Cold fusion and property rights - criticism of U.S. patent laws

IT WOULD HAVE BEEN nice, but the odds were against it from the start. Most technological change is evolutionary, the product of many small accretions of knowledge rather than a single quantum leap forward such as the Utah fusion experiment originally appeared to be. And if data on patents issued in this country are any indication, new technologies are increasingly likely to be spawned abroad rather than in the United States:

U.S. PATENTS GRANTED, By COUNTRY OF INVENTOR

All Other Foreign

U.S. Japan Countries Share (%)

1971 55,984 4,029 18,304 28.5

1980 37,356 7,124 17,339 39.6

1983 32,871 8,793 15,196 42.2

1987 47,711 17,288 24,386 46.6

1988 44,570 16,984 22,718 47.1

In 1983 there were 23,000 fewer patents granted to U.S. nationals than in 1971, a 40 per cent decline, and although there has been a recovery during the last five years, the figure remains well below its earlier peak. Meanwhile, the share of U.S. patents going to foreign inventors, which had been as low as 18.6 per cent in 1963, approached 50 per cent last year.

The decline in patents granted to U.S. inventors does not mean we are devoting less of our resources to basic research and development. In fact R&D spending in 1983, the low year for U.S. patent grants, was 40 per cent higher in real terms than in 1971, the peak year for patents. R&D spending continues to rise, with last year's $126 billion representing a 24 per cent real increase ftom 1983; this country now spends more on R&D than Japan, West Germany, France, and the UK combined, according to the National Science Foundation.

To a great extent the patent decline reflects shortcomings of the patent system itself, particularly its failure adequately to protect the intellectual property rights of U.S. innovators. A loophole in our trade laws, for example, allows foreigners to use patented U.S. production processes without the approval of the American patent-holder. Domestic competitors can also violate the property rights of the patent-holder by going abroad to use the patented technology, and shipping the goods back to the United States. The laws of virtually every other major industrialized country, including Japan, forbid this practice.

In theory, patent laws allow inventors to make their ideas public without relinquishing the economic benefits, conferring upon them the right to exclude others ftom making, selling, or otherwise using their invention or discovery for 17 years. In practice the cumbersome and often expensive patent-review process prevents many patented ideas from reaching the marketplace before well over half of the 17-year period has gone by. Understandably many firms and individuals are opting to keep new processes secret rather than to reveal them via the patent process, thereby denying society access to bits of technological knowledge some of which, if made available to the right people, might make the next fusion experiment a success.

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