Intellectual property spurs innovation and technological progress – Business Day (registration)

Between the 1920s and 1940s, huge advances in medical procedures were made, including discoveries such as penicillin, sulpha drugs, bacitracin, streptomycin and chloroquine. In the post-Second World War years, such drugs became widely available and their application brought about the remarkable decline in the crude death rates experienced in many developing countries. By the 1950s and 1960s, fewer and fewer children and young people were succumbing to the easily preventable diseases that, historically, had depressed the health indicators of developing nations. Throughout the world, life expectancy was on the rise.

This process continues today. New drugs and medicines invented in one place are made available throughout the world via international markets. Most drugs start off protected by patents which eventually expire and open the market for generic competition. As a result, many off-patent medicines are available at extremely low prices, allowing people in poorer countries to benefit from the knowledge and innovation of more affluent countries. Recent examples of this include antiretroviral drugs, statins and insulin, as well as neo-natal intensive care units, kidney dialysis equipment, screening equipment and myriad other modern medical devices.

Many patented drugs are also subject to competition from other medicines in the same class, which puts downward pressure on price, and the strategy of price differentiation practised by manufacturers allows many developing countries to access patented drugs at prices close to the cost of production or for free.

Patent laws were developed to encourage people to share their inventions with others for the benefit of all. The logic was obvious: if people could own the right to their creative endeavours they would earn more by sharing them with others rather than by concealing them. Innovations would spread more rapidly to the benefit of society. Perceptive entrepreneurs would recognise their potential and develop them further. As competition and financial rewards build up, it encourages more and more people to invest in innovation.

Countries that followed the patent law path went on to become the worlds first advanced countries, after being, at the time, less advanced than those countries that now doubt the wisdom of patent laws. For a country, such as SA, that aspires to reduce poverty and boost income levels, innovation is a critical cornerstone for economic growth. Innovators and creators need to be able to secure their investment in developing their creations or they simply do not create. They certainly will not invest in commercialising and bringing products to market if they can freely be stolen and copied.

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Intellectual property spurs innovation and technological progress - Business Day (registration)