Why Do Patents Tend To Cause More Harm Than Good?

from the monopoly-economics dept

Continuing my series of posts on some of the basics behind intellectual property, I wanted to delve further into the discussion I kicked off last week about judging the harm vs. benefit of intellectual property, and being able to properly balance the two. As we pointed out last week, nearly all of the economic evidence shows that patents tend to do more harm than good. Researchers James Bessen and Michael J. Meurer (perfect timing again) have gone into a little more detail as to how much damage is done, but I wanted to focus on why the downsides to patents are so often worse than the upsides.

At one level, it goes back to basic fundamental economics. Any given monopoly is going to be bad. There are economic rents associated with a monopoly. It limits the supply available and increases the cost, acting as a deadweight loss to society. That's absolutely true with patents as well (as much of the research has shown). However, there are a few more reasons why patents tend to be a net negative. First, let's focus on why the reasons in favor of patents aren't particularly strong.

The first is that it should act as an incentive to create the product. Yet, as the research has shown, that's almost never true in practice. More innovation tends to happen with weaker patent laws, and when stronger patent laws are put in place, the pace of innovation decreases. The reason is that real innovation almost never happens because of patents. Very few people invent stuff "to get a patent," but because there's a need in the market and they can help solve it. That's true with, or without, patents. Furthermore, it's that need in the market that is the real incentive for innovation. If you can serve a market, there's a way to make money from that market, and that acts as plenty of incentive.

The fears that an "easily copied" product will damage the original inventor are also wildly overblown. Study after study after study has shown that there is a distinct first mover advantage, and even things that are easily "copied" doesn't mean that the copycats get success in the market. People put a premium on buying from the original creator. Furthermore, they often believe (correctly in many cases) that the original creator has a better understanding of the market, and is likely to continue to innovate faster and with better solutions. Finally, in the worst case scenario, where a copycat is able to do a better job, that's also not a bad thing, because the societal benefit is still a better product. It's called competition, and is generally considered a good thing in a market economy.

Another popular claim is that patent benefit us via "disclosure." Because patents require the inventor to "disclose" the invention, the idea is that these patents will spur additional innovation as others learn from the patents and build on them. The idea is that there's obvious benefit in keeping the idea secret, so in exchange for disclosing the idea, the government gives the inventor a monopoly. However, this is easily shown to be false. First, very few patents these days are written to the point where they actually disclose enough to be useful. They tend to be broadly written in a way that can cover as much as possible. However, there's an even better simple logical rationale for why disclosure is a myth when it comes to patents. If the inventor truly believes there's tremendous value in keeping the idea secret, he or she will still keep it secret. There's no real benefit to disclosing it to get the patent. You get just as much benefit from keeping it secret. The only benefit is if you think that others will be able to figure out the same concept in less time than it takes for the patent to expire. In other words, if you realize that others will be able to come up with the same thing in that amount of time. So getting a patent prevents others from doing that. But if you truly believe that it would take longer than the length of the patent to figure out its secrets, then you'll keep it quiet anyway.

As for why the downsides to patents are almost always present, it's based on a fundamental understanding of how innovation works. If most innovation was a single burst of inspiration, then patents could make sense. However, in a scenario where innovation is an ongoing process of building, trying, adjusting, building, trying, adjusting -- then patents are likely to be harmful. They add a cost and a hassle at many of the steps along the way. They add a series of hurdles that involve time, money and effort for each step of that process. That, alone, significantly slows down innovation. Studies have shown, in fact, that most innovation is an ongoing series of innovations rather than a single burst of inspiration. Furthermore, great breakthroughs tend to come not from a single mind, but in different people looking at the same problem, learning from each other and building on each other's work. By throwing tollbooths into that process, you slow down the innovation.

Thus, the supposed benefits of patents rarely are all that beneficial, and yet the downsides to patents are quite large and show up quite often. So, it should be no surprise that the research shows patents tend to do quite a bit to slow down innovation, rather than accelerate it.
Links to other posts in the series:


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, Mar 20th, 2008 @ 12:50pm

    Mike, after reading your past article, it seems you have backed off your earlier claims of patents not being beneficial in the pharmaceutical industry? Is that a fair assumption to make?

     

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  2.  
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    angry dude, Mar 20th, 2008 @ 12:56pm

    Mikey's riding a dead horse, AGAIN !

    Gee, mikey

    you are riding a dead horse again

    Your cited "research" is completely bogus - paid for by large patent-averse corporations

    Before any "independent" research is published a source of funding should be announced
    Also, I'd like to know the source of YOUR funding, buddy
    But we all know it already, don't we ?
    Follow the money, dude
    Always follow the money

    P.S. Why don't you stop shitty blogging and run for US Congress ?
    I'm sure you'll do well - you have a natural talent for demagogy

     

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  3.  
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    Killer_Tofu (profile), Mar 20th, 2008 @ 1:01pm

    Perfect Example

    An excellent example of the first to market, since somebody undoubtedly try to shoot Mike down on that one, is the iPod.
    No, it wasn't the first MP3 player to the market.
    But it was definitely one of the first to do everything that people actually wanted them to be able to do.
    There are plenty of other MP3 players out now that do much of the same functions and more, yet Apple still dominates the MP3 player market.

     

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  4.  
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    Jonah, Mar 20th, 2008 @ 1:04pm

    Pharma disagrees

    Overall there are some excellent points in this post. I would however like to raise one objection which is not adequately covered. The current US patent system provides companies and individuals in high risk and expense R&D in fields like pharmaceuticals the opportunity to recoup that initial investment without competitors running out equivalent products without the cost of research.

    Patients (and profit hungry insurance companies) will always choose a low cost generic if it is available. Where insurance mandates the lowest cost option… there can be no first mover advantage.

    As DiMasi of Tufts university (the universally agreed expert in the field of pharmacoeconomics) indicates the cost of bringing a new drug to market (2003 estimates) is $403 million dollars. Out of every 10 drugs which are even approved for clinical testing, only one will be a commercialized product. The cost of design and proving bioequivalence of a generic drug to compete is less then $5 million.

    I would argue that the length of patent protection is currently an excellent drive of innovation within the market. The “blockbuster” drug only has 7 years on market (tops) before patents expire. This drives pharma to create news drugs to guarantee future revenues streams to their shareholders. The one concern here is the need to replicate the blockbuster in order to maintain shareholder value. A longer patent might create a market for further development in unmet medical needs (such as disease with 100,000 to 250,000 cases a year). These disorders will not produce the blockbuster profits but will pat the bottom line of an otherwise well of company.

    I don’t think disclosure is an applicable discussion point with regards to this industry due to the involvement of the Food and Drug Administration. The drug must be well understood and characterized in order to meet regulatory guide lines for safety and efficacy. Most generic drug makers know the formula (either through the patent, or reverse engineering from package inserts and journal articles) prior to loss of patent protection.

    While in many cases your argument is based soundly in facts, I don't think you will find a company willing to invest this amount of money in life saving treatments without the guarantee of profit from sale (at least until cost of R&D is covered).

     

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  5.  
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    sonofdot, Mar 20th, 2008 @ 1:06pm

    Re: Mikey's riding a dead horse, AGAIN !

    Seriously, butthole, if you hate Mike's writing so much, and can't stand any of the topics, SHUT THE FUCK UP! Go away, quit reading and commenting here -- you're wasting valuable bits.

    You never have anything constructive to offer, and you never offer any facts with your childish attempts to refute Mike's arguments.

    If you have some evidence, some facts you can site, then do it. Otherwise, STFU and go away.

     

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  6.  
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    Anonymous Coward, Mar 20th, 2008 @ 1:10pm

    Jonah, in one of the reference articles, Mike states that "besides pharma" so maybe he does not feel that pharma should be included in this conversation, but I can't speak (or write) for him.

    Indeed, R&D is high, but I also think that the Tufts numbers are high due to the fact that they include "lost opportunity costs" which I don't think should be there. Right now Tufts pegs the cost of R&D at over a billion dollars, even without opportunity costs, its still a really big number.

    Also, pharma has gotten better at bringing a drug to market, so you see patent protection more along the lines of 10-12 years, not just 7 anymore. Of course, with the FDA becoming more cautious, that may indeed come back down in the near term future.

     

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  7.  
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    angry dude, Mar 20th, 2008 @ 1:12pm

    Re: Re: Mikey's riding a dead horse, AGAIN !

    Ho-Ho-Ho

    One of Mike's lemmings has spoken
    Ligten up dude
    it's just internet
    anything goes even shit like this blog
    you can browse porn sites or read techdirt comments
    Whatever makes you happy dude

     

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  8.  
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    Jake, Mar 20th, 2008 @ 2:17pm

    Re: Pharma disagrees

    I would strongly suggest that medical research -among other things- ought to be undertaken for reasons other than profit, by institutions answerable directly to the government, but that's another debate altogether.

     

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  9.  
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    Anonymous Coward, Mar 20th, 2008 @ 2:18pm

    Re: Re: Re: Mikey's riding a dead horse, AGAIN !

     

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  10.  
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    sonofdot, Mar 20th, 2008 @ 2:19pm

    Re: Re: Re: Mikey's riding a dead horse, AGAIN !

    I disagree, this isn't an anything goes free-for-all. The Internet can be, and generally is, a civil place. Then again, there are weasels like you, who make the Internet a pretty shitty place most of the time. A few people try to have an intelligent conversation, and we're interrupted by someone with Tourette's syndrome of the keyboard.

    Each of your posts proves that you're socially-challenged and poorly educated. But I guess you have nothing better to do than post asshole comments on blogs, but only because you can't masturbate 24 hours a day. But I think you should give it another try -- it'll keep your hands off the keyboard.

     

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  11.  
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    Derek Kerton (profile), Mar 20th, 2008 @ 2:34pm

    The Powerful "Anti Patent Lobby"

    Angry Troll Dude,

    "Large Anti-patent corporations"? Is there such a thing? Who exactly is in this shadow "anti patent lobby"? I know big business, big oil, big pharma, telecom, etc. I am familiar with the powerful lobbies of the NRA, the Jewish leagues, religious right, weapons makers, etc. But excuse me if I'm not so familiar with which big, monied interests are anti-patent.

    You say "Follow the money" with such enthusiasm. Pray, tell, have you done this? What did you find is funding this anti-patent movement? A bunch of libertarians, hippies, freethinkers, economists, patriots, right AND left wingers, and basically a grassroots movement of people willing to re-think our goalposts, and put them back where the founding fathers placed them? Wow, sounds like it might just be the voice of the people, making a little bit of noise among the thunder of the pro-patent lobby.

    Keep following the money. Where does Techdirt's money come from? Well, a look at the banner ads is one indication. I see Intel and Motorola ads on this page as I type. Hmmm, do you think those two companies are anti-patent? You have to be a complete idiot if you do. The fact that you're wrong is staring you in the face as you rant.

    Techdirt sometimes takes positions AGAINST the people who are funding it. Other clients for Techdirt are private equity houses, which invest frequently in patent portfolios. Techdirt does private research for numerous companies that file and protect IP with patents. Why do these people still pay Techdirt despite this rift? Because they also get solid, unbiased, straight-up honest advice of the sort you seldom get from the top Consulting/analyst firms (who bias their results to make the paying clients happy).

    It's something called integrity. You may have integrity for all I know, but from what I can tell, you could use a few more sandwiches before calling yourself a picnic.

    And yeah, my firm is a Techdirt partner, and I disagree with about 20% of what I read here, too. But I sure can't ever question the integrity of a blog that takes positions that harm its economic interests just because they actually studied the issue, and print what they believe.

     

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  12.  
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    andy, Mar 20th, 2008 @ 2:45pm

    point of order

    your efforts are appreciated, but please don't feed the trolls, sonofdot.

     

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  13.  
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    Willton, Mar 20th, 2008 @ 3:06pm

    Bogus Research

    This "little more detail" that Messrs. Bessen and Muerer do has a fatal flaw: it only focuses on publicly traded firms. I don't think anyone should be all that surprised that firms like Microsoft, Yahoo, Cisco, and Google don't benefit from the patent system: those companies aren't developing cutting-edge technology anymore. Bessen and Muerer's research takes in no input from small start-up companies, who use patents to get a foothold in the market and protect their R&D investments against poaching by the the large firms analyzed here.

    Perhaps the authors should compare their estimated value of patents with the amounts paid by these same publicly traded firms to acquire patents over the same period of time. I suspect that the guys in the trenches buying patents are much more in touch with the value of patents than the ivory tower economists.

    Here's my favorite quote from these guys: "When an innovator commercializes a new technology there is a risk that a patent owner will assert a patent against the innovator."

    Well, then I guess the "innovator" is not so innovative, is it?

     

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  14.  
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    Willton, Mar 20th, 2008 @ 3:20pm

    More Flaws in "Patent Failure"

     

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  15.  
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    Willton, Mar 20th, 2008 @ 3:25pm

    More Flaws in "Patent Failure"

    Sorry for the double post.

    http://www.patentlyo.com/patent/2008/03/the-costs-and-b.html#comment-107738998

    B&M s notion that acquisition costs of patent rights required by a firm to sell its products should be in line with some nominal fraction of its R&D spending is absurd. This follows from the simple realization that the less a firm invests on its own R&D, the more expenses it is likely to incur for acquiring patent rights arising out of the R&D fruits of OTHERS. By their distorted logic of using R&D spending as some proxy, B&M demonstrate a lack of understanding of basic aspects of licensing and how innovations come to market. B&M’s findings that publicly traded companies which they tracked from 1984 to 1999 make lower R&D investments in relative terms compared to their costs for infringing patents of others is no evidence of “patent failure”. B&M’s inference of “failure” cannot be considered as scholarship but as mere advocacy. B&M merely advocate the position of firms that seek to weaken the U.S. patent system. In a rare candid passage, B&M identify such a firm as “the average public firm outside the chemical and pharmaceutical industries [that] would be better off if patents did not exist”.

     

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  16.  
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    Mike (profile), Mar 20th, 2008 @ 3:39pm

    Re:

    Mike, after reading your past article, it seems you have backed off your earlier claims of patents not being beneficial in the pharmaceutical industry? Is that a fair assumption to make?

    No. I still think they're harmful in the pharma industry, but I'm saving that discussion up for another time. :) The story in pharma is a bit different. I'll get to it...

     

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  17.  
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    Greg, Mar 20th, 2008 @ 3:41pm

    Patents

    Sure, your right. I can't wait to develop something and give it away. After all, I don't really deserve anthing for all my time, effort, and money spent.
    perhaps we should do away with copyrights also and pay someone ele less to write this same artice.

     

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  18.  
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    Mike (profile), Mar 20th, 2008 @ 3:46pm

    Re: Mikey's riding a dead horse, AGAIN !

    Your cited "research" is completely bogus - paid for by large patent-averse corporations

    Actually, almost all of the cited research is peer-reviewed academic research. I've yet to come across any research supporting this position that is corporate-backed.

    But you know that.

    Also, I'm unaware of many "patent-averse" corporations. I know of many who dislike how patents are used, but most of them are strongly pro-patent themselves.

    Before any "independent" research is published a source of funding should be announced

    As I said, nearly all of it is academic research by well known and well respected economists.

    What's YOUR funding?

    Also, I'd like to know the source of YOUR funding, buddy

    There's no secret there either. Techdirt makes its money providing services to many companies -- though all of it is for their internal use. We do not do any public advocacy work at all. We don't do any work currently having to do with patents. You know this. You've been told this. But because you fail to have an actual argument (you know, with evidence) you spout lies.

     

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  19.  
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    Mike (profile), Mar 20th, 2008 @ 3:52pm

    Re: Pharma disagrees

    I would however like to raise one objection which is not adequately covered. The current US patent system provides companies and individuals in high risk and expense R&D in fields like pharmaceuticals the opportunity to recoup that initial investment without competitors running out equivalent products without the cost of research.

    This is a pretty common argument, and some find it persuasive. I, however, do not. As I mentioned in a comment above, I'll address the pharma situation later. However, the research there also suggests patents are unnecessary.

    The Italian example is rather instructive here, in that Italy did not allow pharma patents, but still had a very productive and competitive pharma industry. Once they did allow pharma patents, that industry shrunk.

    As DiMasi of Tufts university (the universally agreed expert in the field of pharmacoeconomics) indicates the cost of bringing a new drug to market (2003 estimates) is $403 million dollars. Out of every 10 drugs which are even approved for clinical testing, only one will be a commercialized product. The cost of design and proving bioequivalence of a generic drug to compete is less then $5 million.

    I'd suggest you look at the research of Merrill Goozner who has done a fantastic job looking at the real cost of developing new drugs.

    I would argue that the length of patent protection is currently an excellent drive of innovation within the market. The “blockbuster” drug only has 7 years on market (tops) before patents expire. This drives pharma to create news drugs to guarantee future revenues streams to their shareholders. The one concern here is the need to replicate the blockbuster in order to maintain shareholder value. A longer patent might create a market for further development in unmet medical needs (such as disease with 100,000 to 250,000 cases a year). These disorders will not produce the blockbuster profits but will pat the bottom line of an otherwise well of company

    Again, the research suggests something else entirely. The monopoly rents from patents on pharma set in process bad innovation decisions, such as efforts to make "me too" drugs that can be granted a new patent and new monopoly rents. Meanwhile, actual breakthroughs are rare from industry. Almost all are from gov't funded institutions.

    While in many cases your argument is based soundly in facts, I don't think you will find a company willing to invest this amount of money in life saving treatments without the guarantee of profit from sale (at least until cost of R&D is covered).

    Again, look at Goozner's work. The real costs are quite different than you assume.

     

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  20.  
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    Anonymous Coward, Mar 20th, 2008 @ 3:56pm

    Re: Mikey's riding a dead horse, AGAIN !

    Ignore the troll

     

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  21.  
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    Mike (profile), Mar 20th, 2008 @ 3:57pm

    Re: Bogus Research

    This "little more detail" that Messrs. Bessen and Muerer do has a fatal flaw: it only focuses on publicly traded firms.

    This post did not focus on their research. And, the research they pointed to last week was not their own, but a LOT of studies by other economists showing quite consistently the problems patents cause. So highlighting problems with this particular report isn't particularly convincing.

    I don't think anyone should be all that surprised that firms like Microsoft, Yahoo, Cisco, and Google don't benefit from the patent system: those companies aren't developing cutting-edge technology anymore.

    Really? You clearly have no clue what goes on at firms like Microsoft, Yahoo, Cisco and Google if you think they aren't developing cutting edge technologies any more.

    Bessen and Muerer's research takes in no input from small start-up companies, who use patents to get a foothold in the market and protect their R&D investments against poaching by the the large firms analyzed here.

    Then you clearly have little exposure to startup companies. It's quite rare for startups to use patents to "gain a foothold in the market." Besides, why should we grant them a monopoly to gain a foothold in the market? What's wrong with just letting them compete?

    As the research has shown time and time again, there's little evidence that patents lead to greater innovation.

    Perhaps the authors should compare their estimated value of patents with the amounts paid by these same publicly traded firms to acquire patents over the same period of time. I suspect that the guys in the trenches buying patents are much more in touch with the value of patents than the ivory tower economists.

    The value of patents is not indicative of their economic benefit.

    Here's my favorite quote from these guys: "When an innovator commercializes a new technology there is a risk that a patent owner will assert a patent against the innovator." Well, then I guess the "innovator" is not so innovative, is it?

    Well, this shows a basic misunderstanding between invention and innovation. Patents protect invention, not innovation. And, yes, there is tremendous risk that an innovator -- one who successfully brings a new product to market -- will have a patent asserted against him. It's either because an inventor who FAILED in the marketplace (i.e., FAILED to innovate) is suing him, or it's because someone has a patent so broadly worded or on such an obvious idea that they can apply it to real innovation.

    You don't think that's a huge problem? The economic evidence suggests you are wrong.

     

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  22.  
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    Mike (profile), Mar 20th, 2008 @ 3:59pm

    Re: Patents

    Sure, your right. I can't wait to develop something and give it away. After all, I don't really deserve anthing for all my time, effort, and money spent.

    Greg, at no point did I say that people don't deserve anything for their time, effort or money spent. In fact, if you bothered to read the post, I note that there are plenty of ways to get rewarded for the time, effort and money spent -- it's called the marketplace. Selling an actual product to people who demand it.

    perhaps we should do away with copyrights also and pay someone ele less to write this same artice.

    As I've made clear, I don't believe that copyrights are necessary either. So I'm not sure what point you think you're proving.

     

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  23.  
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    Kiba, Mar 20th, 2008 @ 4:09pm

    Re: Bogus Research

    Tell that to the various Free software folks who done without software patents.

     

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  24.  
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    Anonymous Coward, Mar 20th, 2008 @ 5:07pm

    Re: Re: Pharma disagrees

    I look forward to that, as for Italy, I would argue that their government price controls had more to do with their pharma industry's fall (and the overall fall of their healthcare) than patents did.

     

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  25.  
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    Greg, Mar 20th, 2008 @ 6:16pm

    Re: Re: Patents

    I just don't believe that, because I don't have a great deal of development money I automatically should lose out completely to someone who does. As I understand you, someone who can't get his new invention (etc.) out to the world immediately should stand back and let the big companies make the money because they can distribute the invention much more widely, much more quickly.

    I'm a small businessman so I deserve nothing? Why should I spend all the time and effort for development to give it to the big companies? I couldn't afford to do that if I wanted to.

     

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  26.  
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    Greg, Mar 20th, 2008 @ 6:30pm

    Re: Re: Bogus Research

    Software would fall under copyright, not patent laws. Many people put out "free" software (like games) to allow users to debug their early programs; Then charge for the improved program. Others let people play the software games while they download spyware on their computer. Everybody makes money somehow, or they don't eat.

     

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  27.  
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    Mike (profile), Mar 20th, 2008 @ 6:51pm

    Re: Re: Re: Patents

    I just don't believe that, because I don't have a great deal of development money I automatically should lose out completely to someone who does. As I understand you, someone who can't get his new invention (etc.) out to the world immediately should stand back and let the big companies make the money because they can distribute the invention much more widely, much more quickly.

    You understand wrong. Read the 4th paragraph again. I say that the smaller company is often more likely to do a better job with the product. If you can't beat a big company, you shouldn't be in the market.

    I'm a small businessman so I deserve nothing? Why should I spend all the time and effort for development to give it to the big companies? I couldn't afford to do that if I wanted to.

    No. Again, that's not what I said. I said the smaller company has a better chance of winning in the market place. If you don't think you can beat the big company, you're doing something wrong.

    And, remember, patents aren't welfare for small companies.

     

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  28.  
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    Stephan Kinsella (profile), Mar 20th, 2008 @ 7:10pm

    Claiming vs. Disclosing

    Mr. Masnick: great stuff. However I think one of your comments is not quite correct: "very few patents these days are written to the point where they actually disclose enough to be useful. They tend to be broadly written in a way that can cover as much as possible." As much as I'm opposed to patents, for all the reasons you give, and others (I'm a practicing patent lawyer), I don't quite agree with this. Say what you will about patents, but the disclosure requirements are pretty strict. What you are talking about, I think, is how the claims are drafted. Yes, they are written as broadly as possible. But no matter how broadly they are written, the disclosure must both enable the claimed invention, and must disclose the best mode. Failure to do so is very serious. It might be engaged in on occasion by pro se applicants, but most patent practitioners I'm aware of are scrupulous about complying with this.

    I agree with all of your other comments, however.

