Non-market good

To begin, a market-based platform cannot be expected to provide adequate incentives for the production of nonmarket goods.89 When a research project is not directed towards an invention that could be commercialized, the exclusive rights conferred by patent law are essentially irrelevant.

One important context where this inherent limitation of the patent system is evident is basic research—research carried out for the advancement of scientific knowledge without a specific practical application in view.90 Thus, those who pursue basic research generally do not do so in order to gain market profits.91 In fact, the results of basic research are often too abstract in order to have an appropriable market value.92 Thus, as stated by Richard Nelson: “It seems clear that, were the field of basic research left exclusively to private firms operating independently of each other and selling in competitive markets, profit incentives would not draw so large a quantity of resources to basic research as is socially desirable.”93 It is therefore easy to understand why basic scientific research is commonly funded directly by governments outside the patent system.94

This is highly relevant in regard to environmental innovation, which relies, to a great extent, on basic scientific research in the relevant scientific disciplines.95 In the context of climate change, in particular, there is a need for an ongoing inquiry with respect to the magnitude, rate, and mechanisms of climate change; the impact of climate change on various ecological systems; and other fundamental questions.96 Absent solid understanding of these issues, one cannot expect R&D to be applied towards the right directions and result in the successful development of technological solutions that significantly impact the state of the environment or the ability of humankind to adapt to climate change.97 As basic scientific research cannot be incentivized by the patent system, it must be adequately funded in other ways.98