The Hoax of Invention History
[Chapter 8, live blog]
All popular business histories are replete with lies. Or to be more charitable, they are filled with untruths based on a stupid version of cause and effect: inventions happen because people take out a patent on them. This assumption is hardly ever questioned in the mainline literature. Writers look through patent records and assume that they are a record of technological advance.
The truth is far messier. The patent records are a snap shot of those who filed a patent, and nothing more.
It is because of patent-based historiography that people believe that the Wright Brothers invented the airplane, when in fact they made only a tiny contribution of combining wing warping with a rudder. It was Sir George Cayley in Britain and Otto Lilienthal of Germany who did the bulk of the work of inventing the airplane. But it was the Wright Brothers who applied for the patent and quickly used it against Glenn Curtiss who improved wing warping with movable control surfaces.
So it was with the radio, which is conventionally attributed to Guglielmo Marconi, the Nobel Prize winner in 1909. What about the contribution of Oliver Lodge in the UK or the forgotten genius Nikola Tesla or the Russian Aleksander Popov or the British Naval engineer Henry B. Jackson?
All Marconi did was ground the antenna, and also manage to win the patent wars thanks to the deep pockets of fellow aristocrat and partner Andrew Carnegie. Fifty years after the patent was granted, the Supreme Court conceded that it was unjustly given but by then, the other claimants were dead! (Marconi was consistent at least: he was a big supporter of fascism in Italy.)
Then there is the famous myth about Alexander Bell that displaced knowledge of the real inventor of the telephone, Antonio Meucci. But Meucci couldn't afford the fee to file the patent. This oversight was fixed in a 2002 declaration by the U.S. Congress but just a bit too late.
There are an unlimited number of such cases that lead to fundamental questioning of the relationship between patents and innovation. It turns out that there are very few great leaps forward in history that are the result of a single Prometheus-style figure. Most advances are the cooperative work of many factors alive in society, with individuals improving things a bit at a time until all those improvements come together in a marketable form.
The patent has essentially nothing to do with it. And Boldin and Levine are hardly the first to point this out. You might be surprised to know that many academic economists have done empirical studies on the relationship between patents and economic advance. Of all those studies they reviewed, 23 in total, they found none that could establish a strong relationship and many that found negative relationships between patents and development: that is, that patents actually impede progress.
What they further find is that the main contribution of patents is to increase the production of patents. But that is not the same as increasing invention, for the main use of the patent is to put a stop to any similar innovation that builds upon and improves the patented thing. The patent holder rides high for a time but history is actually frozen in place. The process of imitation and sharing that led to the innovation becomes formalized, centralized, fixed, and stagnant.
They examine the case of databases, which are patented in Europe but not in the United States. The U.S. wins the competition easily. The American dominance of database production runs 2.5:1 compared with Europe. To me, this helps explain what many have noticed, namely that Europe is seriously behind in its digitalization and organization of information, with most Europeans possessing oddly antiquated intellectual capital concerning even the most basic databasing skills. Now we know: it's not their fault; it's the fault of their IP regimes.
Thus does chapter eight of Against Intellectual Monopoly discuss all the existing literature that makes the case--on purpose or inadvertently--against patents. It is packed with empirical detail, but in particular I'm intrigued at their review of the history of musical composition in England Europe in the 18th and 19th centuries.
They find that the countries with no copyright legislation (German territories in particular) had more composer per capita than countries like England. And in England in particular, the 1750 law had the effect of bringing the entire composition industry to a grinding halt. And later, when copyright was imposed on Italy and France, it led to a diminution of composer effort.
This demonstration is intriguing beyond most music historians can possibly imagine. It solves a long-running mystery as how it came to be that the most musically educated population in the world, one with a massive history of compositional genius, would suddenly fail to participate in the progress that defined the age of Mozart and Beethoven. These historians just haven't known where to look for clues.
This chapter makes me sad for all the great innovators whose names are not in the history books, and even sadder for all of us who have been denied great innovations because some fool managed to make it to the patent office first only to use that privilege to kill his competition the next day. Far from encouraged innovation, patent and copyright have managed to kill off so many wonderful works of art and technologies that it boggles the mind. In order to understand this, you have to look beyond the patent records. You have to train yourself to look at the unseen costs of government regulation.
Bookmark/Share
|
Comments (72)
Comments (72)
I Hate Taxes
Inventions happen because of NEEDS.
But then again, most "inventions" aren't really inventions but rather applications.
If patents didn't exists, most "inventions" would simply be regarded as applications of already existing stuff made to work differently.
And perversely, most applicators are being forced to patent their applications and call them "inventions" out of the fear that someone else will patent their application and prevent them from using it.
Published: February 3, 2009 3:35 PM
David@TR
Fascinating summary of historical inventions and patents. While I was aware of the idea of the stepping stone process of invention, I didn't know about many of the particular examples cited.
And the end note about composers and patents is highly relevant to the current discussions of musicians' copyright extension, etc.
Published: February 3, 2009 4:02 PM
Joseph P Grymin CPA
Well the lawyers would not like an "open source world" any more than they would like a truly "equal" world. Bad for their business of protecting your interests, which actually results in going after someone else's interest.
One lawyer in a small town will starve, two will prosper!
Published: February 3, 2009 5:12 PM
Arend
@ I Hate Taxes who said "But then again, most "inventions" aren't really inventions but rather applications."
That's why a common defintion for an innovation is... an invention implemented into a good or service and successfully introduced to the market.
I think conceptually both inventions and innovations are new combinations of resources, knowledge et cetera. The only difference between a mere invention and an innovation is that the former never found a place in consumer preference.
Published: February 3, 2009 5:14 PM
prettyskin
Eye opening points. Deregulate innovation, not so fast. Unjust practices created regulations. They just don't fall from some sky fairy.
Patents put innovators speediness ahead of their accomplishments and is unreasonable for anyone to hold the patent title that notes the 'invention' because it is fear mongers with deep pockets way of challenging the unestablished innovator.
Published: February 3, 2009 6:14 PM
Darryl W. Perry
It was actually Nathan Stubblefield, a farmer from Kentucky, that invented broadcasting. He invented a device to transmit the human voice, while others were merely transmitting "Morse Code". But, again, because he didn't have "deep pockets"; his inventions weren't as "useful" as those of Marconi, Tesla, Popov and the rest.
Published: February 3, 2009 6:23 PM
Andras
Jeffrey,
Your interpretation of 18th and 19th century European (musical) history just does not add up.
I have a different interpretation as we discussed before in e-mails:
The appearance of the professional musician, independent from royal or church mentors (Liszt as first) at 1870-s strangely coincides with the enforcing of continental copyright laws. I wouldn't go as far as to claim that as the only reason but it might have had some effect. Although I understand that it rather served the publishers than the artists (whom are wasn't famous for their financial genius anyway), but their consent was still a must as, at the beginning, enticing the artists was very important.
