Consumers and buyers don’t like monopolies because they don’t give us choice. Yet when the government provides someone with a patent, isn’t that exactly what they’re doing, creating a monopoly? N.C. State University economist Mike Walden weighs in.
“The rationale for this — and it’s been around a long time, and most countries do it — is that developing a new idea or developing an invention is very expensive, and there’s no assurance of payoff. There are lots of examples of things out there that people have invented and they’ve just not paid off. And yet we need ideas and inventions. You can make the argument that’s the only way we get ahead in our life economically is by having new inventions and new technologies develop which will improve our standard of living.
“So, what are you going to do to encourage people to … have a new idea and have an invention and put their time and effort into it, not knowing if it’s going to pay off? Well … if they do come up with something, give them exclusive … rights over that invention for a period of time. And that’s what we call a patent.
“Usually that period of time is around 20 years. And very interesting … this did not make headlines, but just recently … the U.S. Congress in a very bipartisan fashion just renewed our patent law. They tweaked it a little bit, but they just renewed our patent law for the nation. And what … that tells me — in the sense that it was very bipartisan, you didn’t see a lot of bickering over that — is that our elected officials know how crucial this is to the future of our country — to, yes, give someone … an exclusive right to a product or an invention for a short period of time, in order to encourage that process from continuing.”