The Dangerous Trend Of Thinking That Ideas Can Be Owned, Sold Or Stolen

from the locking-up-knowledge dept

An anonymous reader called our attention to a comment reposting some fantastic thinking on the dangerous trend of believing we can own, sell or steal ideas. The comment was in response to a post on Slashdot from a college student worried that his professors were "stealing" his ideas. The commenter posted a bit from The Zen of Graphics Programming, by Michael Abrash, who among other things co-wrote the game Quake. The whole blurb is worth reading, but there are two things worth calling out. First, he points out that the idea is rarely the important part:
This trend toward selling ideas is one symptom of an attitude that I've noticed more and more among programmers over the past few years-an attitude of which software patents are the most obvious manifestation-a desire to think something up without breaking a sweat, then let someone else's hard work make you money. Its an attitude that says, "I'm so smart that my ideas alone set me apart." Sorry, it doesn't work that way in the real world. Ideas are a dime a dozen in programming, too; I have a lifetime's worth of article and software ideas written neatly in a notebook, and I know several truly original thinkers who have far more yet. Folks, it's not the ideas; it's design, implementation, and especially hard work that make the difference.
Second, he points out how ridiculous a scenario it is when everyone "owns" the ideas they came up with, and what it would lead to:
A closely related point is the astonishing lack of gratitude some programmers show for the hard work and sense of community that went into building the knowledge base with which they work. How about this? Anyone who thinks they have a unique idea that they want to "own" and milk for money can do so-but first they have to track down and appropriately compensate all the people who made possible the compilers, algorithms, programming courses, books, hardware, and so forth that put them in a position to have their brainstorm.

Put that way, it sounds like a silly idea, but the idea behind software patents is precisely that eventually everyone will own parts of our communal knowledge base, and that programming will become in large part a process of properly identifylng and compensating each and every owner of the techniques you use. All I can say is that if we do go down that path, I guarantee that it will be a poorer profession for all of us - except the patent attorneys, I guess.
Exactly. The only unfortunate bit in the piece is that he then talks about an encounter with the author Neal Stephenson, where the two talked about the importance of sharing ideas and using networks to spread cheap or free tools to unleash the next creative genius. I'm a fan of Stephenson's work, and I'm sure that he at times talks up such things, but recently Stephenson has gone over to the other side, working part-time at Intellectual Ventures, one of the worst of the worst in terms of companies that are really trying to build a world where ideas are owned and limited. It's a shame that someone like Stephenson would get involved in such a project.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Twinrova, Jan 8th, 2009 @ 9:11am

    Now, if only ideas can be transferred to IP, everyone will be happier.

    This blog represents my entire defense since becoming a Techdirt reader.

    I'm guessing the DRMed minds of those who can't think this way won't understand the basic message of the italicized segments above but instead will continue to sue everyone it can to protect their own stupidity, er, IP ideas.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Anonymous Coward, Jan 8th, 2009 @ 10:44am

    "It's a shame that someone like Stephenson would get involved in such a project."

    Hope he is trying to sabotage them from the inside.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Yankee Infidel, Jan 8th, 2009 @ 11:24am

    Just to keep the Slashdot article in context...

    Keep in mind that this student was rightfully worried about his university patenting his ideas and then charging him $75,000 or more to use it in any software/services he may wish to develop after college based on the following Slashdot article:

    "Universities Patenting More Student Ideas"
    http://yro.slashdot.org/article.pl?sid=09/01/03/2327255

    I wonder if people realize what the Bayh-Dole Act does to any ideas they might develop at the university while using a "significant" amount of the university's resources, will they then keep more of their ideas closer to the vest and not try to come up with innovations in the classrooms and labs?

    In these economic downturn, there is little doubt that many universities will want to try to build a patent portfolio on pharmaceuticals, software, etc. to try to eek out as much cash revenue as possible. However, such knee-jerk reactions from the universities will certainly stifle if not outright kill innovation in the universities if they choose to go down that path.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Anonymous Coward, Jan 8th, 2009 @ 11:26am

    Re:

    I 2nd that!

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Hulser, Jan 8th, 2009 @ 11:40am

    Re: Just to keep the Slashdot article in context...

    Keep in mind that this student was rightfully worried about his university patenting his ideas and then charging him $75,000 or more to use it in any software/services he may wish to develop after college

    Excellent point. If you don't read any of the linked articles, you could easilly get the idea that the student was the one trying to abuse the patent system. But I think his original question is justifiable given the possibility that he'd be prevented from using his own idea. I think his concern is quite natural given the state of the patent system today and the position of power which univirsities have over students in appropriating their ideas. In other words, you don't have to buy into the concept that ideas can be owned to understand that you can get burned by a system that does think ideas can be owned.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Anonymous Coward, Jan 8th, 2009 @ 11:57am

    A great response......

    There were a few responses that were interesting. But my favorite was this: http://ask.slashdot.org/comments.pl?sid=1082003&cid=26347229

    I do agree that current patent (and copyright) system is broken. But suggesting the exact opposite, not allowing inventors get a headstart, is also wrong. Stop giving patents to trivial inventions (who decides what is trivial? Yes. Some government agency and it can make mistakes) and limit validity to smaller period (also add use or lose condition).

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    SVContrarian, Jan 8th, 2009 @ 12:12pm

    "How about this? Anyone who thinks they have a unique idea that they want to "own" and milk for money can do so-but first they have to track down and appropriately compensate all the people who made possible the compilers, algorithms, programming courses, books"
    This is perhaps the most boneheaded economic analysis I've ever seen. Anyone stop to think that those who created those compilers, books, etc. DID get compensated through their copyrights, sales, and software licensing? And if they chose to give it away to the community, that's their choice? Sorry folks. Ideas are the root of intellectual property and they have value. It's pretty much the underpinning of our civilization and economy. The mechanisms certainly need improvement, (e.g., patents, copyrights), and implementation DOES matter (as anyone with a modicum of patent knowledge realizes) but I posit we're much better off in a society that protects IP and creates financial incentives for individuals to generate more.
    I think the more dangerous trend is this nonsense that ideas DON'T have value and all intellectual property should be communal. Take that to its logical conclusion and the world is NOT a better place.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    nullop, Jan 8th, 2009 @ 12:16pm

    Skool...

    The boy is right to worry about his ideas. Generally, your ideas are best kept to yourself. Especially if you are a programmer. If you have an idea for 'the next big thing' its not a dandy idea to spread it around. Its a good idea to research it, see if its been done, etc. Then, consider developing it. Or selling it to someone who has the jing to develop it. Oh, patent it first!

     

    reply to this | link to this | view in thread ]

  9.  
    icon
    ChurchHatesTucker (profile), Jan 8th, 2009 @ 12:17pm

    Re: A great response......

    Weird how the system only makes sense if you're a large institution.

    Did I say weird? I meant predictable.

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    nasch, Jan 8th, 2009 @ 12:51pm

    Re:

    Do you have any evidence for your claims (we're much better off in a society that protects IP and creates financial incentives for individuals to generate more, and the more dangerous trend is this nonsense that ideas DON'T have value and all intellectual property should be communal. Take that to its logical conclusion and the world is NOT a better place.)?

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    Anonymous Coward, Jan 8th, 2009 @ 12:51pm

    Re:

    Or even better, reason with them and help them out.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    usmcdvdg, Jan 8th, 2009 @ 1:11pm

    Re: A great response......

    Well I say Give a patent and a copyright to anyone that wants it. Patents can last 10-20 yrs(long enough for anyone to get up and going) and Copyrights can last 30-40 yrs(half a human lifespan) after which everything entires the public domain as fact or common knowledge.

    IMHO that would fix most everything.

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous Coward, Jan 8th, 2009 @ 1:15pm

    Re:

    Anyone stop to think that those who created those compilers, books, etc. DID get compensated through their copyrights, sales, and software licensing? And if they chose to give it away to the community, that's their choice?
    Um, you need to do some research on the history of patents; those kind of things haven't always been patentable. Many, probably most, of those things were created before such things could be patented.
    And if they chose to give it away to the community, that's their choice?
    Perhaps expecting others to do likewise?
    Sorry folks. Ideas are the root of intellectual property and they have value.
    Air has value too, but how many of us expect to pay for every breath we take? Now I suppose that if you're holding someone's head under water and suffocating them, then they might be willing to pay you a handsome fee to let them up for a breath. Come to think of it, that's kind of the way the patent system works too. Suffocating innovation.
    It's pretty much the underpinning of our civilization and economy.
    Huh? So there was no civilization or economy before patents? Then along came patents and gave us this wonderful world we have today? Hardly. That has got to one of the most delusional defenses of the patent system I've heard to date.
    I think the more dangerous trend is this nonsense that ideas DON'T have value and all intellectual property should be communal. Take that to its logical conclusion and the world is NOT a better place.
    Pardon me for saying so, but "logical conclusions" do not seem to your forte.

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    usmcdvldg, Jan 8th, 2009 @ 1:16pm

    Re:

    yes but what is ruining are economy is that people can own ideas FOREVER(basically). Its generally not the inventor that profits from IP as they would be able to sell there unknown design with or without a patent. Its the company that buys it that stiffels innovation.

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Anonymous Coward, Jan 8th, 2009 @ 1:42pm

    Sometimes I just can't seem to get outraged over intellectual property law.

     

    reply to this | link to this | view in thread ]

  16.  
    icon
    Mike (profile), Jan 8th, 2009 @ 1:43pm

    Re:

    Anyone stop to think that those who created those compilers, books, etc. DID get compensated through their copyrights, sales, and software licensing?

    As others have pointed out, changes to the way the court systems have viewed the patent system have changed how patents work these days, which has resulted in numerous problems. And if you read through the names of people he's talking about, you'll find that they mostly DID NOT get compensated via copyright, sales or software licensing.

    Sorry folks. Ideas are the root of intellectual property and they have value.

    No one has said they don't have value (straw man alert!). What we're saying is that it's not the core value, and locking up those ideas actually serves to destroy value, rather than enhance it.

    I posit we're much better off in a society that protects IP and creates financial incentives for individuals to generate more.

    This is incorrect as numerous studies have shown. Please do some research before making such claims.

    Societies without intellectual property have shown just as much, if not more, innovation and economic growth than those with. Societies where patent laws have become stricter have shown a *decrease* in the pace of innovation. There is so much evidence that stronger patent laws hurt innovation that it's laughable to suggest otherwise at this point.

    I think the more dangerous trend is this nonsense that ideas DON'T have value and all intellectual property should be communal. Take that to its logical conclusion and the world is NOT a better place.

    Of course, you post another strawman. No one's saying they should be "communal" (owned by everyone). We're saying that they should be *accessible* by anyone who wants to improve on them.

    And that DOES lead to a better place, because it's a much more economically efficient world, where ideas are usable, and those ideas produce economic growth (read your Romer).