Published: February 3, 2009 7:07 PM
Giles
Thanks for a great series of posts! This one was particularly interesting for me, because my fiancee and I had been wondering recently what it might have been that killed English classical music after Handel (d 1759). At least now we have a suspect...
Published: February 3, 2009 7:43 PM
Vanmind
Yes indeed, I came up with the Information Age's greatest innovation back in the early 90's, yet I have always been poor and thus I subsequently saw others market similar ideas (discovered independently though at a later date) and establish multi-billion dollar companies.
Now I'm unemployed once again and broke...
Published: February 3, 2009 7:47 PM
engine44
Let me get this straight. If I have invented a physical product. Spent two years of my time. Spent well over a hundred thousand dollars in research and developement. Spent fifty thousand dollars for a machinist to make an injection mold for me. Hired a chemist to help me work out a formula.
Spent more money to build a prototype. And, the product fulfills a need in the marketplace. Your telling me I don't have a right to have a patent on my invention?
If I don't have patent rights. There is no way in hell I can even come to market. There are major equipment manufacturers who will take my invention, copy it and sell the hell out of it. There is no way I can manufacture this with out first obtaining the patent since I will be in an entry level position in the marketplace. I also will not be able to attract investment capital with out the patent.
It seems to me that there would be no money spent in research and development on ideas by entry level participants in the market place without patent rights.
Published: February 3, 2009 8:06 PM
Francisco Torres
Let me get this straight[:] If I have invented a physical product[,] [s]pent two years of my time [in it,] [s]pent well over a hundred thousand dollars in research and development[,] [s]pent fifty thousand dollars for a machinist to make an injection mold for me[,] [h]ired a chemist to help me work out a formula[,] [s]pent more money to build a prototype[,] [a]nd the product fulfills a need in the marketplace. You['re] telling me I don't have a right to have a patent on my invention?
You do not have a right to tell others not to copy your invention, since others would be just arranging their OWN property to look like your invention, but the cogs and parts of YOUR invention are still yours. Yo do have a right to waste money on a piece of paper that says "patent", if that makes you happy.
By the way, the costs of reverse-engineering are just as great (if not greater) as the costs of development for a new product, so your seemingly dramatic progression of expenditures do not say much - you would still have the advantage of being first to arrive at the market, and still enjoy plenty of time before imitators come by.
If I don't have patent rights[,] [t]here is no way in hell I can even come to market.
Why not? It certainly did NOT stop Henry Ford.
Published: February 3, 2009 9:37 PM
engine44
Mr. Torres,
So if I, as a small entrepreneur invented the equivalent
of the turbocharger(a device to greatly increase the horse power of an engine) in my garage. Do I stand any chance at all of competing with any of the big auto manufacturers? They have the facility to make and sell the device at a much cheaper price than I could hope to without the time to develop my own manufacturing capabilities.
If I ever am in this situation, could someone please tell me a business model I could use. Remember, I am not pitting my resources against the guy down the street. I'm competing against the giants of industry.
Oh, by the way, didn't Henry Ford have over 160 patents?
Published: February 3, 2009 10:26 PM
Lonnie E. Holder
Mr. Torres:
I have no idea what drug you are taking, but whatever it is, your brain is not doing so well under its influence. In the world of mechanical inventions, it is nearly always cheaper to make a copy than to develop a design. Copying a design costs a fraction of what it takes to come up with the design in the first place. I would say that copying a mechanical invention is cheaper 100% of the time, but since I have not seen all inventions, I would not wish to be so bold.
Published: February 3, 2009 10:50 PM
'Nuke' Gray
I think the issues can be resolved through property laws.
What you build on your property should be up to you- though I might move if you start to build an atomic bomb!
Who owns the roads? Anarcho-Capitalists leave the question open, but I'm a minarchist. I think that the roads would belong to the local tier of government, which should be turned into an open-to-all company, democratically run by its' citizen-shareholders. This road-owner, like any owner of property, should have the right to dictate the terms of the use of its' property. Thus I think licences are legitimate, wherever 'public' property is utilised, or crossed.
Public-space licences could replace intellectual property laws. These would give a monopoly to a company to advertise an invention or product over public property. Other people could still copy products, but they wouldn't be able to advertise it, at least directly (ads in magazines might not be the same thing.) Open advertising would then be what this law would cover.
No doubt some people will want to tear this idea to pieces, but what do others think?
Published: February 3, 2009 11:10 PM
newson
to engine44:
your question presupposes that the commercial landscape remains unchanged after ip is scrubbed.
naturally you're not going to invest money without substantial measures in place to safeguard your idea. trustworthy businesses, with whom it will pay to contract (subject to confidentiality agreements) will attract inventors, less reliable operators will be shunned.
as no nanny-state is looking after you, you'll have to be responsible for choosing your partners and your contractors more carefully. but again, if there's a demand for trustworthiness ratings, the market will spring up.
maybe if ideas were more freely accessible, the big car makers you've assumed to be a constant may get eaten alive by a multitude of smaller and nimbler competitors.
Published: February 3, 2009 11:51 PM
Gil
Likewise I believe N. Tesla had a number of patents himself.
Published: February 3, 2009 11:55 PM
newson
to le holder:
perhaps you too should actually read the book, and then comment.
copies are made mainly after the initial product has been deemed a commercial success (so the inventor has already been rewarded). otherwise, why bother? there are millions of dud inventions out there, and reverse-engineering does have costs.
whomever gets to market in a timely fashion earns the profits, latecomers don't.
Published: February 4, 2009 12:01 AM
nuke gray
Another point-
if you scrap all patent and copyright laws, won't the creative people move to countries that have IP?
Published: February 4, 2009 12:09 AM
newson
to nick gray:
so what? ideas then migrate to no-ip countries, get commercialized quickly and cheaply and the resulting goods exported back to costly, sclerotic, ip-happy regimes.
which is what happens today, where china gets pressured by the us for being lax on ip protection/enforcement.
Published: February 4, 2009 12:24 AM
engine44
It seems to me that entry of invention into the world of no patent rights would nearly be impossible. The only parties who would attempt this would be those who had manufacturing facilities in place, or monopoly businesses to start with. I'm talking about physical goods here.
The invention is the physical manifistation of my idea.
Without patent rights, my idea gets zero investor capital.
When Ford Motor Co. hears of my invention they already have the manufacturing facility, distribution network and enduser support in place to get the final product to the end user in a very small time frame. They could probably do this at less than 1/2 my cost.
Without patent rights it seems there is no new entry into the market by non-wealthy new entreprenuers.
On a side note, I've witnessed a large equipment manufacturer reverse engineer a prototype( on which they purchased the patent from the inventor) in a matter of minutes. Then they programed machine tools to make an injection mold that was ready the next day.
