Patents and Medical Biotechnology: An Empirical Analysis of Issues Facing the Australian Industry

This occasional paper (Centre for Law and Genetics Occasional Paper Series, No 6) addresses the ongoing debate both within Australia and internationally about the ways in which patents impact on the medical biotechnology industry. The underlying purpose of the patent system is to encourage innovation by granting the patent holder a temporary monopoly over the patented invention. However, patents can also have a detrimental effect on innovation, for example, by stifling the free flow of information or increasing transaction costs. Gene patents and broadly applicable research tool patents are of particular concern for two main reasons. First, if individual patents are licensed on a restrictive basis, access to broadly applicable foundational technology could be blocked, impeding downstream research and development. Secondly, if it is necessary to enter into licence negotiations over multiple patents, the pace of innovation could be delayed, creating what has become known as an anticommons. This study uses empirical survey evidence from the Australian medical biotechnology industry to assess these concerns in Australia.