What Kind Of Progress Are We Promoting?

from the the-big-question dept

Continuing my series of posts exploring some of the basics of "intellectual property," I wanted to discuss that key clause in the Constitution that I brought up in the first post in the series:
"The Congress shall have Power... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"
Unfortunately, many have interpreted this clause to mean that any such monopoly granted must "promote the progress of Science and useful Arts." However, a much more reasonable reading of this clause -- especially given Jefferson and Madison's clearly stated concerns about it as they argued over whether or not to include it -- is that these monopoly grants (whether copyright or patent) should only be considered Constitutional if they actually "promote the progress." What Madison and Jefferson saw (which is all too often ignored these days) is that granting a monopoly has both negative impacts and positive impacts. If the positive impacts outweigh the negative, then you can say that the granted monopolies promote the progress. If it's the other way around, however....

Now there are some who insist that there are no negative impacts of such monopolies, but that's easily shown to be false. Clearly, by limiting the ability of everyone else to make use of the ideas or content, that's a loss. The argument in favor of these monopolies is straightforward: that without the monopoly, there is little (or perhaps no) incentive for the creator to create the content or bring a product to market in the first place. Even for those who recognize the downsides to patents and copyright, many will argue that this particular benefit vastly outweighs the negatives. However, it would appear to be a more open question than many believe.

There are different parts to break out in examining the question of whether or not a patent or copyright actually "promotes the progress." First, it's weighing the negative impacts. To do that, you start out by determining the deadweight loss from the monopoly pricing that is enforced via the patent or copyright. This would be the higher price that can be charged for the good, thanks to the exclusivity granted by the government. The second, much more difficult to calculate, concept to figure out is whether (and to what degree) that exclusivity also slows down additional later improvements, which would, clearly, go against the concept of promoting the progress. This point is often ignored in discussions about patents, due to the fact that many look at an invention in a "static" world -- where the invention (or new content) is the end of production. However, in a dynamic world, innovation is actually an ongoing process of experimenting and changing and tinkering. If each stage of that process is limited and blocked, then clearly it can slow down "the progress" by quite a bit. Third is to look at other costs, such as diverted resources to legal fees.

Of course, it's important to look at the benefits side of the equation as well, and weigh them against the negatives. On that side, the question should be whether or not the content or invention would be created at all in the absence of the protection. To answer that question, what you really need to look at is whether or not there are alternative business models that would create an acceptable likelihood of return to still have the product created. If such models exist, then it would suggest that the "benefit" of the monopoly is somewhat limited. However, if such models do not exist, then you need to account for the loss associated with the invention or content never being created, including the further impacts down the line (if there were no steam engine, would there be no steamboats etc...). You can also look at whether or not such inventions or content would take longer to produce in the absence of protection, and account for how that might slow down the pace of innovation. When it comes to patents, there are also some who claim that another important benefit is "disclosure." That is, a part of the bargain for getting the patent is that you need to disclose the details of the concept so that others can learn from it, and that disclosure should, in theory, create further innovations.

So what does the evidence show? I had been working out a list of all the research to include in this post when I saw that James Bessen and Michael J. Meurer had written up part of a summary of their new book, Patent Failures, which we had mentioned recently. The summary goes through much of the peer reviewed research that I had been planning to mention on the impact (good and bad) of patents, and reveals a rather consistent finding: there is almost no evidence that patents help promote the progress. Specifically:
"it is hard to find evidence suggesting patents are a major factor spurring R&D investment, that patents contribute to economic growth, or even that the patent system is a source of great wealth to important inventors and innovators."
What they find, instead, is that whenever there's a correlation between increased research and development and patents, it's a reverse causality. That is, greater patent protection trails greater research and development. Greater patent protection, however, does not increase research and development. What that clearly suggests is that stronger patent systems are put in place after the research and development is done, in order to protect those who did the work against competition, not to spur further innovation. That may make the earlier inventors happy (it lets them rest on their laurels rather than continue to innovate), but it goes against the very purpose of the patent system, and results in an overall societal loss. This certainly isn't a new finding, and much of the research discussed by Bessen and Meurer can also be found in David Levine and Michele Boldrin's book Against Intellectual Monopoly.

This isn't just the result of one study, either, but a number of different studies comparing a number of different things, both over different time periods, across different countries, different types of products and many other factors. And almost all of the research points in the same direction. There is little evidence that patents actually do what the Constitution says they must to remain Constitutional. There is, potentially, one exception. Bessen and Meurer do note that there is some evidence that patents do have an impact on R&D in the pharmaceutical business (on this Levine and Boldrin disagree with Bessen and Meurer). Indeed, there are some people who claim that a situation like pharmaceuticals is the one case of market failure where patents could make sense, since there's a high capital expenditure requirement on the front end, and the barrier to copying is exceptionally low on the output. This post is long enough already, but there are reasons to even doubt that patents are necessary in pharmaceuticals as well (and actually many reasons to believe that they actively harm the market for health care). However, we'll have to cover that another time.