Published: February 4, 2009 12:33 AM
andras
@newson,
The USSR was a no-IP country. It was a black hole of ideas, it absorbed every practical idea but nothing came out of it. It might be not a coincidence.
You can argue which was first the chicken or the egg.
Published: February 4, 2009 12:44 AM
engine44
newson,
I like the idea of the private contractors to protect ideas and secure resourses.
Published: February 4, 2009 12:53 AM
Francisco Torres
Lonnie,
I have no idea what drug you are taking, but whatever it is, your brain is not doing so well under its influence. In the world of mechanical inventions, it is nearly always cheaper to make a copy than to develop a design.
How many designs have YOU copied? Because I work in the heavy industry (cement), and I know that reverse-engineering is NOT for the faint of heart.
Copying a design costs a fraction of what it takes to come up with the design in the first place.
Depends on the design. The design for the kaleidoscope certainly took very little time to copy, but try copying a grating casting for a raw material pre-heater for cement production - it ain't cheap, and it takes time, and you have to test it first after casting, see if the metallurgy was good. In the meantime, the original designer already had time to reap substantial profits.
Engine44,
Oh, by the way, didn't Henry Ford have over 160 patents?
Not the one for the automobile - again, the fact that there were other cars did not stop Henry Ford from putting his on the market.
Without patent rights it seems there is no new entry into the market by non-wealthy new entrepreneurs
I don't think so: http://www.dklevine.com/papers/ip.ch.4.m1004.pdf
Published: February 4, 2009 12:54 AM
newson
to engine44:
you may be right that inventors initially have to deal with established businesses, and in the transition phase there will be some bitter experiences of inventors being ripped off.
word travels fast, and deals that turn out bad will get plenty of press; reliable co-developers likewise will have people beating a path to their door.
the players and market complexion will change, and vigilance will be the inventor's best ally.
much as would happen if the sec got out of regulating the stock market. people wouldn't be lulled into a sense of false security and there'd probably be no more sharks than today. costs would be lower without the massive "protective" structure, yet with recourse available to contract and fraud law, it wouldn't be a jungle.
Published: February 4, 2009 1:41 AM
Rares Marian
Actually under patent law you could just as easily publish your idea in a journal therefore establishing prior art. This would make your idea unpatentable by anyone else anyways!
IP law is a contradiction. Patents protect applications not inventions. Copyright protects content not ideas. Trademarks protect reputation not names. These are not compatible nor relevant under the same class, intellectual property.
None of it is property. It's just an offer priority ahead of others.
Now some of you who actually have seen a patent would know they are absolutely illegible, that inventors are instructed to not ever look at them to avoid lawsuits, so the purpose, opening up of ideas, is completely unsatisfied and violated.
Published: February 4, 2009 3:35 AM
heuristic
This article is mostly an exercise in disparaging particular famous inventors.
So in this thread first we have heard argument from utility and now argument ad hominem.
I'm still waiting for an argument from ethics!
Published: February 4, 2009 4:26 AM
Nathan
"Let me get this straight. If I have invented a physical product. Spent two years of my time. Spent well over a hundred thousand dollars in research and developement. Spent fifty thousand dollars for a machinist to make an injection mold for me. Hired a chemist to help me work out a formula.
Spent more money to build a prototype. And, the product fulfills a need in the marketplace. Your telling me I don't have a right to have a patent on my invention?
If I don't have patent rights. There is no way in hell I can even come to market. There are major equipment manufacturers who will take my invention, copy it and sell the hell out of it. There is no way I can manufacture this with out first obtaining the patent since I will be in an entry level position in the marketplace. I also will not be able to attract investment capital with out the patent.
It seems to me that there would be no money spent in research and development on ideas by entry level participants in the market place without patent rights."
Sounds like mal-investment. Some say that government throwing money at a problem often accomplishes nothing. Is it not true that patents also encourage money to chase expensive, infeasible, and frankly bad ideas? If the consumers of your invention are not clamoring for the 1% increase in productivity, it is likely your invention should not have been undertaken. The cost of your investment in the invention should not exceed the immediate benefit to the users, a price premium. Without patents, industries would go through a much more fluid, inexpensive, piecemeal improvement.
Published: February 4, 2009 4:55 AM
I Hate Taxes
Engine44,
"Your telling me I don't have a right to have a patent on my invention?"
Your invention is complicated, if you don't spill the beans and don't tell others how you did it, they will have to spend a lot of money and time themselves to reverse engineer and try to find out.
Plus, patents are costly and are just a license to sue. If you are not a multimillionaire, your competitors could copy and sell your products and how will you sue them if you are broke ?
You sue them at YOUR own expenses, not the state's expenses.
Also, you will make more money by actually manufacturing and selling your invention than by patenting it, don't you think ?
Also, the amount of money you spend to build a good should not prevent others to do what they want with their own goods.
No, I am against patents and copyrights.
Published: February 4, 2009 7:03 AM
I Hate Taxes
Rares Marian,
"Actually under patent law you could just as easily publish your idea in a journal therefore establishing prior art. This would make your idea unpatentable by anyone else anyways!"
But you would have to GIVE your invention to everybody else and disclose all your trade secrets.
This is why the patent laws are bad.
Sometimes, keeping a secret is much better than a patent.
But under patent laws, it's all or nothing, either you patent it or you give it away for free, this is outrageous.
Plenty of inventions could be kept secret and sold as is to make money and the trade secret would be a form of "patent" if you want.
By the time competition has reverse engineered your invention, you have already made improvements and moved on to other things.
Patent laws are bad.
Published: February 4, 2009 7:08 AM
Colin
@ heuristic
"I'm still waiting for an argument from ethics!"
It is ethical for someone to keep their knowledge secret if they wish, or to sell their knowledge.
When such knowledge or parts of it become known to others, how is it ethical to deny those who have gained knowledge the right to use it as they wish?
Involuntary IP monopoly laws might be better presented as a theft of ideas from those who learned them from IP rights holders.
There is sympathy for people discover, invent and create and rightly so. This provides for them some advantage in addition to being first to market. How is it ethically justified to extend this advantage to a force protected monopoly?
The creation does not justify an ownership of the entire market. All that is justified is the right to posses and use that idea as the creator sees fit.
Published: February 4, 2009 7:12 AM
newson
andras says:
"The USSR was a no-IP country. It was a black hole of ideas, it absorbed every practical idea but nothing came out of it. It might be not a coincidence."
it was the lack of (physical) property rights under socialism that lead to backwardness, both cultural and scientific.
an absence of ip doesn't mean the disappearance of profits, they're just more evanescent.
inventors/artists got rich before ip, society didn't regress, so your hypothesis seems null.
Published: February 4, 2009 8:02 AM
Mike
"Another point-
if you scrap all patent and copyright laws, won't the creative people move to countries that have IP?"
So? This will in no way prevent us from utilizing the innovations they bring to market. So we lose nothing. Let them move.
