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The Case Against Patents (2013)

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Re: The Case Against Patents (2013)

#61
post #53

Meanwhile the Intellectual "Property" wants patents treated as real estate and the party of corporate interests is in power.

wants? this is the way it has been done for a long long time in the US (the first US patent grant was from George Washington in 1790), there is Property category where there is at least Real Property & Intellectual Property, patents which are in the Intellectual Property 'bucket' so to speak There are multiple of forms of intellectual property beyond patents: copyright, trademarks, etc This is the way the legal syste…

There is no intellectual "property", merely a temporary exclusive grant made by the public to encourage the arts and sciences. To call it "property" is, as I warned, the goal of the "IP" industry in equating a patent as no different from a house and land. Then it magically becomes some sort of right, but one is fundamental a restriction of your own fundamental human rights because a patent can be accidentally infringed.

A patent can be accidentally issued, but it can be hell to accidentally UN-issue it. Meanwhile the patent constraints your actions and speech through its power. And we want to treat it like a house? The house limits what you may do upon that land, a patent limits what you may do anywhere any everywhere. And you don't even need to know the patent "property" upon your actions even exists.

Re: The Case Against Patents (2013)

#62
post #33

This seems like as good a thread as any to mention one of my favorite unrealized enterprises: Patent Trolling for Good (PTG) The idea is simple: take the traditional model of a patent troll, but alter the settlement terms to create a cascade that ultimately ends or significantly reduces the exclusive ownership of facts (aka IP). Patent Trolling for Good acts like a traditional Patent Troll in that it takes any IP it…

> exclusive ownership of facts (aka IP)

This is one of the weirdest definitions of IP I have ever seen.

You think a story is a fact? Stories are usually copyrighted and usually part of what people mean by "IP".

Facts are generally not copyrightable. You want to go and make a phone book or a map, you can. Other existing phone books or maps do not mean you can't make your own.

What about a distinctive trademark? Surely you agree that my company logo is not a fact. You want to use my company logo to sell your stuff? That would be deceiving customers if you started to sell your stuff under my name. Is the logo and distinctive mark a fact?

Re: The Case Against Patents (2013)

#64
post #41

Earlier quoted context omitted.

the costs of your system are probably way more than the value created for society via patents.

That may be true, but I suspect you're underestimating the value created by patents. Three examples: 1) Patents enable "benevolent monopolies." Companies that can afford to splurge on fundamental research because they have a revenue source protected by some sort of barrier to entry or network effect. Xerox PARC, for example, created many of the technologies fundamental to modern computing. PARC was bankrolled by Xero…

> 2) Patents enable business models that separate design from production. ARM and MIPS, for example, design chips incorporated into designs from myriad manufacturers.

Their designs are already protected by copyright, though.

Re: The Case Against Patents (2013)

#65
post #52
post #13

Earlier quoted context omitted.

Suggesting that they’re “impossible to execute” correctly is a bit odd, as all US technology arose in the context of the patent system (the first Patent Act predates the Constitution).

You haven't given any evidence that it arose because of that system or in spite of it. There are plenty of examples going back to Singer sewing machines [1] and the Wright Brothers [2] that demonstrate that the surest way to delay the widespread deployment of any transformative technology by many years is to patent it. [1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1354849 [2] https://en.wikipedia.org/wiki/W…

You can also find dozens of examples where investors pour billions of dollars into developing technology because they know they can patent it and won’t immediately be undercut by free riders. I’m typing this on a machine that has CPU technology licensed from ARM, GPU technology licensed from Imagination Technologies, and cellular technology licensed from dozens of companies. Those companies did, in fact, invest in all of those technologies in reliance on patent protection for the resulting developments.

One can imagine alternative ways to monetize that R&D. Unfortunately, the main alternative historically was proprietary products and vertical integration. But one can imagine there is something better.

Re: The Case Against Patents (2013)

#66
post #64
post #41

Earlier quoted context omitted.

That may be true, but I suspect you're underestimating the value created by patents. Three examples: 1) Patents enable "benevolent monopolies." Companies that can afford to splurge on fundamental research because they have a revenue source protected by some sort of barrier to entry or network effect. Xerox PARC, for example, created many of the technologies fundamental to modern computing. PARC was bankrolled by Xero…

> 2) Patents enable business models that separate design from production. ARM and MIPS, for example, design chips incorporated into designs from myriad manufacturers. Their designs are already protected by copyright, though.

That only protects against literal copying. That’s useful where the expensive part of your R&D is laying out the gates, but not if the expensive part is figuring out how the gates should be laid out to achieve particular results.

Re: The Case Against Patents (2013)

#67
post #41

Earlier quoted context omitted.

the costs of your system are probably way more than the value created for society via patents.

That may be true, but I suspect you're underestimating the value created by patents. Three examples: 1) Patents enable "benevolent monopolies." Companies that can afford to splurge on fundamental research because they have a revenue source protected by some sort of barrier to entry or network effect. Xerox PARC, for example, created many of the technologies fundamental to modern computing. PARC was bankrolled by Xero…

Great, let's see what the fine article has to say about these things.

