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Needed: A New System of IntellectualProperty Rights

by Lester C. Thurow

Reprint 97510

Harvard Business Review

94 ARTWORK BY CRAIG FRAZIER

C O M P E T I N G I N T H E I N F O R M AT I O N E C O N O M Y

undamental shifts in technology and in the economic

landscape are rapidly making the current system of intellectual

property rights unworkable and ineffective. Designed more than

100 years ago to meet the simpler needs of an industrial era, it is

an undifferentiated, one-size-fits-all system. Although treating all

advances in knowledge in the same way may have worked when

most patents were granted for new mechanical devices, today’s

brainpower industries pose challenges that are far more complex.

Consider the case of the physician who noticed a relationship be-

tween an elevated level of a particular human hormone and a con-

genital birth defect. He was awarded a patent for his observation,

Copyright © 1997 by the President and Fellows of Harvard College. All rights reserved. 95

Squeezing today’s innovations intoyesterday’s system simply won’t work.

n e e d e d : AN e w S y s t e m o fI n t e l l e c t u a l

P r o p e r t yR i g h t sb y L e s t e r C . T h u r o w

Lester C. Thurow is the Jerome and Dorothy Lemelson Professor of Management andEconomics at the Massachusetts Institute of Technology’s Sloan School of Managementin Cambridge.

f

although by itself his test had too many false posi-tives to be useful. But later developments showedthat if his test were used along with two others,they would accurately forecast whether a babywould be born with Down’s Syndrome. Today thephysician is suing to get a $9 fee from every labora-tory that uses his part of the test. If he wins, the costof testing will more than double.

Should the physician who first ob-served how the existing gene worksget some intellectual propertyrights? Probably. But they should notbe the same kind of rights as thosegranted to someone who invents anew gene to replace the defectiveone. Noticing what an existing genedoes is simply not equivalent to in-venting a new gene. Such distinc-tions are necessary, yet our patent system has nobasis for making them. All patents are identical –you either get one or you don’t.

The prevailing wisdom among those who earntheir living within our system of intellectual prop-erty protection is that some minor tweaking hereand there will fix the problem. Much of this wis-dom flows from nothing more profound than thebelief that to open up the system to fundamentalchange would be equivalent to opening Pandora’sbox. All can vividly see themselves as potentiallosers. Few consider the private and public gainsthat might accrue from a different system.

The prevailing wisdom is wrong. The time hascome not for marginal changes but for wide-openthinking about designing a new system from theground up.

Why the Old System Doesn’t WorkToday it is both more important than ever to pro-tect intellectual property rights – and more difficultto do so. To understand why, consider the followingfour shifts in the economic landscape:

The Centrality of Intellectual Property Rights.With the advent of the information revolution – orthe third industrial revolution (call it what youwill) – skills and knowledge have become the onlysource of sustainable long-term competitive advan-tage. Intellectual property lies at the center of themodern company’s economic success or failure.

Raw materials can be bought and moved, andthey are falling in price and decreasing in value as a share of U.S. gross domestic product. Capital is acommodity that can be borrowed in New York,Tokyo, or London. Unique pieces of equipment thatcannot be obtained by – or are too expensive for –

one’s competitors simply don’t exist. What used tobe tertiary after raw materials and capital in deter-mining economic success is now primary.

Major companies such as Microsoft own nothingof value except knowledge. Fighting to defend andextend the domain of their intellectual property ishow they play the economic game. With this reality

comes the need for more differentiated systems ofdetermining who owns what, better protection forwhatever is owned, and faster systems of disputeresolution.

Bill Gates is the perfect symbol of the new cen-trality of intellectual property. For more than a century, the world’s wealthiest human being hasbeen associated with oil – starting with John D.Rockefeller in the late nineteenth century and end-ing with the Sultan of Brunei in the late twentiethcentury. But today, for the first time in history, theworld’s wealthiest person is a knowledge worker.

In addition, the world’s major growth industries –such as microelectronics, biotechnology, designer-made materials, and telecommunications – arebrainpower industries. If their intellectual propertycan be copied easily, they will not be able to gener-ate either wealth for their owners or high wages fortheir employees.

These knowledge-based industries are importantin their own right, but they also enable other indus-tries, in turn, to become knowledge based. Consid-er the oil industry. The story in the famous JamesDean movie, Giant, typified the old means of suc-cess in the oil business: luck and brawn. But newtechnologies such as three-dimensional acousticalsounding, horizontal drilling, and deep offshoredrilling have turned the oil business into a knowl-edge industry. Luck and brawn have disappeared.Supercomputers have taken their place. The oil in-dustry now has a big interest in intellectual prop-erty rights.