In the meantime, the next post in the series will pick up on exactly why the negatives associated with patents seem to almost always outweigh the positives.
Links to other posts in the series:


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, Mar 13th, 2008 @ 1:20pm

    I bet you, 100% that somebody will eventually say "copying is stealing" in their post.

    I also bet you 100% that nobody will offer empirical evidence that patent or copyright actually spurs innovation and contributes to economic evidence.

    I also bet you 95% that someone will think Mike support "piracy".

    I bet you 50% that Angry Dude will say that Mike is shilling for his corporate overlord.

    All of this predictions is based on past observation of past copyright and patent debates.


    If all my predictions are wrong, than I done my job of improving the quality of this debate by helping techdirt's detractors avoid the same pitfalls that is the demise of many techdirt's critics and opponents.

     

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  2.  
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    Anonymous Coward, Mar 13th, 2008 @ 1:21pm

    Re:

    Correction:

    If all my predictions are wrong, than I attribute the improvement in the quality of debates to my post.

     

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  3.  
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    Anonymous Coward, Mar 13th, 2008 @ 1:24pm

    Hasn't this dead horse had enough?

    Why not post about America’s broken welfare system, or that cigarettes are unhealthy?

    It’s plain as day, posts like these in your series only serve one purpose, letting the author beat his chest.

    Well Mike, I hope your ego has gotten its needed daily dose of arrogance and we can move on to TechDirt worthy content.

    C’mon Mike.

     

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  4.  
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    angry dude, Mar 13th, 2008 @ 1:29pm

    just another drivel

    One more of those very LOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOng pieces of nonsensical shit from Mikey, the master of demagogy

    Run for US Senate, Mikey

     

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  5.  
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    Kiba, Mar 13th, 2008 @ 1:38pm

    Re: just another drivel

    Maybe I should add "I bet you 100%, that angry dude will make a personal attack at Mike." to my original post too.

    The first comment by anonymous coward is actually by me. I forgot to post my nick.

     

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  6.  
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    Anonymous Coward, Mar 13th, 2008 @ 1:46pm

    Re: Hasn't this dead horse had enough?

    It appears that my first reply didn't get through techdirt.


    The horse ain't dead until the general population agree that intellectual monopoly is generally a bad thing.

    Also, let not forget there are no storage of newbies who will argue against Mike's position with many of the same flawed arguments that their predecessors put out. There are still some education and debates that need to go on.

     

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  7.  
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    Anonymous Coward, Mar 13th, 2008 @ 1:57pm

    Come on .. I never heard anything about Lincoln!?

     

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    still bored, Mar 13th, 2008 @ 2:04pm

    i bet

    i bet you, 100% of all mike's posts are about copyright laws.

     

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  9.  
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    That Guy, Mar 13th, 2008 @ 3:06pm

    Why must reform = abandonment

    These articles are all the same.

    A. Current system if flawed.

    B. Another system based on an opposing theory would work better

    C. Abandon current system, go to opposing system

    There is NEVER any discussion on how to reform a current system, its almost always just dump it and start over.

    That to me just seems intellectually lazy.

     

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  10.  
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    Jake, Mar 13th, 2008 @ 3:11pm

    Something To Remember

    Apologies to anyone who bet too much on Kiba's first bet, but direct imitation of someone else's technology is stealing, and not terribly beneficial to the advancement of science. For example, if Company A devises a new formula for detergent and Company B takes a long took at the component chemicals, then adds a few extra chemicals and finds it works better that way, it's innovation and competition. However if Company C mixes up the exact same formula, puts it in different packaging and passes it of as their own work, it's patent infringement. There are always going to be grey areas, of course, and the Patent Office has probably made a few bad calls over the years; that's why they're subject to judicial review. Unfortunately, some companies seem to feel a greater sense of entitlement than the Constitution was meant to allow them -or just figure that it's cheaper to suppress competition with lawsuits than actually innovate- and have found lawyers and elected officials willing to help them. That's what's wrong with the US patent system.

     

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  11.  
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    Mike (profile), Mar 13th, 2008 @ 3:13pm

    Re: Why must reform = abandonment

    There is NEVER any discussion on how to reform a current system, its almost always just dump it and start over.

    Actually, that's a large part of the discussion, so I'm sorry if that's not clear. We've discussed in great detail various proposals for reform and why they would or wouldn't work. And I'm not saying "scrap the whole system and start over." I'm explaining *why* the system if flawed so people can understand a better way of going about things that might not even involve doing anything to the old system at all.

    The next post in this series will go into great detail about *why* the system is flawed, and from there we can look at the various types of reform available and whether or not they make more sense.

    But, the more you look at the research, the more you would realize that most reform attempts will actually make things worse, not better. But you can't understand why unless you understand where the problems are in the first place. So that's what I'm trying to describe.

    I'm not just saying A is bad, B is better. I'm saying A is bad, here's why it's bad, here's the evidence as to why it's bad, here are proposals to reform it, and here's why they do or do not work. I think that's rather comprehensive.

     

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  12.  
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    Justin Hollabaugh (profile), Mar 13th, 2008 @ 3:18pm

    Just wanted to say...

    Just wanted to say thanks Mike for all of your work on exposing the truth of the issue. I'm finding this series very interesting and informative, and I'm learning a lot.

