“It is by no means self-evident that patents encourage an increased absolute quantity of research expenditures. But certainly patents distort the type of research expenditure being conducted. For while it is true that the first discoverer benefits from the privilege, it is also true that his competitors are excluded from production in the area of the patent for many years. And since one patent can build upon a related one in the same field, competitors can often be indefinitely discouraged from further research expenditures in the general area covered by the patent. Moreover, the patentee is himself discouraged from engaging in further research in this field, for the privilege permits him to rest on his laurels for the entire period of the patent, with the assurance that no competitor can trespass on his domain. The competitive spur for further research is eliminated. Research expenditures are therefore overstimulated in the early stages before anyone has a patent, and they are unduly restricted in the period after the patent is received. In addition, some inventions are considered patentable, while others are not. The patent system then has the further effect of artificially stimulating research expenditures in the patentable areas, while artificially restricting research in the nonpatentable areas.”
See also Arnold Plant, “The Economic Theory Concerning Patents for Inventions,” Economica, New Series, 1, no. 1 (Feb., 1934), p. 43.)
And yet, in Orwellian fashion, the intellectual properteers justify IP in the name of promoting innovation. War is peace. Sickness is health. Murder is collateral damage. And stultifying innovation is somehow promoting it!
The victims of this murderous policy in this case tried to lobby the NIH to authorize other companies to produce some more of the life-saving drug–and pay royalties to Genzyme. How is Genzyme harmed by this? They would be receiving the proceeds of a private tax levied in their favor courtesy of the USPTO. But, predictably, disgustingly, the NIH rejected the petition. There is no justification for this outrage. What the petitioners basically want is a compulsory license. The feds have the authority to grant this. There is no good reason not to. As I argue in Reducing the Cost of IP Law: