Research Monopolies and Development Monopolies

Here is one thing that I don’t understand about the standard distinction between research and development and how all this fits into ideas about commercialization.

Let’s say that research produces a result that is immediately useful. Isn’t the research then development? And consider development. Let’s say I have got an invention–new, useful, and non-obvious, patentable subject matter, and all that. It’s already useful, but it’s not in product form yet. So am I doing “development” to make it into a product?

Let’s say so. But what does that mean? If I have to mess around with variations–different materials, different designs, adapting it to manufacturing processes, making it easy for someone to use, making it safe, complying with regulations–then what happens? If all this messing around is not obvious, then am I doing research again? And if I figure something out that’s not obvious, then aren’t I on the borders of inventing all over again–this time more interesting stuff because it’s supposed to be even more useful than the first stuff?

And if the work before me is obvious–just a matter of doing–then what’s the big deal with development? It’s just standard stuff. Some tests and QA, but mostly just doing the obvious. Why does such development need funding–or a definition?

Consider then a common university patent administrator claim about exclusive licensing. Companies require monopolies to “call forth the risk capital” to develop an invention to the point of practical application. Or so that’s the claim. But if that development using risk capital is not obvious, then there will be more inventions, more research, more exclusive positions to be had (even trade secrets, which exclude in their own way, too). The development will include more research, not just more development. Why does a company need an exclusive license (or, more likely, an assignment misnamed as an exclusive license)? If the company will develop more IP positions, then its monopoly will be based on what it develops. Why isn’t that good enough?

And if the company won’t develop any new IP in “development,” then isn’t the use of the invention straightforward, and any company that sees utility of the invention can practice it without any serious additional work?

You see the problem in the university patent administrators’ claim about the necessity of monopolies, don’t you? If the risk capital requires non-obvious work, then the development will (often, invariably, necessarily) result in new IP. The new IP then may anchor a private monopoly. If the risk capital does not require non-obvious work, then there’s no actual public policy justification for the initial monopoly–anyone can practice the initial invention if they want to, and any development is competitive–whoever establishes secondary IP positions for a given line of product development can prevent others from following that line. But since new IP positions are often variations on a theme, another developer might follow a different line of development, form different secondary IP, and have a shot at the same market.

Even if there’s no public policy reason for creating monopolies on initial research inventions, there are still reasons to do so if the issue is money or power. A patent holder can exclude others to gain the advantage of monopoly pricing, to prevent others from practicing what they would otherwise jump at practicing, or to prevent others from practicing in a different way, in a different market–at least preventing them until they have paid or cross-licensed their new stuff.

If the monopoly is necessary to call for risk capital to develop a product, then the development will invariably involve new IP that protects the product as developed. Thus, the monopoly actually isn’t necessary. And if the monopoly isn’t necessary in the first place, well then we are done before we start.

Why then is it that university patent administrators argue that the initial private monopoly is so necessary? If it’s not the compound but its development that matters, then why isn’t the IP of the development sufficient? What does the public gain by a university administrator tying up the compound itself as well? Furthermore–what does the public gain when it is not just a single compound that gets put behind a patent monopoly but rather a whole class of compounds–hundreds, maybe thousands? Why should a company seeking a monopoly on whatever it may develop also get to control a monopoly on hundreds to thousands of compounds that it likely will never develop? How is the public served by such a thing?

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