The Relationship Between Patents and Innovation

The relationship between patents and innovation has recently been subjected to scrutiny; experts wonder if patents are either contributing to or restricting innovation, and how the level of patent strength can be adjusted to produce a desired effect.Innovation Road Sign with dramatic clouds and sky.

A recent Forbes article explains the significance Tabarrok Curve, which graphs the correlation between innovation and patent strength. According to the graph, the two factors have a positive correlation, until the graph reaches its maximum and from there the correlation turns negative. According to Alex Tabarrok, the creator of the curve and author of Launching the Innovation Renaissance, we are currently passed the maximum of the curve, and with less patent strength, there would be more innovation.

And yet while Tabarrok seems critical of the current patent situation, Tim Worstall, the author of the Forbes article, explains why patents also fuel innovation. According to Worstall, patents that are strongly backed provide monetary incentives for entrepreneurs and researches to make new discoveries and make new inventions, and thus a balancing act is required for the optimal amount of innovation:

“Yet we also recognize that if we provide protection that is too strong then we will be reducing the amount of innovation and invention. Too strong a protection for the initial invention will prevent that ongoing innovation around it. Which is where our balancing act comes in. We want to have patent protection that is strong enough to encourage more invention but not one that is strong enough to deter further invention or innovation.”

So what the Tabarrok curve means is that even though some experts are frustrated with the current patent situation and think that it costs too much money, patents will still hold their value because soon there will be newfound demand for patents. At this point, patents will increase in value because they will be fueling innovation, not hindering it.

Understanding the relationship between patents and innovation requires perspective, and though the patent system is currently under scrutiny, patents are no less important and will remain necessary to promote innovation.

If you’re interested in obtaining a patent, or would like more information about the relationship between innovation and patents, contact us.

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