Patent it or keep it a secret?
Conventionally, the way to protect an invention is by patenting it. However, this seems to leave a window open for an individual in a less lawful country as it is less secure this way. Secrets are not secure, as hackers have become cunning, like China for instance has been reported to use thousands of hackers to steal foreign secrets. Unfortunately, it is hard to notice when these secrets have their way out, not until the Economic Espionage Act (EEA) made theft of commercial secrets a federal crime, several individuals were taking advantage of this loophole especially through insiders given the sensitive information that they snuffle out. Diplomatic efforts, a new class of “economic sensitive” patents, and tougher laws have been enforced in a mild attempt to fight this ill.
Intellectual Property Rights (IPRs) are known to stimulate research and development efforts as well as probing into the much-needed foreign investment. If not protected the expected output yield is reduced by losses due to piracy and imitation. This can be related to the slow growth of the developing countries, but if these growing countries strengthen their IPRs in order to enhance innovation, creativity, and growth result to positive outcomes. Meanwhile, leaking of secrets and stealing of patents is bound to have consequences on the Gross Domestic Product (GDP) of these countries as explained below.
Firstly, new products are made available to the market from both domestic and foreign produced goods thus enriching the economy of the “stealing” country. Consequently, an increase in products in the market implies that there is an increase in investment into the same market through subcomponents, such as, fixed investments, and change in private inventories. This also raises the expectations of consumption, all of these shifting the GDP upwards.
Secondly, foreign investment in the protected environment would be more inviting to foreign firms and as a result a greater flow of technology transfer to the “stealing” country. This is bound to increase the net exports in the given country which when added to the model of generating the GDP, raises final output as it literally implies more exports have been made compared to imports. This means good businesses.
Thirdly, indigenous industries in the “stealing” country would be aided by an inflow of new technologies. Therefore, producers adopting new technologies would benefit from lower production costs, which may be passed to consumers in the form of lower prices. Unfortunately, this leads to a reduction in the GDP as the national consumption (durable and non-durable goods) is minimized.
Conclusion
It is clear that patent protection and the GDP of involved countries correlate this to further support the reluctance at times by developing countries to adopt stronger patent laws until they attain a given level of development. Advanced patent protection and enhancement of security for “trade secrets” is proven essential if not vital at some given point, in the development process of a nation. It is however, gradual and comes at a cost as industries prone to imitation are bound to incur increased production costs, which is likely to trickle down to consumers eventually leading to increased costs of living. Is it the way to go? Sure! If we want a world of professionalism and integrity.
Works Cited
Thompson, Mark. A and Rushing, Francis .W, Policy Research Centre, Research Paper No 54, “An Empirical Analysis of the Impact of Patent Protection on Economic Growth.” Atlanta, Georgia. (1995): 2-6. Print