The growth of electronic commerce is bringing asimilar transformation to retailing. The source ofany retailer’s future success is apt to be buried inthe software of its electronic information and logis-tics systems rather than in the art of its window dis-

96 harvard business review September – October 1997


For more than a century, theworld’s wealthiest human being

has been associated with oil.Now he’s a knowledge worker.

N E E D E D : A N E W S Y S T E M O F I N T E L L E C T U A L P R O P E R T Y R I G H T S

plays. Fast knockoffs makes it difficult to sell any-thing that is truly unique.

More directly, the rising importance of intellec-tual property can be seen in the earnings gainedfrom the licensing of technology. In the past, com-panies were willing to share their technology be-cause it did not seem to be the source of their suc-cess and could not be sold for much anyway. Butthose days are gone. For example, Polaroid and Kodak settled a patent infringement case for almost$1 billion. And Texas Instruments, aftershifting to an aggressive licensing pro-gram, earned more than $1.5 billion infees; in some years its licensing feeshave been bigger than its operating in-come. Having noticed these numbers,many other corporations are now order-ing their technology-licensing officersto step up their efforts.

Increasingly, intellectual property isbecoming central to strategic battleplans. Companies such as Intel have biglegal budgets to defend what they thinkis their property, but they are also ac-cused of aggressively attacking whatothers think is theirs in order to createuncertainties, time delays, and higherstart-up costs for their competitors. Forexample, Digital Equipment Corpora-tion, unsuccessful in the marketplace,filed a huge triple-damages patent suitagainst Intel for infringing on its Alphachip technologies. Perhaps DEC willgain in the courts what it could not gain in the economic arena. If it wins,the damages awarded will be in the bil-lions. Or perhaps DEC’s strategy is tomake Intel more cautious, and henceslower, in designing its next generationof microprocessors.

DEC’s suit was triggered by a remarkin a Wall Street Journal article in whicha top-level executive on an Intel chip-research team was reported as saying, “There’snothing left to copy.” Wherever the truth lies inthis case, reverse engineering is a way of life in thecorporate world. But where should the limits be?Surely the answer is not where a patent systemmore than a century old sets them.

The Decline of Public Knowledge. For most ofthe period since World War II, knowledge hasflowed easily and cheaply around the world. TheU.S. government paid for most of the basic researchand, with the exception of military technologies,encouraged its worldwide dissemination. During

the Cold War, economic success by other countrieswas seen as almost as important to the UnitedStates’s strategic geopolitical position as its own in-ternal economic success.

Arrogance also contributed to this free flow of in-formation. Americans believed that the rest of theworld would not be able to catch up with Americaningenuity. While foreigners were copying the lastgeneration of technology, the thinking went, Amer-icans would be inventing the next generation. But

the United States now lives in a competitive worldin which its economic dominance is long gone. De-veloping proprietary technologies and the skillsthat go with them is the only way to defend U.S.workers from the downward wage pressures of fac-tor price equalization. The nation’s most profitablecompanies are those with a lock on some form ofknowledge. As a vivid sign of this need to controlthe flow of information, witness the call by somemembers of Congress to keep foreign students outof U.S. university laboratories in order to stop tax-payer-financed technologies from leaking abroad.

harvard business review September – October 1997 97

At the same time, the U.S. government is cuttingits support for research and development – in bothreal dollars and as a share of total spending. Whatused to be a fifty-fifty split between governmentand the private sector is now a one-third versustwo-thirds split. Under the current budget-balanc-ing agreement, sharper cuts lie ahead. A Demo-cratic president has promised to cut federal R&Dspending by 14% by 2002; a Republican Congresshas promised to cut it by 20%.

As a consequence, less new knowledge will befreely available in the public domain. If the nationis to fill this gap and generate the knowledge need-ed to maintain its economic progress in the future,companies will have to be enticed – through newincentives – to put more private money into R&D.Stronger systems of protection for intellectualproperty rights are clearly part of the answer.

In the past, U.S. antitrust laws explicitly forcedsome privately financed laboratories, such as theBell Labs of AT&T, to share their technologies witheveryone and implicitly forced others, such as theIBM labs, to do the same. But the monopolisti-cally funded private research laboratories are gone.IBM and AT&T are now in competitive businessesin which they cannot afford to fund the generalknowledge that they used to generate. Private com-panies now expect to get big money from their in-ventions and will vigorously defend their rights.The days of the low-cost sharing of private knowl-edge are over.