     

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  29.  
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    Kiba, Mar 20th, 2008 @ 7:54pm

    Re: Re: Re: Bogus Research

    I am not talking about proprietary software or freeware for that matter.

    What I am really talking about is software that offer freedom to modify, run, distribute, among others. These kind of software are open to competition and are not under the protection of copyright law. Instead, copyright law is hacked to provide a different kind of benefit to their users.

    Yet people who dare make free software for a living were able to thrive anyway.

    Freewares and proprietary software are certainly not exposed to competiton.

     

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  30.  
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    Anonymous Coward, Mar 20th, 2008 @ 7:55pm

    Re: Re: Re: Re: Bogus Research

    Correction: Err, freewares and proprietary software on the other hand try to limit competition.

     

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  31.  
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    Kiba, Mar 20th, 2008 @ 7:56pm

    Re: Re: Re: Re: Re: Bogus Research

    Above comment is mine

     

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  32.  
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    angry dude, Mar 20th, 2008 @ 8:33pm

    Re: Claiming vs. Disclosing

    Ho-Ho-ho

    some familiar fellas here:
    a patent attorney who hates patents

    same as full-time butcher taking part in animal rights movement..
    or a life-long hooker publishing "the joy of celibacy" magazine...
    way to go, little stephan, way to go...

     

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  33.  
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    Anonymous Coward, Mar 21st, 2008 @ 6:03am

    Re: Re: Claiming vs. Disclosing

    hey angry dude, does your mommy know you're back on the computer again?

     

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  34.  
    identicon
    stv, Mar 21st, 2008 @ 7:11am

    What is a patent troll?

    According to some a patent troll is a firm who licenses patents they do not themselves commercialize. Yet many of the large firms who are most critical of the practice do it themselves. Out licensing is now an important profit center of most every firm. Often, as a result they end up licensing out patents covering technologies they themselves do not use as they are not consistent with their corporate plan. Rather hypocritical isnt it?

    Still, there is nothing illegal or unethical about a small entity only licensing or selling their inventions. In fact, the traditional approach for many if not most independent inventors is to solely license or sell the rights to their invention. This is because most inventors, while they may be quite creative and even have genius in their field, are not always so adept at business, such as marketing or manufacturing, or simply lack the money. Inventors frequently find they are better off leaving the business end of it to someone else. Then again, some just love inventing and don't want to be bothered with the business end of it so that their time is fully focused on invention, not on business. Edison himself, one of the world's most prolific inventors, most often sold or licensed his patents to others that they might commercialize his inventions. No one derided him as a "patent troll". Many times when he attempted to manufacture and/or market his products himself he struggled with profitability. Therefore, the argument by large multinationals and other parties that there is something wrong with inventors solely selling or licensing their inventions is mere dissembling or only signals a lack of understanding in invention and inventors. So they should stop this childish name calling.

    Sadly, some legislators and other parties have been duped by these slick firms and their well greased lawyers, lobbyists (some disguised as trade or public interest groups), and stealth PR firms. Don't be surprised to find the Washington lobbyist scandal spreading into the patent deform proceedings.

    All this talk of "patent trolls" is then but a red herring fabricated by a handful of large tech firms as a diversion away from the real issue...that they have no valid defense against charges they are using other parties' technologies without permission. The objective of these large firms is not to fix the patent system, but to destroy it or pervert it so only they may obtain and defend patents; to make it a sport of kings. Patents are a threat against their market dominance. They would rather use their size alone to secure their market position. Patents of others, especially small entities, jeopardize that. For example, the proposed change to eliminate the use of injunctions would only further encourage blatant infringement. Any large company would merely force you to make them take a license. They would have little to lose. Everything would be litigated to death -if a small entity can come up with the cash to pursue. That's what these large multinationals are betting against. This legislation in regressive, not progressive.

    Actually, even the present threat of injunction is not sufficient to deter would be infringers. Just look at the Blackberry case. RIM had to have known they were infringing or likely so and yet they still held out to the bitter end. They took the nuclear option and guess what...they got nuked. If anything, we need harsher penalties to force large aggressive firms into thinking twice before thumbing their nose at small patent holders. I recently noticed one country is considering jail time for infringers. That sounds like a great solution to me. "Don't bother to pack boys, we've got your suits all ready...pinstripes!"

    The problem is that companies who are using your technology aren't so genteel as to stop using it merely because you politely ask them to do so. Invention is rough and tumble. The fact is, a patent is merely a right to sue someone to not make your invention without permission. Unless you have the will and money to sue them, they will turn a deaf ear. Unless you have a good patent, you will not get the money. It's sad, but it's the reality of business. All this talk about patentees gaming the system with bad patents is then a hoax. Why do these detractors never identify these supposed bad patents? Surely if they exist they can be identified?

    If anyone is gaming the system, it is large multinationals. After losing in court they coerce the Patent Office into conducting a reexamination on the patents they have been found guilty of infringing. That is pure abuse of process!

    The fact is, there is no systematic abuse of the patent system by patentees which would require an overhaul of the system. To the contrary, there is a reason why the patent system works the way it does. We didn't get here by accident. That's because of past abuse of the system by large companies who used their wealth to give inventors the run around and make a sham of the system. Take a look at the RCA/Armstrong case of years ago on FM radio. RCA ruined Armstrong with a legion of attorneys. They so destroyed Armstrong and made a mockery of the patent system that he committed suicide. Check out Tom Lewis's "Empire of the Air", chapter 10, p313 and p356. Part of RCA's outrageous conduct was to string Armstrong along making him think they were interested in his invention only to copy his work and file patent applications of their own. Later they then entered into an interference against him at the patent office -a fraudulent act. RCA committed similar abuses of the patent system against electronic television inventor Philo Farnsworth. See "The Boy Who Invented Television" by Paul Schatzkin.

    As to the quality of patents; based on court rulings of the last several years, roughly half of all litigated patents are upheld in court. That's pretty balanced and suggests there is no problem with patent quality. Further, seldom do cases ever make it to trial as the parties settle out of court. The facts do not support the contention that there is a patent quality issue. Still, with almost half a million patent applications filed each year a few are bound to be issued that shouldn't. However, rarely are they ever an issue because you can't enforce them without money and you wont get the money unless you have a good patent. Keep in mind it costs the patent holder about as much in a patent suit as it does the accused infringer. Investors are not stupid. If they don't have confidence in your patent, they will not invest. It's that simple. Bad patents do not get funded.

    If there is a problem with the patent system, it is not that patents are issued too hastily but rather that many are issued too slowly. Witness the current backlog and pendency. I for example have applications with a pendency of 15 years! In one instance it took 3 years just to get a first office action. With this kind of pendency by the time an inventor gets their patent their technology is of no value. That is the problem everyone should be focused on -not this imaginary issue of patent quality trumped up and propped up by large multinationals as a way to stifle innovation and further cement their market control. Can you say "monopoly"?

    Further, certain large multinationals speak of the need for harmonization. Why is that necessary? If others are backward would we want to modify our system just to match theirs? When one looks at the efficacy of patent systems throughout the world the US patent system has produced far more innovation than those of other countries over the last several decades. If anything, other countries should be changing their systems to get inline with ours. Rather what's going on is these large multinationals and those they have duped are using specious arguments to get what will benefit them personally. The rest of the country be damned.

    Ours is a finely tuned patent system developed over 200 years which has led to US dominance in technology. We had better think carefully and move cautiously lest we create more problems than we solve and reap unintended and unforseen consequences.

    All this is then not about present abuse of the system by inventors or a need for patent reform, but rather systematic past and present abuses by large companies. Witness the present conduct of firms like RIM in using the courts to drag out a final verdict. The judge in that case remarked about how delays frustrate justice. Also, look at the exploitations and predations of Medtronic.

    Even worse; not only is there no need for reform, but the proposed changes will actually damage our functional system.

    When corporate America agrees to not use our inventions without consent, American inventors and small entities will agree to stop suing them.

     

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  35.  
    identicon
    DanC, Mar 21st, 2008 @ 8:55am

    Re:

    Just look at the Blackberry case. RIM had to have known they were infringing or likely so and yet they still held out to the bitter end.

    I love the illogical conclusion you draw here. Here's reality: RIM held on to the end precisely because they didn't believe themselves to be infringing on NTP's patents. They obviously had a very good reason for believing this, as all five of NTP's patents were issued rejections by the USPTO.

    If there is a problem with the patent system, it is not that patents are issued too hastily but rather that many are issued too slowly

    As previously discussed, the real problem is patent quality. Speeding up the patent process at this point would only serve to aggravate the current problems with the patent system.

    Can you say "monopoly"

    Sure. A patent is a temporary monopoly, which you obviously support, so why you're trying to use the term "monopoly" in a negative light is confusing.

    If anything, other countries should be changing their systems to get inline with ours.

    Which is what the U.S. is unfortunately trying to do through international trade treaties. Why other countries should be forced to bend to U.S. IP laws is beyond me. Luckily, some countries are standing up to us, like Israel. If another country tried to do this kind of thing to the U.S., they'd be ignored or rebuked for attempting to encroach on sovereignty.

    The judge in that case remarked about how delays frustrate justice.

    That would be the judge who refused to wait for the patent office to review NTP's patents. Since each patent was rejected by the patent office during examination, that doesn't exactly sound like justice was served. The 'delays frustrate justice' complaint is a weak argument typically put forth by those who don't want to allow the defendant the time to properly defend themselves.

    Even worse; not only is there no need for reform, but the proposed changes will actually damage our functional system.

    Saying that there is no need for reform is an exercise in ignorance. There's obviously a problem; both large and small companies (and everyone's favorite 'little guy' inventors) are filing broadly worded patents. This leads to frivolous lawsuits where the outcome seems to rely more on where the case was filed than on the strength of the case.

    but rather systematic past and present abuses by large companies.

    Abuse happens on both sides of the fence. This isn't a 'david vs. goliath' problem where the evil, corrupt 'big guys' are infringing on the poor, innocent 'little guys' rights. You don't have to be a big, successful company to abuse the patent system, so please stop spreading this myth that big corporations are responsible for the current state of the patent system.

     

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  36.  
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    Mike (profile), Mar 21st, 2008 @ 9:35am

    Re:

    According to some a patent troll is a firm who licenses patents they do not themselves commercialize. Yet many of the large firms who are most critical of the practice do it themselves. Out licensing is now an important profit center of most every firm. Often, as a result they end up licensing out patents covering technologies they themselves do not use as they are not consistent with their corporate plan. Rather hypocritical isnt it?

    Um. stv, you are the first person to mention patent trolls on this page. It's not about patent trolls at all. It's about patents.

    And when big companies act in the same way, abusing the patent system, we're just as quick to point it out. So I don't think the distinction matters. The only one making it here is you.

    Still, there is nothing illegal or unethical about a small entity only licensing or selling their inventions. In fact, the traditional approach for many if not most independent inventors is to solely license or sell the rights to their invention. This is because most inventors, while they may be quite creative and even have genius in their field, are not always so adept at business, such as marketing or manufacturing, or simply lack the money.

    This is why we have wonderful capital markets that can help fund a business. That doesn't require licensing.

    Edison himself, one of the world's most prolific inventors, most often sold or licensed his patents to others that they might commercialize his inventions.

    This is a rewriting of history. Edison was not much of an inventor, but was a prolific marketer. We were just discussing this the other day:

    http://www.techdirt.com/articles/20061219/014818.shtml

    So, you got that story backwards. Edison took the ideas of others, and was a successful marketer. Part of that marketing was to convince others that he was the inventor when he was not.

    And, trust me, while the term patent troll wasn't in existence in his time, people RAILED against Edison for his abuse of the patent system. The whole reason Hollywood is in Hollywood was to avoid Edison's overbearing use of patents.

    Sadly, some legislators and other parties have been duped by these slick firms and their well greased lawyers, lobbyists (some disguised as trade or public interest groups), and stealth PR firms. Don't be surprised to find the Washington lobbyist scandal spreading into the patent deform proceedings.

    Again, as I have pointed out, I don't like the patent reform bill that's up for vote either.

    You seem to be setting up red herrings. You claim we're talking about patent trolls. WE are not. You claim we're supporting patent reform as written. We are not.

    All this talk of "patent trolls" is then but a red herring fabricated by a handful of large tech firms as a diversion away from the real issue..

    Actually, we've pointed to the evidence showing that patent infringement cases from non practicing entities has become a huge burden on the system.... but, I see you don't like to deal in facts.

    For example, the proposed change to eliminate the use of injunctions would only further encourage blatant infringement. Any large company would merely force you to make them take a license. They would have little to lose.

    This is also factually incorrect. There is no attempt to ELIMINATE the use of injunctions. It merely gives the judge discretion in determining if an injuntion is appropriate.

    Do you always make stuff up?

    Everything would be litigated to death -if a small entity can come up with the cash to pursue.

    Actually, as you see, what's happening now is the threat of injunctions on minor parts of a larger invention is leading to the opposite problem. Many companies are simply paying up to avoid having to go to court, even if no infringement takes place. This has resulted in MORE bogus patetns being file and MORE bogus patent lawsuits being filed.

    It's taking money AWAY from actual R&D and giving it to lawyers and bogus patent holders. That is dangerous and hugely damaging to our economy.

    RIM had to have known they were infringing or likely so and yet they still held out to the bitter end.

    You're talking about the NTP patents that the USPTO rejected? You're talking about the NTP patents that were so broadly written as to cover "wireless email." Once again, rewriting history...

    RIM fought to the end because it believed (correctly, according to the USPTO) that those patents were invalid, and that if it didn't fight, it would lead to more baseless infringement lawsuits (again, correctly).

    If anything, we need harsher penalties to force large aggressive firms into thinking twice before thumbing their nose at small patent holders.

    Even for patents that are shown to be invalid?

    Unless you have a good patent, you will not get the money. It's sad, but it's the reality of business.

    So you ADMIT that bad patent holders deserve to get money?

    Why do these detractors never identify these supposed bad patents? Surely if they exist they can be identified?

    We point them out all the time. There's a thing call a search engine. Use it and you'll find a long list of bad patents.

    If anyone is gaming the system, it is large multinationals. After losing in court they coerce the Patent Office into conducting a reexamination on the patents they have been found guilty of infringing. That is pure abuse of process!

    As we just pointed out the other day, over 75% of reexams result in reducing the number of claims approved. In other words, those reexams ACCURATELY are showing problems in the patent approval process. How is that abuse?

    Clearly, the USPTO is not doing a good job the first time around, which even they admit. Why do you not?

    Further, seldom do cases ever make it to trial as the parties settle out of court.

    That evidence does not support your position. The reason parties settle out of court is that it is often cheaper to do so than to fight a bad patent in court. And, that only encourages more bogus patent infringement lawsuits.

    Bad patents do not get funded.

    You are apparently unaware of companies like Acacia and GPH?

    Further, certain large multinationals speak of the need for harmonization. Why is that necessary?

    Clearly you do not read what I wrote. I agree with you. I am no fan of harmonization. Again you incorrectly seem to think I am arguing in favor of the patent reform before Congress.

    I am not. I think it will make many things worse. Just for different reasons than you. But that's because I am not rewriting history, as you are, and I have looked at the actual research and numbers, which you clearly have not.

    Ours is a finely tuned patent system developed over 200 years which has led to US dominance in technology. We had better think carefully and move cautiously lest we create more problems than we solve and reap unintended and unforseen consequences.

    And this shows you clearly do not know what you are talking about. In the last 60 years, we have made a large number of hasty changes to the patent system, most of which have had unintended and unforeseen consequences that have made things worse. To claim that the system is finely tuned over 200 years shows an ignorance of the recent history of the patent system.

    All this is then not about present abuse of the system by inventors or a need for patent reform, but rather systematic past and present abuses by large companies. Witness the present conduct of firms like RIM in using the courts to drag out a final verdict. The judge in that case remarked about how delays frustrate justice. Also, look at the exploitations and predations of Medtronic.

    Again, you seem to think that we're siding with large companies over small. We are not. We have equally trashed both RIM and Medtronic for their abuses of the patent system as well.

    When corporate America agrees to not use our inventions without consent, American inventors and small entities will agree to stop suing them.

    And when the patent system has been shown to actually encourage innovation, rather than stifle it, then we will stop complaining about it.

     

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  37.  
    identicon
    angry dude, Mar 21st, 2008 @ 10:30am

    kidding us ?

    "And when the patent system has been shown to actually encourage innovation, rather than stifle it, then we will stop complaining about it."

    Ha ?
    You'll stop complaining about patents when your corporate daddies stop sponsoring your shitty blog

     

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  38.  
    icon
    Mike (profile), Mar 21st, 2008 @ 11:25am

    Re: kidding us ?

    Angry dude,

    I have asked you repeatedly to back up your statements. You cannot, because they are lies.

    There is not a single company we work with who supports changing the patent system the way we propose. For you to suggest otherwise is an outright lie. Furthermore, we do no public advocacy work. We help companies understand trends -- we do not promote anything.

    I ask you, once again, to retract your lies.

    So, we have no "corporate daddy's" sponsoring this blog, and yet we still keep writing about patents. You are easily shown to be wrong.

    Please retract your lies.

    And, while you're at it, learn how to craft an actual argument.

     

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  39.  
    identicon
    mjr1007, Mar 21st, 2008 @ 1:00pm

    Once again you've missed the point

    This really does get tedious and tiresome.


    All discussion about patents in the US should start with Article I Section VIII clause 8 of the US Constitution.

    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;

    Nowhere is the word market mentioned. Not competing in the market not letting the market decide.

    Nowhere is the word products mentioned.

    Nowhere is corporate profits mentioned.

    Yet somehow these topics come up over and over again. It really does seem rather pointless. Unless you are proposing a constitutional amendment then try staying within the law.



    There was a great article a few months back about a CEO of a tech company saying that unless you can figure out a way to monetize an advancement then all you really have is an expense.

    The point here is that corporations are only interested in one thing, profits. Ever here the term fiduciary responsibility? Image the CEO of any tech company going to the board and saying "we lost our shirts this quarter but we put out some great technology". It would never happen.

    Look at big Pharm. Supposedly they spend more on advertising then research. With all the ED drugs being advertised during sporting events I wouldn't doubt it. Besides exactly how many different blockbuster ED drugs do we really need.

    Also is it really necessary to thing drugs are the only way to get health. Anyone hear of diet, exercise and a good nights sleep?

    Mike, it seems to have gotten cause and effect back asswards. Patents don't cause companies to suddenly stop being innovative it merely gives them a tool to do what they always wanted to do anyway. Companies use their patents to eliminate competition and ignore them when they don't hold them. Recently Intel got sued for just that. There is also the case of the intermittent windshield wipers. That inventor, who by all accounts really did come up with a great idea spent the rest of his life suing the automakers rather then continuing to invent great new things.

    As far a competition is concerned it's the sort of thing that companies hate. They want to dominate their markets not compete in them. This leads to all the anticompetitive behavior you always hear about.

    Adam Smith of "Wealth of Nations" fame correctly point out "Monopoly is the enemy of good management".

    I think we can all agree we need to encourage the developments in the useful arts and sciences, the question is what is the best way?

     

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  40.  
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    Mike (profile), Mar 22nd, 2008 @ 9:29am

    Re: Once again you've missed the point

    All discussion about patents in the US should start with Article I Section VIII clause 8 of the US Constitution.

    Um, mjr1007, this conversation DID start with that. Did you not read the first post in this series:

    http://www.techdirt.com/articles/20080220/020252302.shtml

    Nowhere is the word market mentioned. Not competing in the market not letting the market decide.

    Nowhere is the word products mentioned.

    Nowhere is corporate profits mentioned.


    Nor have I said they were. However, what you are missing is that it very clearly says "TO PROMOTE THE PROGRESS..."

    If patents are NOT promoting the progress, then they clearly do not fall under this clause of the Constitution. What I am showing is the evidence that they do not Promote The Progress, and thus, are unconstitutional. And to do that, you show how they do not help a market grow, they hurt competition and they generally slow down innovation.


    Yet somehow these topics come up over and over again. It really does seem rather pointless. Unless you are proposing a constitutional amendment then try staying within the law.


    Nope. We're very much correct within the terms of the constitution as is.


    The point here is that corporations are only interested in one thing, profits. Ever here the term fiduciary responsibility? Image the CEO of any tech company going to the board and saying "we lost our shirts this quarter but we put out some great technology". It would never happen.


    Again, you seem to be confused. Did you even read the research I pointed to? The evidence suggests that companies DO NOT make bigger profits thanks to patents. They make a smaller profit. Why? Because the market develops much more slowly. So the whole POINT is that these things align. You can promote progress and you can do away with most patents, and you still get progress and profits.

    Look at big Pharm. Supposedly they spend more on advertising then research. With all the ED drugs being advertised during sporting events I wouldn't doubt it. Besides exactly how many different blockbuster ED drugs do we really need.

    Also is it really necessary to thing drugs are the only way to get health. Anyone hear of diet, exercise and a good nights sleep?


    You seem to be arguing my point here. But I'd argue differently at the end. It's not just about diet, exercise and sleep. It's about realizing that pharma is quite inaccurate, and newer technologies can be much more effective.

    Mike, it seems to have gotten cause and effect back asswards. Patents don't cause companies to suddenly stop being innovative it merely gives them a tool to do what they always wanted to do anyway. Companies use their patents to eliminate competition and ignore them when they don't hold them.

    What's backwards about that? That's basically what I said patents do.

    Adam Smith of "Wealth of Nations" fame correctly point out "Monopoly is the enemy of good management".


    Again, you're agreeing with me.

    I think we can all agree we need to encourage the developments in the useful arts and sciences, the question is what is the best way?

    Well, from the historical evidence, making it much more difficult to get patents seems to have been effective...

     

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  41.  
    identicon
    mjr1007, Mar 22nd, 2008 @ 12:55pm

    Re: Re: Once again you've missed the point

    mjr1007 wrote:
    All discussion about patents in the US should start with Article I Section VIII clause 8 of the US Constitution.

    Mike responded
    Um, mjr1007, this conversation DID start with that. Did you not read the first post in this series:

    http://www.techdirt.com/articles/20080220/020252302.shtml

    mjr1007 responded
    Seems like you are living up to the title (missing the point). The intent was to list the clause at the beginning of every post, not just at the beginning of a series of post. It also seems odd that in you editing you once again left out the actual content. Don't worry Mike it's not copyrighted.

    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;


    mjr1007 wrote:
    Nowhere is the word market mentioned. Not competing in the market not letting the market decide.

    Nowhere is the word products mentioned.

    Nowhere is corporate profits mentioned.

    Mike responded
    Nor have I said they were. However, what you are missing is that it very clearly says "TO PROMOTE THE PROGRESS..."

    If patents are NOT promoting the progress, then they clearly do not fall under this clause of the Constitution. What I am showing is the evidence that they do not Promote The Progress, and thus, are unconstitutional. And to do that, you show how they do not help a market grow, they hurt competition and they generally slow down innovation.

    mjr1007 responded
    This right here, what you just say is EXACTLY what I'm writing about. In case anyone missed it I will copy and paste it on a separate line.

    Mike wrote:
    "And to do that, you show how they do not help a market grow"

    You've just conflated progress with market growth. They are not the same thing stop writing as if they are!!!!

    On a personal note I would like to thank you for proving my point better then I ever could. Now back to the bickering. 8-)

    mjr1007 wrote:
    Yet somehow these topics come up over and over again. It really does seem rather pointless. Unless you are proposing a constitutional amendment then try staying within the law.