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Jake, Jan 8th, 2009 @ 2:17pm

    Obvious in hindsight...

    Mike,
    This might be the capstone post to much of the work you've been doing on this blog. You've discussed the idea before, but title of this point cuts to the heart of the matter that explains many of the issues you've been digesting to date. It's a great principle to live by. Thanks for all of your work to arrive at this inexorable conclusion.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    nick gonzalez, Jan 8th, 2009 @ 2:20pm

    I totally agree. So many people, even in business, ignore the institutions that make their prosperity possible. i.e. The attitude, "I earned the money, so I shouldn't have to pay the government taxes on it"

     

    reply to this | link to this | view in thread ]

  19.  
    icon
    Killer_Tofu (profile), Jan 8th, 2009 @ 3:25pm

    Re:

    My thoughts exactly.
    Hopefully he is trying to show them what fools they are being.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    Anonymous Coward, Jan 8th, 2009 @ 3:36pm

    Since an "idea" is not a recognized form of "property" under US law, it is a bit of an oversimplification to try and squeeze patents and copyrights into the discussion. There are, however, a couple bodies of "non-property" related law that do apply, trade secrets (which for some unknown reason do not appear to stir up much of a fuss) and contracts.

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    Experienced, Jan 8th, 2009 @ 3:41pm

    Ideas are everything

    Think about the musician, whom keeps people from getting their music without paying for it-

    Ideas and Intellectual Property are the same thing-

    People who spend the time to invent and rasie the standard of living for us all- going against tons of Nay Sayers.

    Thats a load of scrutiny/bs.

    To overcome it, is a tremndous effort- and believe me, those professors, taking students ideas-

    If those professors were half as brilliant, they wouldve already done the breakthrus/ideas, and would be running a company rather than teaching-

    and Yes, what a wondeful racket between Government and State to, develope technologies and not have to pay the employees?!!! yes , actually students/young adults, show up
    and pay to show up- and develope big breakthrus while, whatever Gov University department heads go to the bank-

    Now that is proper?

    If you are a student and see a cool new thing to raise the standard of living for us all... by all means- wiat to deal with it after graduation- go get the patent- and do a startup company on your won- become another Bill Gates- and help the world on your own accord-

    Peace!

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    Lonnie E. Holder, Jan 8th, 2009 @ 5:14pm

    Ummm...not quite

    I posit we're much better off in a society that protects IP and creates financial incentives for individuals to generate more.

    This is incorrect as numerous studies have shown. Please do some research before making such claims.

    Societies without intellectual property have shown just as much, if not more, innovation and economic growth than those with. Societies where patent laws have become stricter have shown a *decrease* in the pace of innovation. There is so much evidence that stronger patent laws hurt innovation that it's laughable to suggest otherwise at this point.


    Not quite, Mike. There are studies that show that several categories of industry have benefited from patents.

    o Pharmaceutical
    o Capital intensive industries
    o Small to medium-sized companies
    o Certain high tech industries in their infancy; e.g., biotech.

    I have also read the array of studies cited over at AgainstMonopoly.org, and the studies state generally the same thing. There is no evidence that stronger patent laws *increase* innovation. However, the studies were unable to prove that patent laws *decreased* innovation, at least in the eight or so studies that I have read. Further, there is evidence that in certain situations that increasing patent protection can help certain countries, particularly developing countries.

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    Anonymous Coward, Jan 9th, 2009 @ 12:04am

    Look, the fallacy underlying all these posts is:

    * People need to be compensated for their time. (No problem. Even detractors admit this)

    * IP is a dodgy concept. (No problem. Even proponents admit this.)

    * We havent done any thinking to see if we can come up with a better way for solving the original problem (people neeed to be compensated) therefore IP is the only solution.

    Bzzzt! Lose!

     

    reply to this | link to this | view in thread ]

  24.  
    icon
    Mike (profile), Jan 9th, 2009 @ 12:51am

    Re: Ummm...not quite

    Not quite, Mike

    Actually, my original statement was correct.

    There are studies that show that several categories of industry have benefited from patents.

    Yes. Of course, there are *sectors* that have benefited, but that is different than showing that economic growth benefits.

    o Pharmaceutical

    Yes, at the expense of a better, more efficient overall healthcare system that keeps more people alive.

    o Capital intensive industries

    I've seen no evidence that this is so. I've seen conjecture, but I have seen plenty of business models that work perfectly fine without patents, and enable capital intensive industries to grow faster and bigger.

    o Small to medium-sized companies

    No evidence to support that, and plenty to support the opposite.

    o Certain high tech industries in their infancy; e.g., biotech.

    Again, not true. Plenty of evidence, however, that shows the biotech field has been massively (and, I should point out, DANGEROUSLY) hindered thanks to patents.


    I have also read the array of studies cited over at AgainstMonopoly.org, and the studies state generally the same thing. There is no evidence that stronger patent laws *increase* innovation. However, the studies were unable to prove that patent laws *decreased* innovation, at least in the eight or so studies that I have read


    There is more than just the studies at AM. And, even some of the studies they point out have shown decreased innovation.

    Further, there is evidence that in certain situations that increasing patent protection can help certain countries, particularly developing countries.

    Totally untrue. In fact, the evidence is incredibly clear that developing countries are the *worst* place for patents, because they hinder that initial competition needed for economic growth.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 5:55am

    Re: Re: Ummm...not quite

    Mike:

    With respect to your comment regarding economic growth benefits, I point you to the following:

    Roberto Mazzoleni and Richard R. Nelson: “The collection of small and medium sized firms in the American biotechnology industry is, of course, a striking example of enterprises that would not have come into existence without the prospect of a patent, and which depend on patent protection to make their profits, and to attract capital, through one or another of these strategies.”

    Roberto Mazzoleni and Richard R. Nelson: “In some areas, patent rights certainly are economically and socially productive in generating invention, spreading technological knowledge, inducing innovation and commercialization, and providing some degree of order in the development of broad technological prospects.

    Kanwar and Evanson have data for 31 countries in the period 1981-1990. They found a correlation between higher patent protection and increases in R&D as a fraction of GDP.

    Roberto Mazzoleni and Richard R. Nelson: “Nor do these studies get at the question of whether the prospect of patents motivates firms and other organizations outside of a particular industry to undertake inventions which would be used inside that industry. This class of inventors, call them industry-outsiders, is likely to lack the complementary assets needed to appropriate the returns from innovation by being first to market or by rapidly moving down the learning curve. Studies such as that by Jewkes et al. (1969) have documented the importance of such outsiders to technical advance in a number of industries. For such outsiders, the prospect of a patent may be essential if there is to be incentive to invent.”

    From Boldrin and Levine, summarizing 23 studies on patenting and innovation, "strengthening IP increases the flow of foreign investment in sectors where patents are frequently used."

    Park and Ginarte studied 60 countries from 1960 to 1990 and found that the strength of IPR (including pharm) led to growth of R&D in developed countries.

    Hall and Ham noted "The results suggest that stronger patents may have facilitated entry by firms in niche product markets..."

    Bessen and Meurer: “…the patent system provides positive incentives in some industries like pharmaceuticals…”

    Cohen et al/Levin et al found that patents were not important for securing returns on innovation, except in pharmaceuticals.

    How many more studies would you like quoted? I could probably give you a dozen or so that are actually somewhat objective as opposed to those studies seeking to point out negative aspects without pointing out that there are positive aspects.

    As far as the health care industry, pharmaceutical patents make up less than 10% of health care dollars. Personal habits make up nearly 25%. Which is cheaper and easier to focus upon? If we want to have a cheaper, more efficient health care system, start with getting more exercise, eating healthier, drink in moderation, and eliminate smoking. We have far greater issues with our health care system than patents.

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    Stelios, Jan 9th, 2009 @ 5:55am

    The way patents and the copyright law works in practice favors bigger IP entity holders. I don't think that this was the intention though. It is sad that it counteracts the intention.

    Second, how can a society protect the individual inventors and the creators in general? The incentive for creative people is already there.

    It is not about incentives but rather how can we strike a better balance between people who create knowledge and people you handle/manage knowledge (who usually end up profiting).

     

    reply to this | link to this | view in thread ]

  27.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 6:14am

    Re:

    Stelios:

    Why do you say that patent laws work in favor bigger IP entity holders? According to the SBA, small business actually use patents more per employee and apparently to greater affect than larger businesses.

    http://www.sba.gov/advo/research/rs335tot.pdf

     

    reply to this | link to this | view in thread ]

  28.  
    identicon
    Penance, Jan 9th, 2009 @ 7:15am

    Re:

    I'm not seeing it. Help me out. Take it to its logical conclusion, and show me how it would be worse if IP was communal.

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    Ronnie, Jan 9th, 2009 @ 7:32am

    Patents are too broad

    Lonnie, I don't think many people doubt that patents encourage development. I think most people's gripe with it is its chilling effects on derivative and alternative works, or the increasingly vague and alarmingly broad terms patents are often given to. Consider how awful Linux distributions would be if Microsoft patented double clicking [newscientist.com], for instance.

    The way I understand it, the original intent of patents was that they were to be granted after all of the investigation and scientific innovation. What led to it, the formulae, the algorithms and such, remained public domain. If merely the idea of such an invention is owned and fiercely protected, then how does it benefit anybody at all? Intellectual property rights are supposed to be incentives to create that would otherwise be lacking. Consider the business world. Businesses copy each others' tactics all the time. It isn't called theft, it is called competition. It the basis of our free-market economy. What good would giving any one of those businesses sole rights to a new money-making scheme? (Amazon's patent on one-click [stanford.edu] buying comes to mind.)

    As far as biotech goes I do think patents are often alarmingly broad. Consider this one for instance owned by The U.S. Department of Health and Human Services,

    "This invention relates to novel molecular constructs that act as various logic elements, i.e., gates and flip-flops. The basic functional unit of the construct comprises a nucleic acid having at least two protein binding sites that cannot be simultaneously occupied by their cognate binding protein. This basic unit can be assembled in any number of formats providing molecular constructs that act like traditional digital logic elements (flips-flops, gates, inverters, etc.)." (Patent 6,774,222. [freepatentsonline.com].)

    Computers have used such "gates" and "flip flops" from the very beginning, in the form of Boolean algebra and binary. It is this logic that every computing innovation since has relied upon. Biotech is still in its infancy, and it seems may well depend on such logic. If no one else but the patent-holders of this logic can make advancement with programming biology, so to speak, then how does anybody benefit? Patenting inventions is well and good, but patenting the very building blocks of such inventions is most certainly not going to encourage innovation at all.

    How about Goldenrice? [goldenrich.org] The possibilities of that stuff are incredible, and yet the patent problem has pretty much destroyed it [reasononline.com]. It certainly hasn't helped in any way at all. Overly broad patents make innovations such as this extraordinarily difficult.

