Boston University School of Law

Of Patents and Property

James E. Bessen and Michael J. Meurer

Boston University School of Law Working Paper 09-18

Abstract

Do patents behave substantially like property rights in tangible assets, in that they encourage development and innovation? This article notes that historical evidence, cross-country evidence, economic experiments, and estimates of net benefits all indicate that general property rights institutions have a substantial direct effect on economic growth. Conversely, with a few important exceptions like chemicals and pharmaceuticals, empirical evidence indicates that intellectual property rights have at best only a weak and indirect effect on economic growth. Further, it appears that for public firms in most industries today, patents may actually discourage investment in innovation for fear of winding up on the losing side of a patent fight, and routine injunctive relief from patent protection may contribute to this problem.

Keywords: property, intellectual property, property rights, patent, property law, patent law, Industrial Revolution, economic growth, natural economic experiments, Eastern European economies, Eastern European transition, free-riders, generic drug

JEL Classifications: D2, D23, D4, K1, K11, L65, 014, 012, 016, 03, 031, 032, 034, P51

Accepted Paper Series

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James E. Bessen Contact Information
jbessen@researchoninnovation.org

Michael J. Meurer Contact Information

meurer@bu.edu

Boston University School of Law
765 Commonwealth Ave
Boston, MA 02215
USA
(617) 353-6292

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