Without stronger systems of protection, compa-nies will defend their economic positions by keep-ing their knowledge secret. Articles about research

papers whose publication is deliberately delayed often pop up now in the scientific press. Secrecy is amuch bigger deterrent to the expansion of knowl-edge than any monopolistic system of protectionfor intellectual property rights. An investigatorwho knows what is known can go to the next step.One who doesn’t wastes time reinventing what isknown or wandering in an intellectual wildernesslooking for a path that someone else has alreadyfound. A recent study found that 73% of private

patents were based on knowledge generated by pub-lic sources such as universities and nonprofit orgovernment laboratories. Private, secretly heldknowledge simply does not generate the next gen-eration of knowledge.

The Emergence of New Technologies. New tech-nologies have both created new potential forms ofintellectual property rights (can pieces of a humanbeing be patented?) and made old rights unenforce-able (when books can be downloaded from an elec-tronic library, what does a copyright mean?). Weneed to rethink fundamentally what should andshould not be appropriable as private property. Atthe same time, we need to generate new ideas andtechnologies to offer effective protection of intel-lectual property rights.

How should we think about what should bepatentable? It is clear that the invention of a newgene for making human beings different or bettercannot be handled in the same way as the inventionof a new gearbox. And society isn’t going to letsomeone have a monopoly on the cure for cancer.Nor will biologists be allowed to clone and ownwhole human beings.

But it is equally clear that companies engaging inbiological research must be allowed to own piecesof human beings; otherwise, no one would investthe funds necessary to find genetic cures for dis-eases such as Alzheimer’s. Since patents on geneticcures for diseases cannot be differentiated frompatents on genetic materials that make humanstaller, smarter, or more beautiful, the exact line be-tween what is and is not allowed is going to be diffi-cult to draw. But inventing a new piece of biology

that alters the natural characteristicsof plants, animals, or humans is notequivalent to discovering how an ex-isting piece of biology works. What apatent means has to be different inthose two areas.

We also need to differentiate be-tween fundamental advances inknowledge and logical extensions ofexisting knowledge. Each deserves adifferent kind of patent. One of the

objections to the “first to file” system used outsidethe United States is that it allows smart, knowledge-able people to guess where technology is going and tofile patents on things that have not yet been invent-ed. If they guess right one out of ten times, they morethan cover their costs of filing multiple patents.

New technologies make enforcement of propertyrights much tougher. People can use high-qualityscanning technologies with optical character rec-ognition to build electronic libraries quickly and



It is clear that the invention of anew gene cannot be handled inthe same way as the invention ofa new gearbox.


easily. Electronic publishers can in turn just asquickly and easily convert that material back intoprinted form. When anything can be rapidly, cheap-ly, and privately replicated in low volumes at highlevels of quality and then distributed in whateverform the user wants, the choke points available toprevent reproduction of what used to be printedmaterials have essentially evaporated.

With that evaporation comes the end of the copy-right system – not just for books but for all infor-mation and data systems. A system de-signed to allow people to browse andborrow books from physical librariescannot provide the right framework fordealing with the issues raised by thepossibility of downloading a book froman electronic library.

What initially may seem relevant on-ly to authors and book companies isn’t.If books can be freely downloaded, thenthose selling financial information willalso find that their databases can bedownloaded and resold by lower-costcompetitors – whose costs are lower pre-cisely because they did not have to incurthe costs of creating the databases! Tele-phone companies are trying to stop thatpractice by putting some phony num-bers in their telephone books in order toprove in court that competitors havenot generated their own list of namesand numbers.

Magnify what is now happening inthe recorded music business and youcan see the future in printed materials.Even though the equipment needed torecord compact discs is too expensive tobe found in every household, CD piratesmay hold as much as a 20% share of themarket. In contrast, in personal elec-tronic publishing the equipment is ascheap and available as a personal com-puter plus a scanner. The fully electron-ic library does not yet exist, but it soon will. Onehas to expect that pirated works will end up with aneven bigger market share of what used to be con-ventionally printed materials than they now haveof CDs and tapes. The legal system may be able tostop factories from copying and selling CDs orbooks in volume, but it cannot stop individualsfrom replicating the materials for themselves orselling small numbers to their friends.

