State of Innovation

Patents and Innovation Economics

The Economist Weights In on Patent Deform

The Economist in an article entitled The spluttering invention machine repeats a number of lies associated with patent reform.  For instance, they repeat the Patent Thicket theory for which there is absolutely no empirical evidence.  You would expect that a magazine like the The Economist would at least do a little research on the topic.  Here are some of the errors in the article.



This Article repeats the Patent Thicket theory (too many patents inhibit innovation).  Every single empirical study has found little or no evidence for the Patent Thicket theory.  For instance see R&D, Invention and Economic Growth: An Empirical Analysis, by Professor Hulya Ulku and Ted Buckley, Ph.D., The Myth of the Anticommons, Bio, (2007) and Epstien, Richard A., Kuhlik, Bruce N., Is there a Biomedical Anticommons, Regulation, (Summer 2004), pp. 54-58.  You would expect an organization like the Economist to do their homework before they repeat these myths.

However, there is plenty of evidence that a lack of a patent system or a weak patent system inhibits innovation and economic growth.  For instance, North Korea has no patent system and has absolutely no innovation.  Those countries that first adopted a modern patent system have been the most innovative.  When the patent system was under attack in the US in the 1970s the US suffered stagflation.  For more information see The Source of Economic Growth.



This Article also repeats the myth of low patent quality in the US.  By every objective measure the quality of patents has been increasing, including GDP per patent, R&D spending per patents, and number of citations per patent.  See Patent Quality Nonsense and The Patent Quality Myth.  It is disappointing that the Economist repeats these diatribes against patents without even a cursory check of the facts.


PATENT REFORM: America Invents Act

The main problem with the US patent system is the long pendency time.  This is a result of the underfunding (stealing of user fees) of the Patent Office.  Suffice it to say that correcting this situation is not the major thrust of this legislation.  The main point of this legislation is to weaken the US patent system, by the addition of oppositions and the weakening of the US grace period, so that it easier for large corporations to steal the inventions of startups and independent inventors.


March 17, 2011 - Posted by | -How to, Patents | , , , , ,


  1. DB,

    Perpetuating a series of lies to a gullible and critically unthinking public is “innovation” all by itself. In that regard, the Economist article is very “innovative”.

    Let us list a few of the many ways:

    1. Insinuating that the US patent laws have not been changed since the 1950s.

    2. Suggesting there is need for the USA to “align” its ways with those of foreign countries (should we find ourselves back in the USSR? or is that already where we are?)

    3. Suggesting that the “patent system” causes people to “invent” and the reason that the number of good inventions is down is the fault of the patent system and not of the education system or the financial system or of the economists’ systems.

    4. …

    One could go on and on. But it’s hard to keep up with all the reverse-truthiness “innovations” that takes place in this one article.

    BTW, “innovation” is not necessarily the same as, nor does it always include a patentable “invention”. There is a reason the words are not spelled the same way. They are not the same thing.

    Comment by step back | March 18, 2011 | Reply

    • Thanks for cheering me up. Yeah, innovation is used by business people so that non-inventors can feel important or so that they can pay inventors less.

      Comment by dbhalling | March 18, 2011 | Reply

      • DB: Quite right you are.

        “Innovation” is a word used by business men to keep the lowly engineer/inventor in his place.

        A conversation between the Dilbert cartoon character and his pointed hairs manager might go something like this:

        Dilbert: I just invented something truly valuable!

        Manager: None of your work has any value unless we in management give it value. We are the ones who transform engineering babble into meaningful “innovation” that can be absorbed by the market place. Without us, you are nothing. Now go back to your cubicle and invent some more stuff although I don’t know why we keep you and pay you in the first place. Your cubicle would be more productive if it was instead occupied by a house plant.

        Dilbert: OK (Goes back to cubicle and invents next ‘valueless’ thing for the company so that management can take credit for it)

        Comment by step back | March 18, 2011

  2. Stepback,

    That is good – perhaps you have a future in cartoons. Since your future in patents appears compromised.

    Comment by dbhalling | March 18, 2011 | Reply

    • No. You meant to say my future in patents is “comprised”. ;-)

      Comment by step back | March 18, 2011 | Reply

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