Bad Ideas: Trying To Build Patent Marketplaces
from the a-market-in-ideas-after-the-fact? dept
The NY Times has what feels like a warmed over press release talking up the rise of patent auctions and makes some very one-sided and weakly supported assertions that this is somehow good for the market of innovation. It’s not. In any way. There have been a bunch of companies trying to “trade” in patents or patent auctions, and all they’ve done is help make innovation harder by separating the idea from the implementation, and encouraging more lawsuits or extortionary techniques. Patents are no longer being used for innovation or to distribute knowledge. They’re used to create a tax on anyone who actually innovates, and comes up with the same concept that others have come up with. Amazingly, the NY Times notes none of this. Instead, it makes the following statement:
And patents, after all, are ideas. Any market mechanisms that speed up the process of figuring out what a patent is worth should hasten the flow of ideas into the economy, accelerating the pace of innovation, policy experts say.
That’s wrong. Flat out, bizarrely, backwards and wrong. Ideas don’t need a market. You want a market for scarce goods. You don’t need a market for goods that are not scarce. This is fundamental stuff and has been obvious for ages. Hell, Thomas Jefferson famously noted that very issue ages ago:
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. Inventions then cannot, in nature, be a subject of property.”
Markets are for property exchange and the more efficient allocation of property. Ideas are not property, and making a market for them and holding them back doesn’t accelerate the pace of innovation, it retards it. Greatly. And, more and more studies have been showing this.