[Ip-health] Bouchard articles on patent value

Aidan Hollis ahollis at ucalgary.ca
Tue Jun 5 15:25:27 PDT 2012

Ron Bouchard has recently published two articles that should be of interest to many on this list. Ron did a very substantive analysis of the value of patents, and showed empirically something that is pretty well known, that there has been an enormous expansion of patenting into not very useful areas. He also casts doubt on the effectiveness of patenting in pharmaceuticals as a tool for generating valuable innovation.  See 
for the description and references.

These articles are not easy going -- but certainly very useful for serious scholars in this area.

Quoting from the end of the Santa Clara article:

"The innovation index provides a means of weighing legitimate 
patent protection against perceived societal benefit. As such, it yields 
a  qualitative measure of the innovative nature of drug patents that, 
when compared to counting methods, may more adequately reveal the 
outcome of development incentives for firms and regulating bodies 
insofar as these parties have conflicting interests. The results from our 
analysis indicate that it is not the most innovative or even strongly 
innovative drugs that are attracting the greatest firm patenting effort. 
Rather, when gauged against development priorities disclosed by 
regulators, it is the least  innovative drugs of all classes investigated 
that display the strongest patenting efforts. The data obtained fully 
support the conclusion that cluster-based, or portfolio-based, drug 
development has become the dominant innovation strategy for both 
brand and generic firms. An important conclusion from the analysis in 
this regard is that the data suggest that the perception on the part of 
governments, industry and the public to the effect that societal benefit 
comes as a kind of “natural consequence” of patenting may need to be 

"Taken together with earlier work from our group, the data 
reported here continue to challenge the assumption that strong patent 
rights are essential to motivate and increase the amount of high value 
innovation in the pharmaceutical sector. The data also cast doubt on 
the claim that public health goals can be well and efficiently met by 
providing strong intellectual property incentives to private industry by 
merging public health goals with industrial goals. "

Aidan Hollis

Professor of Economics
University of Calgary, 2500 University Dr NW Calgary AB T2N 1N4 Canada
tel: +1 403 220 5861  fax: +1 403 220 5861
email: ahollis at ucalgary.ca
web: http://econ.ucalgary.ca/profiles/aidan-hollis
Vice President,
Incentives for Global Health

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