    Thanks!

     

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  13.  
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    Michael Long, Mar 13th, 2008 @ 3:28pm

    rest on their laurels

    "... it lets them rest on their laurels rather than continue to innovate..."

    This horse is often trottled out of the barn durning these discussions, and to my mind it's simply made of straw. Did Edison just create one invention, and then rest on his laurels? Did King or Clancey or Heinlein just write one bestselling novel and call it quits? Did Spielberg just direct one blockbuster?

    Heck, even bands labeled as "one hit wonders" aren't in that category on purpose. Most at least tried to come up with another song or hit in order to build on their earlier success, but simply failed to capture the public's fancy.

    I suspect that if you look at almost any inventor, author, director, or musician, you'll find that the "hit" upon whose larels they're supposedly resting was neither their first attempt, nor their last.

     

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  14.  
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    mike allen, Mar 13th, 2008 @ 3:36pm

    Re: just another drivel

    of all the stupid drival I have read about copyright on many sites mike is the only one talking sence once again angry dude you are proving to be the raving nosencical mind assuming you can find yours (mind that is)

     

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  15.  
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    Mike (profile), Mar 13th, 2008 @ 3:38pm

    Re: Something To Remember

    Apologies to anyone who bet too much on Kiba's first bet, but direct imitation of someone else's technology is stealing

    It's infringement, not stealing. Two very different things with two very different properties and results. Understanding the difference is important. Not saying it's any less illegal. Just saying that it's different.

    and not terribly beneficial to the advancement of science.

    Actually, if you look at the research and the history, you are incorrect. It actually does tend to lead to the beneficial advancement of science. It's not hard to understand why when you think it through. Merely copying what someone else has done isn't generally useful in the market. You are offering an identical product and you are not the first to market, so tend to have less brand recognition and brand trust. Plus you might not understand the product as well, leading to quality problems.

    So, instead, what happens, is you work on that design to *improve* upon it. In other words, you *compete* and make things better. And then, the competitor can do the same to you. So it's that competition that does tend to lead to the advancement of science. This has been shown historically to happen over and over again.

    For example, if Company A devises a new formula for detergent and Company B takes a long took at the component chemicals, then adds a few extra chemicals and finds it works better that way, it's innovation and competition.

    Which is what tends to happen. But, that IS still considered infringement under the current system.

    However if Company C mixes up the exact same formula, puts it in different packaging and passes it of as their own work, it's patent infringement.

    Why isn't that competition as well? If you open a pizza shop, and I see that you're successful so I open one down the street, isn't that just competition? Then both of us work to make our product more appealing to customers. You might do it by making yours cheaper, and I might do it by improving the product. It's all competition, which drives each of us to be different and innovate in search of profits.

    Unfortunately, some companies seem to feel a greater sense of entitlement than the Constitution was meant to allow them -or just figure that it's cheaper to suppress competition with lawsuits than actually innovate- and have found lawyers and elected officials willing to help them. That's what's wrong with the US patent system.

    I don't deny that that's a big problem of the US patent system, but if you look at the research above, there's yet to be a patent system (other than for pharma) that has done what the patent system is supposed to do. So it's not just a recent problem or one with the US's system. It's endemic to a system that grants monopoly rights.

     

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  16.  
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    Mike (profile), Mar 13th, 2008 @ 3:51pm

    Re: rest on their laurels

    This horse is often trottled out of the barn durning these discussions, and to my mind it's simply made of straw. Did Edison just create one invention, and then rest on his laurels? Did King or Clancey or Heinlein just write one bestselling novel and call it quits? Did Spielberg just direct one blockbuster?

    Fair enough. Perhaps the statement isn't entirely correct, but the evidence DOES show that they slow down the rate and pace of innovation with protection than without. That's what the research linked above has shown, and other studies have shown as well. It doesn't mean they *stop* innovating, but the pace of innovation slows.

     

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  17.  
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    Kiba, Mar 13th, 2008 @ 4:00pm

    Re: Something To Remember

    I win!

    Copying is copying. It isn't stealing.Copying is making a copy of something. Stealing is depriving someone of property.

    It doesn't matter how evil copying is, it is still copying.

    Got that?

    These bets I made are about the likelihood of logical fallacy and personal attacks.

    And you fall for one of the most common fallacy and made one of my bet a self-fulfilling prophecy.

     

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  18.  
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    Anonymous Coward, Mar 13th, 2008 @ 6:03pm

    Don't feed the troll

     

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  19.  
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    Iron Chef, Mar 13th, 2008 @ 7:02pm

    Rambling on what's wrong - a Primer

    I've spent a lot of time trying to identify the main issues (from a business perspective) of the current IP system and trying to tie realistic goals which increase innovation and reduce lawsuits. As such I've identified a few core issues:

    1.) How do you prevent patent trolling, and at the same time promote true innovation?
    Patent trolling hinders innovation and prevents progress by adding additional checks and balances before a company goes to market with a product. If we continue the current course, you can equate the research to Sarbanes Oxley for product development. SOX adds about $2M in overhead costs to a medium sized business, and that is just by adding checks within an organization. To add checks external to an organization adds an incredible amount of labor and effort costs.