And consider software piracy. When computermakers ship their products “naked” – that is, with-out an operating system – as they often do in Asia,

the only reason they do so is to allow the use of pi-rated software. Effectively, these computer makershave the tacit approval of local governments to vio-late patents and copyrights. In Thailand, up to 97%of the software in use has been illegally copied, and even in the United States as much as 40% ofthe software in use may have been illegally copied.Estimates of pirated software in Europe range froma high of 80% in Spain to a low of 25% in the Unit-ed Kingdom.

Computer software provides a good illustrationof what happens when patent and copyright laws donot keep up with technology. Judges end up makingdecisions that they should not be making. One suchdecision ruled that the “look and feel” of a softwareprogram could not be patented – which means, ef-fectively, that any successful program can be legal-ly copied. The copiers need to write their own code,but they start knowing exactly what the program issupposed to do, how the internal programmingcomponents are structured, how the final programis supposed to look and feel, and that a viable mar-


ket exists for the product. Knowing exactly what tocreate lowers costs; but more important, the copierfaces much less market uncertainty and risk thanthe original writers of successful software programs.

When software programs cannot be protected ef-fectively, it is not just the Apples that will lose. Re-tailers, for example, that develop software to selltheir products over the Internet will find their soft-ware copied and freely used by their competitors.

The Globalization of the Economy. Increasingly,the acquisition of knowledge is central for both“catch-up states” and “keep-ahead states.” Smartdeveloping countries understand that reality. Oper-ating as a monopsonist (a buyer that controls a mar-ket) and dangling access to its domestic market asthe enticement, China demands the sharing oftechnology from companies such as Boeing andReuters that sell in its markets. It doesn’t need theircapital – it saves 30% of its income and has accu-mulated $100 billion in international exchange re-serves – but it demands their knowledge in returnfor the right to operate in China. Americans de-plore China’s demands but remember fondly from

their high-school history classes the clever Yankeeengineers who visited British textile mills in theearly 1800s and then reconstructed them in NewEngland. Initially, Americans were amused in theaftermath of World War II when Japanese business-men with their cameras were ubiquitously touringU.S. factories. They are no longer amused. Fewtoday will let Third World visitors into their plants.

Yet copying to catch up is the only way to catchup. Every country that has caught up has done it bycopying. Third World countries know that unlessthey can acquire the necessary knowledge, theywill never make it into the First World. They can-not afford to buy what they need – even if those whohave the knowledge were willing to sell, and theyare not. So they have to copy.

Recently I heard a talk given by the managingpartner of a large U.S. consulting firm. The partnerurged his fellow consultants to recommend reloca-tion to India because Indians were very good atcopying, had few laws making copying illegal, andoften did not enforce the laws that did exist. He re-marked that India recognized patents only on the

processes for making drugs, not on the drugs them-selves, but then went on to say that Indians werevery good at developing alternative manufacturingprocesses. The fact that no one checks those pro-cesses very closely to see that they are really dif-ferent was left unsaid. Nor did he need to say thatwhat was made in India could be slipped quietly into the channels of world commerce without any-one having to pay for knowledge that would be con-sidered proprietary elsewhere.

The issues are not just those of where a countrystands in the invention cycle or where it stands onthe economic development ladder. Different cul-tures and different parts of the world look at intel-lectual property rights quite differently. The ideathat people should be paid to be creative is a point ofview that stems from the Judeo-Christian and Mus-lim belief in a God who created humankind in Hisimage. It has no analogue in Hindu, Buddhist, orConfucian societies. There are real differences in be-liefs about what should be freely available in thepublic domain and what should be for sale in the pri-vate marketplace. Countries also differ enormously

in their propensities to use theirpatent systems. Switzerland, for ex-ample, issues four and one-half timesas many patents per capita as theUnited States. Does anyone believethat the Swiss are really that muchmore creative than Americans?

Yet despite these differences ineconomic positions, cultures, and

practices, no system of protecting intellectual prop-erty rights can work unless most of the govern-ments of the world agree to enforce it. A law thatdoes not exist or is not enforced in country X is es-sentially a law that cannot be enforced in countryY. Production simply moves to country X. What dif-ferent countries want, need, and should have in asystem of intellectual property rights is very differ-ent, depending on their level of economic develop-ment. National systems, such as that of the UnitedStates, are not going to evolve into de facto worldstandards. The economic game of catch-up is notthe game of keep ahead. Countries playing eithergame have the right to a world system that letsthem succeed.

