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5th October 2005, 18:39
The following is by Joseph E. Stiglitz, a Nobel laureate in economics:
"Ideas are the most important input into research, and if intellectual property slows down the ability to use others’ ideas, then scientific and technological progress will suffer.
In fact, many of the most important ideas – for example, the mathematics that underlies the modern computer or the theories behind atomic energy or lasers – are not protected by intellectual property. Academics spend considerable energy freely disseminating their research findings. I am pleased when someone uses my ideas on asymmetric information – though I do appreciate them giving me some credit. The growth of the “open source” movement on the Internet shows that not just the most basic ideas, but even products of enormous immediate commercial value can be produced without intellectual property protection.
By contrast, an intellectual property regime rewards innovators by creating a temporary monopoly power, allowing them to charge far higher prices than they could if there were competition. In the process, ideas are disseminated and used less than they would be otherwise.
The economic rationale for intellectual property is that faster innovation offsets the enormous costs of such inefficiencies. But it has become increasingly clear that excessively strong or badly formulated intellectual property rights may actually impede innovation – and not just by increasing the price of research.
Monopolists may have much less incentive to innovate than they would if they had to compete. Modern research has shown that the great economist Joseph Schumpeter was wrong in thinking that competition in innovation leads to a succession of firms. In fact, a monopolist, once established, may be hard to dislodge, as Microsoft has so amply demonstrated.
Indeed, once established, a monopoly can use its market power to squelch competitors, as Microsoft so amply demonstrated in the case of the Netscape Web browser. Such abuses of market power discourage innovation.
Moreover, so-called “patent thickets” – the fear that some advance will tread on pre-existing patents, of which the innovator may not even be aware – may also discourage innovation".
The entire article can be read Here. (http://www.project-syndicate.org/commentary/stiglitz61)
"Ideas are the most important input into research, and if intellectual property slows down the ability to use others’ ideas, then scientific and technological progress will suffer.
In fact, many of the most important ideas – for example, the mathematics that underlies the modern computer or the theories behind atomic energy or lasers – are not protected by intellectual property. Academics spend considerable energy freely disseminating their research findings. I am pleased when someone uses my ideas on asymmetric information – though I do appreciate them giving me some credit. The growth of the “open source” movement on the Internet shows that not just the most basic ideas, but even products of enormous immediate commercial value can be produced without intellectual property protection.
By contrast, an intellectual property regime rewards innovators by creating a temporary monopoly power, allowing them to charge far higher prices than they could if there were competition. In the process, ideas are disseminated and used less than they would be otherwise.
The economic rationale for intellectual property is that faster innovation offsets the enormous costs of such inefficiencies. But it has become increasingly clear that excessively strong or badly formulated intellectual property rights may actually impede innovation – and not just by increasing the price of research.
Monopolists may have much less incentive to innovate than they would if they had to compete. Modern research has shown that the great economist Joseph Schumpeter was wrong in thinking that competition in innovation leads to a succession of firms. In fact, a monopolist, once established, may be hard to dislodge, as Microsoft has so amply demonstrated.
Indeed, once established, a monopoly can use its market power to squelch competitors, as Microsoft so amply demonstrated in the case of the Netscape Web browser. Such abuses of market power discourage innovation.
Moreover, so-called “patent thickets” – the fear that some advance will tread on pre-existing patents, of which the innovator may not even be aware – may also discourage innovation".
The entire article can be read Here. (http://www.project-syndicate.org/commentary/stiglitz61)