    Mike responded:
    Nope. We're very much correct within the terms of the constitution as is.

    mjr1007 responded:
    Not if you keep talking about markets instead of progress. Progress in the useful arts and science would be new discoveries and new technology, not new markets or products.

    mjr1007 wrote:
    The point here is that corporations are only interested in one thing, profits. Ever hear the term fiduciary responsibility? Image the CEO of any tech company going to the board and saying "we lost our shirts this quarter but we put out some great technology". It would never happen.

    Mike responded
    Again, you seem to be confused. Did you even read the research I pointed to? The evidence suggests that companies DO NOT make bigger profits thanks to patents. They make a smaller profit. Why? Because the market develops much more slowly. So the whole POINT is that these things align. You can promote progress and you can do away with most patents, and you still get progress and profits.

    mjr1007 responded:
    Mike at the risk of beating a dead horse, yes that is beating and not riding. Beating a dead horse is pointless, riding one would be ghoulish if not impossible.8-) Anyway, you just can't help yourself can you? Markets and profits are not the way to measure progress in the useful arts and sciences discoveries and breakthroughs are. It's does seem nice to have that little old Constitutional quote near by doesn't it. 8-)

    mjr1007 wrote:
    Look at big Pharm. Supposedly they spend more on advertising then research. With all the ED drugs being advertised during sporting events I wouldn't doubt it. Besides exactly how many different blockbuster ED drugs do we really need.

    Also is it really necessary to thing drugs are the only way to get health. Anyone hear of diet, exercise and a good nights sleep?

    Mike responded:
    You seem to be arguing my point here. But I'd argue differently at the end. It's not just about diet, exercise and sleep. It's about realizing that pharma is quite inaccurate, and newer technologies can be much more effective.

    mjr1007 responded.
    Once again please refer to the original title of the article. The point I'm actually arguing is that companies are not interested in progress in the useful arts and sciences, only profits. One ED drug is a breakthrough several are just variations of a theme. It would be interesting to see what would happen if the second and third ED drugs didn't get patents. Might stop a lot of this me-too-ism.

    mjr1007 wrote:
    Mike, it seems to have gotten cause and effect back asswards. Patents don't cause companies to suddenly stop being innovative it merely gives them a tool to do what they always wanted to do anyway. Companies use their patents to eliminate competition and ignore them when they don't hold them.

    Mike responded:
    What's backwards about that? That's basically what I said patents do.

    mjr1007 responded:
    The point here is that patents don't do anything, companies do things with patents. Also have you ever written about corporations knowingly infringing real patents or driving innovative companies out of business by monopolistic behavior? If so please, please post the URL to that. If not it seem intellectually dishonest not to talk about abuses on both sides.

    mjr1007 wrote
    Adam Smith of "Wealth of Nations" fame correctly point out "Monopoly is the enemy of good management".

    Mike responded:
    Again, you're agreeing with me.

    mjr1007 responded:
    No, actually I'm agreeing with Adam Smith. The quote has nothing to do with patents.
    The problem here is that you believe the only form of IP rights is to grant a monopoly. Probably got that idea from some crazy old document somewhere. 8-)

    Oddly enough compulsory licensing, for music anyway, has been around for almost a century. It seems the latest incarnation can be found at:

    http://www.law.cornell.edu/uscode/17/usc_sec_17_00000115----000-.html

    This first came up in the 1909 copyright law.

    There is also an interesting proposal from the EFF at

    http://www.eff.org/wp/better-way-forward-voluntary-collective-licensing-music-file-sharing

    No w I'm in favor of allowing anyone to license either copyright or patents, trademarks seem very different. I'm a computer geek not a legal geek so I guess I don't really have to understand it, but for the life of me I can't see how they got there from Article I Section VII Clause 8. Be that as it may they did seem to get there. Why not discuss this sort of thing rather then continue to beat that same monopoly. no patent dead horse. There is a world of ideas on how to improve IP law, try exploring them.

    Here are some interesting ones.
    Companies must submit complete build trees for their software. If they are convicted of anticompetitive behavior they loose their copyright and anyone can build and sell their software.

    Pornography is not useful and should not receive copyright protection. This would eliminate the profit motive while maintaining free speech.

     

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  42.  
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    Mike (profile), Mar 22nd, 2008 @ 2:30pm

    Re: Re: Re: Once again you've missed the point

    The intent was to list the clause at the beginning of every post, not just at the beginning of a series of post. It also seems odd that in you editing you once again left out the actual content. Don't worry Mike it's not copyrighted.

    I'm afraid I don't understand what you are saying here. You expect me to repeat the clause with every post? Why would that possibly be necessary? I discussed the clause in the first post of the series and most normal people can remember it.

    You've just conflated progress with market growth. They are not the same thing stop writing as if they are!!!!

    Well, on this we disagree. I absolutely believe that economic growth and progress are synonymous. I'm curious as to why you would claim otherwise. I can't come up with any argument where economic growth is not considered progress.

    Not if you keep talking about markets instead of progress. Progress in the useful arts and science would be new discoveries and new technology, not new markets or products.

    Not at all. No way, no how. New discoveries and new technology are not a measure of progress at all. I can make a million new discoveries a day, but if they're useless, and there's no market for them, there's no progress.

    Markets and profits are not the way to measure progress in the useful arts and sciences discoveries and breakthroughs are. It's does seem nice to have that little old Constitutional quote near by doesn't it.

    Yes, let's go back to that Constitutional quote:

    "Promote the progress of Science and the Useful Arts."

    To me that's clearly stating anything that causes economic growth. USEFUL arts. This is not about just coming up with something new. It's coming up with something that BETTERS society. That means creating economic growth.

    This is rather fundamental stuff.

    The point I'm actually arguing is that companies are not interested in progress in the useful arts and sciences, only profits. One ED drug is a breakthrough several are just variations of a theme. It would be interesting to see what would happen if the second and third ED drugs didn't get patents. Might stop a lot of this me-too-ism.

    We agree on this. I'm not sure why you think we disagree.

    Also have you ever written about corporations knowingly infringing real patents or driving innovative companies out of business by monopolistic behavior? If so please, please post the URL to that. If not it seem intellectually dishonest not to talk about abuses on both sides.

    You seem to be confused. The only monopolistic behavior we've seen lately is using patents. Patents are a monopoly. And, yes, they've driven innovative companies out of business by using those monopolies to stop competition.

    No, actually I'm agreeing with Adam Smith. The quote has nothing to do with patents.

    Again, the monopolies we're talking about are patents. Adam Smith points out that monopolies are bad. i.e., patents are bad.

    The problem here is that you believe the only form of IP rights is to grant a monopoly.

    Can you point out to me how a patent is not a monopoly?

    trademarks seem very different. I'm a computer geek not a legal geek so I guess I don't really have to understand it, but for the life of me I can't see how they got there from Article I Section VII Clause 8.

    Trademarks aren't from that clause. Trademarks are a consumer protection issue, and from the Lanham Act.

    There is a world of ideas on how to improve IP law, try exploring them.

    I have. In great detail. For over a dozen years. And I've discussed many different ideas and pointed to tons of research. Why do you think otherwise?

    Companies must submit complete build trees for their software. If they are convicted of anticompetitive behavior they loose their copyright and anyone can build and sell their software.

    What possible benefit is that?

    Pornography is not useful and should not receive copyright protection. This would eliminate the profit motive while maintaining free speech.

    Again, huh? Who are you to determine what kind of speech is useful and what isn't?

    I'm afraid I have trouble understanding where you are coming from.

     

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  43.  
    identicon
    MLS, Mar 22nd, 2008 @ 3:56pm

    Re: Re: Re: Re: Once again you've missed the point

    It is difficult to have a cogent discussion on this subject as long as a clear distinction is not drawn between what a patent is and what a copyright is. The arguments seem to wax and wane in a manner that seamlessly combines the two, which only adds to reader confusion.

    BTW, copyrights are a creature derived from Article 1, Section 8, Clause 8, and reach all manner of original works of authorship. Personally, I have never seen a poem, which is protected under copyright law, expand the "poem market". To equate "progress" with "economic expansion" seems to fall a bit short as a strong argument with regard to much subject matter protected under copyright law.

    A final BTW, just for the sake of accuracy, trademarks are protectable at both the state and federal level, with the authority for federal protection falling under what is known as the "Commerce Clause".

     

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  44.  
    identicon
    mjr1007, Mar 22nd, 2008 @ 4:08pm

    Re: Re: Re: Re: Once again you've missed the point

    mjr1007 wrote:
    The intent was to list the clause at the beginning of every post, not just at the beginning of a series of post. It also seems odd that in you editing you once again left out the actual content. Don't worry Mike it's not copyrighted.

    Mike replied:
    I'm afraid I don't understand what you are saying here. You expect me to repeat the clause with every post? Why would that possibly be necessary? I discussed the clause in the first post of the series and most normal people can remember it.

    mjr1007 replied:
    Actually you seem to grasp the concept just fine. You just don't seem inclined to follow the suggestion. Might be because it would make it more difficult for you to stray from it.

    mjr1007 wrote:
    You've just conflated progress with market growth. They are not the same thing stop writing as if they are!!!!

    Mike resplied:
    Well, on this we disagree. I absolutely believe that economic growth and progress are synonymous. I'm curious as to why you would claim otherwise. I can't come up with any argument where economic growth is not considered progress.

    mjr1007 replied:
    Good rhetoric but faulty reasoning. It the old all birds are not cardinals fallacy. All cardinals are birds but not all birds are cardinals. Here it would be all growth is progress but not all progress is growth. But once again you have added words that were not in the constitution. It says progress in the useful arts and sciences. No mention of economics, either growth or progress.

    mjr1007 wrote:
    Not if you keep talking about markets instead of progress. Progress in the useful arts and science would be new discoveries and new technology, not new markets or products.

    Mike replied:
    Not at all. No way, no how. New discoveries and new technology are not a measure of progress at all. I can make a million new discoveries a day, but if they're useless, and there's no market for them, there's no progress.

    mjr1007 replied:
    Ok then, what your saying is that despite the fact that there is no mention of economics or market or profits in the clause that's how we should interpret it? Could you please give some reason for this? This is actually fundamental to your argument and just doesn't seem to be supported by the clause.

    mjr1007 wrote:
    Markets and profits are not the way to measure progress in the useful arts and sciences discoveries and breakthroughs are. It's does seem nice to have that little old Constitutional quote near by doesn't it.

    Mike replied
    Yes, let's go back to that Constitutional quote:

    "Promote the progress of Science and the Useful Arts."

    To me that's clearly stating anything that causes economic growth. USEFUL arts. This is not about just coming up with something new. It's coming up with something that BETTERS society. That means creating economic growth.

    This is rather fundamental stuff.

    mjr1007 replied
    Fundamentally wrong. What may be clear to you is completely wrong to me. It seems that originally the useful part was to prevent people from trying to patent laws of nature and such, not some side reference to economics. Besides it is modifying what is to patentable not how to judge the effects of patents. All of this really seems not to be supported in the clause itself.

    mjr1007 wrote
    The point I'm actually arguing is that companies are not interested in progress in the useful arts and sciences, only profits. One ED drug is a breakthrough several are just variations of a theme. It would be interesting to see what would happen if the second and third ED drugs didn't get patents. Might stop a lot of this me-too-ism.

    Mike replied:
    We agree on this. I'm not sure why you think we disagree.

    mjr1007 replied.
    Your editing here is misleading. You originally stated that companies make bigger profits without patents. Which was irrelevant to the point, which is companies are not interested in progress, only profits. I'm glad you agree with this point but it certainly wasn't what you posted.

    mjr1007 wrote:
    Also have you ever written about corporations knowingly infringing real patents or driving innovative companies out of business by monopolistic behavior? If so please, please post the URL to that. If not it seem intellectually dishonest not to talk about abuses on both sides.

    Mike replied:
    You seem to be confused. The only monopolistic behavior we've seen lately is using patents. Patents are a monopoly. And, yes, they've driven innovative companies out of business by using those monopolies to stop competition.

    mjr1007 replied:
    Thanks but I'm not confused. I didn't only say monopolistic behavior I also said infringing on patents. It's the same rhetoric device you used earlier. All monopolistic behavior is abusive but not all abusive behavior is monopolistic. But there was some monopolistic behavior by MS against Netscape which wasn't patent inspired. Or did this happen is some alternate reality.

    mjr1007 wrote:
    No, actually I'm agreeing with Adam Smith. The quote has nothing to do with patents.

    Mike resplied:
    Again, the monopolies we're talking about are patents. Adam Smith points out that monopolies are bad. i.e., patents are bad.

    mjr1007 replied:
    You really seem to like that rhetorical device. All patents are monopolies but not all monopolies are patents. Which was the point I was trying to make. There are other types of monopolies as well. I was merely pointing out that I was agreeing with Smith in the broader sense.

    mjr1007 wrote:
    The problem here is that you believe the only form of IP rights is to grant a monopoly.

    Mike responded.
    Can you point out to me how a patent is not a monopoly?

    mjr1007 replied:
    Actually I already did, but somehow it was edited out in your response. Funny how that seems to happen. Did you not understand the part about compulsory licensing? You own the IP but must let others use it for a fee. Maybe it's just me but I'm thinking once you are forced to license it to others the whole monopoly thing just doesn't seem to fit. Or do you have some argument which states that when lots of people can offer products based on the same IP it's still a monopoly. Gee what are the chances this little bit will make it into your next selective edits. Probably a little better now that I pointed it out.

    mjr1007's comments were taken out of context:
    trademarks seem very different. I'm a computer geek not a legal geek so I guess I don't really have to understand it, but for the life of me I can't see how they got there from Article I Section VII Clause 8.

    Mike replied:
    Trademarks aren't from that clause. Trademarks are a consumer protection issue, and from the Lanham Act.

    mjr1007 replied:
    The original context was talking about extending compulsory licensing to patents. Trademarks where thrown in for completeness. To summarize the big 3 of IP copyright and patents yes on compulsory licensing, trademarks no.

    Probably should have started a new paragraph after that. The whole point was I can't see how they got to compulsory licensing of copyrights. Even though it's a good ideas I'm not sure why it doesn't conflict with the Constitution.

    These were two separate ideas not sure how you managed to conflate them.


    mjr1007 wrote:
    There is a world of ideas on how to improve IP law, try exploring them.

    Mike replied:
    I have. In great detail. For over a dozen years. And I've discussed many different ideas and pointed to tons of research. Why do you think otherwise?

    mjr1007 replied:
    Because all of you post seem to have this very narrow focus and sameness about them. Which is probably why the troll started off with riding a dead horse post.

    mjr1007 wrote:
    Companies must submit complete build trees for their software. If they are convicted of anticompetitive behavior they loose their copyright and anyone can build and sell their software.

    Mike replied:
    What possible benefit is that?

    mjr1007 replied:
    I just find it rather ironic that a legal monopoly would be voided for illegal monopolistic behavior. I think it's called thinking outside the box, try it some time, you might like it.

    mjr1007 wrote:
    Pornography is not useful and should not receive copyright protection. This would eliminate the profit motive while maintaining free speech.

    Mike replied:
    Again, huh? Who are you to determine what kind of speech is useful and what isn't?

    I'm afraid I have trouble understanding where you are coming from.

    mjr1007 replied:
    Mike I never said I would determine that it's something the courts would have to decide. It was posed as an interesting idea, just thinking outside the box again. It has the benefit of allowing all speech but not allowing commercial speech offensive to the community to have commercial protections.

    I'm also afraid you are having trouble understanding where I'm coming from.

    Just looking for an honest and intelligent discussion of the ideas.

    Hope that helps

     

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  45.  
    icon
    Mike (profile), Mar 23rd, 2008 @ 10:44am

    Re: Re: Re: Re: Re: Once again you've missed the p

    BTW, copyrights are a creature derived from Article 1, Section 8, Clause 8, and reach all manner of original works of authorship. Personally, I have never seen a poem, which is protected under copyright law, expand the "poem market". To equate "progress" with "economic expansion" seems to fall a bit short as a strong argument with regard to much subject matter protected under copyright law.

    Really? I would think that every new poem expands the poem market? Why do you not think so?

     

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  46.  
    icon
    Mike (profile), Mar 23rd, 2008 @ 11:08am

    Re: Re: Re: Re: Re: Once again you've missed the p

    Actually you seem to grasp the concept just fine. You just don't seem inclined to follow the suggestion. Might be because it would make it more difficult for you to stray from it.

    Ok. So you actually did think I needed to include it in each post. Well, when you run Techdirt, you can decide what goes in each post. Until then, you don't.

    I tend to think my readers are smart enough to either know the clause or go back and read it again.

    I tend to think that they would be both annoyed and insulted if I started each and every post with it.

    You, clearly, feel differently. Luckily, you can start your own blog, and we'll see who does better.

    Here it would be all growth is progress but not all progress is growth. But once again you have added words that were not in the constitution. It says progress in the useful arts and sciences. No mention of economics, either growth or progress.

    Nor does it say, as you claimed, "new discoveries and new technology" so I'm afraid that you are equally as incorrect.

    It all depends on how you define promoting the progress of the sciences and useful arts. To me, that's clearly an economic phrase. To you, it's not. We can argue this all day, but in the end, I'm pretty sure I win. Why? Because the point of the document was to help provide a path for the advancement of society. And you do that through economic growth. Without economic growth there is no progress.

    Ok then, what your saying is that despite the fact that there is no mention of economics or market or profits in the clause that's how we should interpret it? Could you please give some reason for this? This is actually fundamental to your argument and just doesn't seem to be supported by the clause.


    I repeat my statement above. You claim that it's new discoveries and new technologies, despite NO support for that in the clause. Yet, if you look at the history and the discussion between Jefferson and Madison, you see they were VERY MUCH concerned with economic growth (even if that phrase wasn't known or thought about, it was the concept they discussed).

    Progress is economic growth. I don't see how you have progress without economic growth.

    It seems that originally the useful part was to prevent people from trying to patent laws of nature and such, not some side reference to economics. Besides it is modifying what is to patentable not how to judge the effects of patents. All of this really seems not to be supported in the clause itself.

    Clearly, we interpret the clause differently. I see no possible way to read the clause the way you have.

    Nowhere do they say or reference anything about patenting the laws of nature. Nowhere is that even implied. Yet, what they do imply, quite frequently, is the question of economic growth. I'm sorry. You are simply incorrect.

    You originally stated that companies make bigger profits without patents. Which was irrelevant to the point, which is companies are not interested in progress, only profits.

    But if profits and progress are tied together, it does matter very much.

    I didn't only say monopolistic behavior I also said infringing on patents. It's the same rhetoric device you used earlier. All monopolistic behavior is abusive but not all abusive behavior is monopolistic.

    I agree. I didn't say otherwise. There is monopolistic behavior that is not about patents. But I was asking for an example, because the only things we had discussed to date that involved monopolies was patents.

    You are saying that infringing on a patent is monopolistic? How do you figure? It would seem to me that infringing on a patent is the opposite of monopolistic behavior, because it adds a competitor against a monopoly.

    But there was some monopolistic behavior by MS against Netscape which wasn't patent inspired.

    Well, again this is a point of debate, but when you look at the details I do not believe MS's behavior against Netscape was monopolistic. I believe that there was a combination of competition and some incredibly dumb mgmt moves on the part of Netscape. It wasn't MS's "monopoly" that did in Netscape. It was its own mgmt not understanding the marketplace. Microsoft just did a better job competing.

    There are other types of monopolies as well. I was merely pointing out that I was agreeing with Smith in the broader sense.

    If so, then why are you in favor of patent monopolies? If you support Adam Smith, I can't see how you also favor patents.

    Did you not understand the part about compulsory licensing? You own the IP but must let others use it for a fee. Maybe it's just me but I'm thinking once you are forced to license it to others the whole monopoly thing just doesn't seem to fit.

    Not at all. That's still very much a monopoly, because the only one who can sell that particular product is you, by law. That's a gov't granted monopoly. Whether the price is compulsory or not makes no difference to the fundamental monopoly.

    Or do you have some argument which states that when lots of people can offer products based on the same IP it's still a monopoly. Gee what are the chances this little bit will make it into your next selective edits.

    There is still a monopoly on the original piece, because all payments need to go back to that original creator. All of those payments are a deadweight loss to society. Look at your basic economic supply and demand curve. Because the price is higher than the point at which supply = demand (in this case, at a price of $0), there are monopoly rents being charged here. In the most basic economic sense, there is a huge monopoly problem here.

    The original context was talking about extending compulsory licensing to patents. Trademarks where thrown in for completeness. To summarize the big 3 of IP copyright and patents yes on compulsory licensing, trademarks no.

    As I said, it's unfair to link trademark to the other two. They are completely different animals, and it makes no sense to bring trademarks into the discussion.

    Probably should have started a new paragraph after that. The whole point was I can't see how they got to compulsory licensing of copyrights. Even though it's a good ideas I'm not sure why it doesn't conflict with the Constitution.

    You can read up on the history of compulsory licensing if you want. There's plenty of info out there...

    I just find it rather ironic that a legal monopoly would be voided for illegal monopolistic behavior.

    And that brings us back to the question of why you think it's ok to have a "legal monopoly" in the first place when even you admit that monopolies are bad.

    I think it's called thinking outside the box, try it some time, you might like it.

    Thanks for the insult. It shows how strong you think your argument is. Considering that you're the one pushing for the status quo and I'm the one suggesting major reform, I think I think outside the box plenty... but, alas... we differ.

    It was posed as an interesting idea, just thinking outside the box again.

    Funny that you accuse me of not thinking things through, and then when I point out the same to you, you say "I'm just thinking outside of the box." I've spent plenty of time researching all of these ideas, writing about them, discussing them, testing the theories, reading the research.

    Your idea is not an interesting idea. It's totally arbitrary and has no basic rationale, other than your own decision that porn is somehow "bad."

    It has the benefit of allowing all speech but not allowing commercial speech offensive to the community to have commercial protections.

    "Offensive"? If it were offensive, there wouldn't be any demand for it. What's wrong with letting the market decide? Why should we let you decide what is and what is not offensive?

     

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  47.  
    identicon
    mjr1007, Mar 23rd, 2008 @ 6:16pm

    Re: Re: Re: Re: Re: Re: Once again you've missed t

    Mjr1007 wrote:
    Actually you seem to grasp the concept just fine. You just don't seem inclined to follow the suggestion. Might be because it would make it more difficult for you to stray from it.

    Mike replied:
    Ok. So you actually did think I needed to include it in each post. Well, when you run Techdirt, you can decide what goes in each post. Until then, you don't.

    I tend to think my readers are smart enough to either know the clause or go back and read it again.

    I tend to think that they would be both annoyed and insulted if I started each and every post with it.

    You, clearly, feel differently. Luckily, you can start your own blog, and we'll see who does better.


    Mjr1007 replied:
    Getting a little snippy aren't we? Relax Mike, a little controversy is usually good for page views.
    The suggestion was actually rhetoric since it seemed to me you were getting somewhat far afield. As your later post demonstrate you actually don't think your off at all so it really won't make sense.

    As far as starting my own blog goes, thanks for the career advice but it seems like a poor fit for someone with lexdysia (dyslexia). If it's all the same to you I'll just stick with my bits and bytes and the occasion odd posting.

    Mjr1007 was taken out of context:
    Here it would be all growth is progress but not all progress is growth. But once again you have added words that were not in the constitution. It says progress in the useful arts and sciences. No mention of economics, either growth or progress.

    Mike replied
    Nor does it say, as you claimed, "new discoveries and new technology" so I'm afraid that you are equally as incorrect.