    My personal gripe with the patent system are patent troll [news.google.co.uk] companies. These guys seriously are leeches. Their goal is to accumulate as many patents as possible and then, like vultures, crush anybody who dares to try to invent something. They produce and innovate absolutely nothing themselves. The simple fact is that as they don't actually do anything with the patents once they acquire them, the rest of the world suffers.

    I think we need to be careful about what sort of things we want to remain free in the future. Personally, I take Jefferson's stance.

    "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation." -- Thomas Jefferson, in a letter to Isaac McPherson, August 13, 1813.

     

    reply to this | link to this | view in thread ]

  30.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 8:23am

    Re: Patents are too broad

    Lonnie, I don't think many people doubt that patents encourage development.

    Mike seems to believe the opposite.

    I think most people's gripe with it is its chilling effects on derivative and alternative works, or the increasingly vague and alarmingly broad terms patents are often given to. Consider how awful Linux distributions would be if Microsoft patented double clicking [newscientist.com], for instance.

    You are speaking of software. I have yet to make more than peripheral comments regarding software. Patents have seemed to have little or no such effect on mechanical inventions, and with a few exceptions, little or no such effect on electronic inventions.

    The way I understand it, the original intent of patents was that they were to be granted after all of the investigation and scientific innovation. What led to it, the formulae, the algorithms and such, remained public domain.

    In fact, these categories are considered non-patentable matter.

    If merely the idea of such an invention is owned and fiercely protected, then how does it benefit anybody at all?

    I have trouble getting my bosses to understand that ideas can not be patented, inventions are patented. The USPTO will not permit you to patent the idea of faster-than-light travel or any other idea. They will permit you to patent an invention that accomplished faster-than-light travel.

    Intellectual property rights are supposed to be incentives to create that would otherwise be lacking. Consider the business world. Businesses copy each others' tactics all the time. It isn't called theft, it is called competition. It the basis of our free-market economy. What good would giving any one of those businesses sole rights to a new money-making scheme? (Amazon's patent on one-click [stanford.edu] buying comes to mind.)

    You have mixed two concepts. Business methods (offering sales after Christmas Day) should not be patented and, after the Bilski decision, hopefully will not be patented. The one-click method of purchasing a product was nominally an invention that accomplished a transformation. Does that mean it is patentable? I was not the person making that decision. I probably would have tried harder to reject the application. Surely there is a non-computer analogy to this technique.

    As far as biotech goes I do think patents are often alarmingly broad. Consider this one for instance owned by The U.S. Department of Health and Human Services,

    "This invention relates to novel molecular constructs that act as various logic elements, i.e., gates and flip-flops. The basic functional unit of the construct comprises a nucleic acid having at least two protein binding sites that cannot be simultaneously occupied by their cognate binding protein. This basic unit can be assembled in any number of formats providing molecular constructs that act like traditional digital logic elements (flips-flops, gates, inverters, etc.)." (Patent 6,774,222. [freepatentsonline.com].)


    You have quoted the abstract of the invention, not the claims. The abstract is often relatively vague and describes the general broad field of the invention. Claim 1 is as follows:

    1. A system comprising


    an isolated nucleic acid having a length of at least 5 base pairs and having a nucleotide sequence that comprises a first protein binding site and a second protein binding site, where said first and second protein binding sites specifically bind the same nucleic acid binding protein, and where said first and second protein binding sites are spaced in proximity to each other such that:
    when said first protein binding site is specifically bound by the nucleic acid binding protein, said second binding site cannot be bound by a second molecule of the protein that otherwise specifically recognizes and binds said second binding site; and
    when said second binding site is specifically bound by the nucleic acid binding protein, said first binding site cannot be bound by a second molecule of the protein that otherwise specifically recognizes and binds said first binding site; and
    the nucleic acid binding protein that specifically binds said first protein binding site or said second protein binding site.


    Computers have used such "gates" and "flip flops" from the very beginning, in the form of Boolean algebra and binary. It is this logic that every computing innovation since has relied upon. Biotech is still in its infancy, and it seems may well depend on such logic. If no one else but the patent-holders of this logic can make advancement with programming biology, so to speak, then how does anybody benefit? Patenting inventions is well and good, but patenting the very building blocks of such inventions is most certainly not going to encourage innovation at all.

    The claims appear to be a very specific technique for limiting binding at one site when another site has already got a binding. How broad and limiting to others is this claim? I am not a biologist, so I do not know. On the other hand, people that may have been trying to create such devices and were struggling with alternatives now know how to do it and can quickly leapfrog ahead merely by acquiring a license to practice the invention. On the other hand, until they are actually doing something with the invention, they can continue to develop new technology without repeating the lessons taught by the patent, which benefits everyone in the field.

    Lastly, the patent expires in about another ten years, after which this invention will be available to all without limit.

    How about Goldenrice? [goldenrich.org] The possibilities of that stuff are incredible, and yet the patent problem has pretty much destroyed it [reasononline.com]. It certainly hasn't helped in any way at all. Overly broad patents make innovations such as this extraordinarily difficult.

    Beats me. I am unable to get access to "goldenrich.com" and a search for goldenrich on the reasononline.com web site was fruitless. Can you provide a better link?

    My personal gripe with the patent system are patent troll [news.google.co.uk] companies. These guys seriously are leeches. Their goal is to accumulate as many patents as possible and then, like vultures, crush anybody who dares to try to invent something. They produce and innovate absolutely nothing themselves. The simple fact is that as they don't actually do anything with the patents once they acquire them, the rest of the world suffers.

    I too have used the term patent troll. Yes, they have increased litigation and they have been a cost to the system. Defenders of companies and people who fit the definition also point to IP that they have successfully promoted that would otherwise have been obscure, further enhancing innovation and development. Where is the balance? I have no facts to support a position either way. In the meantime, their detriment is anecdotal and a matter of opinion.

    I think we need to be careful about what sort of things we want to remain free in the future. Personally, I take Jefferson's stance.

    "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation." -- Thomas Jefferson, in a letter to Isaac McPherson, August 13, 1813.


    And yet Jefferson supported the patent system. However, note that ideas can NOT be patented; only inventions can be patented.

    Jefferson recognized that certain endeavors required some sort of protection in order to enable them in a free market. If it requires $100 million to develop a product, and payback is ten years, but copying that product costs $10 million and takes only two years to copy, what happens to the innovator that developed the product in the first place? Answer: They go out of business or they stop inventing new products.

    I hear all sorts of objections to that (but they have first-mover status; they can leverage their position; yada yada yada - all conjecture without basis in fact), but where is the evidence that this scenario will not happen?

    Patents have existed in one form or another for more than two millenia, across an array of societies. Patents and rapid technological growth go hand in hand. Do patents result from technological growth or do they cause it? The debate goes on. Regardless, since the advent of patents in modern times, knowledge and technological growth has increased at an exponential rate. I recently read that we will create more knowledge in the next two years than has been created in previous recorded history. How can this be if patents are stifling knowledge and innovation? Are patents to blame for the economic situation?

    I only ask one simple thing from those who oppose patents: Do the math for the benefit of patents and for the cost of patents and show clearly that patents are a net harm to the major segments of industry. Unfortunately, every single person with data begins to look red-faced because they discover that patents provide benefits in certain segments and for certain countries. Patents may be harmful to some industries, but they have certainly helped others, to the betterment of mankind.

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    Anonymous Coward, Jan 9th, 2009 @ 8:57am

    Re: Re: Patents are too broad

    Unfortunately, people unfamiliar with the views of TJ stop at this paragraph. BTW, contrary to popular opinion, TJ was not Mr. Patents and Copyrights. These are his personal views, and do not necessarily reflect the views of his contemporaries, many of whom were equally thoughtful men.

    Back to the letter, just once I would like those who "cherry pick" it to continue reading the paragraph that follows where TJ does make clear his support for patents, but notes that he does believe they should be issued with some form of restraint.

     

    reply to this | link to this | view in thread ]

  32.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 11:02am

    Re: Re: Re: Patents are too broad

    Yes. Jefferson was conflicted regarding patents. He thought that patents could hinder competition and free markets. However, he was unable to resolve payback of significant investment in some industries. He finally decided that the best choice was to support patents and hope he was making the right decision.

    As I have said numerous times before, though I have to repeat myself time and again, numerous studies show that for certain industries and countries patents have helped economically and in the advancement of knowledge. There are those who try to explain away these studies or try to claim there is some great alternative that would be better. Explain away, but there are too many studies pointing out with great specificity the types of businesses and industries helped by patents and I have yet to see a better option than patents for those industries.

    I have also pointed out time and again (it is sad that someone has to say the same thing over and over again) that patents appear to have harmed certain industries (software may be the best example). Does this mean patents should be eliminated or severely constrained for stuff such as software? I am reminded of the old saying "throwing out the baby with the bath water."

     

    reply to this | link to this | view in thread ]

  33.  
    icon
    Mike (profile), Jan 9th, 2009 @ 12:01pm

    Re: Re: Re: Ummm...not quite

    How many more studies would you like quoted?

    How about quoting ANY that show overall economic benefits to patents. Every one you quoted shows that money flows to industries where patents exist. No one questions that at all.

    The question is whether or not that's a net benefit in terms of economic growth or not.

    You are making the broken windows fallacy that any economic activity is good activity. That's simply untrue. The problem is that because patents drive economic activity into inefficient markets, the overall rate of economic growth is drastically hindered.

    As far as the health care industry, pharmaceutical patents make up less than 10% of health care dollars. Personal habits make up nearly 25%. Which is cheaper and easier to focus upon? If we want to have a cheaper, more efficient health care system, start with getting more exercise, eating healthier, drink in moderation, and eliminate smoking. We have far greater issues with our health care system than patents.

    Indeed. Who said otherwise.

    You seem to be responding to things you wished I said rather than anything I actually said.

     

    reply to this | link to this | view in thread ]

  34.  
    icon
    Mike (profile), Jan 9th, 2009 @ 12:05pm

    Re:

    Second, how can a society protect the individual inventors and the creators in general? The incentive for creative people is already there.

    I have a problem with your premise. There is no need to "protect." As you said, the incentive for creative people is already there, so why do you need additional incentive?

     

    reply to this | link to this | view in thread ]

  35.  
    icon
    Mike (profile), Jan 9th, 2009 @ 12:07pm

    Re: Re:

    Why do you say that patent laws work in favor bigger IP entity holders? According to the SBA, small business actually use patents more per employee and apparently to greater affect than larger businesses.

    The SBA's quote notwithstanding, if you look at markets with strong patent protection vs. those with weak (or non-existent) patent protection, you almost always find that those without patent protection or weak patent protection have MANY more small companies competing.

    The patent system tends to lead to consolidation into larger companies, because it's the only way to actually get stuff done.

    This has been shown repeatedly.