Published: February 4, 2009 10:13 AM
Andras
@Newson,
"inventors/artists got rich before ip"
Do you have an example? I have several for the opposite.
Published: February 4, 2009 12:37 PM
Egosumabbas
@Andras:
"@Newson,
"inventors/artists got rich before ip"
Do you have an example? I have several for the opposite."
Leonardo DaVinci? I heard that people back in the day were falling all over themselves to hire out his talent to create new inventions.
Published: February 4, 2009 1:07 PM
Egosumabbas
In no-ip land, couldn't you just go to a manufacturer and pitch the concept to them, and create the prototype with them on contract? All these nightmare-scenarios of inventors not coming to market betray an ironic lack of imagination.
Published: February 4, 2009 1:17 PM
Andras
@Ergosumabbas:
-Newson: "inventors/artists got rich before ip"
-Andras: "Do you have an example? I have several for the opposite."
-Ergosumabbas: "Leonardo DaVinci? I heard that people back in the day were falling all over themselves to hire out his talent to create new inventions."
-Andras: "You heard it wrong, hardly any of his invention went into practice. He was hired for his artistry: paintings and sculpting on the spot. Thus for ideas that were impossible to copy that time.
Please try again!
Published: February 4, 2009 3:27 PM
Andras
@Egosumabbas:"In no-ip land, couldn't you just go to a manufacturer and pitch the concept to them, and create the prototype with them on contract? All these nightmare-scenarios of inventors not coming to market betray an ironic lack of imagination."
Andras: Why would anybody give you a chance when he could just steal it?
All this whining about lack of imagination from people who has too unlimited (by reality) imagination.
Have you ever went through an invention/discovery process? You would know how hard to separate false ideas from productives. You wouldn't even have a way to separate proponents of false ideas. You would not even know who to listen to as all ideas and their holders are valued at $0.
As an economist, try also to imagine the unseen when you propose anti-IP not just the temporary fast grab like with every nationalization.
Published: February 4, 2009 3:39 PM
nuke gray
Whilst Shakespear ended up rich without our modern copyright laws, I think he would have used them if he they had been made then, so he might not be a good example.
As for the argument that our modern laws are only for those who can afford to sue, this seems more like an argument that our legal system needs an overhaul! Why shouldn't our Police Stations have rooms of public lawyers, publicly funded like the police, where people can freely discuss their rights?
Published: February 4, 2009 5:28 PM
newson
to andras:
well, rubens made plenty of money through his "factory" system (a sort of andy warhol of his day). some of his work was copyright, and some wasn't.
shakespeare made money from performances of his plays.
technology-wise, i'm thinking of the many trade secrets that enabled craftsmen to charge scarcity value on know-how. an example is damascus steel for swords (not pattern-welded steel which is available), which to this day cannot be successfully reverse-engineered. also russian red leather, a particularly good leather for boots and razor-strops: the carefully guarded secret was lost following the bolshevik revolution, and no amount of experimenting has managed to recreate it exactly.
Published: February 4, 2009 11:00 PM
nuke gray
Newson- are you for or against IP? Because if the Russians had run an IP system, we would know how to make that leather now, and the secret would not have been lost!
And can anyone point out to me any country in the world that has reverse-engineered Viagra, to give just one potent example of a protected drug? There exist plenty of back-yard chemists, but i never hear of knock-offs. Maybe reverse-making is not as easy as we think.
Published: February 5, 2009 12:42 AM
Berend de Boer
I suggest the author goes to the Smithsonian museum to have a look at the exposition on the Wright Brothers. Anyone who has had a look at the real documents and evidence of these brothers will find that an article that begins with: "in fact they made only a tiny contribution of combining wing warping with a rudder. It was Sir George Cayley in Britain and Otto Lilienthal of Germany who did the bulk of the work of inventing the airplane" such an utter nonsense that we can safely dismiss the rest without reading.
Dear Mr. Tucker, the formulas and numbers of Cayley and Lilienthal did not work. The brothers had to redo it. They also invented the wind tunnel to test their theories. Their work was unique.
Published: February 5, 2009 1:39 AM
newson
to nuke gray:
against ip!. the bolsheviks killed so many and ruined the economy it's not surprising that know-how was also lost in the chaos.
if you're interested in how patent-free countries got on in the face of ip protected countries, i recommend having a read of this paper by petra moser:
http://web.mit.edu/moser/www/pat501.pdf
countries without patents tended to foster growth in industries where secrecy was a better protector than dedicated legislation. dyes, food processing, watchmaking and precision instruments were extremely hard to reverse-engineer.
that was my point about damascus steel and russian leather. so prized was the russian leather that a shipwrecked crate of the 200 year-old leather was made into very expensive shoes by new and lingwood. only for the very rich...
http://www.newandlingwood.com/information.phtml
Published: February 5, 2009 5:26 AM
Egosumabbas
"All this whining about lack of imagination from people who has too unlimited (by reality) imagination.
Have you ever went through an invention/discovery process? You would know how hard to separate false ideas from productives. You wouldn't even have a way to separate proponents of false ideas. You would not even know who to listen to as all ideas and their holders are valued at $0."
I'm a software engineer by trade and by hobby. All I do is fart out ideas all day long, and have been for years since I left college, and I'm paid a good salary for it. My sympathy for those "inventors" who seek to use the power of the state to create a monopoly for themselves at my expense makes me ill.
Going back to Leonardo DaVinci, I assume that instead of deliberately lying, you're simply being lazy. From wikipedia:
"Engineering and inventions
During his lifetime Leonardo was valued as an engineer. In a letter to Ludovico il Moro he claimed to be able to create all sorts of machines both for the protection of a city and for siege. When he fled to Venice in 1499 he found employment as an engineer and devised a system of moveable barricades to protect the city from attack. He also had a scheme for diverting the flow of the Arno River in order to flood Pisa. His journals include a vast number of inventions, both practical and impractical. They include musical instruments, hydraulic pumps, reversible crank mechanisms, finned mortar shells, and a steam cannon."
A google search returns a lot more information than that.
Published: February 5, 2009 9:43 AM
Egosumabbas
I should say rather that I have no sympathy and their rent-seeking makes me ill.
Published: February 5, 2009 9:49 AM
Anon.
I have been involved, directly and indirectly, in patent/copyright issues with various so-called "high-tech" companies for over 35 years, so your reported treatment of the issues, by Boldin and Levine, have generated considerable interest on my part; enough interest to actually purchase the book and digest it.