    Mjr1007 replied:
    While it is true that neither is mentioned it in no way proves that they are equally incorrect. Nice bit of rhetoric but lousy reasoning. Let's try a little Gedankenexperiment (thought experiment). Let's say that someone (Willy Wonka) proposed the production of chocolate as the one true metric for progress in the useful arts and sciences. Would you say that since chocolate was not mentioned in the clause either, he would be EQUALLY as incorrect? It is not reasonable to say that all things not mentioned in the clause are equally wrong. This is called Reductio ad absurdum or reduce to the absurd, just in case you were interested.

    Mike wrote:
    It all depends on how you define promoting the progress of the sciences and useful arts. To me, that's clearly an economic phrase. To you, it's not. We can argue this all day, but in the end, I'm pretty sure I win. Why? Because the point of the document was to help provide a path for the advancement of society. And you do that through economic growth. Without economic growth there is no progress.

    Mjr1007 replied:
    Wow, not really sure what to make of that last sentence. I hope for your sake it's just rhetoric, otherwise this has become quite sad. 8-(

    We seem to have drift a little afield here but in for a Pence in for a Pound. Just of the top of my head, I'm thinking the elimination of tyrants would be progress that won't have to be measured in GDP. Peace and justice would also seem to fall into that category. In fact I'm thinking that trading some growth in GDP for more peace and justice would be OK. Hopefully you will just edit this part out in your response. I would hate to think you would actually argue for war and injustice for increased GDP growth.

    While we're at it let's take a look at how practitioners in the field measure progress. One way is papers or patents published, but as we all know all published papers are not equal. An other way is citations of published papers. This is sort of a peer review. It shows how others in the field view your work. This link count scheme has had some success in the field of information retrieval.

    This is really kind of interesting because the one clause covers both patents and copyrights. I'm not sure how the how the market and profit plays out for copyrights. Hopefully you will enlighten us. Do you judge the quality of literature by the size of the audience. If this were true the Jerry Springer would be winning awards left and right. 8-)

    mjr1007 wrote:
    OK then, what your saying is that despite the fact that there is no mention of economics or market or profits in the clause that's how we should interpret it? Could you please give some reason for this? This is actually fundamental to your argument and just doesn't seem to be supported by the clause.

    Mike replied:
    I repeat my statement above. You claim that it's new discoveries and new technologies, despite NO support for that in the clause. Yet, if you look at the history and the discussion between Jefferson and Madison, you see they were VERY MUCH concerned with economic growth (even if that phrase wasn't known or thought about, it was the concept they discussed).

    mjr1007 replied:
    Once again I'm really not sure how to respond. Are you seriously saying that discoveries and new technologies are not progress in the useful arts and sciences? It would seem like a difficult position to defend, but go ahead and give it a shot if you like.

    As far as correspondence between Jefferson and Madison it doesn't seem unreasonable to me to think of the economic impact of a particular law without having the economic impact be the sole criteria for judging the success or failure of the law. This seem pretty basic. Your position seems more rhetorical then reasoned.

    Mike also wrote:
    Progress is economic growth. I don't see how you have progress without economic growth.

    mjr1007 replied:
    We seem to be treading the same ground here again, this time you should feel free to cut one of these out. Progress in freedom, justice and peace sound like noneconomic progress.

    mjr1007 wrote:
    It seems that originally the useful part was to prevent people from trying to patent laws of nature and such, not some side reference to economics. Besides it is modifying what is to patentable not how to judge the effects of patents. All of this really seems not to be supported in the clause itself.

    Mike replied:
    Clearly, we interpret the clause differently. I see no possible way to read the clause the way you have.

    Nowhere do they say or reference anything about patenting the laws of nature. Nowhere is that even implied. Yet, what they do imply, quite frequently, is the question of economic growth. I'm sorry. You are simply incorrect.

    mjr1007 wrote:
    I may have misinterpreted it. The quote comes from

    The patent law specifies that the subject matter must be “useful.” The term “useful” in this connection refers to the condition that the subject matter has a useful purpose and also includes operativeness, that is, a machine which will not operate to perform the intended purpose would not be called useful, and therefore would not be granted a patent.
    Interpretations of the statute by the courts have defined the limits of the field of subject matter that can be patented, thus it has been held that the laws of nature, physical phenomena, and abstract ideas are not patentable subject matter.

    The reference is from
    http://www.uspto.gov/go/pac/doc/general/

    While the USPTO isn't held in particularly high regard on this site they do seem to be the De facto authority on the subject. After rereading the two paragraphs I will concede that useful might only refer to something that actually works rather then also not being a law of nature. But again there is a huge difference between something that works and something that dominates the market. The most ridiculous example would be Rube Goldberg.

    mjr1007 wrote:
    You originally stated that companies make bigger profits without patents. Which was irrelevant to the point, which is companies are not interested in progress, only profits.

    Mike replied:
    But if profits and progress are tied together, it does matter very much.

    mjr1007 wrote:
    I would still argue my point that progress and profits, within the context of patents are different. It does seem that Smith was right about monopoly being the great enemy of good management. Even legal monopolies. Either utilities or non-compulsory patents. It seem the companies loose their desire to continue to innovate. As I wrote earlier, CEOs seem to think innovation without a quick monetization is just an expense. It seems like you've got a pretty difficult sell here to the CEO. Good luck with it though.

    mjr1007 wrote:
    I didn't only say monopolistic behavior I also said infringing on patents. It's the same rhetoric device you used earlier. All monopolistic behavior is abusive but not all abusive behavior is monopolistic.

    Mike replied
    I agree. I didn't say otherwise. There is monopolistic behavior that is not about patents. But I was asking for an example, because the only things we had discussed to date that involved monopolies was patents.

    You are saying that infringing on a patent is monopolistic? How do you figure? It would seem to me that infringing on a patent is the opposite of monopolistic behavior, because it adds a competitor against a monopoly.

    mjr1007 replied:
    What I'm saying is infringing is abusive not monopolistic.

    mjr1007 wrote:
    But there was some monopolistic behavior by M$ against Netscape which wasn't patent inspired.

    Mike replied.
    Well, again this is a point of debate, but when you look at the details I do not believe MS's behavior against Netscape was monopolistic. I believe that there was a combination of competition and some incredibly dumb mgmt moves on the part of Netscape. It wasn't MS's "monopoly" that did in Netscape. It was its own mgmt not understanding the marketplace. Microsoft just did a better job competing.

    mjr1007 replied:
    It may be a point of debate for you but I think the court decided it was. While I would not defend Netscape's mgmt it really is hard not to call bundling software to but a competitor out of business anticompetitive behavior.

    The relevant part of the Court's Finding of Fact

    409. To the detriment of consumers, however, Microsoft has done much more than develop innovative browsing software of commendable quality and offer it bundled with Windows at no additional charge. As has been shown, Microsoft also engaged in a concerted series of actions designed to protect the applications barrier to entry, and hence its monopoly power, from a variety of middleware threats, including Netscape's Web browser and Sun's implementation of Java. Many of these actions have harmed consumers in ways that are immediate and easily discernible. They have also caused less direct, but nevertheless serious and far-reaching, consumer harm by distorting competition.

    The URL is

    http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm#vii

    Mike do you really want to be know as an M$ shill?

    Interesting side note, Spritzer was the name on the complaint. Gee I wonder if it's an M$ conspiracy to get even? 8-)



    mjr1007 wrote:
    There are other types of monopolies as well. I was merely pointing out that I was agreeing with Smith in the broader sense.

    Mike replied:
    If so, then why are you in favor of patent monopolies? If you support Adam Smith, I can't see how you also favor patents.

    mjr1007 wrote:
    Did you not understand the part about compulsory licensing? You own the IP but must let others use it for a fee. Maybe it's just me but I'm thinking once you are forced to license it to others the whole monopoly thing just doesn't seem to fit.

    Mike replied
    Not at all. That's still very much a monopoly, because the only one who can sell that particular product is you, by law. That's a gov't granted monopoly. Whether the price is compulsory or not makes no difference to the fundamental monopoly.

    mjr1007 wrote:
    Or do you have some argument which states that when lots of people can offer products based on the same IP it's still a monopoly. Gee what are the chances this little bit will make it into your next selective edits.

    Mike replied:
    There is still a monopoly on the original piece, because all payments need to go back to that original creator. All of those payments are a deadweight loss to society. Look at your basic economic supply and demand curve. Because the price is higher than the point at which supply = demand (in this case, at a price of $0), there are monopoly rents being charged here. In the most basic economic sense, there is a huge monopoly problem here.

    mjr1007 replied:
    Interesting take on compulsory licensing. With a reasonable low fees it's hard to see how this would be onerous for manufactures. It would be a level playing field for manufactures, they would have to compete on cost and quality. Of course the patent holder would also have to compete. If big Pharm had to license their drugs and generic makers had a choice between several ED drugs it would be interesting to see how it would play out. I have an opinion here but no real facts.

    Now would be an excellent time to discuss the economic impact without making it the sole criteria of the law. All of those payments could fund additional research which far from being a dead weight would actually bring even more progress in the useful arts and sciences.




    mjr1007 wrote:
    I just find it rather ironic that a legal monopoly would be voided for illegal monopolistic behavior.

    Mike replied:
    And that brings us back to the question of why you think it's OK to have a "legal monopoly" in the first place when even you admit that monopolies are bad.

    mjr1007 wrote:
    Mike one doesn't have to agree with the idea of a legal monopoly to find irony here. In fact, depending on how you define monopoly I don't think they are a good idea.

    mjr1007 wrote:
    I think it's called thinking outside the box, try it some time, you might like it.

    Mike replied:
    Thanks for the insult. It shows how strong you think your argument is. Considering that you're the one pushing for the status quo and I'm the one suggesting major reform, I think I think outside the box plenty... but, alas... we differ.

    mjr1007 wrote:
    Sorry Mike, I thought blogging was a rough and tumble affair, didn't realize how sensitive you were. I'll try to tone it down a little. But not too much because as we know controversy drives page views. 8-)

    Mike, I've been called a lot of things in my life, many of them not fit to print, but never have I've been accused of pushing for the status quo. I'm pretty sure the whole compulsory licensing thing for patents is not status quo. Again great rhetoric but just a little weak on facts and reason.


    mjr1007 wrote:
    It was posed as an interesting idea, just thinking outside the box again.

    Mike replied
    Funny that you accuse me of not thinking things through, and then when I point out the same to you, you say "I'm just thinking outside of the box." I've spent plenty of time researching all of these ideas, writing about them, discussing them, testing the theories, reading the research.

    mjr1007 replied:
    And yet after all that all you could come up with is: patent verses no patent. Seems kind of black and white, don't you think? No ideas on how to modify the system to allow more people to support themselves doing research.

    Researcher not economic growth or profits will be the way out of the mess we find ourselves in. Give the severity of the problems we are facing it will be interesting to see how much long we can continue with the status quo. Not just for patents but for your fundamental measure of progress, economic growth. At least as currently measured.

    mjr1007 wrote:
    Pornography is not useful and should not receive copyright protection. This would eliminate the profit motive while maintaining free speech.

    Mike wrote
    Your idea is not an interesting idea. It's totally arbitrary and has no basic rationale, other than your own decision that porn is somehow "bad."

    It has the benefit of allowing all speech but not allowing commercial speech offensive to the community to have commercial protections.

    "Offensive"? If it were offensive, there wouldn't be any demand for it. What's wrong with letting the market decide? Why should we let you decide what is and what is not offensive?

    mjr1007 wrote:
    Come on Mike, don't be diplomatic tell us what you really think. 8-)

    As far as porn goes, community standards are what decide what's offensive, not me. In most case I'm not concern one way or the other about it. Again it's just an interesting compromise between free speech and copyright.

    Now it seems you have really gone too far with

    "Offensive"? If it were offensive, there wouldn't be any demand for it.

    In this case you really don't seem to have thought this one through. The obvious counter example is child porn. There is a demand for it and it's really quite illegal. I hope, no really I do, that this is one we can agree on. To put it succinctly, child porn bad, demand or not.

     

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  48.  
    icon
    Mike (profile), Mar 23rd, 2008 @ 8:39pm

    Re: Re: Re: Re: Re: Re: Re: Once again you've miss

    Relax Mike, a little controversy is usually good for page views.

    First, I don't concern myself with pageview numbers. That's not our business. Second, trust me, this is not increasing pageviews. The only people reading this page right now are you and me. :)

    Let's say that someone (Willy Wonka) proposed the production of chocolate as the one true metric for progress in the useful arts and sciences. Would you say that since chocolate was not mentioned in the clause either, he would be EQUALLY as incorrect? It is not reasonable to say that all things not mentioned in the clause are equally wrong. This is called Reductio ad absurdum or reduce to the absurd, just in case you were interested.

    I'm quite familiar with reductio ad absurdum, but it only works when you are properly reducing something to the absurd level. You didn't reduce anything -- you went in a totally different direction. No one is defining a unit of measurement here, so the chocolate point is meaningless. We're talking about economic growth as a whole. That can be measured in chocolate, gold, dollars, or q-tips for all I care. It doesn't change the simple fact that it's the only way to measure progress of science and the useful arts.

    Just of the top of my head, I'm thinking the elimination of tyrants would be progress that won't have to be measured in GDP. Peace and justice would also seem to fall into that category. In fact I'm thinking that trading some growth in GDP for more peace and justice would be OK. Hopefully you will just edit this part out in your response. I would hate to think you would actually argue for war and injustice for increased GDP growth.

    My argument on these are rather straightforward. I believe that the elimination of tyrants and the increase in peace both lead to economic growth (progress). So they fit together. The idea that doing one hurts economic growth is not supported by any economic research I have ever seen.

    While we're at it let's take a look at how practitioners in the field measure progress. One way is papers or patents published, but as we all know all published papers are not equal. An other way is citations of published papers. This is sort of a peer review. It shows how others in the field view your work. This link count scheme has had some success in the field of information retrieval.

    None of those are very good measures. They are extremely weak proxies (especially using patents themselves).

    Once again I'm really not sure how to respond. Are you seriously saying that discoveries and new technologies are not progress in the useful arts and sciences? It would seem like a difficult position to defend, but go ahead and give it a shot if you like.

    Simple to defend and rather obvious as well. I build a machine that does nothing useful. It's new, but it does nothing at all. That's not progress. That's a waste. I could build a million machines that do nothing useful and have no demand. That is not progress.

    But if I build a machine that solves a real problem and fills demand, that's progress.

    While the USPTO isn't held in particularly high regard on this site they do seem to be the De facto authority on the subject. After rereading the two paragraphs I will concede that useful might only refer to something that actually works rather then also not being a law of nature

    The USPTO is hardly an unbiased party in this debate... Their mission is focused on getting more patents in (they're funded by application fees). They have no mandate to study the economic impacts.

    I would still argue my point that progress and profits, within the context of patents are different. It does seem that Smith was right about monopoly being the great enemy of good management. Even legal monopolies. Either utilities or non-compulsory patents. It seem the companies loose their desire to continue to innovate. As I wrote earlier, CEOs seem to think innovation without a quick monetization is just an expense. It seems like you've got a pretty difficult sell here to the CEO. Good luck with it though.

    Not as tough as you would think. When you can explain the long term advantage, you'd be surprised at how willing they are to understand it. Any CEO who prefers short-term advantage at the cost of long-term success isn't going to last all that long in a job.

    It may be a point of debate for you but I think the court decided it was. While I would not defend Netscape's mgmt it really is hard not to call bundling software to but a competitor out of business anticompetitive behavior.

    Yes. A court did decide it was, but I believe the court was wrong. I think that our antitrust laws are not proper antitrust laws. They are designed to punish companies that are too successful, not those that have an actual monopoly.

    I have no problem stopping monopolistic behavior, but I disagree that Microsoft's actions were monopolistic.

    I especially disagree that bundling software is monopolistic, because I think the business model for software SHOULD be to bundle it (see my posts on pricing and copyright of infinite goods).

    So, all Microsoft did against Netscape was choose the proper economic path. Netscape's problem was an inability to understand those same economics. That the courts chose to punish MS for its activities was more political than anything else.

    Mike do you really want to be know as an M$ shill?

    Given the amount of bad things I've said about Microsoft around these parts, it's ridiculous that anyone would call me a Microsoft shill.

    Just because I believe they weren't acting as a monopolist does not make me a shill. Please, have a little decency.

    Did you not understand the part about compulsory licensing? You own the IP but must let others use it for a fee. Maybe it's just me but I'm thinking once you are forced to license it to others the whole monopoly thing just doesn't seem to fit.

    I explained that. You very much still have a monopoly on it, as no one else can supply that good without paying you. It is, by all economic definitions, a monopoly still.

    With a reasonable low fees it's hard to see how this would be onerous for manufactures.

    The difference between "zero" and "something" is rather huge and can totally change the dynamic of a market. For you to decide that it's not "onerous" or that it's "reasonable" is incorrect. It's for the market to decide, not you and not some central planning organization or a patent body.

    It would be a level playing field for manufactures, they would have to compete on cost and quality.

    That is true without patents as well.

    If big Pharm had to license their drugs and generic makers had a choice between several ED drugs it would be interesting to see how it would play out. I have an opinion here but no real facts.

    Well, then take a look at the economic research. It does lead to *some* additional competition, but not necessarily the type of competition you want. I'll grant you that compulsory licensing is better than nothing, but it's still a limitation that is not necessary. You can do even better without that need at all, and just by letting the market compete.

    I'm pretty sure the whole compulsory licensing thing for patents is not status quo. Again great rhetoric but just a little weak on facts and reason.

    If you don't think that compulsory licensing of patents hasn't been discussed to death, then you are apparently new to this debate. There is a long and detailed research history here.

    And yet after all that all you could come up with is: patent verses no patent. Seems kind of black and white, don't you think? No ideas on how to modify the system to allow more people to support themselves doing research.

    Oh, I tried. I wasn't always completely against patents. I've gone through the research and looked at all the other proposed systems, and looked at more research for over a dozen years. It's only in the last two years or so that I finally put it all together and saw that if you understand the basic economics, there is almost no reason for the patent system.

    So, no, this wasn't just a "bah, be gone with them." This was ten years of research before I understood it enough, and understood the topic enough to be comfortable with the fact that patents do not make sense.

    And I'm not totally against the idea. I have always said that the one reason why a patent could make sense, the one arena where gov't intervention makes sense, is if there's clear evidence of a market failure. If someone can show me a case where there is a market failure, and then show how a patent solves that market failure better than alternatives, I could be persuaded that a patent makes sense. The problem is that I've yet to see such a case.

    Researcher not economic growth or profits will be the way out of the mess we find ourselves in. Give the severity of the problems we are facing it will be interesting to see how much long we can continue with the status quo. Not just for patents but for your fundamental measure of progress, economic growth. At least as currently measured.

    I'm afraid I don't understand what you are saying here. If you believe that the current system works against economic growth, then we agree. I'm all for proposing alternatives, but I've yet to see an alternative that makes more sense than just doing away with the system except in extreme circumstances.

    Come on Mike, don't be diplomatic tell us what you really think. 8-)

    If you want to know, I personally do not like pornography. I find it rather pointless and somewhat demeaning. But I'm not going to be the judge of that for others. The fact that so many people like it certainly suggests there's a market for it.

    As far as porn goes, community standards are what decide what's offensive, not me. In most case I'm not concern one way or the other about it. Again it's just an interesting compromise between free speech and copyright.

    While I know that the courts have set a "community standards" standard, I have trouble with that as well. If you are doing something in the privacy of your own home that does no harm for others, then I think the relevant community is you. Not those peeping in through the windows.


    In this case you really don't seem to have thought this one through. The obvious counter example is child porn. There is a demand for it and it's really quite illegal. I hope, no really I do, that this is one we can agree on. To put it succinctly, child porn bad, demand or not.


    That is a case where someone has been dangerously exploited. The problem that people have there isn't in the "value" of the content, but in the way in which it is manufactured. So yes of course child porn is bad, but because of it's exploitive nature.

    That does not support the rest of your argument at all.

    I am afraid, at this point, our arguments are going around in circles, and I need to get back to my real work. I've enjoyed the debate, but your arguments have been entirely unconvincing at this point, and tread over ground that has been tread over many times before.

    Clearly, we define some aspects of this differently. I would suggest that you do your own research and learn about this space. It took me 10 years to agree, finally, that I couldn't come up with an economic model where patents make society better off. Given time, hopefully you'll discover the same.

     

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  49.  
    identicon
    MLS, Mar 23rd, 2008 @ 9:03pm

    Re: Re: Re: Re: Re: Re: Re: Re: Once again you've

    Perhaps you have mentioned this before such that this is a silly question, but I am curious if you or another member of your team at Techdirt have ever filed a patent application (domestic and/or international) or registered a claim to copyright? If so, might you share the motivation(s) for doing so?

     

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  50.  
    icon
    Mike (profile), Mar 23rd, 2008 @ 10:31pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Once again you

    Perhaps you have mentioned this before such that this is a silly question, but I am curious if you or another member of your team at Techdirt have ever filed a patent application (domestic and/or international) or registered a claim to copyright? If so, might you share the motivation(s) for doing so?

    MLS, it's a good question. Over the past few years, we've developed a number of interesting technologies (and even business model innovations) internally, and our lawyers actually suggested we try to patent a few of them. I was tempted for a while to do so, just to experience the full process first-hand (and to have a response to those who claim I am not qualified to speak on the matter until I have). Eventually, after talking it over, however, we decided that it wasn't worth the time, effort, or money and it certainly wouldn't be worth the claims of hypocrisy from people who wouldn't understand why we were doing so. It certainly wouldn't be to charge anyone with infringement.

    And, no, I've never registered a claim to copyright. Some of the stuff I've written has been registered by others in work-for-hire type situations, but that, obviously, was not my call.

    I am not aware of whether or not this is true for others at Techdirt, though I'm not aware of any patents. My wife, however, does hold a patent (though, it's been assigned to the company she works for).

     

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  51.  
    identicon
    mjr1007, Mar 24th, 2008 @ 11:34am

    Re: Re: Re: Re: Re: Re: Re: Re: Once again you've

    mjr1007 wrote:
    Relax Mike, a little controversy is usually good for page views.

    Mike replied:
    First, I don't concern myself with pageview numbers. That's not our business. Second, trust me, this is not increasing pageviews. The only people reading this page right now are you and me. :)

    mjr1007 replied:
    LOL, good to see you enjoying yourself a little. If not page views then maybe click through. It would seem odd that you always rail against companies who complain about Google increasing their traffic and how this should increase their bottom line and yet you don't try to monetize your traffic. Just seems odd.

    mjr1007 was taken out of context:
    Let's say that someone (Willy Wonka) proposed the production of chocolate as the one true metric for progress in the useful arts and sciences. Would you say that since chocolate was not mentioned in the clause either, he would be EQUALLY as incorrect? It is not reasonable to say that all things not mentioned in the clause are equally wrong. This is called Reductio ad absurdum or reduce to the absurd, just in case you were interested.

    Mike replied
    I'm quite familiar with reductio ad absurdum, but it only works when you are properly reducing something to the absurd level. You didn't reduce anything -- you went in a totally different direction. No one is defining a unit of measurement here, so the chocolate point is meaningless. We're talking about economic growth as a whole. That can be measured in chocolate, gold, dollars, or q-tips for all I care. It doesn't change the simple fact that it's the only way to measure progress of science and the useful arts.

