Monday, February 22, 2010

Do patents help innovation ?

The problem with answering this question is that when a company has a patent, we hear about it, particularly if the patent leads to money.

However, we don't hear about all the cases where something did not happen, because action was blocked by a patent.
This is similar to the problem discovered a few years ago in how mutual funds were being portrayed; the success of funds was overstated because all the funds that failed were not included in the calculation ( survivorship bias, see wikipedia

In the biotech industry, one can certainly point to huge success stories driven by patents - Amgen and Erythropoietin; Genzyme; Cambridge Antibody Technologys.

However, in this area, one can also point to huge success stories that occured because of open availability, the absecne of patnets: 2hybrid, GFP.

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