Patent News

May. 8, 2015

Forbes Commentary: Why America’s patent system is not killing innovation, by David J. Kappos

This post originally appeared in Forbes on May 8, 2015.

“Never let the facts get in the way of a good story.” The old saying, often attributed to Mark Twain, is as applicable today as in his time. And in the intellectual property arena, a “good story” has been going around recounting the death of American innovation at the hands of an outmoded and obstructive patent system. But, again to paraphrase Twain, rumors of innovation’s death have been greatly exaggerated. In fact, American innovation is thriving—and not in spite of patents but because of them.

When we look beyond the fairytales and examine the facts concerning the value of the American patent system, the real story is that patents have a demonstrably positive impact on American jobs, the economy and the innovation ecosystem. Opposition to the system is nothing new; the notion of granting exclusivity over ideas strikes some as inherently undemocratic. Yet the founders recognized that the extraordinary knowledge-sharing benefits far outweigh the detriments of a time-limited monopoly — so much so that the patent system is provided for directly by the Constitution, the very document on which American democracy was built.

The founders would certainly be impressed, if not surprised, by the extent to which knowledge is shared in our modern economy. The open innovation model, by which distinct (sometimes even competing) entities share information, research and expertise to develop new inventions and products, is an illustrative example of how patents encourage knowledge-sharing and create value. According to recent research, firms that harness information from multiple sources enhance innovation and provide additional value for customers. Though some storytellers portray patents as necessarily anti-collaboration, in practice it is quite the opposite.