Excessive IP protection causes economic gridlock, says expert
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Intellectual property laws which were designed to protect inventors are actually stifling innovation, according to a leading US law academic.
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“I discovered a paradox in the free market and it is this: usually private ownership creates wealth, but too much ownership has the opposite effect - it creates gridlock,” he said. “When too many owners control a single resource – it can be a patent, a copyright, land – when too many people control a single resource, co-operation breaks down and wealth disappears. Everybody ends up losing.”
Heller has expanded on his theory in a just-published book, The Gridlock Economy – how too much ownership wrecks markets, stops innovation and costs lives.
He uses the example of someone who has come up with a new medicine and is trying to get it to market. To do that they must use systems, processes and tests which are owned by other people.
“Imagine a drug developer walking into an auditorium and seeing 50 or 100 or several hundred patent owners, each with their essential patent on their lap, and the drug developer knows that unless he’s able to negotiate successfully with every single one of those patent owners, his drug can’t come to market,” said Heller.