Building a New System: Basic PrinciplesAs those who launched capitalism two centuriesago discovered, enforceable property rights had tobe defined and enforced for capitalism to work. Theold Communist countries now trying to convert to



Developing countries know thatevery country that has “caughtup” has done so by copying.


market economies are discovering the same realitytoday. Closer to home, the failure to develop ade-quate property rights lies behind many U.S. prob-lems with air and water pollution. Free usage – thatis, no enforceable property rights – is sensible foreach individual, but it ends up depriving the wholecommunity of clean air and water. So, too, with in-tellectual property rights: free usage of knowledgeends up with societies that create too little newknowledge.

The Industrial Revolution began withan enclosure movement that abolishedcommon land in England. The worldnow needs a socially managed enclosuremovement for intellectual propertyrights or it will witness a scrambleamong the powerful to grab valuablepieces of intellectual property, just asthe powerful grabbed the common landsof England three centuries ago. Threebasic design principles are needed:

A new system must strike the rightbalance between the production and thedistribution of new ideas. In thinkingabout protecting intellectual propertyrights, one starts with an inherent ten-sion in the system. To develop new prod-ucts and processes, individuals musthave a financial incentive to undertakethe costs, risks, and efforts of developingnew knowledge. Not surprisingly, biggerincentives lead to the production ofmore knowledge than do smaller incen-tives. A recent change allowing patentson plants, for example, has led to an ex-plosion of new developments.

As the government role in R&D fades,the need for stronger private incentivesgrows. The standard incentive is to giveinventors a monopoly on the right toproduce the products that can be createdwith their knowledge – a right that theycan use or sell. Whether we like it ornot, the corollary of fading government efforts isthe need for stronger private monopoly rights.

At the same time, once any piece of knowledgeexists, the social incentives are reversed 180 de-grees. The wider the use and the faster the distribu-tion of that new knowledge, the greater the benefitto society. Free usage leads to the widest and fastestdistribution. For this reason, whenever anyone hasa really important patent it is often suggested thatantitrust laws should be used to take away the mo-nopoly rights that have been bestowed by thepatent laws.

Any system of intellectual property rights mustmake a trade-off between these two inherently con-flicting objectives – more production versus fasterdistribution. There is no single right answer abouthow to make that trade-off. It is a judgment call.But it is a call that should not be made by a judge.

Judges do not think about what makes sense fromthe perspective of accelerating technological andeconomic progress. Their concern is with how newareas of technology can be inserted into the legal

framework with the least disruption to existing interpretations. Such lazy law-writing practices do not make for good economics or sensible tech-nology policies. The right approach would be to in-vestigate the underlying economics of an industryin order to determine what incentives are necessaryfor its successful development. Those are socioeco-nomic decisions that should be made in our legisla-tures, not in our courts.

In our modern economies, private monopolypower should be less worrisome than it was whenour patent system was originally set up. As alterna-



tive technologies proliferate, there are fewer andfewer products with inelastic demand curves thatwould allow companies to raise their prices arbitrar-ily and earn monopoly returns. Today customershave many alternatives – very few products are ne-cessities that lack close substitutes. And small

amounts of monopoly power, which translate intoslightly higher prices, simply don’t matter as muchwith today’s higher incomes as they did in the past.

As monopoly power wanes and social interests inencouraging the development of new intellectualproperty grow, the balance in our system should shifttoward encouraging the production of new knowl-edge and be less concerned about the free distribu-tion of existing knowledge. Tighter or longer-termpatents and copyrights would seem to be warranted.

Laws on intellectual property rights must be en-forceable or they should not be laws. Although theneed for the protection of intellectual property hasnever been greater, the same technologies and de-velopments that have made intellectual propertyrights more central to economic success have alsomade enforcement of those rights much more difficult. Laws can be written, but they are mean-ingless – and should not be written – unless a tech-nological choke point exists to make enforcementis possible. Laws that cannot or will not be enforcedmake for neither good law nor good technologypolicies. The honest end up being suckers who paymore precisely because they are honest. And a lawthat is widely violated leads to disrespect for thelaw and more violations. Put bluntly, if someonecannot think of how a legal right can be enforced, itshould not be a legal right.

The system must be able to determine rights andresolve disputes quickly and efficiently. Many ofthe problems with the patent system flow from thelack of consistent, predictable, rapid, low-cost de-terminations about intellectual property rights anda means of quick, cheap dispute resolution. Thefirst problem is easily solved, at least in part. In theUnited States, people who file for patents pay userfees that exceed the costs incurred by the patent of-fice. Those fees are put into the general budget, andCongress then appropriates funds – less than theamount collected in fees – to run the patent office.