Since I was a young man, I have wondered if anyone had (or ever would have) undertaken the effort in order to compile and report on the tens of thousands of man-years worth of effort that has been expended (wasted) by technology companies on issues regarding legal compliance (aka: legal avoidance) with patent and copyright statutes. My personal activity has been limited to computer hardware and software design. In this area, I know that patents exist, primarily, as defensive legal ammunition; not so much for me to prevent you from doing something, but rather as a means to keep you from preventing me from doing something. The great majority of the patent applications I've seen describe extremely dubious "innovations" that, though claimed as non-obvious to one "trained in the art", are in fact little more than obvious and logical progressions of well-known and widely used technologies. Most claims are of such a dubious nautre, even when expressed in
the overly arcane language of patent lawyers, that a lightly-experienced technician (a non-lawyer) would be able to devise the same so-called "innovation" or "improvement" in the normal course of applying one's skills.
By and large, patents and copyrights are further vehicles by which legal technicians can continue to throttle genuine innovation while enriching themselves at the ultimate expense of consumers as well as the original inventor(s). There are many instances of failed patent applications, filed by inventors, who did not possess the economic resources to engage sufficient help from patent lawyers, in which those failed applications (publicly documented and studied by a certain scavenger-species of patent attorney) have been taken and redrafted by this or that patent attorney, without the knowledge or permission of the original submitter of the application, in order to produce a granted patent to a preditory attorney who discovers some procedural flaw in a failed application. Often times, the subsequently granted patent can then be used as a statutory device, usually against the original inventor(s), in order to pry royalties from the pockets of any
commercial entity who may be employing some portion of the "innovation" described by the issued patent.
The business practices adopted, as a result of our patent and copyright laws, have caused the implementation of procedures that are, at best, humorous and ridiculous, and, at worst, prohibitively wasteful.
I have personally been involved in such situations whereby intimate knowledge of a particular technology can (and has) resulted in corporate procedures designed to limit the ability of one or more individuals from conversation with one or more co-workers. By way of example, if I have many years of experience with, and intimate knowledge of, a particular technology that is of great interest to ABC company, I might attempt to offer my services as an employee to ABC company, presumably to improve my own economic situation. ABC company, upon learning of my interests, decides to extend a generous offer to have me as an employee. Upon arrival at my new place of employment, ABC company may learn, through their own patent lawyers, that my intimate knowledge of a given technology cannot be directly applied to some technical effort being undertaken by ABC company because of the potential legal liability which might result from my direct participation. The
legal thicket thus artificially created has, in my own case, required the following absurdity:
If a member of the so-called "clean" staff encounters some kind of technical difficulty or problem, it might seem obvious that I would be a natural source, as a new employee and as someone with experience in the problem area, to field questions regarding the solution to such problems or difficulties. This is not (was not) the case. In order to, according to the resident patent law expert(s), avoid potential patent difficulties, I will be placed in one room, by myself, while the member of the "clean" engineering staff is placed in an entirely different room. The "clean" engineer poses a question to the patent attorney. The patent attorney leaves the room, walks down the hall, and enters the room where I'm seated. The attorney then poses a question to me, outside of the hearing of the "clean" engineer, and I give a response. The lawyer then leaves the room and, presumably, walks back to the first room where, again I presume, that my answer is
repeated. As I'm not in the other room, I do not hear the response and therefore I cannot truthfully state that my response has been repeated to the "clean" engineer. I also cannot truthfully state that the question, posed to me by the patent attorney, even originated with the "clean" engineer. I was seated in the room in such a way that I cannot state, with certainty, that the "clean" engineer is actually seated somewhere down the hall, since I did not personally witness his or her arrival. Such communications, between the patent attorney and some other engineer, are regarded as privileged communications. The absurd nature of such a defensive "procedure" is obvious to anyone who has ever been engaged in such a situation, but continues to be insisted upon by legal expertise employed by ABC company. When one takes this all-too-common procedure and multiplies it across an industry, the resulting waste and non-productive nature of it demonstrates, if
demonstration were really necessary, the economic penalty that must ultimately be paid by the consumer for whatever product(s) manage to be birthed, in spite of the legal barriers thus constructed and navigated.
Published: February 5, 2009 10:00 AM
Jon Fibbs
I think one very good example of what you describe can be seen in the
computing world. I have nothing against Mircrosoft or Apple and do not
wish to take away from them the respect they are due, but I am a Linux
user. It is true that Linux has taken a lot of its design cue's from
other operating systems but it is equally true that these operating
systems have taken a lot of cues from Linux as well.
The popularity of various Linux distributions has been surging lately
(Ubuntu in particular) as have other open source (or copy lefted)
applications such as Firefox and I firmly believe that this is due in
LARGE part to the open nature of their framework. While Apple maintains
dictatorial control over its products and immediately smashes anybody
they view as encroaching on their IP (Pystar), the Linux community
actively fosters and encourages group participation and in some cases
actually requires the sharing of ones work with others for eventual
improvement. This has led to monumental leaps forward and the momentum
seams only to be growing.
Apple and MS may employ thousands upon thousands of employees worldwide
but even they can make missteps (Vista). The Linux community has no
centralized control (although individual distro's often times have
corporate backing). Anybody and everybody is free to take any piece of
the puzzle and add to or improve upon it. Anybody is free to write
programs for it. Amazingly (or not so amazingly) a sort of spontanious
order has sprung up out of the chaos and since there is no top down
control it seems to move much faster and adapt far more easily to
conditions that may arise.
Additionally, several companies have discovered (shock) that there are
in fact profits to be made from such a business model. Much like a
musician that hands our his music for free to build demand for a paid
concert ticket, corporations have realized that they can hand out the OS
and software for free and make a profit by charging for the the support
and maintenance of their software. With the economy being what it is
today (thank you fed) and companies looking to cut costs wherever
possible, this philosophy might be getting ready to make a huge impact.
Why pay Microsoft for its highly controlled and often unpopular OS and
then pay your IT department to maintain it when you can just get the OS
for free and pay your IT department to maintain it.
Anyway, I don't mean to bore you, but I just felt that the Linux
community offered a perfect case and point for the effects of IP rights
and how not having them was far from disastrous for either business
or future product development and improvement.
Sincerely,
Jon C. Fibbs
Published: February 5, 2009 6:48 PM
newson
great post, anon. and like many of the contra-ip posts, one that speaks from personal experience.
it's interesting that all the pro-ip posters acknowledge the problems inherent in the regulatory system, without being able to suggest an improved version (except that copyright duration be reduced).
Published: February 5, 2009 7:12 PM
Lonnie E. Holder
newson:
I have read the book, cover to cover. I have twenty pages of notes regarding distortions, errors, and ignored facts. I have already promised David Levine that I would provide that information to him when I get around to putting it into a Word document.
Published: February 6, 2009 8:11 AM
Lonnie E. Holder
newson & nuke gray:
Shakespeare made money as an actor and a playwright. However, his wealth came from being co-owner of the Globe theater. As always, it is the distributor that makes the big money, not the creator. I suspect he would have been wealthy without being co-owner of the Globe had he been able to receive a royalty for his plays performed elsewhere.