     

    reply to this | link to this | view in thread ]

  36.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 12:11pm

    Re: Re: Re: Re: Ummm...not quite

    How about quoting ANY that show overall economic benefits to patents. Every one you quoted shows that money flows to industries where patents exist. No one questions that at all.

    How about in reverse? Show me ANY study that shows overall economic disadvantages to patents.

    I also pointed to studies that indicated that patents were instrumental in the creation of new industries. Further, the conclusion of those authors was that those industries might not have been created without patents. The industries that benefited the most in these studies were those with the greatest upfront investment required.

    I also find it interesting that in several recent articles I have read that the existence of patents is a virtual requirement for VC money.

     

    reply to this | link to this | view in thread ]

  37.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 12:13pm

    Re: Re: Re:

    Would you have a source that I could review?

     

    reply to this | link to this | view in thread ]

  38.  
    icon
    Mike (profile), Jan 9th, 2009 @ 12:13pm

    Re: Re: Patents are too broad

    Lonnie, I don't think many people doubt that patents encourage development.

    Mike seems to believe the opposite.


    Lonnie, that is incorrect. I believe that patents encourage investment into fields that can be patented. But that's at the expense of overall economic growth. It acts as a distortionary effect on the market, in significantly damaging ways.


    I only ask one simple thing from those who oppose patents: Do the math for the benefit of patents and for the cost of patents and show clearly that patents are a net harm to the major segments of industry. Unfortunately, every single person with data begins to look red-faced because they discover that patents provide benefits in certain segments and for certain countries. Patents may be harmful to some industries, but they have certainly helped others, to the betterment of mankind.


    Not at all. If you do the math you realize, as you have pointed out, that money flows into certain segments, causing significant harm to the natural mechanisms of the free market, damaging those markets by creating inefficiencies and inefficient allocation of resources.

    The money that's been poured into pharma and biotech, for example, is money that could have been much more efficiently spent on means to keep people healthy.

     

    reply to this | link to this | view in thread ]

  39.  
    icon
    Mike (profile), Jan 9th, 2009 @ 12:17pm

    Re: Re: Re: Re: Re: Ummm...not quite

    How about in reverse? Show me ANY study that shows overall economic disadvantages to patents.

    Keep watching this space.... :)

    I also pointed to studies that indicated that patents were instrumental in the creation of new industries. Further, the conclusion of those authors was that those industries might not have been created without patents. The industries that benefited the most in these studies were those with the greatest upfront investment required.

    Yes, as noted, it encouraged significant cash to be invested in inefficient markets at the EXPENSE of more innovative solutions.

    You are only focused on what happened, not what didn't happen. Look at the research on that front and prepare to be horrified by the damage done by patents diverting money from innovation and into monopolies.

    I also find it interesting that in several recent articles I have read that the existence of patents is a virtual requirement for VC money.

    Perhaps among bad VCs. Some of the most successful VCs around have come around to realizing how dangerous patents are:

    http://www.techdirt.com/articles/20060414/0120234.shtml

     

    reply to this | link to this | view in thread ]

  40.  
    identicon
    gene_cavanaugh, Jan 9th, 2009 @ 1:47pm

    Owning ideas

    I both agree and disagree.
    Software patents (and business methods patents, etc.) are so bad that they should be abolished - even if some good things are discarded as well.
    And yes, the implementation of an idea is where the value is; but, and this is an all-important but, you have to have the idea to IMPLEMENT!
    Patents should be awarded only to people who then develop the idea, or are forced to provide reasonable (low cost) usage of the idea (thus, third party development) - but without protection, some very important ideas would be abandoned, and never implemented - that was true in the past, and it is true now; like it or not.

     

    reply to this | link to this | view in thread ]

  41.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 3:21pm

    Re: Re: Re: Re: Re: Re: Ummm...not quite

    Mike:

    I followed your links all they way through to learn that (gasp) the author was in fact in favor of patents, but he wanted changes to the system because of abuses.

    I think I have consistently said similar things. The patent system is not perfect. However, I have never (just like the author of the post that I ended up at through the links) advocated we eliminate the system. There are too many studies that show the benefits of patents to ignore.

    You also stated that there are more innovative solutions to patents. That may well be. However, every time I look for those innovative solutions in the metal banging industries, I fail to find them. In fact, Thomas Jefferson's solution (and that of many others) is the granting of a patent for a limited time. I am no smarter than Jefferson.

     

    reply to this | link to this | view in thread ]

  42.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 5:25pm

    Re: Owning ideas

    Gene:

    You should not confuse the anti-patent folks with facts, it just confuses them.

     

    reply to this | link to this | view in thread ]

  43.  
    icon
    Mike (profile), Jan 9th, 2009 @ 6:00pm

    Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    There are too many studies that show the benefits of patents to ignore.

    Again, I have yet to see a single one. I have seen studies, such as the ones you link to, that show how patents have benefited a particular industry, by diverting funds to that industry, but that does not show how they have an overall benefit on society.

    I recognize that you are having trouble grasping this, but think bigger. Think about the overall impact on society if money that could be diverted towards more important things is instead diverted into what the market is less interested in, or is less useful, due to patents?

     

    reply to this | link to this | view in thread ]

  44.  
    identicon
    Anonymous Coward, Jan 9th, 2009 @ 8:20pm

    Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    Think about the overall impact on society if money that could be diverted towards more important things is instead diverted into what the market is less interested in, or is less useful, due to patents?

    I am not sure this really says what you mean it to say. Please correct me if I misunderstand, but you seem to be suggesting that a downside of patents is that they drive others to pursue other, less beneficial services and/or products. I do not believe this is your intent.

     

    reply to this | link to this | view in thread ]

  45.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 9:39pm

    Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    If the market is uninterested in a patented product, it will die. Moving money will not change that. In fact, some estimates claim that up to 90% of all patents are never economically useful during their life. Unfortunately, there are no estimates of the potential value of those patents after they expire.

    You should think bigger for me. If the $2 billion dollars spent on patents each year was diverted to something else, then what would happen to the economy? What about the 90% of all patents that would not see the light of day? What is the net effect on society? What industries would be losers? Which would be winners? I look forward to your link to a study.

     

    reply to this | link to this | view in thread ]

  46.  
    identicon
    Lonnie E. Holder, Jan 9th, 2009 @ 9:40pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    Pretty much what he said.

     

    reply to this | link to this | view in thread ]

  47.  
    icon
    Mike (profile), Jan 10th, 2009 @ 11:37am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite


    I am not sure this really says what you mean it to say. Please correct me if I misunderstand, but you seem to be suggesting that a downside of patents is that they drive others to pursue other, less beneficial services and/or products. I do not believe this is your intent.


    That is exactly what I am saying, and there is plenty of evidence to support it. Patent divert money from important, market driven, endeavors, into less important, inefficient, monopoly-driven pursuits.

     

    reply to this | link to this | view in thread ]

  48.  
    identicon
    Lonnie E. Holder, Jan 10th, 2009 @ 9:05pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    There is plenty of evidence that patents allow companies that have invested significant resources in developing an invention to recover the investment, thus allowing them to make yet more significant investments into more new developments. These developments are those which are least likely to happen without patents, AS HAS BEEN SHOWN BY NUMEROUS STUDIES.

     

    reply to this | link to this | view in thread ]

  49.  
    icon
    Mike (profile), Jan 11th, 2009 @ 3:34pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    There is plenty of evidence that patents allow companies that have invested significant resources in developing an invention to recover the investment, thus allowing them to make yet more significant investments into more new developments. These developments are those which are least likely to happen without patents, AS HAS BEEN SHOWN BY NUMEROUS STUDIES.

    You keep repeating this, but you seem to be missing the point, so let me try again... s l o w l y.

    No one doubts that patents allow money to flow to certain industries or industry segments or players. No one doubts that patents are used to protect by giving monopoly protection to certain companies, allowing them to gain monopoly rents from their investments (which is what you said).

    But, that's got NOTHING to do with the point I am making. Which is that those monopoly rents, and those distortions in the market, do harm to the overall market and to overall innovation, by diverting money from where it should be, and having it placed in inefficient systems and monopolies.

    And THAT has been SHOWN BY NUMEROUS STUDIES.

    So, the studies that you are talking about are rather meaningless to the larger question. It's like saying "Sugar monopolies helped the sugar monopolists." Well, DUH. Of course they did. But that doesn't mean that the sugar monopolies were good for society as a whole -- or, as we later discovered, good for *the wider sugar industry*.

    All the studies you're talking about have shown is that it's good to be a monopolist. Big freakin' whoop. Everyone knows that. But that doesn't mean it's good for the overall industry or good for society.

     

    reply to this | link to this | view in thread ]

  50.  
    identicon
    Anonymous Coward, Jan 11th, 2009 @ 6:14pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    Comapny A creates an invention that represents a significant improvement over current products in the relevant market.

    Company A files a patent application, while the application is pending Company A publishes a journal article, at 18 months after the application is filed the application is published, a patent duly issues to Company A covering the invention, and while all of this is going on Company A introduces a product into the market that incorporates the invention.

    The above is a rather typical timeline, though it must be borne in mind that in many instances the product does not make it to market for any number of reasons having nothing to do with Company A's ability to compete.

    Assuming, arguendo, Company A's product does make it to market, the conclusion that Company A is now able to charge "monopolistic rents" seems a bit off the mark in that it appears to rely on the existence of a static, versus dynamic, market. Company A is not a lone wolf; it has competitiors, and these competitors with their product offerings place pricing constraints on Company A. In this situation it is difficult to reconcile the phrase "monopoly rents" with the reality of a vigorous competitive environment with its inherent price regulating effect. Patented or not, Company A can charge no more than what the market will bear under the circumstances.

    In addition the the above, it is a fair assumption to make that most competitiors in the market are not resting on their laurels. They see that Company A is marketing what customers may perceive as a better widget, so it seems reasonable to assume they will engage in R&D to improve their widgets. Knowing what Company A has done, it seems likely that the latter R&D efforts will involve approaches that do not replicate what Company A has done; rather, they will head off in a different direction to create yet other improvements. In some instances these improvements may add to the work done by Company A such that later products fall within the scope of Company A's patent. In other instances the improvements are in no way impacted by the existence of Company A's patent. (Note: In my experience it is the latter, and not former, that by far predominates.)

    In the above, admittedly simplistic, scenario, the relevant market is now populated with a variety of products, ranging from the original, to the improvement offered by Company A, to the improvements offered by other competitiors, and to the further improvements that will invariably follow.

    A drawback of many studies asserting the negative impact of patents is the "staticness" of the the relevant market that undergirds the conclusions ultimately drawn by the researchers. Other researchers who have studied the impact of patents have raised this point to question if "static" assumptions truly do reflect what transpires in a "dynamic" environment. One point they have raised is that patents, rather than creating R&D inefficiencies, may have just the opposite effect by reducing duplication of effort so that R&D monies are directed into alternate areas of inquiry, with the end result being that more new and improved widgets enter the market.