    2.) How do you accelearate identification of potential IP challenges early in the process?
    The current system is very, very costly. Involving legal strategy into product development is an afterthought for even large businesses and can slow progress to a crawl. The current system centainly puts small business and startup ventures at an extreme disadvantage. What does not happen is that small companies to innovate and focus on growing client base and delivering the product. In the situation of a infringement challenge, how can they be expedited? Consider unfortunate cases where Vonage or Blackberry RIM/NTP cases where IP holders waited for innovations in the market to gain critical mass.

    3.) How can the process properly promote extending existing inventions?
    Patents specifically, are for the most part, generally built upon another's ideas, or inspired by another piece of art-- filed or not. It's silly to think that no one will think of a better way to accomplish the same task in 70 years! However the current system lacks the ability to truly adopt and extend existing ideas or inventions.


    I also identified that the common benefactor on all sides of the equation was those who actively participate in the employment field of "Law". And, as luck would have it, it's also the most expensive labor component to the equation. When measuring the earned value of these "Law" activities and weighing them in relation to the outputs of their activities, the net productivity gain from these activities is not surprisingly, negative to the entire equation. It negatively effects the overall invention or product development process.

    It looks like Mike will have another post about the negatives, where I'll discuss some ideas of process reform whenever Mike posts that.

    In the meantime, Fire away. What do you think about this?

     

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  20.  
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    Anonymous Coward, Mar 14th, 2008 @ 12:39am

    "that cigarettes are unhealthy?"

    What? Why Wasn't I told?

     

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  21.  
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    Lance, Mar 14th, 2008 @ 3:41am

    Question about the Constitutional clause

    Apologies if this is painfully obvious to everyone else, but I found Mike's initial description of the interpretation of the "key clause" to be a little confusing. In the third paragraph, Mike says:
    ...many have interpreted this clause to mean that any such monopoly granted must "promote the progress of Science and useful Arts." However, a much more reasonable reading of this clause... is that these monopoly grants... should only be considered Constitutional if they actually "promote the progress."
    It appears to me that this statement says, in effect, "Many people interpret this clause to mean X, but what it really means is X." I feel like I'm missing some subtle but important point here. Any help greatly appreciated.

     

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  22.  
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    Lance, Mar 14th, 2008 @ 3:50am

    Dean Baker's ideas about IP, pharma, etc.

    Can someone tell me if economist Dean Baker's ideas about new IP business models and "free trade," particularly with regard to the pharmaceutical industry, have ever been discussed on Techdirt? I have not seen any references to them, but they seem to me to be particularly relevant.

     

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  23.  
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    Anonymous Coward, Mar 14th, 2008 @ 10:10am

    Measurable progression of an idea

    The problem with current patent laws is that once a patent is held, it becomes more profitable to maintain exclusive rights to the idea (and generate money from licensing, lawsuits, etc.) than to focus on improving the idea (and generating money from consumers) except when the monopoly is already established and consumer interest in licensed products begins to wane. New ideas should be viewed in three very similar but distinct ways: 1) An implementation of a patented idea, which should be profitable to the patent holder. 2) A measurable progression of an idea, which should be free but not patentable. And 3) A significant development, which should be patentable

    I don't see immediately how this simplifies the issue from a legal standpoint, but it seems that according to Mike's interpretation of of the Constitutional clause related to IP, 1) and 3) should be more tightly restricted and 2) should be encouraged by the law.

     

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    Mike (profile), Mar 14th, 2008 @ 10:37am

    Re: Question about the Constitutional clause

    Hi Lance,

    It appears to me that this statement says, in effect, "Many people interpret this clause to mean X, but what it really means is X." I feel like I'm missing some subtle but important point here. Any help greatly appreciated.

    Ah, hopefully I can explain it better.

    The clause of the Constitution says "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

    There are different ways this can be interpreted, depending on where you put the emphasis. You could read it as saying that ANY decision Congress makes to give exclusive rights MUST be to "promote the progress." That's the way many interpret it. IF Congress gives exclusive rights THEN those rights are to promote the progress.

    The other way to interpret it is for a right to qualify as being constitution it MUST "promote the progress." In that reading, if Congress issues an exclusive right that can be shown NOT to promote the progress, then Congress erred, that right is unconstitutional and should be done away with.

    In that reading, it's IF the rights promote the progress THEN Congress is allowed to give that right.

    So, it's the difference between IF A THEN B and IF B THEN A.

    Does that explain it better?

     

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    Mike (profile), Mar 14th, 2008 @ 10:38am

    Re: Dean Baker's ideas about IP, pharma, etc.

    Can someone tell me if economist Dean Baker's ideas about new IP business models and "free trade," particularly with regard to the pharmaceutical industry, have ever been discussed on Techdirt? I have not seen any references to them, but they seem to me to be particularly relevant.

    I've kept up with Dean Baker's ideas, though I don't think I've written about them on Techdirt. I think he gets the first part of the equation right (noting the negatives associated with IP), but I don't think his solution necessarily makes sense. When it comes to the pharma industry, his solution is closer than some others, but I think he discounts how the industry would evolve in the absense of patents.

