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Patents in the United States

Since the turn of global power in the Second World War the United States has been known as the powerhouse of innovation, particularly in consumer products. The inventor’s tradition of course stretches much further back in time, and since that time patents have played an important role in the commercial success of such inventions. Alexander Graham Bell was not the only person seeking to create a device such as what we now know as the telephone. However, in 1876 he obtained the patent for an “apparatus for transmitting vocal or other sounds telegraphically”. Without such a patent it may well have been that we would crediting another with the invention of the telephone today.

The United States has a long history with intellectual property and this is reflected in their strong presence in international patent applications even today. Although their dominance has slightly waned as other countries have expanded their patent portfolios, the United States still has the highest number of patents in force.

Moreover, the United States is considered to be the country with the best environment for intellectual property. This is according to the GIPC International Intellectual Property Index, an index that ranks countries according to the strength of their legislative, regulatory, and administrative strength of their intellectual property environment. That said, the United States is heavily outpaced by China in regards to the number of patents filed to their respective national patent offices. Although it may reflect the process of catching up to the United States, it also suggests that the United States is far from being the only giant of innovation.

Although the U.S. system is established with protecting the interests of innovators in mind, patents do of course still expire. Such expiries allow for patents that are not being pursued, often by large companies, to reenter into the common market. This has led to large revenue loses for major firms in the pharmaceutical industry in the United States. For example, the patent for Abilify, a drug used to treat schizophrenia and bipolar disorder, expired in 2014. The expiry meant that the firms producing the drug no longer controlled the production rights leading to a revenue loss of 3.8 billion U.S. dollars in 2014. From a consumer perspective this can often have positive effects as competition enters the market and large pharmaceutical companies cannot take advantage of a monopoly position.


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