The problem with patents

The problem with patents

It’s hard to believe that a mere 110 patent officers were able to meticulously scrutinize more than 30,000 applications last year. Austria has 100 officers who evaluate less than 3,000 applications a year.

A Mint special report on Tuesday showed how an understaffed patent bureaucracy is beset with cozy deals between patent officers and the agents who file applications. There are broader issues at stake here as well. If patent applications are not scientifically evaluated, then intellectual property rights may end up as just a form of licence.

Patents provide exclusive monopoly rights over an “original" invention for a specified period of time. As is so often the case, the devil lies in the details. Applicants must prove that their invention is “original", not merely an improvement — a difficult task, given that all breakthroughs rely on past ideas. And with intricately meshed production processes, even the line between “final products" and “intermediate processes" (which are not eligible for patents in India) is at best blurred.

Of course, the very idea of granting monopoly over ideas is far from uncontroversial. While property rights were a solution to the problem of scarcity, patents create scarcity to offer monopoly rents for innovation. Whether such rents are necessary for optimal research is debatable.

Being a source of rents, patent offices are prime targets for private profiteers. The challenge is to design checks and balances to align interests of patents officers with the goal of fostering innovation. Yet, far from such institutional mechanisms, the Indian patent department suffers from inadequacy of scientific experts. The Supreme Court, in the Natco Pharma v. Novartis case, noted on 2 September that the government’s Intellectual Property Appellate Board didn’t have a single technical expert. The glaring deficiency is a reflection of the broader outlook towards granting patents. The Indian bureaucracy undoubtedly has great experience in issuing licences, but the very logic of patent rights — unlike, say, cycle rickshaw licences — requires serious technical scrutiny, without which it becomes yet another instrument for extracting monopoly rents.

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