Published: February 6, 2009 8:15 AM
Lonnie E. Holder
Francisco
How many designs have I reverse engineered? A lot. Though my past industries have been lasers and transmissions, I consider reverse engineering to be fun. For difficult cases we have taken a team of people and gathered round the product or component in question and began a sort of brainstorming to intuit how something was made. Occasionally we are unable to figure out how something was made (the ever-popular trade secret), but about 95% of the time you can. Having any patents that are available is a huge help, of course.
Re your comment on cost & reverse engineering. Yes, you are correct that it depends on the design. It also depends on whether something is protected by a trade secret. I should have put those caveats in my comment. However, because the industries I have been in are highly competitive, there is no "reaping of huge profits" before something can be reverse engineered. If patents are not a barrier, we can usually reverse engineer in a year or two, at most. Typically the competitor will not be in production yet.
Published: February 6, 2009 9:14 AM
newson
to le holder:
even with the current regime, distribution counts for a lot. most creators don't see a lot of money for their works. however, the extra costs imposed by the legal structure that goes with ip, must ultimately mean less consumption.
financial success in the arts will always be part entrepreneurial skill, part creative talent. why should the government assist the poorer entrepreneurs in the arts, any more than their counterparts on wall st?
Published: February 6, 2009 9:22 AM
Lonnie E. Holder
newson
You mention the "extra costs" imposed by the legal structure that goes with IP. As I noted before, the "extra costs" with respect to hydrostatic transmissions is, by my estimate, about 20 to 50 cents per unit. What the market got in return is an initial investment of 40 to 60 million dollars in a stagnate market, and cost reductions over the prices that existed at the time totalling, again by my estimate, more than a billion dollars. I personally think the billion dollars saved is worth far more than the several million expended in the "IP system," as you call it. Rather than reduce sales, sales of these units have exploded and have become particularly dominant in zero turn consumer units, which were a teeny fraction of the market a decade ago. Now those units have sales measured in hundreds of thousands. Less consumption under IP? How about consumption that measures in the millions under IP that was previously at about 10,000 units per year or less.
I also think that the explosion of technology in this stagnate arena has already reaped benefits by stimulating new competition and an expansion of the original technology. Within a few years, all that technology will be available for the taking and the dinosaurs in the industry will be able to use that technology freely, if they can.
As for supporting Wall Street, they are already supported by IP. Do they really need more money? It is sad that a couple of executives on Wall Street can get more in bonuses than Hydro-Gear earns in revenue (total dollars in sales) in a year. At least Hydro-Gear is providing a product that the market wants.
Published: February 6, 2009 12:09 PM
newson
to le holder:
first, if your industry is stagnant, and ip has given rise to investment, it does not follow that this is beneficial to the economy. your stagnation is being subsidized by a more vibrant area of the economy, less dependent on ip protection but forced to pay its cost, nonetheless.
second, you seem to be arguing that one or two years lead time would be not result in profits sufficient enough to justify the investment. this does not make sense. if the ephemeral monopoly profits, plus the later normalized returns don't justify the outlay, then the project doesn't merit the green-light.
i recommend reading petra moser's piece which shows how non-ip countries did surprisingly well in the innovation stakes in the nineteenth century. these countries were in direct competition with ip regimes like britain and the us, and yet managed to punch above their weight. the lack of legal protection encouraged different modes of investment, and in areas where reverse engineering was more problematic.
http://web.mit.edu/moser/www/pat501.pdf
Published: February 6, 2009 7:03 PM
Lonnie E. Holder
newson
first, if your industry is stagnant, and ip has given rise to investment, it does not follow that this is beneficial to the economy.
Neither does it follow that it is not beneficial to the economy. I would argue that the expansion of technology, the significant reduction in prices, and the attendant consumer demand demonstrates that the economy appreciated the results. Since other portions of the economy had equal opportunity to use patents, this industry was subsidized no more and no less than any other industry at the same time, further indicating that your argument has weakness.
your stagnation is being subsidized by a more vibrant area of the economy
Unproven hypothesis. Worse, pure speculation.
less dependent on ip protection but forced to pay its cost, nonetheless.
You could make this argument regarding trade secrets, since some portions of the economy are able to use trade secrets and others are not. Thus, secrecy in business should be abolished too. Of course, that can never happen, until we turn into a dictatorship.
second, you seem to be arguing that one or two years lead time would be not result in profits sufficient enough to justify the investment. this does not make sense.
Why does this not make sense? There are hundreds and thousands of industries where a two year lead time makes little or no sense. If you wish an extreme example, take the aircraft industry. Payback for the development of the 747 was more than a decade. How about the Toyota Prius? That product was a losing proposition for the first several years, and it took more time to put the investment in the black. Of course, the investment was clearly justified given that the Prius is one of the better selling cars, now, but initially many "experts" wondered whether it was going to be another novelty or something that sparked consumer interest. The Prius could easily have been an expensive experiment that failed, but Toyota gave it the years it needed to develop a market. Fortunately, the Prius was HEAVILY protected by patents, so someone else could not walk in a copy it, and they still cannot.
if the ephemeral monopoly profits, plus the later normalized returns don't justify the outlay, then the project doesn't merit the green-light.
I never said that "ephemeral monopoly profits," whatever those may be, plus later normalized returns, whatever those may be (which, as YOU well know, are absolutely undefinable), did not justify the outlay. In fact, I am not sure there ever were "monopoly profits." If you are in a competitive industry sensitive to price, which is a significant factor, and the only thing limiting competition is that your exact design is unavailable, then how are monopoly profits available? In fact, there is incentive by the other competitors to reduce price with their products to attempt to win the market. However, the market will decide which combination of features and price will win, and imaginary "monopoly profits" are unacceptable.
i recommend reading petra moser's piece which shows how non-ip countries did surprisingly well in the innovation stakes in the nineteenth century.
Is that an indictment of intellectual property, or evidence that other systems can work? Does every country need to be a democracy? Does every country need an army? You compare apples and oranges. Success of one system does not automatically mean another wrong or inappropriate; it just means there is more than one system. In evolutionary terms, the various systems are in competition. In the long run, the most desirable system should win.
these countries were in direct competition with ip regimes like britain and the us, and yet managed to punch above their weight. the lack of legal protection encouraged different modes of investment, and in areas where reverse engineering was more problematic.
Good for them. As I noted above, the existence of one system does not prevent the existence of other systems. Competition between the systems should determine which is the best system in the long run.
Published: February 7, 2009 10:02 AM
MLS
Mr. Holder,
Perhaps you share the same view, perhaps not, but quite frankly I so find many of the above comments based upon misinformation and lack of real world experience that it scares me to think so many are prepared to accept the Boldrin/Levine publication at face value without any attempt to ascertain if the data being used to support their propositions are even relevant. I have not the slightest doubt I could select an input data set, analyze it, and then arrive at the conclusion that we exist as organisms because patent law exists. Of course this would be stupid and intellectually dishonest, and the conclusions even more so. At least I admit so. It is a shame that those on the other side of the aisle stubbornly refuse to do the same.