1) "In less than 30 years, the flow of patents more than quadrupled. By contrast, neither innovation nor research and development expenditure nor factor productivity have exhibited any particular upward trend." In other words, more patents does not appear to encourage people to splurge on fundamental research in aggregate.

But it gets worse, "The cost of litigating patents is not insubstantial either. Bessen and Meurer (2008) used stock market event studies to estimate the cost of patent litigation: they estimate that during the 1990s such costs rose substantially until, at the end of the period, they constituted nearly 14 percent of total research and development costs." So at least we've identified where some of the money being brought in from all of these monopolies is going (it isn't to the scientists and engineers).

2) It also enables business models that allow taking money from people without contributing anything at all. "On the other hand if a patentholder does not produce a marketable product and hence cannot be countersued---like Microsoft in the phone market or other patent trolls in other markets---then patents become a mechanism for sharing the profits without doing the work. In this scenario, not only do patents discourage innovation, but they are also a pure waste from a social standpoint."

3) "The downstream blocking effect of existing monopoly grants on incentives for future innovation has greatly increased in recent decades because modern products are made up of so many different components. The recent---and largely successful---efforts of Microsoft to impose a licensing fee on the large and expanding Android phone market is but one case in point. ... Microsoft is attempting to charge a licensing fee solely over a patent involving the scheduling of meetings---a rarely used feature of modern smartphones. ... Hence, the main dynamic general equilibrium effect of a patent system is to subject future inventions to a gigantic hold-up problem: with many licenses to be purchased and uncertainty about the ultimate value of the new innovation, each patent holder, in raising the price of his "component," imposes an externality on other patent holders and so charges a higher than efficient licensing fee." The externality isn't just on patent holders. Later, quoting Bill Gates: "A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose."

Having participated in these kinds of technology sharing efforts, I can assure you that the value extracted is basically unrelated to the actual value of the innovation, and mostly defined by the (current or expected) network effects of the technology in question and the political clout of its proponents in convincing other people to require its use. I.e., you're not paying for an invention, you're paying for a standard, and making standards is not something that requires external incentives.

As for monetization: "At the opposite extreme we have, again among many, the example of the Cornish steam engine discussed in Nuvolari (2004, 2006). Here engineers exchanged nonpatented ideas for decades in a collaborative effort to improve efficiency." I don't think they monetized it via advertising.

Re: The Case Against Patents (2013)

#68
post #17
post #12

Earlier quoted context omitted.

I agree. I think that all patents aren't created equal. We'd have less issues if software patents were only valid for like 5 years. You still have protection but you get rid of a lot of the trolls and the IBMs of the world having 10K patents. For more physical things, the protection can be longer since it takes longer to recoup your investment.

There often isn't even any "investment" in patents. Richard Feynmann would describe how his superiors would just walk around the labs and say, so! who has some ideas we could patent? And Feynmann's fellow scientists would say, well, you could grab this nuclear reactor and stick it into a submarine to power it, but that's pretty dumb and obvious. "Nonsense!" replied the superiors. "Patent that right away!" I don't kno…

This is officially how the patent system at my company works. They just ask for patentable ideas related to what we've worked on.

Re: The Case Against Patents (2013)

#69
post #42

Earlier quoted context omitted.

the costs of your system are probably way more than the value created for society via patents.

Drug patents on their own represent a 1 Trillion dollar industry world wide. So, I doubt that's true. Really the patent office could spend 100 billion per year and still be a net gain for society. The problem seems to be many people have a lot to gain from a broken patent system, and most people don't care.

It's not exactly clear if patents help or harm the drug industry.

It's clear they play some very important roles, and the entire industry is structured around them. So, I sympathize with people that think it's too risky to change them. But I can't agree with that certainty on your comment.

Re: The Case Against Patents (2013)

#70
post #18

The authors summarize as: > ... there is no empirical evidence that [patents] serve to increase innovation and productivity ... This seems to be a fundamental misunderstanding as to what purpose patents serve. The public benefit of a patent is that the information is public -- inventions which might previously have been kept secret are instead put into the light where others may use them. The cost to the public of pa…

> The public benefit of a patent is that the information is public [..] > The cost to the public of patents are that such use must be deferred But who does this benefit? The author points out that it benefits big/old ("stagnant") corporations rather than innovators. And that still holds, no? Here's a thought experiment: if you're a small innovator and you invent something new (let's be evil: a software algorithm), wh…

>Can patents be molded to protect the small innovator?

There's plenty of cases of a small or lone inventor making big companies pay for infringing a patent. I think patents are about the only protection for a small innovator to get enough leverage to enter a market.

As a small innovator myself, at probably every pitch I've ever made to investors, I've been asked immediately if I have patents. When I've looked at Chinese manufacturing for products, the first thing they ask is about patents (un-patented means they can copy and sell in a lot of markets, patented makes it harder for them to sell in markets where I have a patent).

There's also plenty of people that are skilled at invention, that don't work for a big mega-corp, and they make their living by being able to stop big corporations from simply stealing their product ideas and crushing them via bigger and better distribution networks.

Patenting a key aspect of a new item gets small players a seat at the negotiating table where a big player has to buy the product. Without patents this would rarely happen.

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