Patent protection is designed to protect intellectual property (IP) and new invention. The primary inventor(s) may have a patent or market exclusivity depending on the nature of the patent grant. Once a patent is granted, other competitors maybe prohibited from replicating, selling and importing the granted patented product without any license agreement from the inventor (Ashbrook, & Sunkara, 2012). Strong advocates of patent protection have argued that patent protection provides a medium for new innovation and creativity. Patent right is a great method of providing competitive incentives to the original inventor’s art, thus allowing the patentee to recoup the costs associated with the new product (Ashbrook, & Sunkara, 2012). In addition, patent advocates indicated that the 20 years patent-term, also allows the patentee to make sufficient profit in other to invest in another phase of scientific innovations and breakthroughs (Kaufmann, 2008).

On the other hand, assessing the other aisle of patent protection. Opponents of patent concept suggested that there are several limitations and impediments embedded in patent exclusivity right (Kaufmann, 2008). For instance, in a situation where patent protection is an incentive for the investment made in research and development, patent protection does not assure or guarantee the quality of the product (Kaufmann, 2008). Nonetheless, whether patent protection is encouraging new innovation, competition, research and development or improving product quality, is debatable. Perhaps, in order to get a better view of the concept, a clear understanding of the pros and cons of patent protection and the intellectual motives of both sides must be clearly examined and understood. Considering the market competition between a “brand” pharmaceuticals and a “generic” pharmaceuticals, there are indications that the revenue of research intensive firms or patentees has not changed significantly despite the generic competition on the patented brand products (USOTA, 1981). The British survey conducted on the effect of patent protection on research and development (R&D) showed a 64% reduction of expenditure when there is no patent protection (Grabowski, 2002). It also indicated that, in the absence of patent protection, free riders such as generic companies (copycat) would benefit more than the original inventors (Grabowski, 2002). In fact, other reports indicated that 80-85 % of patented products are sold by research intensive firms or the patentee. Another report also indicated that while revenues of research intensive firms have increased significantly, that R & D expenditure has been the same (USOTA, 1981). Furthermore, there are other indications that patent protection prevents competition, and thus encourage monopoly.

Based on the patent-based system and non-patent (common and open source) systems, “The patent game” comparisons shows that the patent-based system generates lower rates of innovation, productivity and societal utility (Kinsella, 2009). “The patent game” model also indicated that there are no significant differences in innovation, productivity and societal utility between a pure patent-based system, and a patent-based system combined with an open source protection (Kinsella, 2009).

If a patent-based system combined with an open source model works in encouraging competition, which in turn lowers the consumer’s cost to a product. It is a necessary alternative to adopt the concept, and still stimulate innovation, productivity and societal utility at a reasonable and proportionate cost.

References

Ashbrook, C, & Sunkara, P. (2012). Patents and Contracts. Retrieved from http://sylvan.live.ecollege.com/ec/crs/default.learn?CourseID=6493792&Survey=1&47= 10828390&ClientNodeID=984640&coursenav=1&bhcp=1.

Gold,C., Kaplan, W., Orbinski, J.,Sarah et.al. (2010). Are Patents Impeding Medical Care and Innovation? Retrieved from http://www.plosmedicine.org/article/info%3Adoi%2F10. 1371%2Fjournal.pmed.1000208.

Grabowski, H. (2002). Patents, innovation and access to new pharmaceuticals. Retrieved from http://levine.sscnet.ucla.edu/archive/grabow-patents_innov.pdf.

Kaufmann, J .(2008). Intellectual Property Rights and the Pharmaceutical Industry. Patented medicines are not to blame for lack of access to life-saving drugs. Retrieved from http://www.america.gov/st/econ-english/2008/April/2008042923045 1myleen0.4181027.html.

Kinsella, S. (2009). Yet Another Study Finds Patents Do Not Encourage Innovation.LVMI. Retrieved from http://blog.mises.org/10217/yet-another-study-finds-patents-do-not- encourage-innovation/.

MNT. (2007). Arrowhead publishers’ new study reveals trends in pharmaceutical clinical trial outsourcing to emerging markets. Medical News Today. Retrieved from http://www.medicalnewstoday.com/releases/70628.php

USOTA. (1981). Patent-term extension and the pharmaceutical industry. Washington, DC: U.S. Government Printing Office. Retrieved from http://www.princeton.e du/~ota/disk3/1981/8119/8119.PDF