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Patent Systems as Regulatory Institutions

National patent systems and the international patent rules have evolved in ways that favour transnational corporations and other firms that claim to need patents in order to innovate. The possibility that at least some of the rule changes have been made at the expense of less powerful actors including consumers and developing countries makes it timely to ask such questions as: Why were the changes made in the first place? Why have most attempts to reverse them failed? Has the patent system always been vulnerable to regulatory capture? And is it necessarily the case that if there are winners there must always be losers? This article adopts a case study approach to argue that the search for plausible answers should begin by treating patent systems for analytical purposes as economic institutions whose evolution cannot in most cases adequately be explained in terms of the objective, well-informed and public spirited calculus of judges and policy makers. In doing so, it also suggests that the patent system itself has been fundamentally shaped from a very early stage by interest group pressure. On the other hand, such interest group pressure may not be decisive in determining outcomes, and may not even be present in all cases. Indeed, even in the apparent absence of commercial interest group pressure, institutionalism can probably explain most if not all of the reforms made. Finally, while a reform may substantially benefit one interest group and have considerable implications for the interests of many other people, patent regulation should not be perceived as a zero-sum game.