Empirical Evidence on Patents and Data Protection

Abstract

This paper summarizes the empirical research on the patent system and on data protection. This is done in the context of the 2015-16 Australian Productivity Commission Inquiry into Intellectual Property Arrangements. The major focus is on whether the patent system is effective and efficient - that is, does it grant patents only for inventions that would not otherwise have occurred and which have net positive spillover benefits. These are the criteria for a parsimonious patent system - one that minimizes damage to consumers and follow-on inventors. In general patent systems are seen to fail this test largely because the inventiveness (non-obviousness) requirement is far too low. Beyond this, patent privileges are seen to be too extensive, now that the local working requirement has been removed. Further, penalties are one-sided encouraging applicants to apply for almost uninventive inventions. In regards to data protection questions are raised about both the economics and the ethics of providing data protection.

Keywords: patent policy, data protection

JEL Classification: O34, O31, L5, L43