What Proportion of Knowledge is Patented?

TL;DR

This paper investigates the proportion of technical knowledge that is patented, analyzing economic and informational factors, and discusses how patenting influences innovation, knowledge dissemination, and industry practices.

Contribution

It provides an empirical and theoretical analysis of the fraction of knowledge that is patented and explores the implications for innovation and information flow.

Findings

Only a small fraction of patentable inventions are patented.

Patenting is an exception rather than the norm across industries.

Patent law's disclosure requirements balance innovation incentives and knowledge sharing.

Abstract

This article examines the proportion of technical knowledge that is eventually patented and discusses implications for innovation. Drawing from economic theory and information science, the study considers a continuum from raw data to applied understanding, while distinguishing between patentable inventions and other types of knowledge. The article explains that although the patent system is designed to incentivize the creation of economically valuable technology, only a small fraction of patentable inventions receive patent protection. Empirical evidence from surveys and historical data reveal that patenting remains an exception rather than a rule in many, but not all, industries. Furthermore, the article explores the trade-offs inherent in public disclosure requirements in patent law, which facilitate knowledge dissemination and may aid competitors. In doing so, it highlights the critical balance between rewarding inventors and preserving the free flow of knowledge, ultimately underscoring the complex role patents play in modern innovation ecosystems.