Published: February 8, 2009 12:40 PM
newson
to mls:
maybe you should listen to this debate hosted by the cato institute, where a pro-ip'er takes on michele boldrin, and where the latter defends his study. it addresses the doubts you have expressed about evidence.
http://www.cato.org/event.php?eventid=5362
Published: February 8, 2009 4:55 PM
Lonnie E. Holder
MLS:
I too find issue with Boldrin & Levine's study. The beginning of the study is absolutely atrocious in that it assumes that IP is undesirable and then sets out to "prove" it. As anyone familiar with statistics and logical proof knows, you assume the opposite of what you wish to prove, for reasons that those familiar with proofs know.
Then, once we get into the heart of the matter, they manage to ignore every piece of data that would tend to refute their position, which of course is far from objective. For example. there is a marvelous study of the value of the Plant Variety Protection Act on cotton. More recently, there is a paper on a similar act implemented by the Chinese to address an issue in their own country regarding lack of new plant development. Boldrin and Levine, on the other hand, use something like "Total Productivity Factor" or something like that. The problem with their "factor" is that it neglects underlying problems in agriculture that, without new plant development, would cause reduction in crop yields. However, their lovely little curve shows that the increase in yields was smooth before and after the act. Surprise, surprise.
They also neglect to point out that many of the plants developed after the act were flowers, which has zero affect on their "factor."
Lastly, in their zeal for "proving" their point (which means ignoring any evidence to the contrary), they neglect the fact that new plant development increased by a factor of 20 after the act, which had dramatic and positive economic effects in several portions of agriculture.
As for the response from newson, I would point out that Albert Einstein was not known for his ability to debate, but it is well known that he knew what he was talking about. Just because Michele Boldrin is a good debater does not make him any more correct in his position, and certainly does not make up for the flaws in the study performed by him and Mr. Levine.
Published: February 8, 2009 7:27 PM
newson
le holder says:
"As for the response from newson, I would point out that Albert Einstein was not known for his ability to debate, but it is well known that he knew what he was talking about."
yeah, right. "The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil." (albert einstein: "why socialism" 1949).
back you your previous comment; that a subsidy produces benefits to some area is not questioned. you seem to imply that because a "stagnant" (your word, remember) area is revitalized, that has an overall benefit to the economy. this of course ignores that everyone pays the cost of the ip legislation, formulation and policing, not just the beneficiaries.
you argue without ip, the 747 and the prius likely would not have arisen. this is pure conjecture, but even if this were the case, so what?
trade secrets are a genuine libertarian approach to creating scarcity value of ideas. all costs are internalized, not socialized. if innovators are able to maintain secrecy, good on them. they'll enjoy monopoly profits for as long as this is true.
it would be good to see both your detailed methodological critique and b&l's reply, should that be forthcoming.
i'm going to leave others to discuss the plant variety protection act, as i see is already the case on the b&l blog.
Published: February 8, 2009 8:29 PM
MLS
Newson,
I watched the video when it was originally released. The individual who followed Mr. Boldrin did not present a persuasive case, but then again neither did Mr. Boldrin.
My problem with the work he co-authored with Mr. Levine is that the data set they chose to examine is largely meaningless. Their work would most certainly benefit from their sitting down with a lawyer who truly understands the pertinent law, one who is neither pro nor anti-patents and copyrights, and working in concert to identify truly relevant data upon which their research should rely.
I do not want to be viewed as "picking" on the authors because the same criticism can be leveled at most researchers dealing in this subject matter area...both those who conclude IP is "bad" and those who conclude IP is "good". Quite frankly, I am not at all sanguine that the "goodness" or "badness" of the IP regime can ever be answered conclusively. Based upon my experience, the only intellectually honest answer that can be given is a resounding "I/We do not know."
Published: February 8, 2009 9:44 PM
Lonnie E. Holder
newson:
You state boldly that everyone pays for IP. I respectfully disagree. No one needs to pay for IP that chooses not to pay. Do the Amish pay for IP? In general, no. Does a person who buys a home and puts furniture into it pay for IP? No. The vast majority of people who pay for IP do so because they choose to do so. Consider this the next time you purchase something that is patented.
Of course, then there is the question of how much people pay. If IP costs $1 million, and saves $1 billion (which has happened), then what is the cost of IP? Is it negative? Does that mean that everyone who has received the benefit of that IP gets a positive benefit from that IP?
Here is a conundrum. There are people who are anti-IP who claim, without proof, of course (it is easy to assert a position without evidence) that without IP a market would have provided the same solution. What this means, of course, is that IP in fact provided a quantifiable benefit. Saying that a free market would have provided the same benefit is merely providing another route to achieve the same end, a route that, I might add, also contributed to some of the worst ills ever bestowed on mankind. I leave you to review history regarding free markets and some of the many ills that free markets led to.
Published: February 8, 2009 10:03 PM
newson
le holder says:
"No one needs to pay for IP that chooses not to pay. Do the Amish pay for IP? In general, no. Does a person who buys a home and puts furniture into it pay for IP? No. The vast majority of people who pay for IP do so because they choose to do so."
nothing bold about it: to the extent that amish pay taxes, they support the ip structure. ditto joe newhomer.
the vast government apparatus that is required to draft the laws, and police the regulation is a drain on all taxpayers. the costs of compliance, and the monopoly rents that ip provides are incorporated into the price of goods.
even someone who grows turnips perhaps uses a fertilizer that has a patent cost, and probably consults the turnip-growers' manual that has a copyright cost added in.
Published: February 9, 2009 8:50 AM
Lonnie E. Holder
newson:
You need to quantify the "vast government apparatus that is required to draft the laws." Because IP laws are such an infinitesimally small portion of government, I suggest that if IP laws were completely abolished not one penny would be saved in taxes.
As for "policing the regulation," there is no policing if non-criminal IP laws because it is up to the holder of IP to pursue such measures at their cost in court.
Any other costs are, as you said, incorporated into the prices of goods covered by intellectual property, which, as I noted before, is your choice to buy or not buy. There are far more products not covered by IP than there are covered by IP, so choices are plentiful. However, you will likely not figure that out by price, since products covered by IP are just as often cheaper than non-IP products as they are more expensive.
The Amish use natural fertilizer, and to the best of my knowledge there are no patented fertilizers. At least, none of the fertilizers I use are patented. I would need to be convinced that the turnip grower's manual has a single penny added to it because of copyright.