     

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    angry dude, Mar 14th, 2008 @ 10:47am

    Re: Re: Question about the Constitutional clause

    Some useless math-challenged MBA type is teaching us boolean logic... How lovely...

    Sorry, I forgot - this is a lecture for retarded kibbutz punks, I realy should go back to academia

    The Founding Fathers are rolling over in their graves
    (they'be been doing it for quite a while now)

     

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    Gene Cavanaugh, Mar 14th, 2008 @ 11:34am

    Comment on IP process

    As a patent attorney, I tend to agree with much of this article; certainly "business model" and "software" IP is in a state of disrepair and abuse.

    However, I quote below:

    "What they find, instead, is that whenever there's a correlation between increased research and development and patents, it's a reverse causality. That is, greater patent protection trails greater research and development. Greater patent protection, however, does not increase research and development. What that clearly suggests is that stronger patent systems are put in place after the research and development is done, in order to protect those who did the work against competition, not to spur further innovation. That may make the earlier inventors happy (it lets them rest on their laurels rather than continue to innovate), but it goes against the very purpose of the patent system, and results in an overall societal loss. This certainly isn't a new finding, and much of the research discussed by Bessen and Meurer can also be found in David Levine and Michele Boldrin's book Against Intellectual Monopoly."

    Edison did not have the money for his experiments and inventions (and certainly for his famous lab) UNTIL he obtained a patent on some of the early ones and used the money gained thereby. So, without IP protection, the light bulb, phonograph (and arguably the telephone) would not have happened at that time (and who knows when?).

    Bell would not have agressively promoted and gained the acceptance of the telephone without IP royalties (and said so!).

    Google would have been unsuccessful in obtaining funding without IP protection, since they were entering a field dominated by well-positioned, well-funded competitors.

    I could go on and on, but I basically agree the IP system needs fixing (specifically, campaign finance reform to "buy back" our legislators! They are the problem!).

    But to make such a statement above smacks of the Bush "Weapons of Mass Destruction" obfuscation; you decide what you want the facts TO BE and act accordingly!

     

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    DanC, Mar 14th, 2008 @ 1:38pm

    Re: Re: Re: Question about the Constitutional clau

    Sorry, I forgot - this is a lecture for retarded kibbutz punks, I realy should go back to academia

    Make sure you attend an English class and participate on a debate team while you're there. Maybe then you'll actually be able to make intelligent comments.

    The Founding Fathers are rolling over in their graves

    Due to the current abuse and flawed implementation of the present copyright and patent system. I agree.

     

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    Anonymous Coward, Mar 14th, 2008 @ 1:47pm

    Re: Re: Something To Remember

    Kiba, you lose.

    Get a dictionary or find an online one (I don't feel like wasting my time typing out the entire definition). Look up stealing - it's not as simple as "Stealing is depriving someone of property." It's definitely one of those gray areas.

     

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    Mike (profile), Mar 14th, 2008 @ 5:58pm

    Re: Comment on IP process

    Hi Gene... I disagree with most of your assertions.


    Edison did not have the money for his experiments and inventions (and certainly for his famous lab) UNTIL he obtained a patent on some of the early ones and used the money gained thereby. So, without IP protection, the light bulb, phonograph (and arguably the telephone) would not have happened at that time (and who knows when?).


    Er, that's a HUGE leap, especially considering that Edison did almost no inventing himself, and basically took the work of others and marketed the hell out of it. Edison was a marketer, not an inventor.

    http://m4th.com/Articles/Article.php?Article-Title=9-Inventions-Edison-Did-Not-Make

    Patents had little to nothing to do with those inventions. What they DID do though, was allow Edison to sue MANY other, more innovative, individuals and companies and slow down their work.

    To claim that patents made any of these products possible is simply false. Clearly, there was a competitive market going on for these products, and the demand from that market would have made them show up.


    Bell would not have agressively promoted and gained the acceptance of the telephone without IP royalties (and said so!).


    Another awful example, considering the new research that shows Bell's own patent was based on getting the USPTO to reveal someone else's patent to him, and then a scam where he got his own patent retroactively dated to beat that one.

    So, no. Bell's patent hurt the competition.

    Google would have been unsuccessful in obtaining funding without IP protection, since they were entering a field dominated by well-positioned, well-funded competitors.

    Huh? While Google does have some patents, they have almost never used them aggressively. Secondly, Google's funding had nothing to do with its patents and everything to do with its growth rate.

    I could go on and on

    It would help if the examples actually showed how the patent system helped. So far, they have not.

    I don't deny that some people got rich off the patent system, but that doesn't prove that it helped promote the progress. Just that it made one person rich.

     

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  31.  
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    Mike (profile), Mar 14th, 2008 @ 6:02pm

    Re: Re: Re: Question about the Constitutional clau

    Some useless math-challenged MBA type is teaching us boolean logic... How lovely...

    Right, a "math-challenged MBA-type" who taught college statistics for 3 years. But, you know, it's not like angry dude has ever checked his facts, ever.

