MOTIVATIONS TO PATENT: THE CASE OF PHARMACEUTICALS

Abstract

The literature reports that patents are commonly seen as isolating mechanisms. But it also points that patents are of limited effectiveness against copying. The purpose of this paper is to identify why pharmaceutical firms file patent applications despite the well known limitations of patents as protective devices. A qualitative approach was used to investigate this topic, and the results are based upon six case studies of pharmaceutical organizations established in the United Kingdom. A common response on why firms engage in the patenting process was the long development time of a new product, and the costs associated with that. Thus, the main purpose of pursuing patents was to protect inventions from copying. In addition, our findings revealed that the motivations to patent also encompass their use: i) to deter entry, ii) to enhance appropriability conditions, iii) to secure royalty income, iv) to use in technology negotiations, v) to influence investors perception, vi) to signal to others, and vii) (apparently to a lesser degree) to incentivise researchers.