Nine out of ten of the most important innovations are not patented, study claims

Natural competitive forces may be just as effective at securing proprietary information as our patent system.

Is our formal patent system -- the wellspring of so many lawsuits and counter-suits -- even necessary to protect innovation? A recent study suggests natural competitive forces may be just as effective at securing proprietary information as the formal legalized apparatus that is our patent system.

This is the key takeaway from a study surfaced by Stephan Kinsella of the Center for the Study of Innovative Freedom, showing that the most important innovations seen over a 25-year period were never patented.

In the study, a group of researchers from the University of Lisbon reviewed the recipients of the R&D 100 Awards presented by the Journal of Research & Development over three decades, and researched their related patent filings with the U.S. Patent Office. Their startling conclusion: only 10% of these highly regarded inventions -- defined as "technologically significant new products available for sale or licensing" and a significant advancement over existing products -- were patented. Among the 3,000 innovations cited were photographic equipment, communications devices, lighting innovations, pharmaceuticals, and electronic innovations.

So were most of the designers and developers behind these innovations -- brilliant minds they are -- actually being careless in not securing patents for their products? In most cases, the innovators preferred more informal methods to keep their innovations close, rather than run them through the labyrinthian patent system. Protective methods, Kinsella points out, include "trade secrecy, lead time/first to market advantages, or other strategies, instead of on the patent system."

The bottom line: "patents are not a significant driver of most innovation, if 90% of important inventions are never patented in the first place," Kinsella adds. He adds this perspective on the worthiness of the patent process as it currently stands:

"Proponents of the patent system often claim that patents are necessary to provide an incentive to innovate; some even (ridiculously) claim that without patents, all innovation would grind to a halt (the truth is the opposite: if patents were made universal and had a perpetual term, all human life would grind to a halt; no offense Galambosians). But even if the 10% of innovations that are patented would never have resulted without the incentives provided by a patent system (an absurd assumption), the great bulk of technological innovations and breakthroughs in modern times would still have come about."

(Thumbnail Photo: NASA.)

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