If, however, this theft is not prevented by legal protection of intellectual property, such as copyright or patent protection, then the painter or the inventor will lose the bulk of his expected return on investment, which he needs in order to survive. It is therefore a second object of patent protection to ensure that inventors receive an adequate remuneration for their creative achievement by preventing the theft of their intellectual property.
If the painter or inventor is no longer able to make a profit from his paintings or inventions, then he will stop painting or carrying out research and seek another means of earning an income. He has no further incentive to paint pictures or make inventions. Hence, it is finally a further object of patent protection to motivate people to engage in innovation.
If the manufacturer of a product that she has developed herself must reckon with the theft of that product, she will no longer make it because the money invested in development would be lost. The situation in the research-based pharmaceutical industry is by analogy the same as that just briefly outlined.
Can the products manufactured by the innovative pharmaceutical industry easily be stolen? The theft in question is not, of course, of the actual pills themselves (i.e., the tangible asset) but of the creative idea that produced them, in other words the invention, which is something intangible. It is precisely this intangible asset that a patent protects. The nub of the matter therefore is whether people have the incentive to copy an invention that they know, for example, from a publication.
It is a regrettable fact that of all branches of the chemical industry, the research-based pharmaceutical industry is the one most liable to theft of intellectual property. The reason is that the development of a new pharmaceutical product is extremely expensive and that the product has a number of typical properties: it is a specialty for which there is a need and which has a relatively long therapeutic life cycle. The product is one of high added value; it has consumer product characteristics (i.e., it is produced in a large number of units, each of which is relatively inexpensive and easily transportable). Last but not least, anyone with an elementary knowledge of chemistry and pharmacology can imitate most of these products at a fraction of the enormous costs incurred by the creator of the original product. For this reason, the pharmaceutical industry is a sector of industry that must have a key interest in securing protection for its innovations. A lead over the competition must be safeguarded by law; otherwise it is impossible to achieve an appropriate return on investment. Profits are necessary for reinvestment in future research. Without such a safeguard against imitation (i.e., without patent protection) there would be no research-based pharmaceutical industry.
The first basic point to be made is therefore that without patent protection, the pharmaceutical industry would make no investments in research.