Innovation: are patents still useful? – EconomyMorning

A year after the start of the health crisis, when four laboratories have filed for vaccine patents, voices are being heard to demand the lifting of these patents in the name of the public health issue. Such a decision would create a break, where traditionally, innovations are still protected by patents. This situation again raises the question: are patents really an incentive to innovation, or on the contrary a brake?

Patents to protect innovation

Designed to protect inventions, patents were invented in the 15th century in Venice, the nerve center of the arts, but also, at the time, of the sciences. The inventor protected his creation for 20 years, but in return had to exploit the invention in the interest of the state. Today, almost all countries protect their inventors through modern patent laws. The possession of a patent constitutes an asset on the market for the company which thus protects itself from the competition.

However, the patent clearly embodies the idea that in return for the rights granted to patentees, the latter innovate in return for the good of all. The social contract thus woven between the creator and the whole of the community is thus found broken when the company uses its patent as an anti-competitive weapon, then flouting – abusively? – freedom of competition and trade in the market economy.

It is nonetheless true that patents reward those who have invested the time and money that have enabled them to innovate. Without this guarantee of being able to profit from their innovation, why would companies innovate? Patents protect inventions and inventors, and are one of the essential means that allow cheaters and copiers to be eliminated.

There is another interesting dimension to take into consideration: the patent provides credibility to the company, in particular among start-ups, and is a valuable asset for forging partnerships. It is also an asset for successful fundraising: it is estimated that in France 15% of French startups file at least one patent (vs. 23% in Germany). In fact, startups that have filed for a patent double their chances of raising funds. If the patent is not blocking for the first round, it can however prevent passing the next course.

Dearest innovation

But protecting an invention comes at a price. And this cost is precisely one of the obstacles to patent filing mentioned by companies. The lack of visibility on costs and the fact of often having to finance intellectual property on their own funds makes companies often hesitate to file a patent. The cost of the file is often high due to the payment of successive years and translation costs to file a file abroad. For the most pragmatic companies, it is also a budget that they prefer to invest directly in R&D. It is to encourage French companies to innovate, and to remove this financial brake, that the expenses inherent in the filing of a patent, including the expenses incurred to defend this patent, appear among the expenses eligible for the Research Tax Credit. It is estimated that 3% of R&D expenditure declared under the CIR relates to patents. This is important help considering that 10,163 European patent applications were filed by France in 2019, the second European producer of patents behind Germany.

Change of epoch

US President Joe Biden has just requested the lifting of patents on anti-Covid vaccines in the name of public health. This approach, understandable from an ethical standpoint with regard to the health emergency, is above all an announcement effect because the production capacity does not seem able to produce the necessary doses, even by freeing the patents. In addition, Moderna has already opened its patent.

Behind what could be compared to a political coup, it is nevertheless, symbolically, a (small?) Change in the relationship to patents and innovation that the story tells us.

In the fight against Covid-19, startups have been faster to produce than large pharmaceutical groups. A surprising fact in view of the investments made in R&D by the large groups: the amounts committed by Sanofi are 30 times higher than those of BioNtech. But it is also a result which can be explained by the lack of incentive generated by the legal framework surrounding patents. Indeed, if the patent encourages innovation, the intellectual property of the invention ultimately belongs to the employer – who can commercially exploit the invention. Dispossessed, in a way, of his invention, the inventor is only slightly remunerated, even if he nevertheless possesses the intrinsic knowledge of his invention. Obviously, within small structures like Moderna or BioNTech, in which many employees are also shareholders, these interests come together: inventors are shareholders of the company which now holds their patent. The employee-shareholder status that we observe in many startups is therefore an incentive to take risks, because these inventors will benefit from the fruit of their work and their research.

Moderna is not the only company to have opened its patent. A major figure in innovation, Elon Musk has also chosen to make his company’s patents accessible, because he considers them “just good to slow down progress, to allow giant companies to stand their ground and to enrich lawyers”. However, it would not occur to anyone to dispute the fact that their companies are among the most innovative. Proof that even without patents, innovation can continue.

The startups that I can meet – and support – are more and more inclined to think that knowledge is shared and that innovations are not intended to remain the exclusive property of their inventors: these are goods that should be shared. to solve our common problems more easily, more collectively. In an increasingly open world, in which platforms now exchange data and services, isn’t the time for change?

Between light gray and dark gray

So, are patents a brake on innovation or an essential driver? The answer is not that simple. Beyond public health issues where the ethical dimension is central, there are areas, starting with that of new technologies, in which inventions are anyway more complex to protect than in other sectors, such as civil engineering for example, which historically operate with few patents.

It is certain that patents still have a bright future ahead of them: as proof, the patent war, against a backdrop of national sovereignty, around disruptive technologies such as 5G, Artificial Intelligence and the open Block Chain between China. , the United States and Europe.

Despite this, among the younger generations, the time seems to be more than ever for collaboration rather than the search at all costs for the protection of inventions.

There are indeed a number of societal issues for which the sharing of knowledge and collective innovation will be more useful and beneficial than the protection at all costs of individual innovations …

Source on civil engineering, for info