    Mjr1007 replied:
    Once again, living down to the title. The point was about two metrics not mentioned in the clause not being equally incorrect. The chocolate point is completely meaningless, and therefor much less correct then either of our metrics. Which was the whole point. Negating the statement, which you so cleverly left out

    “Nor does it say, as you claimed, "new discoveries and new technology" so I'm afraid that you are equally as incorrect”.

    Just because both of our metrics were left out of the clause does not make them equally incorrect.

    The fact that it was meaningless was the point. If chocolate is too concrete for you would sunspots be better. Let say Dr. Sol believes that sunspots are the one true measure of progress of science and useful arts. Clearly sunspots have nothing to do with the progress of science and useful arts. But according to your logic since neither sunspots or economics were mentioned in the clause they would be equally incorrect. Give a choice between the two I would go with the economics over the sunspots. 8-)

    mjr1007 wrote:
    Just of the top of my head, I'm thinking the elimination of tyrants would be progress that won't have to be measured in GDP. Peace and justice would also seem to fall into that category. In fact I'm thinking that trading some growth in GDP for more peace and justice would be OK. Hopefully you will just edit this part out in your response. I would hate to think you would actually argue for war and injustice for increased GDP growth.

    Mike replied:
    My argument on these are rather straightforward. I believe that the elimination of tyrants and the increase in peace both lead to economic growth (progress). So they fit together. The idea that doing one hurts economic growth is not supported by any economic research I have ever seen.

    mjr1007 replied:
    Once again you have lived down to the title. The point here is that there is progress besides economic progress. One could argue that the elimination of slavery retarded economic progress. One could also argue that there was a well known minority in control of major financial institutions and that committing genocide against them would increase progress. Certainly the Nazis believed just that. This in no way could be considered progress.

    Let's try an other truly disgusting example, as if genocide wasn't bad enough. Let's take child prostitution. Eliminating it might actually reduce the economic out put of some developing economies. The trade is very profitable and the kids really don't produce much economically otherwise. One could argue it's their highest economic value. Would you really argue that child prostitution is progress? I certainly hope not.

    QED, progress can be measured in terms other then economics. All increases in economic output is NOT progress.

    mjr1007 wrote:
    While we're at it let's take a look at how practitioners in the field measure progress. One way is papers or patents published, but as we all know all published papers are not equal. An other way is citations of published papers. This is sort of a peer review. It shows how others in the field view your work. This link count scheme has had some success in the field of information retrieval.

    Mike replied
    None of those are very good measures. They are extremely weak proxies (especially using patents themselves).

    mjr1007 replied:
    As is economic measures.

    mjr1007 wrote:
    Once again I'm really not sure how to respond. Are you seriously saying that discoveries and new technologies are not progress in the useful arts and sciences? It would seem like a difficult position to defend, but go ahead and give it a shot if you like.

    Mike replied:
    Simple to defend and rather obvious as well. I build a machine that does nothing useful. It's new, but it does nothing at all. That's not progress. That's a waste. I could build a million machines that do nothing useful and have no demand. That is not progress.

    But if I build a machine that solves a real problem and fills demand, that's progress.

    mjr1007 wrote:
    Wow, you really have my head spinning on that one. Let me think, where should I begin. Building a machine that does nothing useful. Could you give an example of a machine with a scientific breakthrough, utilizes that breakthrough and does nothing useful? Just building a machine does not constitute a scientific or technological breakthrough. This is called begging the question. The classic example is “have you stopped beating your wife?”. Answering either yes or no has you admitting to beating your wife.

    Let's further examine you example, by changing the parameters a little. Lets assume you build a machine that does nothing but is a big hit. You sell millions of them. You make billions. The obvious question is “Is this progress?”. 8-)

    BTW, the patent law actually states that it has to be useful. So the entire example is silly.

    mjr1007 wrote:
    While the USPTO isn't held in particularly high regard on this site they do seem to be the De facto authority on the subject. After rereading the two paragraphs I will concede that useful might only refer to something that actually works rather then also not being a law of nature

    Mike replied:
    The USPTO is hardly an unbiased party in this debate... Their mission is focused on getting more patents in (they're funded by application fees). They have no mandate to study the economic impacts.

    mjr1007 wrote:
    OK Mike, you must just be plain tired by now. First off, I'm conceding a point, so why would you argue about. Second, it was about the interpretation of current patent law and nothing to do with how progress is viewed. Their interpretation actually limits the types of patents they will accept, which is exactly the opposite of what you are accusing them of. It's almost as if you have a set of responses that are trigger by keywords, like patent office, and even if they are wildly inappropriate you use them anyway. Come on Mike your better the that.

    mjr1007 wrote:
    I would still argue my point that progress and profits, within the context of patents are different. It does seem that Smith was right about monopoly being the great enemy of good management. Even legal monopolies. Either utilities or non-compulsory patents. It seem the companies loose their desire to continue to innovate. As I wrote earlier, CEOs seem to think innovation without a quick monetization is just an expense. It seems like you've got a pretty difficult sell here to the CEO. Good luck with it though.

    Mike replied:
    Not as tough as you would think. When you can explain the long term advantage, you'd be surprised at how willing they are to understand it. Any CEO who prefers short-term advantage at the cost of long-term success isn't going to last all that long in a job.

    mjr1007 wrote:
    Sounds good. If it wouldn't break any confidentiality agreements could you cite some examples?

    mjr1007 wrote:
    It may be a point of debate for you but I think the court decided it was. While I would not defend Netscape's mgmt it really is hard not to call bundling software to but a competitor out of business anticompetitive behavior.

    Yes. A court did decide it was, but I believe the court was wrong. I think that our antitrust laws are not proper antitrust laws. They are designed to punish companies that are too successful, not those that have an actual monopoly.

    I have no problem stopping monopolistic behavior, but I disagree that Microsoft's actions were monopolistic.

    I especially disagree that bundling software is monopolistic, because I think the business model for software SHOULD be to bundle it (see my posts on pricing and copyright of infinite goods).

    So, all Microsoft did against Netscape was choose the proper economic path. Netscape's problem was an inability to understand those same economics. That the courts chose to punish MS for its activities was more political than anything else.


    mjr1007 wrote:
    Wow, well I'll say one thing for you Mike you certainly don't lack confidence. A US court found M$ guilty, an appeals court confirmed some of the conviction and somehow Mike know better. How do you ever get that head of yours through a doorway? 8-)

    Please do site an example that meets you lofty criteria.

    mjr1007 wrote:
    Mike do you really want to be know as an M$ shill?

    Mike replied:
    Given the amount of bad things I've said about Microsoft around these parts, it's ridiculous that anyone would call me a Microsoft shill.

    Just because I believe they weren't acting as a monopolist does not make me a shill. Please, have a little decency.

    mjr1007 wrote:
    Actually it was said with tongue planted firmly in cheek. On the other hand the most effective propaganda is done by those who don't appear to be simply a cheerleader. Criticizing M$ on small stuff while agreeing on the most important would be a good way to seem unbiased. 8-)

    mjr1007 wrote:
    With a reasonable low fees it's hard to see how this would be onerous for manufactures.

    Mike replied:
    The difference between "zero" and "something" is rather huge and can totally change the dynamic of a market. For you to decide that it's not "onerous" or that it's "reasonable" is incorrect. It's for the market to decide, not you and not some central planning organization or a patent body.

    mjr1007 wrote:
    This is something you will need to actually demonstrate, with citations and reason. Simply stating your opinion as fact is neither.

    Are you really arguing the difference between 0 and USD 0.01 for a multi dollar item is huge?

    Once again big on rhetoric but completely devoid of facts and reason.

    mjr1007 wrote:
    It would be a level playing field for manufactures, they would have to compete on cost and quality.

    Mike replied:
    That is true without patents as well.

    mjr1007 wrote:
    I'm not so sure this is true. Take a company that spent a large sum on research to develop a particular new technology. Let's say it comes to market and almost immediately is cloned by others. Would you really say this is a level playing field?

    mjr1007 wrote:
    If big Pharm had to license their drugs and generic makers had a choice between several ED drugs it would be interesting to see how it would play out. I have an opinion here but no real facts.

    Mike replied:
    Well, then take a look at the economic research. It does lead to *some* additional competition, but not necessarily the type of competition you want. I'll grant you that compulsory licensing is better than nothing, but it's still a limitation that is not necessary. You can do even better without that need at all, and just by letting the market compete.

    mjr1007 wrote:
    First, thanks for throwing me the compulsory licensing bone. At this point I'll take what I can get. 8-) There is a fundamental difference here between us. You have complete faith in this mythical creature called the market. I say mythical because it only really seems to appear in economic texts. Almost as soon as even a hint of it appears in the real world it is completely devoured by corporate types to make ever greater short term profits. All you have to do is look at business behavior to know that most, simply detest the market. They want a dominate position to dictate to their customers and suppliers. Corp may not be very good a delivering goods and services but they really know how to dominate a market.

    mjr1007 wrote:
    I'm pretty sure the whole compulsory licensing thing for patents is not status quo. Again great rhetoric but just a little weak on facts and reason.

    Mike replied
    If you don't think that compulsory licensing of patents hasn't been discussed to death, then you are apparently new to this debate. There is a long and detailed research history here.

    mjr1007 wrote:
    That is an interesting comment. A little googling seems to disagree with you.

    patent site:techdirt.com 23,000
    patent compulsory site:techdirt.com 108
    patent compulsory -music site:techdirt.com 26

    With elimination of duplicates it came down to 12. The only one which was really close to the topic was an article on the supreme court decision not to automatically grant injunctions. Apparently, somebody viewed this decision as compulsory licensing.

    Maybe you talked this to death with different words or in a parallel universe. 8-)

    mjr1007 wrote:
    And yet after all that all you could come up with is: patent verses no patent. Seems kind of black and white, don't you think? No ideas on how to modify the system to allow more people to support themselves doing research.

    Oh, I tried. I wasn't always completely against patents. I've gone through the research and looked at all the other proposed systems, and looked at more research for over a dozen years. It's only in the last two years or so that I finally put it all together and saw that if you understand the basic economics, there is almost no reason for the patent system.

    So, no, this wasn't just a "bah, be gone with them." This was ten years of research before I understood it enough, and understood the topic enough to be comfortable with the fact that patents do not make sense.

    And I'm not totally against the idea. I have always said that the one reason why a patent could make sense, the one arena where gov't intervention makes sense, is if there's clear evidence of a market failure. If someone can show me a case where there is a market failure, and then show how a patent solves that market failure better than alternatives, I could be persuaded that a patent makes sense. The problem is that I've yet to see such a case.

    mjr1007 wrote:
    This is so very unconvincing. Was it really 10 years of research or was it really one year of research done 10 times. 8-)

    To make a convincing argument try using citations from all that famous research you've done. Once the citations are made then you can employ reason (not rhetoric) to come to defensible conclusion. Simply saying, I've spent 10 years doing this is not a compelling argument to anyone other then your mother.

    mjr1007 wrote:
    Researcher not economic growth or profits will be the way out of the mess we find ourselves in. Give the severity of the problems we are facing it will be interesting to see how much long we can continue with the status quo. Not just for patents but for your fundamental measure of progress, economic growth. At least as currently measured.

    Mike replied:
    I'm afraid I don't understand what you are saying here. If you believe that the current system works against economic growth, then we agree. I'm all for proposing alternatives, but I've yet to see an alternative that makes more sense than just doing away with the system except in extreme circumstances.

    mjr1007 replied:
    What I'm saying here is that economic growth, as we currently measure it is unsustainable and using it as a metric will only increase global climate change, exhaust or limited resources sooner and increase the amount of toxins in the environment.

    mjr1007 wrote:
    Come on Mike, don't be diplomatic tell us what you really think. 8-)

    Mike replied
    If you want to know, I personally do not like pornography. I find it rather pointless and somewhat demeaning. But I'm not going to be the judge of that for others. The fact that so many people like it certainly suggests there's a market for it.

    mjr1007 wrote:
    As far as porn goes, community standards are what decide what's offensive, not me. In most case I'm not concern one way or the other about it. Again it's just an interesting compromise between free speech and copyright.

    Mike replied:
    While I know that the courts have set a "community standards" standard, I have trouble with that as well. If you are doing something in the privacy of your own home that does no harm for others, then I think the relevant community is you. Not those peeping in through the windows.

    mjr1007 replied:
    See this is exactly what I'm talking about, your use of rhetoric instead of facts and reason. No where did I write anything about the gov peeping into your windows. It was about copyrighting porn or actually the lack their of. I'm surprised you don't find this more interesting since it does for copyrights what you are proposing for patents. More about this at the end.

    Mjr1007 once again taken out of context.
    In this case you really don't seem to have thought this one through. The obvious counter example is child porn. There is a demand for it and it's really quite illegal. I hope, no really I do, that this is one we can agree on. To put it succinctly, child porn bad, demand or not.

    That is a case where someone has been dangerously exploited. The problem that people have there isn't in the "value" of the content, but in the way in which it is manufactured. So yes of course child porn is bad, but because of it's exploitive nature.

    That does not support the rest of your argument at all.

    mjr1007 replied:
    Mike, gotta love ya. Even when you agree with me you manage to disagree with me. LOL
    Your point was



    My counter example was offensive material that was in demand by some. So it actually does demonstrate your argument to be false.

    Mike wrote:
    I am afraid, at this point, our arguments are going around in circles, and I need to get back to my real work. I've enjoyed the debate, but your arguments have been entirely unconvincing at this point, and tread over ground that has been tread over many times before.

    Clearly, we define some aspects of this differently. I would suggest that you do your own research and learn about this space. It took me 10 years to agree, finally, that I couldn't come up with an economic model where patents make society better off. Given time, hopefully you'll discover the same.

    mjr1007 wrote:
    Actually it seems to me your arguments are spiraling out of control with ever more use of opinions, unsubstantiated facts, and rhetoric. The main problem here is deciding what is progress in science and the useful arts. Your view is that science and the useful arts can only be viewed through and economic lens. My is that you can have progress without viewing it through that lens. If someone invents a way to extract more Instruction Level Parallelism (ILP) from a processor then was done before, that's progress, whether or not it dominates the market. If the best before was 5 instructions on average and now its 7 instruction on average that's progress. It's progress even before it's incorporated into a product. You don't need to look at the economics of it to know that. The economic argument is just a red herring.

    I am curious about one thing. You said you found my arguments unconvincing. Could you specify exactly what it would take to convince you otherwise? I mean really, a court found M$ guilty, an appellate court upheld some of the convictions and yet you found it unconvincing. I'm not really sure there is anything that could convince you. So once again you have used rhetoric instead of reason. None is so blind as he who will not see.

    On the off chance you were interested in knowing what it would take to convincing me, you would have to use citations, actually quotes not just the names of studies done. You would then have to use reason rather then rhetoric to come to tenable conclusion.

    This entire discussion has been one giant distraction. Instead of discussing important issues we've spent the entire time demonstrating how rhetoric is used.

    Here's an idea, let's actually discuss the issue.

    The criticism of patents are:

    1 It is a difficult system to maintain and mistakes happen.
    2 They are a monopoly and monopolies are bad.
    3 They exclude other and make it increasingly more difficult to produce without infringing.

    1 This is a bit of throwing the baby out with the bath water. It's true that no matter what system is used or even no system, mistakes will be made. This would also include obvious and overly broad patents.

    2 The monopoly argument is a bit of a red herring. Patents grants a monopoly on a particular item but not a market. Look at big Pharm, the ED market has lots of patented drugs competing there. Of course there is the question of whether or not we need to put quite so many scarce resources there but some would say that is the market deciding. Actually it's simple business people trying to make as much money as they can.

    3 Sometimes referred to as the tragedy of the anticommons it also includes the problem of patent trolls.

    Before we look at compulsory licensing lets expand the concept a little to further address these issues. Lets say all producers can licensing all the patents they need to produce their products for 10 % of the wholesale prices of the goods or service. Let's further say there is an arbitration board which patent holders can take grievances to if they feel their percentage is too low. Also once the patent runs out the government gets the money as a tax. The arbitration board would have the right to narrow or even eliminate patents due to being obvious or overly broad or their being prior art which wasn't know at the time of the patent being issued. I'm pretty sure other inventors would have a lot to say here.

    Now what does this do. It eliminates the problem, for the producers, of worrying about lawsuits. They merely pay their 10% and they are done. It make production very easy and it gives them access to the latest and greatest technology no matter who owns the patent. If someone has an obvious and overly broad patent then other patent holder can plead their case to the arbitration board. There will never be a case like RIM where they are held up by a ridiculous patent. If 20 patents from 20 different patent holders are needed to produce a product the producer doesn't even have to talk with any of them, they merely send their 10% to the arbitration board and are done with it. This seems to fit nicely with the economic issues.

    Even if you didn't buy the monopoly as a red herring argument this certainly will eliminate the monopoly from the producers side. As far as the fees being a monopoly since they eventually become a tax it won't really matter. The goal here is to continue to reward people who are good at research and lousy at running companies. It will also eliminate the bottleneck of executives who view advancements as expenses since the expenses are born by others and they will pay their patent tax no matter what anyway. It also eliminates the incentive of infringement since the producers don't get to keep the patent tax no matter what. Of course companies could try to avoid paying the patent tax altogether but that seem like it would be an obvious crime. I'm sure the companies that pay their taxes now would pay this tax and the companies that don't would eventually get caught and get to pay their taxes plus a fine.

    Now on a more personal note for Mike. All of the discussion has been on patents, but copyrights also come from the same clause. What does your vaunted 10 years of economic research say about that? Should we eliminate copyrights too. Would you mind if people copied your site and your smart dossiers? Really if your not constantly updating and improving those dossiers then your not responding to market forces.

    Just a general observation about the discussion, whenever I've pointed out fallacies in your reasoning the entire back an forth has been edited out. No whoops or any sort of admission on your part or even trying to defend it, for that matter.

    I know you will find this hard to believe but I'm actually open to other ideas if couched in facts, (with citations) along with solid logical arguments. The fundamental areas we disagree on are

    using economics as the sole measure of progress.
    having blind faith in the market (which is almost always manipulated).
    That progress only occurs at companies.

    These are fundamental assumptions in you writing even if they are not stated explicitly, they are often implicit. Without first showing real proof for these the discussion can be nothing but a meaningless bickerfest.

    As far as not responding to any more post, it's your choice. You can either respond or let me have the last word. It's your call.

     

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  52.  
    identicon
    GH, Mar 24th, 2008 @ 12:48pm

    patents in principle vs. reality

    It's all very well talking about patents in principle, but when they actually stop you from trying things out it's extremely irritating. I've got my name on a few patents as inventor (not 'applicant' - that was the firm I worked for) but patents are killing off my attempts to try something new.

    I've got some ideas I'd like to test using image processing to solve real problems, but the first thing my employer did was to search for existing patents. There were hundreds loosely connected with the topic, and several which are basically "use of processing unit and video camera to recognise X, plus means of informing the operator". They don't really attempt to fill in what goes in the processing unit, which is what I would really like to work on. Now I don't know whether these patents are anything to worry about, or whether I could work around them, but I will never have the chance to find out because my employers will not even think about entering that whole world of pain; they would prefer to stick with less controversial projects.

    As an individual I could work on the problem, but with no guarantee of ever finding anyone to take my invention on, not because it didn't work, but because it might be infringing an existing patent no matter how spurious. And I certainly couldn't contemplate attempting to patent the invention myself.

    So what I'm saying is that regardless of the overall benefits of patents, in my particular field they are killing off a potential contribution to human progress because of the high legal barrier that is set before even beginning to 'dabble' in a problem. Basically it's just easier to do something else.

     

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  53.  
    icon
    Mike (profile), Mar 25th, 2008 @ 3:35am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Once again you

    It's 3am. I've been up since 6am. And yet here I am responding one more time, but I need to cut through the crap to get to the key points, because otherwise I'll collapse.

    Point 1: Your logic at the beginning is so ridiculous it's not worth responding to. Just out of curiosity (this isn't meant to be insulting, but I'm genuinely curious): how old are you? Have you ever studied economics? Furthermore, your point that "economic growth is unsustainable" is laughable. Where could you possibly come up with such an idea?

    Point 2: Is it really so egotistical to think that a court decision is incorrect, and then to support that opinion with facts? It's what we do here quite often. Considering that court decisions are often overturned, I don't think it's so egotistical. Why would you imply that it is?

    Point 3: On the difference between 0 and 0.01 USD there's a HUGE body of research on this. Look up some of the economic research on moral hazard and the impact of a copay or other tiny barrier above free to getting service.

    Point 4: To say that the market does not exist is simply incorrect. Again, have you studied any economics?

    Point 5: On compulsory licensing of patents. I didn't say I had discussed it to death here. I said it has been discussed to death period. Don't search techdirt.com. Search academic research.

    Point 6: Yes, I've been researching this topic for a dozen years, starting in 1996, and the research has gotten more and more detailed and involved over the years, thanks in large part to the fantastic work being done by various academics around the world. I have pointed out much of that research over and over again in the past. I have written a long post detailing books where you can read more. I'm not going to hunt all those down for you. You are free to do so however. As for the demand for specific quotes, that's silly. You'd just accuse me (as you do multiple times) of taking them out of context. Read all the research and then let's talk.

    Point 7: As for what would convince me: compelling economic evidence of patents aiding economic progress. Compelling evidence of a market failure that can be solved by patents. I've yet to see any and I've read through lots of it.

    Point 8: Your three criticisms of the patent system:

    1 It is a difficult system to maintain and mistakes happen.

    That's two points in one. But the criticism isn't just that mistakes happen, but that mistakes are the rule.

    The "difficulty" is a different criticism. That involves the cost of the system itself.

    2 They are a monopoly and monopolies are bad.

    Indeed. There's not much to add here. History has shown this to be true, and you even stated it.

    Your response suggests you disagree on the definition of what a monopoly is. If so, then I'm not sure how much further this debate will help us. Suffice it to say, I don't see how you can not call a patent a monopoly. It is, by definition, a monopoly.

    3 They exclude other and make it increasingly more difficult to produce without infringing.

    Your solution here is to create a gov't body? Are you serious? A centralized system with set price rules? Have you seen how those markets work out? Have you no sense of economic history? And how can you possibly say 10% is the right price? What do you do on products that have margins of 2%? You've just wiped out a huge portion of the economic output of our nation.

    What's wrong with letting the free market work it out? It has shown time and time again to make better pricing decisions than any human.

    The other thing that your solution would do is overwhelm the patent office, because patents would now be a license to tax everyone. EVERYONE will be claiming patents and then clamoring to get their patents included in the licensing bundle. It would be a huge mess. Much worse than today.

    Point 9: Yes, I have spoken about copyright as well, and we do not copyright our work here. As for the research output from Techdirt and the Insight Community, we also do not copyright it or own the copyright to any of it. Companies who purchase the research are free to do with it what they want. Within the Insight Community, the members who contribute are free to do what they want with their own content, over which they retain copyright, should they want it. We forbid other members from reusing other's content without permission, since that content is their's and we have no right to offer it up.

    So I'm not sure what you think you're proving by challenging me on copyright. My position is consistent.

    Our customers are paying us for the *creation* of new content (a scarce good). Once that's done, we're happy if those customers decide to promote our work by giving it away. We do not resell any work, so copyright is meaningless to us.

    Point 10: I have not edited a single one of your comments. To suggest that is a lie. I believe I have responded to all of your claims of logical fallacies. I may have skipped over the more inane ones in the interest of time, but to accuse me of editing your comments is simply false.