Published: February 9, 2009 12:12 PM
MLS
Mr. Holder,
Merely as a side note, the USPO went PAYG back in the early 80's, at which time it turned into a profit center from which Congress extracted monies for funding other unrelated activities. With the inception of maintenance fees, which administration of which is virtually nil, even more monies were regularly added to the USPTO coffers. Obviously, somewhere along the way people seemed to overlook the fact that the granting of patents is meant to reflect a quid pro quo. An inventor must disclose as a precondition of receiving a grant. PAYG and maintenance fees basically stood quid pro quo on its head such that the system as presently constituted in quid no quo.
Another point that I believe bears mentioning. There seems to be a belief by some not fully immersed in the system that somehow the issuance of a patent means that "monopoly rents" are almost a given. I am not an economist, but I have been around business and the law long enough to know it is rare, if ever, that a patentee is placed in a position where "monopoly rents" are readily available and realized by a patentee. In every instance a product embodying something covered by a patent is in competition with a wide variety of similar products. One can argue that pharmaceuticals are an exception, but even in this situation there are typically many other formulations of virtually identical efficacy. Sometimes a "blockbuster" does rise to the surface, but this is infrequent.
Published: February 9, 2009 1:02 PM
newson
to mls:
are you seriously trying to argue that since uspo is a profit centre for the government, there is no cost to society?
"monopoly rents" are the result of ip, what else could they be? the whole idea of ip is to secure exclusive title to the use of an idea. nobody denies that there isn't competition among patented goods, just that the costs are higher than they otherwise would be.
Published: February 9, 2009 8:48 PM
newson
le holder says:
"Because IP laws are such an infinitesimally small portion of government, I suggest that if IP laws were completely abolished not one penny would be saved in taxes."
you can do better than this. please explain how you arrived at this figure.
Published: February 9, 2009 8:51 PM
Lonnie E. Holder
newson:
Read MLS's post. It is quite accurate. I have seen studies that (depending on which one you believe) state that somewhere between 90 to 98% of all patents are either not used in a product (any product, anywhere) during the effective life of the patent (though they may well be used after the patent has expired), or they do not pay back the cost of filing for the patent.
Now, even if 90% of all patents do not earn back the money paid in filing fees, that means that the remaining 10% have the "potential" for what many people call "monopoly rents." However, as MLS has pointed out, there are many industries where monopoly rents are not available because of competition. I have provided numerous examples of these, so repeating them again is pointless.
I believe it was Boldrin & Levine who estimated that the economic affect of patents in the U.S. was approximately $12 billion per year. Assume that is true (I think that is high, but let's run with it).
If that is true, then compare that to the GDP of $14,280.7 billion. That means the economic impact of patents on GDP would be 0.08%, which I have also said many times before. That equates to an effect of about 8 cents on every 100 dollars. Compare that to sales taxes that run up to 800 cents per hundred dollars, or more.
Now, with respect to the government, as MLS pointed out, patents are paid for by applicants. The USPTO has generated profits to the government of more than $200 million per year. Even if you throw in the relatively small cost of the 12 member CAFC, and the costs of dealing with patent related lawsuits in federal court, which make up about 1% of all federal court cases, the U.S. government still makes money on patents rather than spending money.
As I said, infinitesimal, no matter how you look at it.
And now, Boldrin and Levine has articles on their web site Against Monopoly, objective articles, I might add, that point out the benefits of patents and optimal lengths for patents. How interesting.
Published: February 10, 2009 7:36 AM
newson
to le holder:
cost/benefit analysis of ip is purely speculative. if i accept your figures for the actual administration of the ip bureaucracy, it still gives me no idea about what i'm missing in opportunity costs by not legislating for ip. entire industries would have grown up along different lines.
nobody, b&l included, can quantify what would have been...
Published: February 10, 2009 5:56 PM
Lonnie E. Holder
newson:
You are correct. Neither do we know which industries would never have existed without IP. I do have a couple of recent papers that are interesting, though.
http://www.comp.nus.edu.sg/~ipng/research/patent_grwth.pdf
http://www.comp.nus.edu.sg/~ipng/research/patent_figtab.pdf
http://www.dklevine.com/papers/scalerev10.pdf
Published: February 10, 2009 8:43 PM
Lonnie E. Holder
newson:
You are correct. Neither do we know which industries would never have existed without IP. I do have a couple of recent papers that are interesting, though.
http://www.comp.nus.edu.sg/~ipng/research/patent_grwth.pdf
http://www.comp.nus.edu.sg/~ipng/research/patent_figtab.pdf
http://www.dklevine.com/papers/scalerev10.pdf
Published: February 10, 2009 8:57 PM
MLS
To Newson:
to mls:
are you seriously trying to argue that since uspo is a profit centre for the government, there is no cost to society?.
"monopoly rents" are the result of ip, what else could they be? the whole idea of ip is to secure exclusive title to the use of an idea. nobody denies that there isn't competition among patented goods, just that the costs are higher than they otherwise would be.
I scarcely know where to begin, so I will note just a few points.
You talked about the cost of the patent system to taxpayers, and all I did was note to Mr. Holder about the PAYG structure of the USPTO. I made no mention as you did above about "society".
The whole concept of "monopoly rents" being caused by the existence of IP is simplistic and ignores what really hapens in the marketplace. A patentee can only realize these so-called :monopoly rents" if the patent is so generic that there are for all practical purposes no other alternatives for what the patent covers. In 30 years of practice I have never seen a situation in the marketplace that even comes close. Patentees who sell products/services that embody what their patent covers are not immune to supply/demand pressures. They are still governed by "what the market will bear".
The statement that a patent somehow provides an exclusive right to an idea is wrong, manifesting a lack of understanding of the patent system. A mere "idea" is not even eligible for protection under our patent laws. The same is equally true concerning copyright.
What is protectable if a firm, concrete and definite application of the idea into something that satisfies the tests for eligible subject matter, novelty, non-obviousness, and a complete description of what the application (i.e., invention) entails.
BTW, I am not one who believes our economic future is dependent upon patents and copyrights. But I do know this. In the absence of such a system (which to varying degrees does give some measure of predictability to our system of commerce) other legal mechanisms would invariably spring up that would make the "IP is bad" crowd long for the good old days when patents and copyrights were a part of our law. My advice is to be careful what you wish for because you may very well get it and be none too pleased.
Published: February 11, 2009 12:20 PM
Deefburger
I would like to add a little history to this about Edison and Tesla. Edison owned many many patents. Almost all of them in his name, but without the names of the engineers he employed to invent them for him. His company was one of the first Patent Houses. His employees never saw a dime beyond their paychecks.
Tesla had many patents as well, but it was Westinghouse who owned Tesla and the rights to produce. Tesla died a pauper.
Big money wins in the patent world, every time, no matter who the inventor is.
Published: March 12, 2009 10:10 AM
best computer virus protection
I'm impressed! I found this on google poking around for something totally unrelated, now I'm going to need to go all the archives XD So long my free time this morning, but this was a truly spectacular find :D
Published: December 14, 2009 10:02 AM