Role of Intellectual Property in Promoting Creativity

Does the Intellectual Property Regime play a role in promoting creativity? As stated by most governments, the objective of patent, copyright, design and other laws is to promote the progress of inventive activity and creativity. Are these laws actually achieving their stated objective? While most of us would like to believe that they are, no empirical study has been able to conclusively prove so far that IP laws actually promote creativity. The logical question that follows would be whether we actually need an IP Regime? The answer is not easy because no study has been able to conclusively prove the converse till date either, that the IP system does NOT work. So, since IP laws already exist, we have learned to live with them, and take advantage of them as much as possible.

A few years ago, we took up a project to assess if patent incentives actually filtered down to the inventors in India. We interviewed about a thousand inventors from different fields such as IT, electronics, biotech, pharma etc. The results were not at all surprising, and were in sync with studies of a similar nature in other countries. More than 70% of inventors stated that financial gain was not an incentive to invent. They voted for love of invention, desire to improve, and recognition, as their primary incentives. Why then, do we give so much importance to the patent system?

Investment is an important factor for inventive activity in several fields such as chemistry, pharma, biotech etc. and patent exclusivity incentivises it. Besides, several businesses benefit substantially from the patent system, and derive substantial profits from it. Does that mean that the patent system is only for business benefit? Well, many would argue for, and several against.

Only one out of a hundred patents actually makes money for a business, and most companies give financial rewards to inventors for patent activity. Today, the average financial rewards to inventors ranges from INR 25,000-1,00,000, paid at the time of filing/grant, with only a few exceptions. A comment on their adequacy and their role in encouraging inventors is not necessary. It is worthwhile to state this, though:

Many studies have shown that the following incentives work better than financial rewards to encourage inventors:

a. Amicable work environment
b. Favourable personnel treatment
c. Recognition
d. Good facilities

Unfortunately, most businesses with incentive schemes, do not give enough importance to these aspects as much as they do to financial rewards. Most businesses, lost in their profit making spree, forget that money does not matter to many. Patent laws of several countries like Germany and Japan, among others, mandate inventor compensation, while some of them even define the extent of payment based on the success of an invention in the market. Countries like the USA, India etc., do not have any such mandates in place, and it is up to a company to decide. India has moved in that direction for authors of works incorporated in films, but will be done for inventors?

So, is the IP system really encouraging to the creator, and through him, creativity?

References: Here, here, here, here and here

Image Source/Attribution: here (This image is in public domain)