    Admittedly, in some market situations there may be circumstances where a patent may have a negative impact on competitors to the extent that consumers are disadvantaged. In other situations the impact may be the opposite and present consumers with a wider variety of choices.

    What I am still trying to figure out is "what am I missing"? Do I misunderstand "static" versus "dynamic"? Are the studies upon which techdirt relies really based on "static" markets, or do they apply with equal force to "dynamic" markets? Do patents in fact force the inefficient allocation of R&D? In a dynamic market why would a competitor even for a second consider redirecting R&D activities into areas calculated to result in less attractive widgets? Assuming that a competitor has no interest other that riding the coat tails of Company A, and also assuming others are in the market who continue to engage in beneficial R&D, and also assuming that no one company has such a large presence in the relevant market that it is able to effectively control pricing, how is the consumer actually harmed? I could go one at length, but these are just a few examples of the many question I have been grappling with for many, many years.

    The only answer I have been able to come up with is that there is no black or white answer. Shades of gray predominate, and the benefits or detriments of patents depend upon the specific circumstances associated with each market to which they may have some relevance. There seems to be a notion that once an improvement to a product has been created, then subsequent improvements are to the improvement. But experience teaches this is rarely the case. Most improvements are directed to the original product, and not to that created in my above scenario by Company A. Maybe I have been living the life of a monk in some far away land, but my observations generally bear out that in competitive markets for a product the resultant consumer options include the original product, an improved product embodying Company A's improvement, an improved product embodying Company B's improvement, etc., etc. Sometimes a patent comes into play, but quite frankly it is much more likely based upon my observations that it does not.

    Again, can someone please explain what it is that I am missing?

     

    reply to this | link to this | view in thread ]

  51.  
    identicon
    Lonnie E. Holder, Jan 11th, 2009 @ 6:54pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    AC:

    Incredibly enough, I understand the viewpoint of those here, as limited as it may be.

    Here is the logic:

    For some inventions, there are either no suitable alternatives, or the invention is so fantastic that everyone wants that particular invention. Because of the demand for that particular invention, monopoly rents may be charged.

    Now, I struggled with this concept because in the metal world, this scenario essentially does not exist, the scenario you mentioned does. However, there are two industries where monopoly rents are quite common: software and pharmaceuticals.

    Software is a bizarre situation. I was a very strong believer in patents in general until I did a lot of reading about software patents. I still believe that some software patents should be allowable matter, but perhaps with a substantially reduced life because the time to recoup investment in software is substantially less than that for things like die castings. Of course, copyrights and trade secrets still exist, so those would be any option for a software company without patents.

    Pharmaceuticals has been another issue, but only because the high cost of patented pharmaceuticals limits access to those that can afford them. However, if you look at the number of patented drugs versus the number of drugs overall, unless something changes soon, the number of patented drugs in existence will represent only a fraction of available drugs. I suspect that in about 7 to 10 years that the whole issue of patented drugs and their cost will be significantly reduced.

    I hope this helps!

     

    reply to this | link to this | view in thread ]

  52.  
    identicon
    Lonnie E. Holder, Jan 11th, 2009 @ 6:59pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    But, that's got NOTHING to do with the point I am making. Which is that those monopoly rents, and those distortions in the market, do harm to the overall market and to overall innovation, by diverting money from where it should be, and having it placed in inefficient systems and monopolies.

    It has never been shown that monopoly rents exist in, for example, farming tractors or a gasoline powered car, even though numerous patents exist on both.

    The distortion you speak of is frequently a theoretical distortion, and many of those numerous studies that supposedly "prove" that those rents exist, measure indirect values that have nothing to do with real value or real market prices.

    Lastly, the money is "diverted" from where it should be only in the opinions of people like you. I believe that if the money was not in intellectual property, it would be in corporate security organizations for the enforcement of trade secrets, which would require far more resources than intellectual property. Further, instead of "monopoly" rents, we would have trade secret rents, which would be enforced with far greater diligence and enthusiasm than patents. Now THAT would be a diversion of resources.

     

    reply to this | link to this | view in thread ]

  53.  
    identicon
    Anonymous Coward, Jan 11th, 2009 @ 7:43pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    Your second paragraph bears witness to what I have observed; i.e., in the vast majority of instances patents do not foreclose competitor options and consumer choices. It seems that those who complain the loudest about patents in general tend to focus on situations that are about 3-6 sigma from the norm.

    I do believe there is no reason to exclude "software" from the reach of patent law. I place the word in quotes simply because in far too many discussions it is being used to mean many different things. As you are likely aware, the Bilski decision was recently issued that places substantial restrictions on the patenting of "software". In fact, there are those such as me who believe it essentially closes the door on "software", per se. Now, many opposed to the mere concept of patenting "software" are thrilled with the decision. Unfortunately, they have not taken the decision to the next logical step. For example, if "software" is not eligible to even enter the "Section 101 Door", then to what degree can individual states enter into the fray. Remember, as long as federal patent law pertains states are foreclosed from legislating. It is not at all clear that Bilski precludes both federal protection and state legislation that may fill in some of the gap, Bonito Boats notwithstanding.

    Pahrma is, of course, an easily understood situation. However, even here it is not at all clear that a single product covered by a patent can ever achieve such dominance in a market that the patent holder can simply name its price. It is a rare case indeed where a single product exists without competition from alternate products having similar pharmacological efficacy.

     

    reply to this | link to this | view in thread ]

  54.  
    icon
    Mike (profile), Jan 12th, 2009 @ 1:00am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite


    In addition the the above, it is a fair assumption to make that most competitiors in the market are not resting on their laurels. They see that Company A is marketing what customers may perceive as a better widget, so it seems reasonable to assume they will engage in R&D to improve their widgets. Knowing what Company A has done, it seems likely that the latter R&D efforts will involve approaches that do not replicate what Company A has done;


    Why? Why not build on what company A has done? The history of innovation has shown that often the best advancements do in fact build on what was done before.

    A drawback of many studies asserting the negative impact of patents is the "staticness" of the the relevant market that undergirds the conclusions ultimately drawn by the researchers. Other researchers who have studied the impact of patents have raised this point to question if "static" assumptions truly do reflect what transpires in a "dynamic" environment. One point they have raised is that patents, rather than creating R&D inefficiencies, may have just the opposite effect by reducing duplication of effort so that R&D monies are directed into alternate areas of inquiry, with the end result being that more new and improved widgets enter the market.

    That is actually 100% the opposite of what I have found. The studies quite clearly look at the DYNAMIC nature of the market for innovation, whereby innovation is a continuous process, rather than a one-off static event.

    In such a dynamic market, patents are meaningless and unnecessary, because competition occurs on the ongoing innovation, and the incentive to create is found in the marketplace.

    Patents actually make a fair amount of sense in a static market. Not so in a dynamic one.

    What I am still trying to figure out is "what am I missing"? Do I misunderstand "static" versus "dynamic"? Are the studies upon which techdirt relies really based on "static" markets, or do they apply with equal force to "dynamic" markets?

    Almost every one I rely on looks at dynamic markets. The studies I have seen saying that patents work consistently look at static markets, however -- such as the ones Lonnie was pointing out, which ignored the overall economic impact of the various industries that drew money in, at the expense of what was efficient.

    Do patents in fact force the inefficient allocation of R&D?

    Without a doubt. There is simply no feasible, credible way to claim otherwise.

    In a dynamic market why would a competitor even for a second consider redirecting R&D activities into areas calculated to result in less attractive widgets?

    Good question. About the only way I can think of is if a patent forces them into such an area by increasing the cost of the more attractive widget.

    Assuming that a competitor has no interest other that riding the coat tails of Company A, and also assuming others are in the market who continue to engage in beneficial R&D, and also assuming that no one company has such a large presence in the relevant market that it is able to effectively control pricing, how is the consumer actually harmed?

    Um... WHAT? Did that actually make any sense. I would suggest a peak at an economics textbook on how monopolies work. Otherwise you are spouting gibberish.

    For someone who takes the high and mighty approach about us not understanding obscure legal issues, to make a claim that a monopoly does not then harm consumers is simply gibberish and ignorance.

     

    reply to this | link to this | view in thread ]

  55.  
    icon
    Mike (profile), Jan 12th, 2009 @ 1:07am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    It has never been shown that monopoly rents exist in, for example, farming tractors or a gasoline powered car, even though numerous patents exist on both.

    Wait... I'm confused. First, you say that patents are necessary to help deal with the capital expenditure needed to create the invention. Then, you claim there are no monopoly rents.

    The two do not add up. If there are no monopoly rents, then there are no benefits to holding a patent. The only benefit of a patent is the monopoly rents it provides, which are supposedly the incentive.

    If you claim there are no monopoly rents in those industries, then the patents are meaningless, because the only benefit they provide are monopoly rents.

    The distortion you speak of is frequently a theoretical distortion, and many of those numerous studies that supposedly "prove" that those rents exist, measure indirect values that have nothing to do with real value or real market prices.

    Again, I'm confused. If it's a theoretical distortion, then that would mean patents have no value. The distortion I speak of is the SOLE premise behind patents.

    Lastly, the money is "diverted" from where it should be only in the opinions of people like you.

    No, it has nothing to do with my opinion. It has to do with a factual understanding of how markets work. Money gets diverted to monopoly protections. That's factual, not opinion-based.

    In terms of the harm done, perhaps you don't believe in the free market. If so, then I can't see much point in furthering the discussion. If you don't understand the efficient allocation of capital, then there's not much more to discuss.

    I believe that if the money was not in intellectual property, it would be in corporate security organizations for the enforcement of trade secrets, which would require far more resources than intellectual property. Further, instead of "monopoly" rents, we would have trade secret rents, which would be enforced with far greater diligence and enthusiasm than patents. Now THAT would be a diversion of resources.

    I've gone over this before, though perhaps not with you. There is little to no evidence to support your claim. In fact, companies are currently free to keep trade secrets if they prefer, and it's done very little in terms of providing any true or lasting benefit. The ability to reverse engineer products is well known and protected. The fact that most companies opt for patents, rather than trade secrets makes it quite clear that patents provide great monopoly rents (greater inefficiencies) than trade secret protection does.

     

    reply to this | link to this | view in thread ]

  56.  
    identicon
    Anonymous Coward, Jan 12th, 2009 @ 6:04am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ummm...not quite

    My comment was merely an attempt to try fleshing out some feedback on a variety of issues. Was it really necessary to address them with a response containing the last two paragraphs? I think not.

     

    reply to this | link to this | view in thread ]

  57.  
    identicon
    dinnerbell, Jan 12th, 2009 @ 6:58am

    stop the shilling!!!

    This little “trend” about property rights for ideas as you call it has been around since at least 1787. Before you write you should read. Ever hear of the US Constitution? Confucius said learning without thinking is useless. Thinking without learning is dangerous.

