Abstract We live in a knowledge economy. The production and dissemination of knowledge will be central to solving the problems of climate change and environmental sustainability, reducing global poverty and addressing other global problems. This article asks: do intellectual property rights – with their increasingly global reach –further or hinder the production and dissemination of knowledge? Experience with genetically modified organisms shows that a model markedly different from the current one is more likely to bring wider social benefits, both in the short and the long run. Indeed, the current system may impede both innovation and dissemination. There are reforms in the intellectual property regime, and more broadly in the way we finance, organize and incentivize innovation, that would increase the pace of innovation and its utilization. The spread of the current dysfunctional system owes much to the evolution of intellectual property rights in the US – and the influence of particular special interests there. Policy Implications A well‐functioning patent system requires careful attention to a number of details, including: (1) what can be patented; (2) the breadth of a patent; and (3) the standards of novelty that determine whether an innovation is eligible for a patent. Corporate interests have resulted in a patent system which answers each of these questions in a way that may impede not only the utilization of knowledge, but even innovation. Among the details that matter is the process by which patents are granted. The current system grants too many ‘bad’ patents. Opening the process of examination of patent candidates to all parties that reveal themselves as having private information relevant to a thorough examination (in a process called opposition) should reduce the number of ‘bad’ patents. The patent system is only one part of a society’s innovation system, through which the production of knowledge is financed, incentivized and organized. Too much attention has been focused on IPR (intellectual property rights), and too little on alternatives, e.g. open source systems, publicly financed innovation and prizes. Providing more scope for compulsory licenses – making it easier for countries to issue them – would reduce some of the inefficiencies associated with the current patent system.
Henry et al. (2010) studied this question.