    And, of course, I wasn't "teaching" boolean logic. I was explaining the statement that the guy asked about.

    Your inability to grasp the most basic English astounds ever more each day angry dude.

     

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  32.  
    identicon
    Lance, Mar 15th, 2008 @ 3:38am

    Re: Re: Question about the Constitutional clause

    Thanks for the clarification, Mike. I'm still getting my head around some of this, but it appears that there are two separate but related issues that are confusing (or at least they're confusing to me), and both issues have to do with how a particular intellectual property law is determined to be constitutional.

    Issue #1 appears to involve the "intent" of a given law with regard to promoting the progress vs. the "actuality" of the law with regard to promoting the progress. I.e., some might argue that if Congress merely INTENDED for a law to promote the progress, then that law should be considered constitutional, while others might argue that it's not enough for Congress to merely intend for a law to promote the progress, that law must be shown to ACTUALLY promote the progress (or at least, if it can be shown that the law does not actually promote the progress, then that law should be considered unconstitutional).

    Issue #2 involves the way one determines whether a given law should be considered to promote the progress. There appear to be two primary approaches: a) the law has SOME positive effect in promoting the progress, or b) the law's NET effect is to promote the progress.

    Apologies again if all this is obvious to everyone else; I'm sure as I wrestle with these ideas some more, I will begin to understand them better.

     

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  33.  
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    Mike (profile), Mar 15th, 2008 @ 1:04pm

    Re: Re: Re: Question about the Constitutional clau

    it appears that there are two separate but related issues that are confusing (or at least they're confusing to me), and both issues have to do with how a particular intellectual property law is determined to be constitutional.

    Hi Lance. Yes, I think you've boiled the issues down correctly. That's what the debate is about.

     

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  34.  
    identicon
    MLS, Mar 16th, 2008 @ 12:43pm

    Re: Re: Re: Re: Question about the Constitutional

    Point No. 1: Article 1, Section 8, Clause 8 of the US Constitution merely gives Congress the authority to craft laws concerning "writings and discoveries". It does not mandate that Congress do so. Hence, if Congress chose to do nothing and enact no such laws it would be quite "legal" for it to do so. Of course, this then begs the question about what power the states would have in thie arena. Based upon various articles I have read over the years, prior to the adoption of the US Constitution 12 of the 13 original colonies had already enacted such laws in their own right. Even after the Constitution was adopted certain states continued to acccord such rights under its laws. The most recent I can recall is that the State of California has a copyright law on its books up until the passage by Congress of the Copyright Act of 1976. While the right of the state to grant state copyright expired with passage of the 1976 Act, state conferred copyrights may still remain in effect to some degree and must be considered when assessing a question of copyright infringement.

    Point No. 2: There is considerable difference of opinion between attorneys, scholars, and judges as to the significance of the preamble phrase "To promote the progress of the sciences (i.e., what are now associated with copyrights) and the useful arts (what are now associated with patents). Judicial decisions addressing this question are almost nil. One case dealing with patents, Graham v. John Deere (Supreme Court 1966) suggested in non-binding dictum that promotion of progress is a limitation governing all that follows in the clause. Using this construct, but while at the same time recognizing judicial deferrence in most matters of economic matters to Congress, a not altogether unreasonable interpretation is that it is for Congress to decide what "promotes" and what does not. Except for an occassional legal article, few, if any, addressing interpretation of the clause have advocated that any statute enacted pursuant to the conferred power must actually promote progress in order to pass constitutional muster.

    Point No. 3: There is nothing to prevent Congress from crafting laws in this area differentiating between various works of authorship and invention, including providing no protection for certain classes of works of authorship and inventions, while providing limited terms of duration for others. Likewise, there is nothing inherently wrong in a constitutional sense from according with crafting various classes of subject matter pertaining to works of authorship and inventions, and then to parse out differing limited terms based upon which class one happens to fall.

    Point No. 4: One thing that makes reasoned discussion on this subject so difficult is that both copyright and patent are continually being lumped into the same basket, when in fact the two laws are entirely separate and distinct.

    Perhaps reform of one or both of these two bodies of law is appropriate, but what is now on the table for so-called patent reform is hardly what I would call "reform". It is to date a mere nibbling at the edges of the law with little, if any, substantive effect on the most important concepts currently embraced by patent law. The reform as currently proposed, if it was passed today, would do virtually nothing to address the issues that give rise to the many concerns raised by this site and the comments pertaining to its various articles.

     

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  35.  
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    Mike (profile), Mar 17th, 2008 @ 9:11am

    Re: Re: Re: Re: Re: Question about the Constitutio

    Except for an occassional legal article, few, if any, addressing interpretation of the clause have advocated that any statute enacted pursuant to the conferred power must actually promote progress in order to pass constitutional muster.

    While this is true, it doesn't preclude that possibility from happening.

    However, I'm less interested in having courts look at each separate grant of such monopolies, and more interested in looking at the overall granting. As the article above shows, the evidence is rather abundant that patent law, in almost all cases, does not promote the progress. Thus, it would suggest that patent law itself (perhaps with the exception of the pharmaceutical industry) does not promote the progress and therefore needs to be radically changed or dumped entirely.