     

    reply to this | link to this | view in thread ]

  58.  
    identicon
    DanC, Jan 12th, 2009 @ 11:54am

    Confucius said learning without thinking is useless. Thinking without learning is dangerous.

    And yet you continue to post these idiotic little "shilling" diatribes. You obviously ignore the reasoning presented in the articles and in the comments and refuse to participate in any discussion. So you aren't actually interested in thinking or learning at all.

    This little “trend” about property rights for ideas as you call it has been around since at least 1787.

    The Constitution secures "exclusive rights" that don't exist naturally. It does this so that authors can treat "intellectual property" somewhat like real property.

     

    reply to this | link to this | view in thread ]

  59.  
    identicon
    Lonnie E. Holder, Jan 13th, 2009 @ 6:02am

    Back to Ummm...Not Quite

    It has never been shown that monopoly rents exist in, for example, farming tractors or a gasoline powered car, even though numerous patents exist on both.

    Wait... I'm confused. First, you say that patents are necessary to help deal with the capital expenditure needed to create the invention. Then, you claim there are no monopoly rents.

    The two do not add up. If there are no monopoly rents, then there are no benefits to holding a patent. The only benefit of a patent is the monopoly rents it provides, which are supposedly the incentive.

    If you claim there are no monopoly rents in those industries, then the patents are meaningless, because the only benefit they provide are monopoly rents.


    It is your opinion that the only benefits of patents are monopoly rents. In fact, entire books have been written on patent strategies, and so-called monopoly rents are probably one of the least used reasons for patents.

    Take, for example, hydrostatic transmissions. Up to the late 1980's hydrostatic transmissions were expensive. Consumer lawn tractors with hydrostatic drives existed, but were relatively unaffordable. Yet, there were few patents that existed and anyone was free to enter the market. However, the market share for hydrostatic drives was so low that no one wanted to make the investment to enter.

    Into this market came Hydro-Gear and Tuff Torq, new competitors with new ideas. However, both companies knew they were competing with huge companies like Eaton and Tecumseh, so they filed for patent protection. As it turned out, they needed more defense from each other than from Eaton and Tecumseh, who are now marginal competitors and appear to be on the verge of leaving the market altogether. Parker-Hannifin has now entered the fray, along with a Chinese company.

    Now, with all this expanded competition, and expanded sales, since hydrostatic drives went from being a few percent of the market to about 45% of the total consumer lawn tractor drive market, what happened to "monopoly rents"?

    There are now over 600 patents covering hydrostatic drives divided between several companies, and the number continues to grow steadily. The price of a consumer hydrostatic drive has fallen by more than 50%, and continues to fall. What I find fascinating is that a good portion of the patents issued cover improvement that reduce the price of transmissions. I also find it fascinating that there are now several competing technologies that provide a variety of benefits. Hydro-Gear's hydrostatic transmissions offer different performance from Tuff Torq's. Patent protection has done exactly what was intended. New technology has not only been developed to avoid the other company's patents, but the new technology appeals to different customer needs.

    So, if a "monopoly rent" can be a negative number, then yes, it might still exist in this case.

    The distortion you speak of is frequently a theoretical distortion, and many of those numerous studies that supposedly "prove" that those rents exist, measure indirect values that have nothing to do with real value or real market prices.

    Again, I'm confused. If it's a theoretical distortion, then that would mean patents have no value. The distortion I speak of is the SOLE premise behind patents.

    Charging of "monopoly rents" has never been a goal of any of the companies I have worked for. You are blinded by your own paradigms and are unable to see that there are other values to patents.

    Lastly, the money is "diverted" from where it should be only in the opinions of people like you.

    No, it has nothing to do with my opinion. It has to do with a factual understanding of how markets work. Money gets diverted to monopoly protections. That's factual, not opinion-based.

    Again, you claim that money is "diverted." I disagree. If I intentionally file a patent because my company wishes to have a patent for any of the three reasons established in our patent strategy, that is not a "diversion," but an intent.

    Now, if the money was not deliberately spent on patents for any of the various reasons established in our patent strategy, then we would deliberately spend the money on increasing trade secret security.

    In terms of the harm done, perhaps you don't believe in the free market. If so, then I can't see much point in furthering the discussion. If you don't understand the efficient allocation of capital, then there's not much more to discuss.

    Of course I believe in the free market. Hydrostatic transmissions benefited from patents. Early on in the current explosion of technology applied to hydrostatic drives, there was a discussion of copying technology by both Tuff Torq (parent company Kanzaki) and Hydro-Gear. Fortunately for the market, patents protected the technology of each, and two independent technological paths were followed, forced by patents. Good thing. There are customers that clearly prefer the benefits of Hydro-Gear's products and there are customers that clearly prefer the benefits of Tuff Torq's products. Parker-Hannifin has now entered the picture and is trying to develop another line of technology, providing further choice and further drive to reduce prices. So, we will end up with multiple approaches to the technology, each approach having different characteristics and benefits. Society benefits. The market benefits. Better than copying the first design invented, which has limitations.

    I believe that if the money was not in intellectual property, it would be in corporate security organizations for the enforcement of trade secrets, which would require far more resources than intellectual property. Further, instead of "monopoly" rents, we would have trade secret rents, which would be enforced with far greater diligence and enthusiasm than patents. Now THAT would be a diversion of resources.

    I've gone over this before, though perhaps not with you. There is little to no evidence to support your claim. In fact, companies are currently free to keep trade secrets if they prefer, and it's done very little in terms of providing any true or lasting benefit. The ability to reverse engineer products is well known and protected. The fact that most companies opt for patents, rather than trade secrets makes it quite clear that patents provide great monopoly rents (greater inefficiencies) than trade secret protection does.

    I have gone over this before with others, but not with you. As various anti-patent studies have gleefully shown, the preferred protection for intellectual property is secrecy. However, intellectual property and secrecy is a cost-benefit analysis. Intellectual property is guaranteed, secrecy requires a lot of expensive precautions to be effective. Also factored into this is the life of the "trade secret." If a trade secret will have an effective life of 20 years or less, why bother with secrecy? A patent is cheaper. Take away patents, and those people who have found patents to be cheaper will do their best to have more trade secrets. The transition from intellectual property to trade secrecy is relatively easy. The money to improve protection of trade secrets is already available from the the intellectual property department, so it will just move from one department to another. However, I suspect the money used for trade secrets will be more, because companies will spend money on the technology of trade secrets in addition to physical trade secret protection. I am already aware of companies that have rough contingencies for the loss of intellectual property, though the elimination of patents is considered to be highly unlikely.

    Incidentally, I am aware of a critical trade secret that has been kept a traade secret for 21 years and counting. Just because you can disassemble a product and see what it looks like and just because you can measure the properties of a product, you do not necessarily know what the critical feature is, and you do not necessarily know how the feature was achieved.

    Have a nice day!

     

    reply to this | link to this | view in thread ]

  60.  
    identicon
    Lonnie E. Holder, Jan 13th, 2009 @ 2:05pm

    A little economic benefit of patents...

    From:

    http://www.clevelandfed.org/research/trends/2008/0308/03regact.cfm

    14 Mar 2008

    Education and innovation contributed more to income growth at the state level than other potential factors, according to research conducted at the Federal Reserve Bank of Cleveland. Educational attainment, for example, increased a state's average per capita personal incomes relative to other states by 8 percent, but innovation - measured by patents per capita - boosts personal income nearly 20 percent. Given the importance of innovation to economic performance, we investigate patenting activity in the Fourth District and compare District trends with those across the nation.

     

    reply to this | link to this | view in thread ]

  61.  
    identicon
    Kirk, Jan 14th, 2009 @ 9:00am

    "Of course I believe in the free market. Hydrostatic transmissions benefited from patents. Early on in the current explosion of technology applied to hydrostatic drives, there was a discussion of copying technology by both Tuff Torq (parent company Kanzaki) and Hydro-Gear. Fortunately for the market, patents protected the technology of each, and two independent technological paths were followed, forced by patents. Good thing. There are customers that clearly prefer the benefits of Hydro-Gear's products and there are customers that clearly prefer the benefits of Tuff Torq's products. Parker-Hannifin has now entered the picture and is trying to develop another line of technology, providing further choice and further drive to reduce prices. So, we will end up with multiple approaches to the technology, each approach having different characteristics and benefits. Society benefits. The market benefits." Again, you focus on what happened, and avoid examining what didn't happen. "Better than copying the first design invented, which has limitations." If not building on other's designs or improvements really results in a better product, then the market would have arrived there without patents. Perhaps in the form of another company. If taking an entirely new approach to the design and development of transmissions and avoiding advancements already made was the better way to go, anyone who went that route would have given the consumer what he or she wanted and reaped the benefits. Your argument is that patents improved the market by limiting the options of competitors? You believe that if manufacturers had all options open to them, the result would be that the consumer would have fewer options? You point to a result and offer little or no insight into the other possibilities. It doesn't make you wrong, but it rings hollow. I suspect that argument tasted a little off even to you. You made some good points earlier. You should stick to those. "Charging of "monopoly rents" has never been a goal of any of the companies I have worked for. You are blinded by your own paradigms and are unable to see that there are other values to patents." "Of course I believe in the free market. Hydrostatic transmissions benefited from patents. Early on in the current explosion of technology applied to hydrostatic drives, there was a discussion of copying technology by both Tuff Torq (parent company Kanzaki) and Hydro-Gear. Fortunately for the market, patents protected the technology of each, and two independent technological paths were followed, forced by patents. Good thing. There are customers that clearly prefer the benefits of Hydro-Gear's products and there are customers that clearly prefer the benefits of Tuff Torq's products. Parker-Hannifin has now entered the picture and is trying to develop another line of technology, providing further choice and further drive to reduce prices. So, we will end up with multiple approaches to the technology, each approach having different characteristics and benefits. Society benefits. The market benefits." Again, you focus on what happened, and avoid examining what didn't happen. "Better than copying the first design invented, which has limitations." If not building on other's designs or improvements really results in a better product, then the market would have arrived there without patents. Perhaps in the form of another company. If taking an entirely new approach to the design and development of transmissions and avoiding advancements already made was the better way to go, anyone who went that route would have given the consumer what he or she wanted and reaped the benefits. Your argument is that patents improved the market by limiting the options of competitors? You believe that if manufacturers had all options open to them, the result would be that the consumer would have fewer options? You point to a result and offer little or no insight into the other possibilities. It doesn't make you wrong, but it rings hollow. I suspect that argument tasted a little off even to you. You made some good points earlier. You should stick to those. "Charging of "monopoly rents" has never been a goal of any of the companies I have worked for. You are blinded by your own paradigms and are unable to see that there are other values to patents." I'm ignorant of the other values to patents, besides as a protection from someone else's potential patents, which to me seems to create value for the individual patent, but decrease value in the whole equation. I am, however, ignorant in most things. Are there any such values to patents? Are there any other unrelated values assigned to patents within patent law? I suppose there is value for others in the information contained in the application itself. Are there other benefits to the applicant that would justify the expense of seeking a patent? I am truly open to any reasonable argument here.

