Patents and data-sharing in public science

Richard Nelson's The Simple Economics of Basic Scientific Research (1959) and Kenneth Arrow's Economic Welfare and the Allocation of Resources for Invention (1962) presented the basic analytical tools still used to understand the patent system. Two subsequent changes-one primarily legal and the other primarily technological-represent a sufficient departure from the prior state of the world as to call for ongoing re-examination of some old assumptions about the economics of R&D. First, an increase over time in the appropriability (and appropriation) of basic research results through the patent system raises new questions about the role of government funding. Second, the revolution in information technology (IT) and information networks has had reverberations outside the law of intellectual property in the evolving norms of the scientific community regarding data-sharing. This article examines these changes with particular attention to their impact on biomedical research, an area in which the patent system is generally thought to be particularly important to the incentives of innovators.