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Reform in Patent Legislation

“Change starts when someone sees the next step.”
William Drayton

Developed countries are adamant about extending the reach of patent laws for protection of intellectual rights in concluding bilateral and multilateral trade agreements.

Patent legislation is a government intervention for correction of a market failure. New knowledge creation requires high investments; but, once it is created it can easily be duplicated, benefiting a large number of people without contributing to the necessary investments, and thereby not allowing a reasonable return to the original investor. Unless those who make such investments earn an adequate return, society as a whole will not be allocating sufficient resources for innovations. Patent laws aim to grant, for a definite period, a monopoly right to those who are successful in their investment. The purpose is to ensure an adequate level of investment in innovation and creativity, before allowing information to freely circulate following the expiry of the identified period. Indeed, countries where effective patent laws are in force enjoy more encouragement for creativity and greater number of inventions.

However, government intervention in this area, as is the case of many other areas, lags behind the market conditions. We should question whether it is appropriate to keep the provision allowing for a 20-year patent protection, adopted by taking a specific country as the relevant market, to remain the same when patent protection is simultaneously granted in more than one country. In an environment where the period needed for an invention to be developed into a readily marketable product with a short payback period, and at a time when capital markets reward innovations even before they bring a single penny, should the period of monopoly right remain the same?

Another point to question in connection with patent legislation is the type of innovations that deserve to be included in the patent scope as far as public interest is concerned. For example the US Compton New Media had obtained patent for combining sound, vision and writing in a multimedia disc in 1993. The fact that patent was granted to the first applicant for a technology already in use at that date by many companies in their in-house applications gave rise to doubts as to whether Patent Office had the necessary resources for evaluating innovations for patent issuing purposes. In fact, the US Patent Office had to review its decision in this respect. Nowadays Patent Office is under pressure for launching a study in connection with the optimal duration for internet patents.

The duration, which is longer than necessary, of the monopoly rights under the patent legislation may prove to be a factor restricting development. It may also delay global development due to excessive resource transfers from countries with limited capital accumulation to those enjoying greater number of patents.

It is true that global regulatory measures are needed for the protection of intellectual rights; however the parameters for such regulatory measures should be reviewed in line with the changing conditions of the present day. We are not questioning the need for patent rights, but the parameters that would serve the global society in the most equitable and efficient way. In correcting a market failure, we should be careful not to suppress the global society’s development potential.