Sunday, July 21, 2013

Trade Secrets

I'm not certain what to make of this study which asserts that 90+% of truly useful innovations are not patented. I have my doubts because in the chemical arts--and pharmaceutical inventions in particular--the converse is more likely the case. The paper takes a minute to load so here's the abstract:

It is well known that not all innovations are patented, but the exact volume of innovative activities undertaken outside the coverage of patent protection and, relatedly, the actual propensity to patent an innovation in different contexts remain, to a major degree, a matter of speculation. This paper presents an exploratory study comparing systematically patented and unpatented innovations over the period 1977-2004 across industrial sectors. The main data source is the ‘R&D 100 Awards’ competition organized by the journal Research and Development. Since 1963, the magazine has been awarding this prize to the 100 most technologically significant new products available for sale or licensing in the year preceding the judgments. We match the products winners of the R&D 100 awards competition with USPTO patents and we examine the variation of patent propensity across different contexts (industries, geographical areas and organizations). Finally we compare our findings with previous assessments of patent propensity based on several sources of data.

Trade secrecy is the default setting for intellectual property law. It's what the system reverts to when things get ugly, costly and when openness is abused. Trade secrecy is not what Thomas Jefferson wanted for us.

1 comment:

  1. The usual uninformed answer to this position is that trade secrecy is obsolete because everything can be reverse engineered. This ignores the simple fact that quite a bit of intellectual property is how things are made -- often without leaving a trace -- and not what things are.