ABSTRACT
The 'economic theories', the arguments and the rationale behind the presently-existing patent system have been developed almost exclusively by patent lawyers and jurists supported by business executives. Thoughtful economic analysis has been quite absent.1 In its place broad generalizations, based mostly on legal grounds-though some are theological, such as the principle of 'natural rights' of inventors-underlie the presently accepted notions about industrial property privileges The 19th century debate on the patent system which came close to abolishing patents in England and Germany and actually temporarily abolished them in other countries, marked the end of the active participation by economists in the subject. The absence of serious economic analysis is surprising, given that patents are often a powerful economic tool. They may determine or sometimes hinder the possibilities of further technological advancement, influence or retard the timing of commercial introduction of inventions (for example, in the case of fluorescent lighting, methyl methacrilate
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plastics and cement carbide). They may also underpin particular structures of technological or commercial control in certain sectors (e.g. as in synthetic rubber, or in some types of synthetic fibres). Sometimes patents might determine the world-wide dominance of a whole branch of an industry by certain firms (this is the case at present in the pharmaceutical industry; an earlier example is the classical cartel case of the 'Europaischer Verband der Flaschenfabriken' involving an automatic machine for making glass bottles).