    Point 11: On the fundamentals you claim we disagree on:

    using economics as the sole measure of progress.

    Again, I have asked you to explain how it could be otherwise. You responded by suggesting that economic progress and removing a dictator are mutually exclusive which is false.

    having blind faith in the market (which is almost always manipulated).

    I don't have "blind faith" in the market. I recognize that markets are better determinants of economic outcomes. As for markets being manipulated, in the short-term all markets are manipulated. In the long-term, not so much.

    That progress only occurs at companies.

    I have never said such a thing implicitly or explicitly so I have no clue what you mean. I don't think this is true in the slightest.

     

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  54.  
    identicon
    mjr1007, Mar 25th, 2008 @ 5:29pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Once again

    Mike wrote:
    It's 3am. I've been up since 6am. And yet here I am responding one more time, but I need to cut through the crap to get to the key points, because otherwise I'll collapse.

    mjr1007 wrote:
    Mike, really this silly little discussion isn't worth your health. I and your loyal readership can certainly wait a while for your next response.

    Anyway, so much for this touchy feely crap, let the games begin.

    Mike wrote:
    Point 1: Your logic at the beginning is so ridiculous it's not worth responding to. Just out of curiosity (this isn't meant to be insulting, but I'm genuinely curious): how old are you? Have you ever studied economics? Furthermore, your point that "economic growth is unsustainable" is laughable. Where could you possibly come up with such an idea?

    mjr1007 wrote:
    You know I get that a lot. Your comment or question is not worth responding to. In my mind it always translates to I can't respond to it. By saying it's not worth responding to you've just responded to it, and in a way that makes it appear you really can't respond to it. 8-) I can only assume you are actually conceding the point. 8-) Of course I have no idea what point we're talking about. 8-)

    The first part of the last post was about advertising. Is that what got you so riled? It was just an observation and really not part of the discussion. Since you said it was about logic, the first logic was a reductio argument, which by the way was well formed and correct.

    I'm not insulted at all by the questions. I'll go ahead and answer them. It seems that you have an idea about what the answers are already so please let me know what you were thinking the answers were before I reveled. I'll try and guess in my post. Also I have a question for you. Have you ever taken a symbolic logic course. If so, did you get to proof with Universal and Existential quantifiers?

    how old are you?
    I'm in my 50s.
    My guess would be that you thought I was younger. Possibly even younger then you.

    Have you ever studied economics?
    Yes, while at University, right around the time you were born, if your wikipedia entry is to be believed. In fact I did quite well. Top of the class. Top 10 out of over 1000, if memory servers. Was asked by the prof to become an econ major. Thought I showed great potential. Who would of thunk it? Of course with my lexdisia it was completely out of the question. It was an age before word processors with spell and grammar check were on PCs or even before PCs really, so it just wouldn't have been possible. It was also the time I was proctoring classes in symbolic logic. The prof there thought I was more demanding of my students then the other proctors but also more helpful. I just wasn't letting them skate by. Does this sound at all familiar? 8-)

    My guess would be that you thought the answer would be no.

    Mike wrote:
    your point that "economic growth is unsustainable" is laughable. Where could you possibly come up with such an idea?

    mjr1007 replied
    Hate to fall back to my University days as a proctor, actually that's a lie, I'm quite enjoying it, but once again you have take things out of context. The full quote is

    What I'm saying here is that economic growth, as we currently measure it is unsustainable and using it as a metric will only increase global climate change, exhaust or limited resources sooner and increase the amount of toxins in the environment.

    Really all you have to do is scroll up the page to see it. 8-) The key modifier here, which you left out, was “as we currently measure it”. It was a reference to current types of energy consumption and the deleterious effects it's having on the planet. Which should have been obvious from the limited resources part. With India and China growing their economies in the same way we did, it becomes clear that it will be unsustainable at our current level of technology. Which makes the discussion about IP all the more critical. The whole global climate change thing is really out side the scope here.

    Once again you have mischaracterized what was said to make the counter argument easier. Good rhetoric but lousy reasoning.

    Mike wrote:
    Point 2: Is it really so egotistical to think that a court decision is incorrect, and then to support that opinion with facts? It's what we do here quite often. Considering that court decisions are often overturned, I don't think it's so egotistical. Why would you imply that it is?

    mjr1007 wrote:
    The answer is no it's not so egotistical to think a court decision is wrong and yes I do realize they are often overturned. But Mike reread what I wrote, that's just not the case here. Many of the M$ convictions were upheld on appeal, as stated in the posting. Also your defense was economic not legal and opinion not fact. Which may work here on techdirt but I'm pretty sure the courts are more inclined to follow facts and the law. Just a guess on my part but if you want you can test it, by breaking a law and then seeing how the judge responds to your economic opinions. 8-)

    Mike wrote:
    Point 3: On the difference between 0 and 0.01 USD there's a HUGE body of research on this. Look up some of the economic research on moral hazard and the impact of a copay or other tiny barrier above free to getting service.

    mjr1007 wrote:
    Here we go again. First of all you left out the second half of the quote to make you argument sound better.

    “Are you really arguing the difference between 0 and USD 0.01 for a multi dollar item is huge”

    Of course in you defense I did make the number ridiculously low. Since I threw out the number 10% it wouldn't be unreasonable to go with that here.

    The problem I have here is that you imply that there is this huge body of work that agrees with you. That is to say there was research on the difference between compulsory patent licensing and no patents on the advancement of technology. Google returned almost 42K results for “moral hazard” and patent. The first few pages were more on venture funding and so on. So a little specificity would be helpful here. Unless of course the goal here is to claim others agree without citing any individual. The old “it's well known” defense.

    To be honest I really don't know how the whole “moral hazard” thing plays out. Who is insulated from the risk and how does that effect advancement.

    The same is true for copays. I assume this is a medical reference but other then that I'm not seeing it. The obvious difference here is that the licensing fee would be rolled up into the goods or services and never be seen as a separate charge to the consumer.

    All I get out of this part of the post is that you think your right and I'm wrong, no big surprise there. But other then that there really isn't enough there to determine why, let alone if it's factual and well reasoned.

    If you could cite specific docs, preferably on the Net, it would be really helpful.

    In your defense it was 0300 hours and at that time of the night things often seem obvious that in retrospect may not be to others.

    I bet you never thought I would be defending you. 8-)

    Mike wrote:
    Point 4: To say that the market does not exist is simply incorrect. Again, have you studied any economics?

    mjr1007 wrote:
    Well if you say so then it must be true. There really isn't any need for all those pesky facts, not when it's simply easier to just say it's so. 8-)

    It really depends on what you call a market. Early in the Republican Presidential Debates I actually heard Fred Thompson say the oil market was behaving as expected. The price went up so demand went down. It took me several minutes to stop laughing. If this is your definition of a market then I have no problem defending my position. This is completely unencumbered by reality. The simple answer to this is OPEC. A cartel that sets the price and quantity of oil. All the consumers are left with is a Hobson's choice (take it or leave it). At this point I would expect you to use my argument about monopolies not necessarily being a monopoly when there are alternatives. Of course the problem with the alternatives here is that as soon as one becomes viable the cartel drops the price and drives the competition out of business. Hence the term Cartel.

    If memory servers Thomas Sowell wrote a paper about a true market back in the 70s. In your defense you were probably not yet in grade school. 8-) It used different taxi markets NYC and Wash DC if memory servers. The DC market had a very lower barrier to entry and really helped African American drivers get ahead. NYC had a high barrier and no such corresponding help. From reading that paper it made me realize just how rare true markets are. Of course this never stops business people from screaming “the market the market”.

    As I said earlier business people really don't like markets because it cuts into their short term profits. That doesn't stop them from invoking the term every chance they get though, whether is accurate or not Heck even Politicians like Fred do.

    Of course with OPEC it's really hard to see how a true market in oil would increase their profits but if you would like to take that position I would be more then interested in seeing any citations. Of course, as always, just saying it's so will be insufficient.

    Point 5: On compulsory licensing of patents. I didn't say I had discussed it to death here. I said it has been discussed to death period. Don't search techdirt.com. Search academic research.

    mjr1007 wrote:
    Fair enough, although I find it odd that with the total number of postings about patents on techdirt it never came up, but OK.

    Can you give a few citations that actually agree with your position, or is this just another one of those “because I say so” arguments.

    Point 6: Yes, I've been researching this topic for a dozen years, starting in 1996, and the research has gotten more and more detailed and involved over the years, thanks in large part to the fantastic work being done by various academics around the world. I have pointed out much of that research over and over again in the past. I have written a long post detailing books where you can read more. I'm not going to hunt all those down for you. You are free to do so however. As for the demand for specific quotes, that's silly. You'd just accuse me (as you do multiple times) of taking them out of context. Read all the research and then let's talk.

    mjr1007 wrote:
    I find this point the most interesting. If you read academic research then you should be very familiar with the concept of citation. Not just summarizing someone's work to suit your point, but to actually pick out passages. You imply that I'm intellectually lazy for not having read all of the works you have but good scholarship demands you site specific parts of other's work. This is not something I'm making up to make your life miserable, it pretty standard stuff. And the fact that we seem to go over it again and again is actually quite troubling.

    I've read many of your post on a variety of subjects, some of which I agree with, some of which I disagree with and others of which I have no opinion on. The one thing that I find throughout is that the post really couldn't be considered scholarship, just blogging. Which is what techdirt is of course so no surprise there. But I just don't think you can claim this as anything other then unsubstantiated opinion.

    The only reason I bring this up is you keep writing “my 12 years of research”. When you say that it does demand a high standard. You really can't just say my 12 years of research show I'm right and not give specific citations. Without your citations it's impossible to differentiate your research from your opinion. It just becomes an “appeal to authority”, which, is of course, just empty rhetoric. Actually geeks are notoriously bad a respecting authority without proof, so this seems like the wrong forum for this approach. Anyway all of this is just scholarship 101. I find it hard to believe that this would be controversial.

    Also has all of your research produced a peer reviewed published journal article? If it did, were there specific citations in it?

    Of course it does demand a certain question be asked. Did you do any research on non economic impacts or metrics for patents? I think the problem here is a typical one. You started down the economic road with patents and once down that road you can't even conceive of anything else.

    Mike wrote:
    Point 7: As for what would convince me: compelling economic evidence of patents aiding economic progress. Compelling evidence of a market failure that can be solved by patents. I've yet to see any and I've read through lots of it.

    mjr1007 wrote:
    With all due disrespect, that's a pretty tall order. 8-) I mean really, if the courts can't live up to your standards how is anybody else expected to. 8-)

    A little specificity here would be nice. Give me a hypothetical or actual case that would meet your high standards. I'm just going to attributed this to the 0300 effect.

    On an other note you still seem to be flogging the progress is economics horse. I'll post more about that at the end.

    Mike wrote:
    Point 8: Your three criticisms of the patent system:

    1 It is a difficult system to maintain and mistakes happen.

    That's two points in one. But the criticism isn't just that mistakes happen, but that mistakes are the rule.

    The "difficulty" is a different criticism. That involves the cost of the system itself.

    mjr1007 wrote:
    Should have read

    Three areas of criticisms

    and

    It is a difficult system to maintain and so mistakes happen.

    If this is unacceptable to you we could just raise the number of areas to 4. 8-)

    Is this really the best you got? 8-)

    The difficulty is more then just cost but to be honest I'm not sure which of the cost associated with the patent system you are referring to. Certainly the filing fee is not that high.

    Saying mistakes are the rule seem like hyperbole. Do you really think that over 50% of patents are mistakes? Again evidence with specific citations would be needed here.

    Mike wrote
    2 They are a monopoly and monopolies are bad.

    Indeed. There's not much to add here. History has shown this to be true, and you even stated it.

    Your response suggests you disagree on the definition of what a monopoly is. If so, then I'm not sure how much further this debate will help us. Suffice it to say, I don't see how you can not call a patent a monopoly. It is, by definition, a monopoly.

    mjr1007 wrote:
    If it's your opinion that OPEC is not a monopoly and the ED segment of the drug market, with it's multiple patented choices is, then I would agree with you, further debate will be pointless.

    Companies do try to limit choices to collapse markets into monopolies but it seems that many have more success with things like collusion, whether explicit or implicit, then patents.

    Mike wrote
    3 They exclude other and make it increasingly more difficult to produce without infringing.

    Your solution here is to create a gov't body? Are you serious? A centralized system with set price rules? Have you seen how those markets work out? Have you no sense of economic history? And how can you possibly say 10% is the right price? What do you do on products that have margins of 2%? You've just wiped out a huge portion of the economic output of our nation.

    What's wrong with letting the free market work it out? It has shown time and time again to make better pricing decisions than any human.

    mjr1007 wrote:
    Actually, compulsory licensing of music seems to be OK. It was set by a government body and the last time it came up those effect actually didn't want to let it go. Granted it doesn't have a government body regulating it so there is room for discussion. It just seemed more fair then giving a specific percent or dollar amount since patents do seem to be a much more complex topic the licensing a song. Of course it would be interesting to see how mixes work. Patents could work the same way.

    Unfortunately I have all to good of a sense of economic history. Constantly listening to people, much like you, make claims about an economic free market. Like how the market would set the Savings & Loan industry free. Or let the market decide on child toys safety or sub prime mortgages or any of a ton of other examples.

    The problem with a free market is that in reality they rarely exist. It's the difference between theory and reality. To have a truly free market you have to have enough consumers and producers and each with a small enough percentage of the market, so that no single consumer or produce can effect the market. There has to be low barriers to entry and exit. And there has to be equal information by both producers and consumers. These conditions are almost never met. And lets not even get into the problem of collusion.

    I believe that more harm then good occurs when people insist the market will work it out when they are not, which is usually the case, actually free. If you look at the business cycles that constantly plagued this country you can see the effects of claiming manipulated markets are free.

    Anyway, I hope that give you a feel for my sense of economic history.

    In theory I actually agree with you that a free market is a good mechanism. The reality is that whenever there are large amounts of money to be made the markets are manipulated to the detriment of almost everyone in the market. Even Bear Stearns got clobbered and they should have known better.

    Now about the 10% patent tax on items with 2% margins. Once again I'm going to attributed this to the 0300 effect. This is business 101. Companies don't pay taxes they collect them. They would simply pass the expense on to the consumers. Of course this is only for producers that actually use patents in the first place. The added competition would more then make up for the tax. In other words the price to the consumer would be expected to go down much as generic drugs are much cheaper then name brand ones are because of competition.

    Mike wrote
    The other thing that your solution would do is overwhelm the patent office, because patents would now be a license to tax everyone. EVERYONE will be claiming patents and then clamoring to get their patents included in the licensing bundle. It would be a huge mess. Much worse than today.

    mjr1007 wrote:
    Can't argue that one. Clearly some sort of automation would be needed. You know something like a free online patent search engine to see if the idea already exist. And while your at it why not through in some online research journals. After all much of the research was sponsored by the federal government and should be available. It seems like it would be a reasonable investment to even automate the initial review process to eliminate the obvious problems. Like it already exist or it's a perpetual motion machine.

    I assume you meant that claiming a patent was claiming others are using their patents. It seems to me that anyone developing a new product would simply review current literature, including patents and then specify what they were using. Most engineers don't try to reinvent the wheel when coming out with a new product. In fact many consider it part of their job to keep up with journals and patents.

    It's hard to argue with the engineer who is actually doing the work so their patent references would be the initial cut for claims. Of course their not perfect and they may have missed things, which is why the review board could be helpful. I suspect if the claims were reasonable most engineers and scientist would prefer to spend their time inventing and researching rather then arguing with an arbitration board.

    Mike wrote;
    Point 9: Yes, I have spoken about copyright as well, and we do not copyright our work here. As for the research output from Techdirt and the Insight Community, we also do not copyright it or own the copyright to any of it. Companies who purchase the research are free to do with it what they want. Within the Insight Community, the members who contribute are free to do what they want with their own content, over which they retain copyright, should they want it. We forbid other members from reusing other's content without permission, since that content is their's and we have no right to offer it up.

    So I'm not sure what you think you're proving by challenging me on copyright. My position is consistent.

    Our customers are paying us for the *creation* of new content (a scarce good). Once that's done, we're happy if those customers decide to promote our work by giving it away. We do not resell any work, so copyright is meaningless to us.

    mjr1007 wrote:
    Interesting, so it sounds like you're actually in the consulting business and use your articles as marketing collateral and your reports are a work for hire. My mistake, I thought you were in the publishing business. BTW Mike, this is me conceding the point, so there is no need for you to give me a hard time about it, like you did last time I conceded a point. 8-)

    Point 10: I have not edited a single one of your comments. To suggest that is a lie. I believe I have responded to all of your claims of logical fallacies. I may have skipped over the more inane ones in the interest of time, but to accuse me of editing your comments is simply false.

    mjr1007 wrote:
    Actually once again you've changed the claim to make your points sound better. What I said was you've taken things out of context. One particular egregious example was a response which cut a sentence in half. The edit comment was just editing out the entire parts without further comment. No conceding or contesting the point, just dropping it.

    I take exception to the characterization of my post being inane. I prefer to think of them as humorous. Of course some of the ones that are humorous you respond to and some of the serious ones you delete. I'll try to do a better job with my emoticons.

    Additionally when you summarize my comments, such as this one, you frequently change the meaning. When ever you do I dutifully go back and point out the actual meaning. Since it's my post and I have conceded points when you are right, like about what business you're in, I see no reason not to believe me when I say you've changed the meaning of my posts in your responses.

    It's one of the problems with natural languages, they are imprecise by nature. I'm sure many of the technical techdirt readers would have stories about such problems.

    Mike wrote:
    Point 11: On the fundamentals you claim we disagree on:

    using economics as the sole measure of progress.

    Again, I have asked you to explain how it could be otherwise. You responded by suggesting that economic progress and removing a dictator are mutually exclusive which is false.

    mjr1007 wrote:
    Again I think we have a misunderstanding.

    What I said was they are independent of each other not mutually exclusive. There is a huge difference between the two concepts. It came as a response to economics is the sole measure of progress. Your contention was there is only one measure of progress. My counter example was to show other measures of progress.

    It's logic 101. You make a claim, if I can show a counter example where your claim is not true then your claim is viewed as false.

    Your statement “economics is the only measure of progress” could be translated as

    All measures of progress are economic based
    You can demorganize it to
    There does not exist a measure of progress which is not economic based

    Some might actually translate the original statement directly to the second form. There really isn't anything very tricky here. Now if you would like to say that once seeing it in these terms that's not what you meant then that is a different discussion. The use of Demorgan's law for quantifiers is a bit of an extension of his original law but it's pretty commonly accepted. Personally I prefer the second translation because it becomes clearer that there does not exist merely requires the existence of a single example and no complex logic. It doesn't even matter if progress in a non economic measure causes economic progress. Logically it is irrelevant.

    Therefore the existence of a non economic measure of progress contradicts your assertion that all measures of progress are economic.

    The previous example was with all cardinals are birds but not all birds are cardinals. If someone sees a cardinal (the bird, not the religious leader) I know it's a bird, but if someone see a bird, I don't know, from that statement, if it's a cardinal or not. So if you say someone saw a bird, therefore it must be a cardinal that would not logically follow. The counter example would be seeing a humming bird or a crow or any other non cardinal bird. Also if someone say it's not a bird then I know it can't be a cardinal. That is all one can say logically.

    I'm not arguing that economics is not a metric for progress, I'm arguing it's not the only metric for progress. It exist but others do also. I'm sure if you concede this point we can still argue on which is the best metric, so what do you say Mike, can you through me a bone on this one? 8-)

    Mike wrote:
    having blind faith in the market (which is almost always manipulated).

    I don't have "blind faith" in the market. I recognize that markets are better determinants of economic outcomes. As for markets being manipulated, in the short-term all markets are manipulated. In the long-term, not so much.

    mjr1007 wrote:
    I don't know if your statements about the market rise to the level of blind faith but clearly you have more faith in what is euphemistically called a market then I do.

    Your admission that in the short term all markets are manipulated seems very damning to me. I would tend to agree with you but for someone who claims that markets are the best allocators of resources this seems incredibly damning.

    Mike wrote:
    That progress only occurs at companies.

    I have never said such a thing implicitly or explicitly so I have no clue what you mean. I don't think this is true in the slightest.

    mjr1007 wrote:
    Actually you did say such a thing implicitly. It doesn't quite rise to the level of being logically derived from what you said, but it's close.

    Logically it would be
    Progress is only economic in nature. I thing this is a fair summary of your postings
    That economic nature is the production of goods. “Consumption of goods is not progress”
    All production of goods occurs at companies A bit of an over generalization but not too much
    therefore all progress occurs at companies.

    The reason it doesn't quite rise to the level of a proof is that there is obvious economic production at places other then companies but it would be small in comparison.

    This may not actually be you opinion but it certain the impression you left with me. If I'm wrong on this one I will happily concede this point. But please, don't just say I'm wrong, use logic to point out the flaw. Was it a false premise? If so which one. Well hopefully you get the idea.

    mjr1007 wrote:
    To quote Maslow, of the hierarchy of needs fame, "When the only tool you have is a hammer, everything looks like a nail".

    Your analysis seems to be economic centered because those are the tools you have. Economist like to reduce everything to those terms and then work from there. It's only a model of how the world works, and it's only fit for economist. Your resume didn't show any technology degrees, just a bachelor's degree in Industrial and Labor Relations and an MBA -- both from Cornell University.

    As Korzybski said, “the map is not the territory”. An economic model does not actually produce technological innovations, out side of economics of course. Please stop insisting the map is the territory.

    I'm going to repost a noneconomic base progress example again, since you edited it out last time. No emoticons means it not inane.

    If someone invents a way to extract more Instruction Level Parallelism (ILP) from a microprocessor then was done before, that's progress, whether or not it dominates the market. If the best ILP before was 5 simultaneous instructions on average and now its 7 simultaneous instruction on average that's progress. It's progress even before it's incorporated into a product. These are the sort of metrics that those knowledgeable in the field would easily recognize.

    I'm just stunned that you can't see this. If this doesn't make sense please explain why this doesn't meet you high standard of proof.

    Anyway, I thought GH's comment was very insightful. He just talked about the run of the mill problems tech folks run into. I'm not sure I agree with his conclusion but certainly the issues he raised are quite valid. I'm just not sure that removing patents would allow him to find someone to take on his invention or if they did, without patent protection what would stop them from just using it without compensating him. There is the whole Not Invented Here (NIH) problem with many companies. Even with patent protection, it didn't stop auto makers from screwing Robert Kearns of intermittent windshield wiper fame. A truly sad story. If I understand your approach, in order for this guy to compete in the market place he would have had to start his own car company and even then, who buys cars based solely on windshield wipers? You probably don't remember life before the intermittent wiper but it was a pain. He didn't cure cancer but it was a nice little bit of progress. He deserved to be rewarded for it.

    http://www.washingtonpost.com/wp-dyn/articles/A54564-2005Feb25.html

    Here is a guy who could have contributed a lot to progress, both technological and economic but instead all he did was spend the rest of his life in court. Of course I would say that compulsory licensing would solve all of these problems and more.

     

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  55.  
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    Mike (profile), Mar 27th, 2008 @ 12:29am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Once a

    Will try to address this in more detail when I have the time, but on the request for specific citations, if you hire Techdirt, I'm more than willing to create that report for you at the right price. But here, in the work I'm doing for free, the effort to go back and find the specific citations is simply not worth my time.