     

    reply to this | link to this | view in thread ]

  62.  
    identicon
    Kirk, Jan 14th, 2009 @ 9:03am

    Re: Uhmm

    Apologies for that last post. Mike, Can you delete it?

    "Of course I believe in the free market. Hydrostatic transmissions benefited from patents. Early on in the current explosion of technology applied to hydrostatic drives, there was a discussion of copying technology by both Tuff Torq (parent company Kanzaki) and Hydro-Gear. Fortunately for the market, patents protected the technology of each, and two independent technological paths were followed, forced by patents. Good thing. There are customers that clearly prefer the benefits of Hydro-Gear's products and there are customers that clearly prefer the benefits of Tuff Torq's products. Parker-Hannifin has now entered the picture and is trying to develop another line of technology, providing further choice and further drive to reduce prices. So, we will end up with multiple approaches to the technology, each approach having different characteristics and benefits. Society benefits. The market benefits."

    Again, you focus on what happened, and avoid examining what didn't happen.

    "Better than copying the first design invented, which has limitations."

    If not building on other's designs or improvements really results in a better product, then the market would have arrived there without patents. Perhaps in the form of another company. If taking an entirely new approach to the design and development of transmissions and avoiding advancements already made was the better way to go, anyone who went that route would have given the consumer what he or she wanted and reaped the benefits. Your argument is that patents improved the market by limiting the options of competitors? You believe that if manufacturers had all options open to them, the result would be that the consumer would have fewer options? You point to a result and offer little or no insight into the other possibilities. It doesn't make you wrong, but it rings hollow. I suspect that argument tasted a little off even to you.

    You made some good points earlier. You should stick to those.

    "Charging of "monopoly rents" has never been a goal of any of the companies I have worked for. You are blinded by your own paradigms and are unable to see that there are other values to patents."

    I'm ignorant of the other values to patents, besides as a protection from someone else's potential patents, which to me seems to create value for the individual patent, but decrease value in the whole equation. I am, however, ignorant in most things. Are there any such values to patents? Are there any other unrelated values assigned to patents within patent law? I suppose there is value for others in the information contained in the application itself. Are there other benefits to the applicant that would justify the expense of seeking a patent? I am truly open to any reasonable argument here.

     

    reply to this | link to this | view in thread ]

  63.  
    identicon
    Lonnie E. Holder, Jan 14th, 2009 @ 10:11am

    Re: Re: Uhmm

    Again, you focus on what happened, and avoid examining what didn't happen.

    Well, what did not happen is that prices remained the same and the entrenched players continued to stagnate. What else did not happen?

    If not building on other's designs or improvements really results in a better product, then the market would have arrived there without patents.

    With what incentive? If you have a widget and the widget sells well, what incentive is there to build a competing widget? How do you know it is better until you build it? what if it is not "better" for some customers, but is with others? Bottom line: There is no guarantee that the alternative will be built without patents. Patents guarantee that if there is demand and alternatives, they WILL be built.

    If taking an entirely new approach to the design and development of transmissions and avoiding advancements already made was the better way to go, anyone who went that route would have given the consumer what he or she wanted and reaped the benefits.

    So, company B spends $15 million to create a competing product. The competing product begins taking market share from company A. Company A copies the competing product for a fraction of the cost of company B, and immediately begins regaining market share because customers already have a system compatible with company A. Company B is unable to repay the $15 million in development costs and goes bankrupt. Great system!

    Your argument is that patents improved the market by limiting the options of competitors?

    Patents do not necessarily "improve" the market. What patents do is to force competitors to provide a product using a different approach. If there is one competitor initially, patents will double, triple or more the amount of technology available. Either the alternatives meet another need, or they do not. The market decides.

    You believe that if manufacturers had all options open to them, the result would be that the consumer would have fewer options?

    Absolutely.

    You point to a result and offer little or no insight into the other possibilities. It doesn't make you wrong, but it rings hollow. I suspect that argument tasted a little off even to you.

    When anti-intellectual property people make the same arguments in the opposite directions regarding patents, THAT tastes off to me.

    What no one has done or has been able to do is to prove that a world without patents is better. All they have are limited examples and anecdotes that are rarely compared against the bigger picture. Each time a study is presented that shows the benefits of patents, I hear an excuse. Here is such a study:

    Roberto Mazzoleni and Richard R. Nelson: “The collection of small and medium sized firms in the American biotechnology industry is, of course, a striking example of enterprises that would not have come into existence without the prospect of a patent, and which depend on patent protection to make their profits, and to attract capital, through one or another of these strategies.”

    What is the excuse? Oh, that does not prove there is an economic benefit. Really? Okay, how about this one:

    http://www.clevelandfed.org/research/trends/2008/0308/03regact.cfm

    14 Mar 2008

    Education and innovation contributed more to income growth at the state level than other potential factors, according to research conducted at the Federal Reserve Bank of Cleveland. Educational attainment, for example, increased a state’s average per capita personal incomes relative to other states by 8 percent, but innovation—measured by patents per capita—boosts personal income nearly 20 percent. Given the importance of innovation to economic performance, we investigate patenting activity in the Fourth District and compare District trends with those across the nation.


    I am interested in alternatives, but not alternatives that send the economy crashing to the ground and automatically disadvantage businesses with significant upfront investment that takes years to recoup. Solve that problem and I will reconsider my position.

     

    reply to this | link to this | view in thread ]

  64.  
    identicon
    Lonnie E. Holder, Jan 14th, 2009 @ 10:22am

    Patent Strategies

    I'm ignorant of the other values to patents, besides as a protection from someone else's potential patents, which to me seems to create value for the individual patent, but decrease value in the whole equation. I am, however, ignorant in most things. Are there any such values to patents? Are there any other unrelated values assigned to patents within patent law? I suppose there is value for others in the information contained in the application itself. Are there other benefits to the applicant that would justify the expense of seeking a patent? I am truly open to any reasonable argument here.

    Here are a few of the reasons that individuals or businesses have applied for a patent:

    o Self-esteem; i.e., just to have the prestige of having one.

    o To prove that they have an actual invention to attract investors.

    o For defense from others (probably the most common reason to have a patent).

    o To see whether other art is truly competing or to gain clearance from the USPTO on a concept. If you have an invention and you think it is novel over another invention, file, submit the competing art, and see whether you get an allowance.

    o Marketing value. There is value in some industries to companies that appear to be technological leaders, and patents are respected in manufacturing and high tech industries (other than software, where have a lot of patents makes you appear to be sinister with nefarious purposes).

    o Limiting your competitor. If your competitor has a key, patented technology, and you see a way to keep them in check (which might, but not necessarily will, enable to you charge "monopoly rents").

    o Trade goods for competitor patents or technologies. You develop technologies you know your competitors want in order to be able to use their technology.

     

    reply to this | link to this | view in thread ]

  65.  
    identicon
    Anonymous Coward, Jan 14th, 2009 @ 5:08pm

    Re: Back to Ummm...Not Quite

    So, if a "monopoly rent" can be a negative number, then yes, it might still exist in this case.
    Nothing you wrote in your long diatribe in anyway disproves the existence of monopoly rents. The only thing I could tell from it is that you have no idea what monopoly rents are.
    Incidentally, I am aware of a critical trade secret that has been kept a traade [sic] secret for 21 years and counting.
    You shouldn't go making claims you can't back up.
    As various anti-patent studies have gleefully shown, the preferred protection for intellectual property is secrecy.
    Businesses go the trade secret route when their "secret recipe" or whatever it is doesn't qualify for a patent. The problem with trade secrets is that they can't sue someone else who independently comes up with the same thing. With patents, they can. That's right, they can rob others of the benefits of their own work. A kind of capitalist wet dream. Gee, ain't patents great?

     

    reply to this | link to this | view in thread ]

  66.  
    identicon
    Lonnie E. Holder, Jan 14th, 2009 @ 5:51pm

    Re: Re: Back to Ummm...Not Quite

    So, if a "monopoly rent" can be a negative number, then yes, it might still exist in this case.

    Nothing you wrote in your long diatribe in anyway disproves the existence of monopoly rents. The only thing I could tell from it is that you have no idea what monopoly rents are.

    Nothing you said proves that patent rents exist in all cases. The only thing I could tell from your vague comment is that you had no point.

    Incidentally, I am aware of a critical trade secret that has been kept a traade [sic] secret for 21 years and counting.

    You shouldn't go making claims you can't back up.

    Tough to back that claim up. However, ask anyone in a manufacturing industry whether they have trade secrets, and the longest they have managed to keep one secret. I suspect you will be surprised.

    As various anti-patent studies have gleefully shown, the preferred protection for intellectual property is secrecy.

    Businesses go the trade secret route when their "secret recipe" or whatever it is doesn't qualify for a patent.

    Wrong. Lots of companies could get patents on their trade secrets, but they think they can keep them secret, so they hold on to them. The formula for coke is a perfect example. That could have been a patent.

    The problem with trade secrets is that they can't sue someone else who independently comes up with the same thing.

    That is true. However, the VAST majority of patent holders NEVER sue anyone. So, what is your point?

    With patents, they can. That's right, they can rob others of the benefits of their own work. A kind of capitalist wet dream. Gee, ain't patents great?

    Rob who of what? Rob someone that stole their invention, or "rob" someone that came up with it independently? How many times does someone come up with an invention independent of another at the same time, when you exclude software? I would love to see your numbers. As you said earlier, prove your facts.

     

    reply to this | link to this | view in thread ]

  67.  
    identicon
    Anonymous Coward, Jan 15th, 2009 @ 2:46pm

    Re: Re: Re: Back to Ummm...Not Quite

    Nothing you said proves that patent rents exist in all cases.
    Never said that it did. In cases where the patent holder makes no money then there are obviously no patent rents. Did you really think that was what was meant or are you just being duplicitous?
    Wrong.
    Companies wouldn't do that, huh? That's so ridiculously incredible that I'll just let your statement speak for you.
    Rob who of what? Rob someone that stole their invention, or "rob" someone that came up with it independently? How many times does someone come up with an invention independent of another at the same time, when you exclude software? I would love to see your numbers. As you said earlier, prove your facts.
    Prove that independent invention exists? I'm not even going to bother. Again, I'll just let your denial speak on the record for you.

    By the way, the Earth's not flat either (just in case you want to argue otherwise).

     

    reply to this | link to this | view in thread ]

  68.  
    identicon
    Kirk, Jan 15th, 2009 @ 3:17pm

    Re: Uhm

    Again, you focus on what happened, and
    avoid examining what didn't happen.