    Point No. 3: There is nothing to prevent Congress from crafting laws in this area differentiating between various works of authorship and invention, including providing no protection for certain classes of works of authorship and inventions, while providing limited terms of duration for others.

    I'm not sure anyone suggested otherwise?

    Perhaps reform of one or both of these two bodies of law is appropriate, but what is now on the table for so-called patent reform is hardly what I would call "reform". It is to date a mere nibbling at the edges of the law with little, if any, substantive effect on the most important concepts currently embraced by patent law.

    On this we agree absolutely. I have said repeatedly that I think the current attempt at patent reform is trying to marginally treat the symptoms, not the disease. And, I think in doing so, it'll make some parts better but many parts much worse.

    For some odd reason, many people who disagree with my position on patents seem to think that I'm a strong supporter of this attempt at patent reform. I am not.

     

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  36.  
    identicon
    MLS, Mar 17th, 2008 @ 9:57am

    Re: Re: Re: Re: Re: Re: Question about the Constit

    "As the article above shows, the evidence is rather abundant that patent law, in almost all cases, does not promote the progress."

    Since I have not read the book I am not in a position to comment one way or another on its contents. I can say, however, that while in some instances patents have proven beneficial in specific cases, in the vast majority of cases innovations are not even patented. Some companies at times rely on trade secret law, and some do not concern themselves at all with any of the plethora of "IP" laws. Yet, innovation continues to flourish. If nothing else, this does suggest that for most who innovate patents are not deemed essential for execution of whatever business model they have chosen to pursue.

    I do believe patents have a proper role, but by and large their importance to our economic system is largely overstated. As a good friend and prolific innovator once told me, patents are all well and good, but he thought they were too much of a hassle and unduly expensive to secure, were not particuarly effective in his technical field, and that his time was better spent continually improving his product(s) to meet the competition and increase his customer base.

     

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  37.  
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    Mike (profile), Mar 17th, 2008 @ 1:10pm

    Re: Re: Re: Re: Re: Re: Re: Question about the Con

    Since I have not read the book I am not in a position to comment one way or another on its contents. I can say, however, that while in some instances patents have proven beneficial in specific cases, in the vast majority of cases innovations are not even patented. Some companies at times rely on trade secret law, and some do not concern themselves at all with any of the plethora of "IP" laws. Yet, innovation continues to flourish. If nothing else, this does suggest that for most who innovate patents are not deemed essential for execution of whatever business model they have chosen to pursue.

    Indeed. Again, we have not said anything differently.

    However, for companies that choose not to make use of IP laws, things are being made increasingly difficult by others who then claim IP rights over the inventions made by those who chose to forgo patents. For that reason alone, we have a big problem, as companies feel obligated to get patents for defensive reasons only.

    I do believe patents have a proper role, but by and large their importance to our economic system is largely overstated. As a good friend and prolific innovator once told me, patents are all well and good, but he thought they were too much of a hassle and unduly expensive to secure, were not particuarly effective in his technical field, and that his time was better spent continually improving his product(s) to meet the competition and increase his customer base.

    Easy enough in theory until someone else suddenly claims you infringed on their patent, just granted, and owe them 15% of the money you made on all your continual improvements...

     

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  38.  
    identicon
    Rusty Mase, Mar 23rd, 2008 @ 11:42am

    Re: Re: Comment on IP process

    Gene Cavanaugh wrote on March 14th
    Bell would not have agressively promoted and gained the acceptance of the telephone without IP royalties (and said so!).

    Mike Masnick wrote on March 14th
    Another awful example, considering the new research that shows Bell's own patent was based on getting the USPTO to reveal someone else's patent to him, and then a scam where he got his own patent retroactively dated to beat that one.

    So, no. Bell's patent hurt the competition.

    Mike, this is a example of where your opinion is expressed as a a fact that drives all of us into concurrence with your conclusion. I will simply cut and past this from Wikipedia.

    http://en.wikipedia.org/wiki/Elisha_Gray_and_Alexander_Bell_Controversy

    Did Bell steal the invention from Gray?

    "Although Bell was accused, and is still accused, of stealing the telephone from Gray,[23] Bell used Gray's water transmitter design only as a proof of concept scientific experiment to prove to his own satisfaction that clear human voice sounds could be electrically transmitted. After that, Bell focused on improving the electromagnetic telephone. Because Bell's electromagnetic telephone did not use Gray's invention in public demonstrations or commercial use, Bell did not steal Gray's invention."
    23. The Telephone Gambit, by Seth Shulman (2008), page 211.

    We possibly need to review Shulman's book on this topic but considering that this matter was subject to court actions, etc., and Bell was found to be the actual inventor in those, your conclusion is simply self-serving for your argumentation in this matter. You need to use honest information to draw honest conclusions, not simply to close the argument by stating the facts are on my side (of the argument).

    Additionally, the issue is not whether this "hurt" the competition but whether the patent system in this instance served to increase innovation and the public good by introducing a new and useful technology to the citizens of the US, which it most certainly did.