    I appreciate your skepticism on the matter, but I've pointed out much of the research to you. You can find the specific citations yourself if you please.

    I may try to do some for a future post, but I'd rather spend my time with paying clients. Both the new Bressen and Meuer book as well as the Levine and Boldrin book both highlight much of the research (though perhaps not all of the most recent work). The Lerner and Jaffee book from a few years back has some good stuff as well (though, their conclusions are a bit weak).

     

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  56.  
    identicon
    mjr1007, Mar 27th, 2008 @ 8:02pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: On

    Mike wrote:
    Will try to address this in more detail when I have the time, but on the request for specific citations, if you hire Techdirt, I'm more than willing to create that report for you at the right price. But here, in the work I'm doing for free, the effort to go back and find the specific citations is simply not worth my time.

    mjr1007 replied:
    To start with I'm going to guess at the answers to my two questions since you didn't answer them.
    Did you write a peer reviewed article from all your research.
    No
    Did you ever study symbolic logic and if so did you do proof with quantifiers?
    No

    Since I answered you questions it seems fair that you should answer mine. There not that complicated and really shouldn't take up much of your time.

    Not making notes at the time you read something just seems like incredibly poor scholarship. Do you normal put citations in you fee based reports?

    As far a paying you to improve you scholarship, what does you keen economic mind tell the chances of that happening are? 8-)

    Mike wrote:
    I appreciate your skepticism on the matter, but I've pointed out much of the research to you. You can find the specific citations yourself if you please.

    I may try to do some for a future post, but I'd rather spend my time with paying clients. Both the new Bressen and Meuer book as well as the Levine and Boldrin book both highlight much of the research (though perhaps not all of the most recent work). The Lerner and Jaffee book from a few years back has some good stuff as well (though, their conclusions are a bit weak).

    mjr1007 replied
    Wow, I'm glad to see that the 12 years of researcher didn't go to waste, you can now give people a reading list. At this rate in a few more decades you just might narrow it down to a few chapters. Does anyone really let you slide with this kind of nonsense or am I the only one who calls you on it?

    This is truly the most bizarre argument I've seen in quite some time. I really don't know what to make of it. It's flawed on almost every level. You really need to learn how to form valid and sound arguments. It's a little out side of my usual consultancy but since you are in such dire need I will be more then happy to help you, for the right price of course. 8-) I truly do love mirroring people. The only reason I put that in was that on a different site they never got it.

    I do want to thank you for helping to crystallize my thinking on this. It wasn't till discussing this with you that I realized how truly FUBARed things get once the economist and lawyers get involved.

    Of course they really aren't that different from everyone else. They think that what they do is the most important thing and what others do is trivial. As if without economist or lawyers nothing would ever get done.

    Other often think the same. Some that I've met in the military thinks the world is there to support their efforts. The truly scary part of this is they will often tell you they have more in common with their enemy counterparts then they do with their fellow citizens. It makes you wonder sometimes. In the defense of economist and lawyers they're really not worse then most and even better then some. At least they don't have automatic weapons. In this regard lawyers are really there just to protect you from other lawyers, and they definitely have more in common with the other lawyers then they do with their clients. As for economist, they're there to say “the market demands you do what my client wants”.

    The invisible hand metaphor, which most economist use as their basis for claim the magic of the market, comes from “An Inquiry into the Nature and Cause of A Wealth of Nation” by A. Smith. According to a search of the online addition at project gutenberg it occurs exactly once. Not exactly the main thrust.

    It's Book IV chapter II

    The Name of the chapter is

    “OF RESTRAINTS UPON IMPORTATION FROM FOREIGN COUNTRIES OF SUCH GOODS AS CAN BE PRODUCED AT HOME”

    Most contemporary usage of it have extended it beyond the original meaning (taken it out of context). Gee who would have thought people would take things out of context to have it better conform with their private agendas? 8-)

    Some interesting quotes from this chapter, just ahead of the invisible hand.

    Every individual is continually exerting himself to find out the most
    advantageous employment for whatever capital he can command. It is his
    own advantage, indeed, and not that of the society, which he has in
    view. But the study of his own advantage naturally, or rather
    necessarily, leads him to prefer that employment which is most
    advantageous to the society.

    It's not about all behavior but rather specifically how one invest their capital.
    Next

    First, every individual endeavours to employ his capital as near home
    as he can, and consequently as much as he can in the support of
    domestic industry, provided always that he can thereby obtain the
    ordinary, or not a great deal less than the ordinary profits of stock.
    This one is really interesting. I wonder what Smith would think of outsourcing?

    Next

    Secondly, every individual who employs his capital in the support of
    domestic industry, necessarily endeavours so to direct that industry,
    that its produce may be of the greatest possible value.

    The produce of industry is what it adds to the subject or materials
    upon which it is employed. In proportion as the value of this produce
    is great or small, so will likewise be the profits of the employer.
    But it is only for the sake of profit that any man employs a capital
    in the support of industry; and he will always, therefore, endeavour
    to employ it in the support of that industry of which the produce is
    likely to be of the greatest value, or to exchange for the greatest
    quantity either of money or of other goods.

    Capital is fluid, it mores around. What if someone was able to make a great profit but a small produce by monopolizing a market. Would those who own capital do that as well? Are there any examples of such things actually occuring?

    And now for the finale

    By preferring the support of domestic to that of foreign industry, he
    intends only his own security; and by directing that industry in such
    a manner as its produce may be of the greatest value, he intends only
    his own gain; and he is in this, as in many other cases, led by an
    invisible hand to promote an end which was no part of his intention.

    Reading this always makes me feel it's some what archaic, both in word usage and the actual observations. He was arguing against Mercantilism. It was just at the start of the industrial revolution so most things were still done by hand. The whole automation thing hadn't really taken hold yet.

    There is a chapter on market pricing

    Book I CHAPTER VII.

    OF THE NATURAL AND MARKET PRICE OF COMMODITIES.

    Odd that the invisible hand didn't show up here. What did show up here is the natural price of goods. You know cost plus a reasonable profit. In fact it shows up 27 times in the book, if I counted right. So why don't economist talk more about the natural price? Why aren't there economist screaming everything should be at it's natural price. Which by the way is what a market is supposed to actually do, if it's not being manipulated. I will start to believe that markets work when the markets start producing goods at the natural price.

    I hope this explains why the whole invisible hand rant really rings very hollow, especially now.
    It's actually pretty funny, the same people who keep crying the market the market run to the government every time things turn south.

    WASHINGTON (AP) -- If big Wall Street investment houses are allowed to run to the Federal Reserve for emergency lending, they must face stepped-up regulation, Treasury Secretary Henry Paulson declared Wednesday.

    http://biz.yahoo.com/ap/080326/paulson_credit_crisis.html
    I wonder where the invisible hand is at Bear Sterns?

    The point here is that truly free markets really don't exist any more. Even you admitted that in the short term all markets are manipulated, which hardly sounds like strong support for them. Especially when you realize that, for these folks, the short term is all that exist. More harm then good occurs when markets are manipulated.

    The problem with maximizing your return on capital is they wind up being like the S&L debacle, the sub prime debacle and even lead painted toys. All in the name of maximizing return. It's would be hard to rationalize this as being in the best interest of society. Our society is so much more complex then the one Smith was writing about. And of course these disasters invite regulations. There seems to be this cycle deregulate, bailout, reregulate. The most troubling part of this, for me anyway, is the bailout. Who do you think is going to pay for that. Certainly not the economist saying, the market will sort things out.

    To give you a sense of regulation throughout history you should think about building codes. Builders cutting corners seems to be almost as old as history itself. Just read Hammurabi's code. Of course to truly understand the issue you have to read it in the original cuneiform. Once you do that then we can talk about it. What you don't have a copy of the original tablets and you don't read ancient cuneiform, well I guess I can't help you then because I just spent the last 12 years researching it and I guess you're just going to have to take my word for it. Maybe after you do the same you will come around to my way of thinking and then we can talk. 8-)

    Sounds pretty stupid doesn't it. The citation is

    http://www.gregpetersoninspections.com/hammurabi.htm

    Here is a case where asymmetric information creates an unfair advantage to the seller and is countered by hash penalties. I guess the market mechanism would be that eventually people would find out who was the really bad builders and not use them. But that would seem to have an extraordinary high cost on those unlucky customers. Of course today, rather then kill the builders we just have regulations and inspectors looking at the building while they're going up. Oh my, regulations, that can't be right. Well just try to get a mortgage on a house that hasn't been inspected. In my experience the builders of today are not a whole lot better then in the past.

    I was remodeling a house a few decades back and working with a number of subcontractors. When the electrical work was being done one of these Yo-yos wanted to put an electrical cable behind the sheet rock instead of through the studs. It was an outside wall so there was already plywood on it. The electrician, fully certified, just couldn't be bothered. The wield thing was he was being paid by the hour. I guess he wanted to go drinking with his buddies or something. Of course I told him he was being paid by the hour so just run the wire through the studs. Took a whole hour longer and I didn't have to worry about the damn house burning down.

    You could argue for private inspections as a market mechanism. Had one of those done on a different house. The guy caught a problem with the furnace. Believe it or not they hooked up the furnace to the flue with a dryer hose. It was amazing the house hadn't caught fire or the hose disintegrated letting exhaust gas into the house. It was fixed before we moved in. The homeowners didn't pay for it, the previous home inspector who missed it did. One for two with private inspections. The point here, other then a stroll down memory lane is, the urge to cut corners is just too strong for some to resist and regulating, while far from perfect is a necessary part of life. These were small things too. Imagine how much more difficult it would be if we were talking millions of dollars. The market just can't solve all the problems.

    Of course this is all very far off the original topic of patents. Even though I don't think economics is the only measure for them it certain is something to discuss. Patents by their very nature are new, novel and non obvious. So a monopoly on them is not the same thing as granting a monopoly on an already existing commodity, like say oil for instance. The patents will typically do one of two things, either bring new products to market or make older ones cheaper or better. Either way it's not nearly as disruptive as a monopoly on an existing commodity. Your probably don't remember the gas lines in the 1970s. How could you, the first oil shock occurred a year before you were born and your were maybe 5 for the second one. I was already driving for both of them and remember it clear. The difference between that monopoly and a patent monopoly are just worlds apart. It's not like without some new gadget you will end up almost freezing to death in their own homes because they couldn't afford heating oil, like some did during the oil shocks. Also, aside from the overly broad patents, which should be able to be handled some way other then just eliminating the entire system, there are usually multiple products out, like the ED drugs, for the same market.

    This seems to me to be a much more balanced analysis of patents. And as economic analyses go there was a great one on your site awhile ago. Unfortunately not by you guy. It was by the barefoot bum in the comments. If you go to

    http://www.techdirt.com/articles/20071012/123943.shtml

    and search for fungible you should find it. It demonstrated what an overly simplistic analysis your guy had done. The barefoot bum pointed out two unexamined assumptions made and pretty much destroyed the conclusions from the posting. Of course you could argue about the fungibility and elasticity of the labor markets but at least the analysis wasn't this I've studied for 12 years and you haven't so just shut up already, crap. It was honest, open and thoughtful. It may not be right but at least it was recognizable as analysis.

    Since all of your arguments are based on rhetoric and false premises it's hard to see any point in continuing at all. It reminds me of the great Groucho quote, “are you going to believe me or your lying eyes”. Mike I think I'm going with the old lying eyes. Despite your insistence that markets work, history shows us when we put our trust in them we just go through these terrible cycle over an over again.

     

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  57.  
    icon
    Mike (profile), Mar 28th, 2008 @ 2:19am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re

    Again, don't have time to go through all of this, but on Adam Smith, he uses the phrase invisible hand once, but the concept is discussed throughout the book.

    The reason you don't hear people referring to his work on pricing is because it's wrong. That's fairly well established. The economics on pricing came about mostly about a century after Adam Smith.

    If you'd like a good history on this, you should try David Warsh's book "Knowledge and the Wealth of Nations." If you want to learn more about what Adam Smith got right and what he got wrong, you should try PJ O'Rourke's recent book reviewing The Wealth of Nations. It's a quick read.

    As for citations, your sarcasm aside (was that really warranted?), yes, I take notes. Lots of them. And when I give our clients our research, they include them. But I'm not going to go back and spend hours finding the exact citations for you -- especially when you sit here and insult me. I am not here to be your personal tutor, and given your own inability to grasp some basic logic concepts, I can see it would be a long, long, long lesson.

    You don't have to believe what I say. As I said, skepticism is a good thing. But I find it amusing that your reasoning is not because you actually understand the economics at play, but because I failed to cite stuff. You are free to continue with your ignorance, but it doesn't get you any closer to being right. I'm sorry that I failed to convince you, but I get the feeling that you're playing a game here: trying to waste my time, rather than have a serious discussion.

    Too bad. It could have been interesting.

     

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  58.  
    identicon
    mjr1007, Mar 28th, 2008 @ 1:31pm

    The never ending story

    Mike wrote:
    Again, don't have time to go through all of this, but on Adam Smith, he uses the phrase invisible hand once, but the concept is discussed throughout the book.

    The reason you don't hear people referring to his work on pricing is because it's wrong. That's fairly well established. The economics on pricing came about mostly about a century after Adam Smith.

    mjr1007 replied:
    Take you time Mike there is absolutely no rush. As far as Smith using the concept throughout the book that's all well and good but he didn't use it in the Market Pricing of Commodities chapter, which is exactly where everyone quotes the invisible hand stuff. At this point it's interesting that you say he got it wrong because what he wrote is what people quote. So in some sense it doesn't matter if he got it right or not, it's what's being said which by your own admission is wrong. Which makes it hard to believe it.

    Mike wrote:
    If you'd like a good history on this, you should try David Warsh's book "Knowledge and the Wealth of Nations." If you want to learn more about what Adam Smith got right and what he got wrong, you should try PJ O'Rourke's recent book reviewing The Wealth of Nations. It's a quick read.

    mjr1007 replied:
    Again with the reading list. Mike, the argument I'm right read this is not an argument, it's just empty rhetoric.

    Mike wrote:
    As for citations, your sarcasm aside (was that really warranted?), yes, I take notes. Lots of them. And when I give our clients our research, they include them. But I'm not going to go back and spend hours finding the exact citations for you -- especially when you sit here and insult me. I am not here to be your personal tutor, and given your own inability to grasp some basic logic concepts, I can see it would be a long, long, long lesson.

    mjr1007 replied:
    Did you read the part on mirroring? If you did then you obviously didn't get it.

    Mirroring in simplest form is copying what someone else is doing while communicating with them. Observed in people exhibiting similar postures, gestures or voice tonality.

    Full link

    http://en.wikipedia.org/wiki/Mirroring_%28psychology%29

    I've extended it a bit to include obnoxious comments. Every time you say something condescending I respond by saying something sarcastic. Get it now?

    Since you give the citations to your clients then obviously you realized the importance of them. Don't be so surprised when you're asked for them.

    I'm not insulting you, I'm insulting you arguments, there is a difference. In fact I've often cut you slack personally, remember the 0300 effect?

    As far as tutoring me in logic, well it seems a bit of a stretch. The only sound argument you've come up with to date is knowing what business you're in. All of your other arguments have been either unsound, invalid or both. BTW theses are actually technical terms in logic and describe different type of failures of logic. They are not personal attacks, but are provable observations.

    Mike wrote:
    You don't have to believe what I say. As I said, skepticism is a good thing. But I find it amusing that your reasoning is not because you actually understand the economics at play, but because I failed to cite stuff. You are free to continue with your ignorance, but it doesn't get you any closer to being right. I'm sorry that I failed to convince you, but I get the feeling that you're playing a game here: trying to waste my time, rather than have a serious discussion.

    mjr1007 replied:
    Mike one of the reasons I'm asking for citations is that you are constantly say things like at the beginning of this post.

    “The reason you don't hear people referring to his work on pricing is because it's wrong. That's fairly well established. The economics on pricing came about mostly about a century after Adam Smith.”

    Not only did you fail to make a convincing argument, you failed to make any argument! You haven't said anything here other then Smith and by indirection I am wrong. You didn't specify what Smith/I got wrong. You haven't even given a hint as to what you think the right answer is. It's just empty rhetoric. Full of sound and fury signifying nothing.

    Mike wrote:
    Too bad. It could have been interesting.

    mjr1007 replied:
    It could be interesting, but only if you actually discuss things and stop handing out reading assignments. If you have a point, make it, otherwise enough with the reading list already. We get it, you have time on your hands so you read a lot.

    Actually this is really beginning to sound like a troll. Are you sure you're not just trying to get your page views up?

     

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  59.  
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    Mike (profile), Mar 28th, 2008 @ 7:09pm

    Re: The never ending story

    Not only did you fail to make a convincing argument, you failed to make any argument! You haven't said anything here other then Smith and by indirection I am wrong.

    You said you did well in your economics classes, so I figured it would be obvious to you why Smith's pricing argument was wrong.

    The problem is that he equates price with value, when they are two separate things. What Smith understood well was the impact of market mechanisms, but he didn't fully understand how they set price (even though he touches on it at points).

    As for the reason I give you a "reading list" is because most of that research and those books have quite detailed explanations of all of this. Asking me to merely repeat what has already been written is pure laziness and clearly an attempt to waste my time.

    I'm sorry you don't want to read, but I don't have the time to hold your hand and take you through things. I pointed you in the direction. Your failure to walk down that path is not my fault.

     

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  60.  
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    mjr1007, Mar 29th, 2008 @ 11:49am

    Re: Re: The never ending story

    mjr1007 wrote:
    Not only did you fail to make a convincing argument, you failed to make any argument! You haven't said anything here other then Smith and by indirection I am wrong.

    Mike wrote:
    You said you did well in your economics classes, so I figured it would be obvious to you why Smith's pricing argument was wrong.

    The problem is that he equates price with value, when they are two separate things. What Smith understood well was the impact of market mechanisms, but he didn't fully understand how they set price (even though he touches on it at points).

    mjr1007 replied:
    My economics are fine, it's my mind reading which is poor. Which is why I got out of the psychic business. 8-) The reason I couldn't read you mind here was, well it went off topic again. The topic was the invisible hand in the MARKET. Not the invisible hand in pricing. Even though the word pricing was in the name of the chapter and it discussed the natural price of goods it also discussed how the market works, but left out the concept of the invisible hand, rightly so in my opinion. Since you admitted in a previous posting that markets are manipulated, then one could logically deduce that market manipulation is the work of the invisible hand which must somehow benefit society. There was no differentiation between short term and long term actions of the invisible hand in the one use of the term so expanding the concept here would seem unwarranted.

    BTW, were you saying that the concept of a natural price for goods and services is wrong. Again from the vague generalities it was impossible to tell exactly what you were saying. Of course your statements would have one believe that in economics all of these issues are resolved and there is consensus in the field. If this were so then it's hard to understand why there are still so many different schools of economic theory which disagree with each other.

    Let's just take the natural price of goods as an example. This is from the classical school. The Austrian school refutes it with the marginality theory. The paper was published just under 100 years after A Wealth of Nation. This is not a cheap shot at your over hundred years later comment, but rather an indication of just how difficult it is to figure out what the hell you are saying. I'm reduced to guess you position by counting years between publications. What you are thinking may be clear in you mind but it's just not that clear to others.

    I actually find this particular argument on pricing interesting. Anyone who has taken accounting will recognize the natural price of a product as the Cost of Goods Sold more or less. It seems the different views of pricing can be accounted for by whether you are looking at micro or macro economics. Once again different economic views and lots of different opinions. I saw a stock market analyst talk about pricing in the oil sector in term of multiples over lifting cost. Depending on what type of analysis you are actually trying to do, different approaches make sense.

    Your implication that anyone who reads your list of books would automatically come to the same conclusions you do is laughable. Economist don't agree with each other, there is plenty of disagreement in the community.

    I hope this explains why you really need to do more then just give out a reading list. It's clear that my appeal to scholarship was not convincing to you. Maybe this example will be.

    Mike wrote:
    As for the reason I give you a "reading list" is because most of that research and those books have quite detailed explanations of all of this. Asking me to merely repeat what has already been written is pure laziness and clearly an attempt to waste my time.

    I'm sorry you don't want to read, but I don't have the time to hold your hand and take you through things. I pointed you in the direction. Your failure to walk down that path is not my fault.

    mjr1007 replied:
    This is really empty rhetoric. As if citing books and saying they make your point is somehow a serious discussion of anything. It's almost impossible to tell what your point is let alone why you think a particular source actually makes the point. Again by only saying “I'm right and this reading list proves it”, you avoid all the messy bits of actually making a coherent argument and backing it up with facts and reason. It's actually laziness on your part and extremely poor scholarship. Actually it's not scholarship at all. The only reason the word scholarship comes up is because you keep saying “my research my research”. If your research is so wonderful why not publish in a peer review journal? It would certainly be a nice little bit of infinite/scarce marketing on your part. Of course they would require citations and be unwilling to pay techdir to have you put them in. It's actually disturbing that you would think that asking for clear unambiguous statements backed up with citations is intellectual laziness. Giving a conclusion and saying it's supported by this reading list is not scholarship, it's not really much in the way of a discussion. It's just empty rhetoric.

    On the other hand the few times you did give specifics the results were disastrous for you. Excluding the fact you actually know what business you are in, you did not come up with a single sound argument. I dutifully showed you why each of your arguments where either invalid or unsound. I even including the old birds and cardinals lesson from my days as a proctor at University. As soon as you were tutored in logic you stopped giving enough information to actually comment on, and fell back on vague generalizations and reading list.

    I spent time going over your arguments and explained how they were flawed. If you disagreed with my analysis of your logic you certainly could have pointed out in detail why you thought your arguments were in fact correct. Instead you chose to edit the comments out and fall back on vague generalities and reading list. You also failed to answer the questions on a whether your research produced a peered reviewed journal article and whether you have ever studied symbolic logic. My reasoning for wanting to see a peer reviewed article, if it existed, was to finally get to those much sought after citations. In the world of markets, the price on those citations must be astronomical, since there is a near infinite demand and apparently no supply. 8-)

    Again, I answered your questions and give specifics with citations and would continue to do so. Once you realized that the specifics of your arguments were actually being analyzed you stopped giving out any. Your actions can be considered excellent use of rhetoric but poor scholarship and reasoning.

     

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    Derek Kerton (profile), Apr 22nd, 2008 @ 3:05pm

    Wow

    There is no commercial or philosophical reason for either of you to spend more time here.

    Glad I took that speed reading course.

     

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    mjr1007, Apr 26th, 2008 @ 8:14am

    Re: Wow

    Derek Kento wrote:
    There is no commercial or philosophical reason for either of you to spend more time here.

    Glad I took that speed reading course.

    mjr1007 replied:
    Interesting comment, would love to hear what others have to say. It seems that Mike just gave a bunch of unsound arguments hoping the weight of them would be persuasive. It didn't make him right but it did take a lot longer to show him to be wrong.

    In the end it just seemed like a filibuster. Just keep talking till time runs out.

    Just my USD 0.02 worth

     

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    Mike (profile), Apr 26th, 2008 @ 11:03am

    Re: Re: Wow

    It seems that Mike just gave a bunch of unsound arguments hoping the weight of them would be persuasive.

    Which arguments were unsound? I stand by my statements, which were backed up by fact and basic economics.

    You were the one who changed definitions, accused me of things I did not say and took my statements out of context. Every time I pointed you to the research that supported my positions your response was that you didn't want to read. I'm sorry, but that is hardly convincing.

