doctrines (policies) which attempted to set a minimum standard for the grant of a patent seem to have evaporated.

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