The importance of patents to innovation: updated cross-industry comparisons with biopharmaceuticals.

Patents have long been considered essential incentives to foster innovation, particularly the development of new prescription drugs, due to the lengthy, costly, and risky nature of the research and development (R&D) process as compared to the lower levels of investment and risk associated with generic drug entry. Compared with other forms of intellectual property protection (such as trade secrets, trademarks, and copyrights) and strategic complementary assets (such as lead time, sales and service, and manufacturing advantages), researchers focused on the US since the 1980s consistently have found patents to be relatively more important to R&D in pharmaceuticals than in other industries. Despite many changes in the market and patent landscape, the most recent data from government surveys and annual surveys of licensing professionals continue to find differential and high importance of patents to biopharmaceutical innovation.