     

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    mjr1007, Apr 27th, 2008 @ 3:37pm

    Re: Re: Re: Wow

    mjr1007 wrote:
    It seems that Mike just gave a bunch of unsound arguments hoping the weight of them would be persuasive.

    Which arguments were unsound? I stand by my statements, which were backed up by fact and basic economics.

    Mike Replied:
    You were the one who changed definitions, accused me of things I did not say and took my statements out of context. Every time I pointed you to the research that supported my positions your response was that you didn't want to read. I'm sorry, but that is hardly convincing.

    mjr1007 replied:
    This is the second time you've accused me of taking your statements out of context. This is really bizarre since I copy your entire statement into my response. It is difficult to conceive how this could be interpreted as taking you out of context, but please go back through the pages of writing and demonstrate how I missed coping your entire statement in.

    As far as which of your arguments were unsound, false premises or faulty logic, that would be virtually all of your statements. Just look at my responses to see specific errors. It's nice that you mix things up, sometimes false premises and others faulty logic.

     

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    Mike (profile), Apr 27th, 2008 @ 11:48pm

    Re: Re: Re: Re: Wow

    mjr1007, at best you played a few semantic games. But you proved nothing. I pointed you to the research and you complained that pointing you to the research wasn't enough. You insisted that patent pools were effective when the research shows just the opposite -- and you even admitted that you didn't know such patent pools have existed (along with all their problems) for ages. As for taking my words out of context, it's more than just quoting (btw, if you must quote, please use italics, it makes it much more readable). It's what you interpret them to mean. Time and time again you pretended I had said something that I had not in your response.

     

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    mjr1007, Apr 28th, 2008 @ 10:28am

    Re: Re: Re: Re: Re: Wow

    Mike simply ignored all previous postings and wrote:
    mjr1007, at best you played a few semantic games. But you proved nothing.

    mjr1007 replied:
    I get this a lot. Whenever people can't make a sound argument they simply claim I'm playing semantic games. When invited to correct their arguments they often claim not to have the time or patients. It's a common rhetorical technique. Nothing new to see here.

    It proves your arguments are unsound.

    Mike continued to rant:
    I pointed you to the research and you complained that pointing you to the research wasn't enough. You insisted that patent pools were effective when the research shows just the opposite -- and you even admitted that you didn't know such patent pools have existed (along with all their problems) for ages.

    mjr1007 replied
    You make vague and unsubstantiated references to works with no specifics. It's impossible to tell what the hell you are talking about. Whenever anyone guesses at what you meant you simply explain they are mistaken without ever actually getting to specifics. Much like this post. Patent pools are ineffective, but not a single specific citation. I find this comment particularly stupid since you just posted a story

    http://www.cceia.org/resources/transcripts/5397.html

    which states

    “... in one case the government taking over, saying, "We won't let the patent lawyers destroy us," because of World War I, where they seized the patents back and formed a patent pool, that we have the airplane today.”

    Mike do you even bother to read the articles in your own postings?

    As for patent pools, what I actually said was I wasn't aware of the LTE plan. Just a little bit different.

    Mike, can you see the difference here. You post vague unsubstantiated claims, I post citations, something you seem unwilling or unable to do.

    Mike finishes his rhetoric:
    As for taking my words out of context, it's more than just quoting (btw, if you must quote, please use italics, it makes it much more readable). It's what you interpret them to mean. Time and time again you pretended I had said something that I had not in your response.

    mjr1007 replied:
    Mike, it makes things much more difficult to take things out of context if you copy the entire post. Human language is an imprecise communications medium, which is why symbolic logic is preferable, so if there was a misunderstanding simply state so. The errors in logic that have been pointed out could not typically be explained as simple mis-communications, since there were false premises and faulty reasoning. Whenever the communications was reduced to symbolic logic you just punted.

    If I put words in your mouth it's only because of your vague and unsubstantiated claims. If you cite specific points in works this would not happen. But of course that just seems to be too much for you, doesn't it.

    If you really have something to say, the say it, cite your references and defend your point. Otherwise you're just trying to drive traffic to you website.

     

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    Bob, May 9th, 2008 @ 9:01pm

    Hey Mike!

    It's amazing how many folks here are ignorant of basic economics.

    Don't worry about MJR, he's just here to stoke the old ego. I stopped reading his posts after the second one. He isn't really saying anything. You, on the other hand seem to actually have something to say, and reasons for it.

    Don't waste your time with loud adolescents. They will just make long posts to waste your time and let them think they are important. By the second response, that was the obvious trend of this thread. If he can't get the point after seeing it 3 times, then he won't. Ever.

    I'd much rather have you using your valuable time to explore more ideas.

     

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    mjr1007, May 12th, 2008 @ 6:33am

    Re: Hey Mikebob

    Bob/Mike's alter ego wrote:
    It's amazing how many folks here are ignorant of basic economics.

    Don't worry about MJR, he's just here to stoke the old ego. I stopped reading his posts after the second one. He isn't really saying anything. You, on the other hand seem to actually have something to say, and reasons for it.

    Don't waste your time with loud adolescents. They will just make long posts to waste your time and let them think they are important. By the second response, that was the obvious trend of this thread. If he can't get the point after seeing it 3 times, then he won't. Ever.

    I'd much rather have you using your valuable time to explore more ideas.

    Mjr1007 replied:
    There is a real pattern forming here. Mike, flogs his favorite bit of nonsense by giving a few tidbits, I point out the flaws, Mike replies with “ISN NOT”, I rake him over the coals for his rhetoric, Mike refuses to actually defend his position, and then finally some other alias appears telling Mike how right here is, some time after the posting has stopped, of course. It's good to be king, isn't it Mike.

    I could go to a different computer as someone else and do the same thing, but I really don't feel the need. If my arguments are so utterly unsound, then it would be as easy for you to expose as Mike's are for me. Since you claim not to read them how could you know if they are sound or not. More garbage rhetoric with absolutely no real information content. Claim your opinions/propaganda is fact, with absolutely no evidence. Pretend to be a disinterested third party and viola, you magically become right after not producing a single coherent argument. Of course all you have to do is wait for the thread to die down again, and just post another “IS NOT” reply with yet another name and then once again you will be magically transformed into a brilliant thinker who is always right.

    Here is a really novel idea, why not actually support your position with real facts and arguments instead of opinions and rhetoric, well how about it Mikebob.

     

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    Mike (profile), May 12th, 2008 @ 12:15pm

    Re: Re: Hey Mikebob

    mjr1007: I stand by every statement *I* make and put *my* name on it. Why would I not? I would ask that you not make assumptions about others on this site. Lying does not do you any good. I don't know who Bob is and for you to suggest that he is me, is a cheap shot.

    I have already explained my position fully above. I have detailed why your arguments are wrong. You brush off my arguments as rhetoric, but it is not. That you don't see that, and that you automatically insult me and anyone who supports me as being a fake version of me is your problem. You clearly will not be convinced by logic or reason (and, in fact, will claim logic and reason is on your side). We'll let people decide.

    I will not go around in circles again with you. I have made my position clear.

    I also have not and will not post under any name other than my own. For you to accuse me of doing so is sad, and suggests a real persecution complex. Is it so hard to believe that others have read what I wrote and agree with me? I guess so.

     

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    mjr1007, May 12th, 2008 @ 5:44pm

    Re: Re: Re: Hey Mikebob

    Mikebob fumed:
    mjr1007: I stand by every statement *I* make and put *my* name on it. Why would I not? I would ask that you not make assumptions about others on this site. Lying does not do you any good. I don't know who Bob is and for you to suggest that he is me, is a cheap shot.

    mjr1007 replied:
    Oh come on Mikebob. The tone of that post was so obsequious that if it wasn't you it must of been one of your employees doing a little butt snorkeling at your behest.

    Mikebob droned on:
    I have already explained my position fully above. I have detailed why your arguments are wrong. You brush off my arguments as rhetoric, but it is not. That you don't see that, and that you automatically insult me and anyone who supports me as being a fake version of me is your problem. You clearly will not be convinced by logic or reason (and, in fact, will claim logic and reason is on your side). We'll let people decide.

    Mjr1007 replied:
    This is why the Mikebob comment is so plausible. You've defended nothing. No citations, and your arguments are nothing but rhetoric. I point out the type of rhetoric you use every time. I point out the false premises you claim. It's clear from the Lessig post that you do actually know the difference but refuse to follow reasonable discussion procedures. The only assumption that can be made is that you actually realize how ridiculous you claims are but continue for ulterior motives, such as driving traffic.

    Mikebob continued to whine:
    I will not go around in circles again with you. I have made my position clear.

    Mjr1007 replied:
    No one is asking you to. Make a proper post, with citations and we will have a proper discussion. Keep posting rhetoric or have other do that for you, and I will call you on it.

    Mikebob stomped his foot and wrote:
    I also have not and will not post under any name other than my own. For you to accuse me of doing so is sad, and suggests a real persecution complex. Is it so hard to believe that others have read what I wrote and agree with me? I guess so.

    Mjr1007 replied:
    It's really not hard to believe others may agree with you. Rhetoric was created to convince people of something that is wrong, and you do a better then average job at it. Which is why I keep asking for a proper discussion, so really facts and reason can be used to examine this topic.

     

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    Mike (profile), May 12th, 2008 @ 7:08pm

    Re: Re: Re: Re: Hey Mikebob

    Mjr1007: One last time. I *have* cited the evidence. I have responded to your ridiculous assertions and semantic arguments. I have *not* posted under any name other than my own.

    That you choose not to believe any of these 3 points is your problem.

    Again, anyone can read the details of what I have written, look at the research I *have* cited, and decide for themselves. Your refusal to read the evidence I pointed out to you, whining that I didn't cite a specific page or quote for you, doesn't mean I have not supported my position with the evidence. It just means that you don't want to do the work in reading it yourself.

    That you accuse me of doing this just to drive traffic is just as ridiculous. These posts don't even drive very much traffic. I'm doing this because I am deeply concerned about the state of innovation these days, and what that means for economic growth.

    It amuses me that you keep accusing me of playing games without evidence, when the only baseless accusations seem to be coming from you: You say I'm doing this to drive traffic (which is false). You say I'm posting comments under names other than my own (which is false). You say I'm not citing evidence (which is false). You say I'm using rhetoric rather than explaining my argument (which is false).

    If you find this an amusing way to spend your time, so be it, but I will not play along any further.

     

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    mjr1007, May 12th, 2008 @ 8:20pm

    Re: Re: Re: Re: Re: Hey Mikebob

    Mikebob, really stomping your feet while you write this helps make the point, "I know you are but what am I". Really that's the best you got?

    Your position is just a false dichotomy, either monopoly patents or no patents. There is a world of other alternatives, some of which your own post point to, but you continue to ignore. Read the article in your Stiglitz post, he discusses prizes to spur innovation. Which is clearly something other then monopoly patent or nothing.

    You never demonstrated how Basic Research would be funded, or even how your no patent system would promote progress, particularly since many companies view R&D particularly Basic Research as only an expense. For that matter I suspect they would prefer not to have to do any development at all.

    As for citations, your Lessig post shows you really do know what a proper citation is so there is no reason to cut you any slack for not doing it on your pride and joy, something I'm calling abundance theory.

    I don' accuse you of playing games with evidence, I accuse you of not presenting any, big difference. You make claims, lots of claims, but you never give a proper citation. Saying these people agree with you without saying where, or even exactly what it is, is not a citation, it's just rhetoric.

    Mikebob, make me a liar, show all of your proper citations, it's all you have to do to shut me the hell up.

    This really isn't amusing, but it is remarkable. Why someone who obviously knows better would continue to do this is just bizarre. Is your ego so fragile?

    We actually agree on one thing, this is an important topic which needs good decision making. If we screw this up, as per your suggestion, we will suffer from it for decades to come.

     

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    Mike (profile), May 13th, 2008 @ 3:32am

    Re: Re: Re: Re: Re: Re: Hey Mikebob

    mjr1007, I find it rather insulting that you insist on referring to me as Mikebob, again claiming that the comment from "Bob" above was from me. Give it a rest. I stand by my comments and put my name on all of them. I told you that already. Your insistence on repeating the claim, despite me telling you it is incorrect makes me question your own motives in posting here.

    And, as I *already* discussed in an earlier thread, I do not ignore other possibilities, and have discussed many of them at great length (despite your claims to the contrary). The point I made is that each have their own problems.

    I have said in the past that I'm more than open to other systems that show a better way to promote innovation -- but I have yet to see one that has any evidence to show that it works better than no patent system at all. For you to claim I "ignore" these other ideas is simply incorrect. Your inability to search and read my earlier discussions on these again is not my problem.

    Again, on the question of basic research, I have pointed you to some of the research that shows how basic research still occurs in the absence of patents. The fact that you don't want to go read it yourself is not my problem.

     

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    mjr1007, May 13th, 2008 @ 5:45am

    Re: Re: Re: Re: Re: Re: Re: Hey Mikebob

    Mikebob,

    You obviously don't care about anything, as long as it drives traffic! I suspect you've been called much worse.

    For a guy who keeps saying he won't continue to engage in this endless circle you seem to make quite a few comments. All garbage of course but quite a few none the less.

    As you can see, I've stopped even bothering to copy your post since there has longs since ceased to be anything of value in them. You just repeat unsubstantiated claims with no evidence. Simply saying that things have problems without any citations is just more of the same Mikebob crap.

    One new bit of rhetoric though does deserve a passing comment. If a completely new approach to promoting research is being proposed, then of course there would be no evidence pro or con. It's something system designers face all the time.

     

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    mjr1007, May 14th, 2008 @ 11:51am

    The problem with Mikebob's no patent strategy

    Now that the thread has gone quite I thought I would post a few simple points before Mikebob post another self congratulatory message in a few days.

    The problem with Mikebob's no patent strategy is that it doesn't take into account the problem that patents were trying to fix, trade secrets.

    If I understand what Mikebob was trying to say with his less then helpful post was that if some of the countries have patents and others don't then there doesn't seem to be a drop off in progress. Of course this is all guess work since Mikebob can't seem to form a coherent argument or post a proper citation.

    This of course is a far cry from eliminating all patents world wide. Mikebob puts most of the blame for the current mess on the patent system when in fact it belongs on the rent seekers who misuse the system. If the patent system were abolished like Mikebob suggest, there is no reason to believe the rent seekers won't just go somewhere else to continue their rent seeking, like trade secrets. So instead of having some disclosure and at least some semblance of limits, it will be even easier to lock up this information. Even if it independently reinvented it still won't be publicly available, ever!

    This of course in no way promotes progress, but why would a guy who can't even cite references be concerned about a silly thing like that.

    The whole point of the IP system was not that it was some fundamental property right, clearly it's not. The whole point was to promote progress. This would mean rewarding progress directly, not hoping that companies would promote progress for ever greater market share. Once there is a shakeout, and there always is, the incentive to continue to improve becomes vanishingly small. One merely has to look at M$. They keep releasing OSes but it's hard to see real progress, it's actually difficult to find much product improvement let alone actual innovation, you know improvements not see elsewhere.

    Hopeful someone will respond thoughtfully, either pro or con. Which pretty much eliminates Mikebob, in any of his forms.

     

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    Bettawrekonize, Dec 24th, 2008 @ 11:03pm

    While I do think that, if used properly, patents can help advance technology, I also think that patents are, by and large, abused to the point where they do cause plenty of harm.

    I go into some of the problems with patents and the pharmaceutical industry here
    http://forums.christianity.com/The_FDA_and_health/m_3795161/mpage_1/tm.htm#1

    (post 11)
    (of course, these aren't the only problems, but these specific problems are ones that I never read anywhere so I had to kinda figure them out on my own).

    This problem doesn't only exist within the pharmaceutical industry. I myself have observed a product that had a patent that has expired (in the printing industry, I can't remember what it was anymore because it was a while ago) and, after the patent expired, it was banned by the EPA, allegedly for environmental reasons. At the time, I didn't know that this product wasn't under patent protection (I did suspect it) and I didn't even know that the competing product had a patent (but I suspected it). I did a little more digging and it turns out that my suspicions were correct. The competing patented product didn't work as well as the previous product with an expired patent and it also cost more. I suspect that there was something going on in the background to cause this, something that had little to do with environmental safety and more to do with the profit margins of those who hold the patent for the competing product. One of the problems with patents is that after a patent expires, what corporations seem to do is they seem to influence the government to ban the previously patented product (with the claim that it's bad for the environment or that it's dangerous, etc...) not because those products are somehow dangerous or bad for the environment, but because they now compete with "me too" patented products.

     

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    Bettawrekonize, Dec 24th, 2008 @ 11:28pm

    Here is another example of this.

    "some brand-name pharmaceuticals began state-by-state campaigns to limit access to generic pharmaceuticals, specifically NTI drugs."

    http://www.cagw.org/site/PageServer?pagename=reports_davidgoliath

    Why would they want to limit access to generic pharmaceuticals? Because they compete with the patented stuff.

    Also, I think patents for drugs last like 20 years (which is ridiculously long), not 7.

    "One company's motive, Dupont Pharmaceuticals, for spending so much time and money to limit access to NTI generic drugs appears to be because its "blood-thinning" drug Coumadin(R) is facing its first serious competition in years."

    (above link).

     

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    Bettawrekonize, Dec 25th, 2008 @ 11:34am

    As for an argument that patents could actually be bad for the environment, it could be the case that a patented product is actually worse for the environment than a non patented product. It could take a while for us to figure out the effects of a product after the product is in use for some time. If a patented product is in fact bad for the environment and the patent allows the owner to sell the product way above cost, the fact that the owner can sell the product way above cost gives him incentive to manipulate or to bury the results of anything (ie: research or evidence) that could reveal the true harm that the product has on the environment (or to prevent studies from being done on the products effects on the environment). We don't need the noise of patents to distort our perception of what's best for the environment.

     

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    Bettawrekonize, Dec 25th, 2008 @ 11:36am

    Or, rather, we don't need the noise of patents to distort our objectivity regarding what's best for the environment.

     

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    Bettawrekonize, Dec 25th, 2008 @ 12:29pm

    "Meanwhile, actual breakthroughs are rare from industry. Almost all are from gov't funded institutions."

    and, after tax payers have paid money for funding research that led to breakthroughs, who ends up getting the patent for this technology and reaping the benefits? Pharmaceutical companies. It's absolutely ridiculous. Taxpayers took the risk, they should receive the benefits, not pharmaceutical companies. What a bunch of freeloaders. If a dollar of taxpayer money went into making a breakthrough, then there should be no patent on the breakthrough.

     

    reply to this | link to this | view in thread ]

  81.  
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    Bettawrekonize, Dec 25th, 2008 @ 12:43pm

    "The value of patents is not indicative of their economic benefit."

    Exactly. What we want to do here is increase aggregate output and the question at stake is not a question of the value of the patents to the patent holder, it's a question of to what extent do patents affect aggregate output. Do they improve it or make it worse? If patents can be good, can they be abused? If so, what balance is necessary to optimize aggregate output (how much is too much and how much is not enough)? What uses of a patent increase aggregate output and what uses of it decrease it? These are the questions we need to be asking.

    "According to some a patent troll is a firm who licenses patents they do not themselves commercialize. Yet many of the large firms who are most critical of the practice do it themselves. Out licensing is now an important profit center of most every firm. Often, as a result they end up licensing out patents covering technologies they themselves do not use as they are not consistent with their corporate plan. Rather hypocritical isnt it?"

    I agree, our current system is one ridiculous joke after another. Something needs to be done.

     

    reply to this | link to this | view in thread ]

  82.  
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    Bettawrekonize, Dec 25th, 2008 @ 12:52pm

    "Um. stv, you are the first person to mention patent trolls on this page. It's not about patent trolls at all. It's about patents."

    The point that he's making is that if you don't have patents, then you don't have patent trolls (and you don't have to go through the entire economically inefficient process of constantly ridding the system of patent trolls. At least the way it works now often adds unnecessary burden and litigation and out of court settlements and the effort of having to take into consideration the threat of being attacked by some patent troll before doing anything, etc... which adds economic inefficiency).

     

    reply to this | link to this | view in thread ]

  83.  
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    Bettawrekonize, Dec 25th, 2008 @ 12:57pm

    Also, often times cases with ridiculous patents are taken to court and the courts throw the patents out. However, even if the entity being attacked by a patent troll wins, the process of going to court for such ridiculous cases (or even asking the court to make a summary judgment) backs our courts up and forces the company being attacked by the patent troll to pay money and waste time to defend itself (which adds economic inefficiency), and this also acts as disincentive for him to do anything that may violate the patent of a patent troll (even if he knows he could win against the patent troll in court).

     

    reply to this | link to this | view in thread ]

  84.  
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    Bettawrekonize, Jan 30th, 2009 @ 9:19pm

    Another reason why not having patents prevents companies from influencing the government to wrongfully ban competing products (in the name of environmental safety or consumer safety) is because, without patents, banning competing products won't help your profits in the long run. It may drive more profits to your products in the very short run but that extra profit will drive other companies to copy your products (until you make a normal profit, which is what you were making before) and then the ban on competing products will effectively not help you.

     

    reply to this | link to this | view in thread ]

  85.  
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    Bettawrekonize, Jan 30th, 2009 @ 9:20pm

    Another reason why not having patents prevents companies from influencing the government to wrongfully ban competing products (in the name of environmental safety or consumer safety) is because, without patents, banning competing products won't help your profits in the long run. It may drive more profits to your products in the very short run but that extra profit will drive other companies to copy your products (until you make a normal profit, which is what you were making before) and then the ban on competing products will effectively not help you.

     

    reply to this | link to this | view in thread ]

  86.  
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    md, Apr 22nd, 2012 @ 4:53pm

    Re: Pharma disagrees

    500 million for a drug to go to market? That shows how much we, as the consumer, are bieng overcharged. It also shows how screwed up our medical system is. If side effects lists are taken seriously, it proves these pharma companies have no clue about what they are doing. All chemists and no understanding of whole organism biology.

    Another thing that is a deadweight on society and innovation? Shareholders and investors. A buisness should start small and get support from the market and reinvest the profit to grow, not take peoples money who just want to turn a quick buck at the expense of the company, government, and/or consumer.

     

    reply to this | link to this | view in thread ]

  87.  
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    md, Apr 22nd, 2012 @ 5:57pm

    shareholders and investors = parasites. Benificent donors and lenders = true help

     

    reply to this | link to this | view in thread ]

  88.  
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    md, Apr 22nd, 2012 @ 6:17pm

    Re: Re: Pharma disagrees

    Mike you are a true baller. Standing up for the people. If we are not serving the lowliest people in the world and making their life better, what are we doing? Patents just get in the way of that. Sure I believe in protecting peoples right to make and sell something they produce, but without patents no one would be prohibited to make and sell anything! Patents should NOT protect someones evil desire for a monopoly so they can oppress those who also or actually want to do something with it. Monopolies create a chronic unfulfilled need in the market (since other people can't join in and help fulfill the demand) which hurts the customer and prevents hiring and jobs from bieng created. Patent Reform is desperatley needed!

     

    reply to this | link to this | view in thread ]

  89.  
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    Jim Gould, Apr 29th, 2012 @ 5:07pm

    trade secret

    Your discussion about trade secrets was missing something. Many inventions can be reverse engineered easily and are not good candidates for a trade secret. Such an invention would receive a monopoly for a term if covered by a patent.
    Regarding patent breadth: this is going to be limited by the prior art and the examination process. Why shouldn't an inventor claim as much as he invented?

     

    reply to this | link to this | view in thread ]


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