     

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  39.  
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    Mike (profile), Mar 23rd, 2008 @ 12:11pm

    Re: Re: Re: Comment on IP process

    We possibly need to review Shulman's book on this topic but considering that this matter was subject to court actions, etc., and Bell was found to be the actual inventor in those, your conclusion is simply self-serving for your argumentation in this matter. You need to use honest information to draw honest conclusions, not simply to close the argument by stating the facts are on my side (of the argument).

    Fair enough. But I think there's enough evidence at this point to suggest that Bell used the patent system to keep out competitors, rather than to innovate...

    Additionally, the issue is not whether this "hurt" the competition but whether the patent system in this instance served to increase innovation and the public good by introducing a new and useful technology to the citizens of the US, which it most certainly did.

    How can you say that it most certainly did? It gave Bell an unnecessary monopoly (since clearly others had come up with similar solutions) and prevented the type of competition that leads to further innovation.

     

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  40.  
    identicon
    Rusty Mase, Mar 23rd, 2008 @ 1:04pm

    Mike wrote:
    ....I think there's enough evidence at this point to suggest that Bell used the patent system to keep out competitors, rather than to innovate...

    Well, we might conclude that and we might otherwise conclude that innovation proceeded very rapidly. Irregardless, it is not a point that substantiates your argument.

    How can you say that it most certainly did? It gave Bell an unnecessary monopoly (since clearly others had come up with similar solutions) and prevented the type of competition that leads to further innovation.

    And the telephone system in the US was not innovatively developed soon afterwards? Mike, you just made that up and then used it as evidence that your opinion should prevail over mine.

    Possibly this was truly a success story where Bell was granted a short-term monopoly that created the opportunity for people to invest in developing the system and making a profit from that investment. If you disperse that opportunity possibly no one can gather the necessary capital to develop this new system of communication and it is slower to develop than with access to a short-term monopoly.

    We might need a historian to research the development of telephone communications in Switzerland from 1880 to possibly 1900 and see just where innovation actually occurred. Obviously, the Swiss were not constrained by US patents during that period.

    That is, where did the citizens of a country actually benefit from this new technology? Do you have any clue as to where we might look that up? Obviously not in patents granted to Swiss citizens as they had no system to issue them. Possibly we might look to US patents granted for improvements in telephone communications during this period and see what date the innovations they suggest were implemented in Switzerland.

    That could be a better indicator of innovation and "promotion of progress."

     

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  41.  
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    Mike (profile), Mar 23rd, 2008 @ 1:47pm

    Re:

    Well, we might conclude that and we might otherwise conclude that innovation proceeded very rapidly. Irregardless, it is not a point that substantiates your argument.

    Wait, the fact that he held back competition doesn't substantiate my argument? How do you figure?

    And the telephone system in the US was not innovatively developed soon afterwards? Mike, you just made that up and then used it as evidence that your opinion should prevail over mine.

    Look at the pace of development of the telephone system after Bell's patent was awarded. It was quite slow for many years, and Bell's early attempts to market it were ridiculous. He focused on other markets (i.e., using it for broadcasts, like radio). There was no real competition to help focus the market, so the market itself did not really develop for many years.

    Possibly this was truly a success story where Bell was granted a short-term monopoly that created the opportunity for people to invest in developing the system and making a profit from that investment. If you disperse that opportunity possibly no one can gather the necessary capital to develop this new system of communication and it is slower to develop than with access to a short-term monopoly.

    Do you have a shred of evidence to support that? I have seen none. What I have seen is that the presence of competition is no impediment to investment (come visit us in Silicon Valley and I'll introduce you to every VC who has invested in different social networks over the past few years), and that competition is no impediment to more innovation. In fact, the path of innovation occurs faster -- and the rewards are bigger.

    Yes, some investors lose their money, and some inventors don't make money, but they dust themselves off and try again. Competition and the markets drive the innovation. If we'd given a monopoly on social networks, we'd still all be using Ryze. Don't know Ryze? It was what inspired Friendster, which inspired MySpace which inspired Facebook. Each one got better.

    Should we pity the founder of Ryze who doesn't get to cash in like MySpace and Facebook's founders? I don't think so. Each evolution was better than the last, and they all happened rapidly, rather than waiting for a "patent" to expire. It's called competition and it's a good thing.

    We might need a historian to research the development of telephone communications in Switzerland from 1880 to possibly 1900 and see just where innovation actually occurred. Obviously, the Swiss were not constrained by US patents during that period.

    I'm not sure what Switzerland has to do with this. And, the historical record will be of little use here for a few reasons. First, in 1888 Switzerland did establish a patent system, if an exceptionally weak one. That's about the time when the concept of the telephone was first being noticed. Second, in many countries, the original telelphone system was gov't owned -- as was the case of Swisscom. So there was little need to innovate.

    That is, where did the citizens of a country actually benefit from this new technology?

    For things like the telephone the answers are so broad and so numerous it's difficult to know where to begin to start. The ability to do instant, person-to-person communications had a tremendous and uncountable benefit. And, of course, it eventually resulted in many additional innovations, including the internet.

     

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