One easy change is to establish a system in whichthe user fees directly finance what they are sup-posed to finance but are set high enough to ensurespeedy decisions. Like an income tax, fees could beadjusted to reflect the income levels of the appli-cants and equalize the burdens on large corpora-

tions and on small, individual inven-tors. The relevant agencies should be taken out of the civil service sys-tem, and salaries should be set highenough to attract and keep the peo-ple who could run the system effi-ciently and speedily.

For inventors of technologies thathave very short useful lives, making

use of today’s system of dispute resolution – withits delayed, lengthy, and expensive court trials –is equivalent to losing one’s rights. In seeking an alternative approach, the U.S. system for settlingwater rights disputes in irrigated areas might serveas a model. Federal water masters are given the au-thority to allocate water in dry years and to settledisputes quickly because crops die quickly.

One Size Doesn’t Fit AllAlthough simplicity can be a powerful virtue,builders of a new system must reconcile a numberof competing interests and allow for some criticaldistinctions.

Public Versus Private Knowledge. To accomplishsociety’s interest in expanding knowledge as rapidlyas possible, certain classes of knowledge ought to bein the public domain and freely available to every-one. One can argue that basic scientific knowledgeshould be public while those who develop productsfrom that knowledge should receive private monop-oly rights. But the line between scientific principlesand the knowledge that is necessary to allow prod-ucts to be built is, in practice, hard to draw. Hereagain, the issue is a judgment call.

There are other reasons for keeping knowledge inthe public domain. A society may determine, forexample, that its interests in educating the youngjustify placing some types of knowledge – educa-tional technologies, for example – in the public do-main. And egalitarian democracies may want, say,lifesaving technologies to be generally available toeveryone, not just to the rich.

Such considerations mean that we need princi-ples to determine when knowledge should be pub-licly available and when it should be kept private.This does not mean that patents or copyrightsshould be forbidden in areas where there is a socialinterest in allowing general access to knowledge at


In no other market do we decidethat everyone wants – and mustbuy – exactly the same product.


little or no cost. That would be unacceptable be-cause no one would have the incentive to producesuch generally useful knowledge. Inventors whohappened upon such discoveries would have anenormous incentive to keep them secret. We mustensure that those who generate knowledge in thepublic domain get paid.

The solution to this problem is found not in thepatent system itself but in the establishment ofsome public agency – perhaps a branch of the Na-tional Science Foundation. Armed withfunds and the power of eminent domain,the agency could decide to buy knowl-edge for the public’s use when it seemedwarranted. If the seller would not agreeto sell at a reasonable price, adjudicationprinciples very similar to those used ineminent domain land-acquisition pro-ceedings could be used.

Developed Versus Developing Coun-tries. In a global economy, a global sys-tem of intellectual property rights isneeded. This system must reflect theneeds both of countries that are devel-oping and of those that have developed.The problem is similar to the one con-cerning which types of knowledgeshould be in the public domain in thedeveloped world. But the Third World’sneed to get low-cost pharmaceuticals isnot equivalent to its need for low-costCDs. Any system that treats such needsequally, as our current system does, isneither a good nor a viable system. De-pending on the income level of thecountry and the importance of the tech-nologies to basic human needs, differentpredetermined levels of fees might beinternationally imposed on those whowant to use what others have invented.

Different Industries, Types of Knowl-edge, Types of Inventors, and Types ofPatents. The optimal patent system willnot be the same for all industries, all types ofknowledge, or all types of inventors. Consider, forexample, the electronics industry and the pharma-ceutical industry. The first wants speed and short-term protection because most of its money isearned soon after new knowledge is developed. Thesecond wants long-term protection because most ofits money is earned after a long period of testing toprove a drug’s effectiveness and the absence of ad-verse side effects.

Different types of advances in knowledge shouldbe distinguished from one another and alternative


patents awarded on that basis. Again, fundamentaladvances are not equivalent to logical extensions ofexisting knowledge and should not be treated as ifthey were. And individual inventors should not betreated in the same way as large corporations. Asnoted above, filing fees could be linked to incomein order to level the playing field for all inventors.

Finally, inventors should be able to choose from aselection of patents or copyrights. A differentiatedsystem might offer different levels of monopoly

rights to inventors. Costs, speed of issuance, anddispute-settlement parameters could vary. Let fil-ers decide what type of patent they wish to have. Inno other market do we decide that everyone wants –and must buy – exactly the same product.

The world’s current one-dimensional system mustbe overhauled to create a more differentiated one.Trying to squeeze today’s developments into yes-terday’s system of intellectual property rights sim-ply won’t work. One size does not fit all.Reprint 97510 To place an order, call 800-988-0886.

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