    Well, what did not happen is that prices remained the same and the entrenched
    players continued to stagnate. What else did not happen?



    Im not an economist, but that sounds like youre assuming a static market.

    If not building on other's designs or improvements really results in a
    better product, then the market would have arrived there without patents.


    With what incentive? If you have a widget and the widget
    sells well, what incentive is there to build a competing widget? What incentive is there to get out of bed in the morning? What incentive is there to go to work. The incentive is to make money. You can do that even without patents. If my widget sells well, the incentive for you to build a competing widget is strong. People
    are buying widgets. Come get some of the pie. If you build a better widget, Ill
    be motivated to do so.
    How do
    you know it is better until you build it? what if it
    is not "better" for some customers, but is with others? Bottom line:
    There is no guarantee that the alternative will be built without patents.
    Patents guarantee that if there is demand and alternatives, they WILL be built. On the other hand, how do know whether the alternative is as good as the original would be after having been refined by a half-dozen different firms. Thats no more or less valid than your argument.



    It is
    an intriguing argument. I will think on it.


    If taking an entirely new approach to the design and development of transmissions and avoiding advancements already made was the better way to go, anyone who went that route would have given the consumer what he or she wanted and reaped the benefits.

    So, company B spends $15 million to create a competing product. The competing product begins taking market share from company A. Company A copies the competing product for a fraction of the cost of company B, and immediately
    begins regaining market share because customers already have a system compatible with company A. Company B is unable to repay the $15 million in development costs and goes bankrupt. Great system!



    I think your scenario actually starts with company A not innovating because there would be no way no protect its investment. My scenario begins when Company B innovates on Company As product. Then, Company A adopts
    that innovation into its products and regains its competitive advantage. Then Company C is formed, and structures its products from the ground up to utilize all improvements so far. Maybe company B goes out of business, but the market continues to be served, Company B did not incur nearly as much debt as in your scenario, and everyone but the president of Company B can get a job at company C. The incentive to compete comes from the market; it demands products, and someone will provide them.


    Your argument is that patents improved the market by limiting the options of competitors?

    Patents do not necessarily "improve" the market. What patents do is
    to force competitors to provide a product using a different approach. If there is one competitor initially, patents will double, triple or more the amount of
    technology available. Either the alternatives meet another need, or they do not. The market decides.



    This is valid from the standpoint of forcing divergence, but it is not necessarily efficient. I
    think though it may multiply the approaches to design or to a problem, it might or might not have a positive effect on the total technology available. It could be said that it encourages invention, but reduces the usefulness of those inventions.


    You believe that if manufacturers had all options open to them, the result would be that the consumer would have fewer options?

    Absolutely




    Fortunately for the market, patents protected the technology of each, and two
    independent technological paths were followed, forced by patents. Good thing.
    There are customers that clearly prefer the benefits of Hydro-Gear's products and
    there are customers that clearly prefer the benefits of Tuff Torq's products.



    That sounds like a segmentation of the
    market leading to watered-down competition. If the two companys products are as different as you say, then it is as though they each have their own market. The importance of product preference will be inversely proportionate to the importance of price in deciding between the two products. If I prefer the benefits of Tuff Torqs products, can I shop around? If no one else can build
    what Tuff Torq builds, and no other design exists to
    replicate what their transmissions do, what incentive Does Tuff Torq have to build the best transmission it can, and offer it at the lowest price possible?




    You point to a result and offer little or no insight into the other possibilities. It doesn't make you wrong, but it rings hollow. I suspect that argument tasted a little off even to you.

    When anti-intellectual property people make the same arguments in the opposite
    directions regarding patents, THAT tastes off to me.



    Okay. Im not sure I could make an
    argument about how much better the world is without patents, since we have patents. If you mean that
    anti-patent people refuse to consider the risks of ditching patents, I can see your point of view. However: Nothing ventured, nothing gained. Weve tried it your way.

    What no one has done or has been able to do is to prove that a world without patents is better. All they have are limited examples and anecdotes that are rarely compared against the bigger picture. Each time a study is presented that shows the benefits of patents, I hear an excuse. Here is such a study:

    Roberto Mazzoleni and Richard R. Nelson: The
    collection of small and medium sized firms in the American biotechnology
    industry is, of course, a striking example of enterprises that would not have
    come into existence without the prospect of a patent, and which depend on patent
    protection to make their profits, and to attract capital, through one or
    another of these strategies.



    I think that those statements make a
    compelling argument for the premise that patents make it possible to dedicate
    resources and get stuff done. They dont speak to Mikes questions about total
    economic benefits, and the efficiency of allocating resources in that way.




    What is the excuse? Oh, that does not prove there is an economic benefit. Really? Okay, how about this one:





    http://www.clevelandfed.org/research/trends/2008/0308/03regact.cfm

    14 Mar 2008

    Education and innovation contributed more to income growth at the state level
    than other potential factors, according to research conducted at the Federal
    Reserve Bank of Cleveland.
    Educational attainment, for example, increased a states average per capita
    personal incomes relative to other states by 8 percent, but innovationmeasured
    by patents per capitaboosts personal income nearly 20 percent. Given the
    importance of innovation to economic performance, we investigate patenting
    activity in the Fourth District and compare District trends with those across
    the nation.



    The
    thesis seems sound. It makes sense that innovation would drive growth. Youll
    forgive me for not reading the entire study, I hope.
    but innovationmeasured by patents per capita It seems
    as though theyre talking about innovation. Does it say anywhere in there that patents are the drivers of
    innovation, or are they simply measuring patenting activity as a means of
    measuring innovation? Since entities have every reason to patent their
    inventions, it seems like a reasonable way to try to track invention.



    I am interested in alternatives, but not
    alternatives that send the economy crashing to the ground and automatically
    disadvantage businesses with significant upfront investment that takes years to
    recoup. Solve that problem and I will reconsider my position.



    It is good that you are interested in
    alternatives. Thats something. I will grant that your concerns are not trivial,
    and it would be foolish to discount them.



    I'm ignorant of the other values to
    patents, besides as a protection from someone else's potential patents, which
    to me seems to create value for the individual patent, but decrease value in
    the whole equation. I am, however, ignorant in most things. Are there any such
    values to patents? Are there any other unrelated values assigned to patents
    within patent law? I suppose there is value for others in the information
    contained in the application itself. Are there other benefits to the applicant
    that would justify the expense of seeking a patent? I am truly open to any
    reasonable argument here.


    Here are a few of the reasons that individuals or businesses have applied for a
    patent:

    o Self-esteem; i.e., just to have the prestige of having one.

    o To prove that they have an actual invention to
    attract investors.



    I would be in favor of establishing an
    invention hall of fame in Washington
    D.C. to allow that activity to continue. Perhaps as one of the new Presidents public works projects. Of course there would be no obstacle to others implementing the inventions showcased there.


    o For defense from others (probably the most common
    reason to have a patent).

    o To see whether other art is truly competing or to
    gain clearance from the USPTO on a concept. If you have an invention and you
    think it is novel over another invention, file, submit the competing art, and
    see whether you get an allowance.



    Thosetwo are only needed because of the patent system as it is.

    o Marketing value. There is value in some industries
    to companies that appear to be technological leaders, and patents are respected in manufacturing and high tech industries (other than software, where have a
    lot of patents makes you appear to be sinister with nefarious purposes).



    Thats
    a combination of the first two groups.


    o Limiting your competitor. If your
    competitor has a key, patented technology, and you see a way to keep them in
    check (which might, but not necessarily will, enable to you charge
    "monopoly rents").



    Is limiting competition a worthy use of
    the patent system? Was it an intended use?




    o Trade goods for competitor patents or technologies.
    You develop technologies you know your competitors want in order to be able to use their technology.



    Thats
    also a purpose that is created by the patent system.

     

    reply to this | link to this | view in thread ]

  69.  
    identicon
    Lonnie E. Holder, Jan 15th, 2009 @ 5:44pm

    Re: Re: Re: Re: Back to Ummm...Not Quite

    Rob who of what? Rob someone that stole their invention, or "rob" someone that came up with it independently? How many times does someone come up with an invention independent of another at the same time, when you exclude software? I would love to see your numbers. As you said earlier, prove your facts.

    Prove that independent invention exists? I'm not even going to bother. Again, I'll just let your denial speak on the record for you.

    I think I was quite clear. Prove the number of times that simultaneous invention happens as a percentage of all inventions. Yes, simultaneous invention happens. Now, how often?

     

    reply to this | link to this | view in thread ]

  70.  
    identicon
    Lonnie E. Holder, Jan 15th, 2009 @ 5:50pm

    Re: Re: Uhm

    Kirk:

    I apologize, but I am unable to make a lot of sense of your response. The formatting is all messed up. However, I caught something about value of patents, and I offer you this modern example of the effects patent has...

    The Plant Variety Protection Act of 1970 provided patent protection for sexually reproducing plants. In the 1960s, about 150 new plant varieties were developed in the U.S. In the 1970's, after providing patent protection, over 3000 new plant varieties were developed.

     

    reply to this | link to this | view in thread ]

  71.  
    identicon
    Lonnie E. Holder, Jan 16th, 2009 @ 6:09am

    Re: Re: Re: Re: Back to Ummm...Not Quite

    AC:

    Since you seem reluctant to prove your case, I will give some facts to you.

    A while ago the New Yorker did an article on simultaneous discovery, which sort of overlapped into invention, though the two are different.

    From http://www.newyorker.com/reporting/2008/05/12/080512fa_fact_gladwell/?currentPage=all

    One of the first comprehensive lists of multiples was put together by William Ogburn and Dorothy Thomas, in 1922, and they found a hundred and forty-eight major scientific discoveries that fit the multiple pattern.

    Note that this list is mostly of "discoveries" rather than inventions. So, let us take another example from the same article:

    After examining some 400 of his 661 scientific communications and addresses . . . Dr. Elinor Barber and I find him testifying to at least 32 multiple discoveries in which he eventually found that his independent discoveries had also been made by others.

    I know it is dangerous to extrapolate from minimal data, but it is the only data anyone has offered. If the ratio of multiples provided above holds throughout all existing patents, approximately 8% of those patents were the subject of multiple independent invention.

    What does 8% mean? Well, it means that multiple independent invention happens sometimes. 8% hardly seems the definition of frequent or often. After all, we are talking about less than one invention in 10. Should we create a system that protects those 8%? I do not know the answer. However, I do know that there is a lot of stirring the pot for something that happens only occasionally by the only data I can find. It is usually a mistake to create a system that focuses on the exceptions.

     

    reply to this | link to this | view in thread ]

  72.  
    identicon
    Joe Smith, Jan 21st, 2009 @ 8:31pm

    Michael Abrash

    is a god. My company used a utility based on one of his magazine articles in PC Techniques for a decade.

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This