I agree with just about everything Mike says here, but there may be a reason to acquire a patent you don't intend to enforce: to preempt a competitor or troll from doing so. Given the USPTO's irrational interpretation of the concepts of obviousness and prior art, having a patent may help in fending off subsequent attempts at patenting the same thing.
That said, AmEx's amicus brief to the CAFC still makes no sense, because no such defense would be necessary in the absence of business-process patents, and their absence would be the best possible reassurance that they could not be used to derail standards.
For the USPTO, this is a wonderful business model: they do a crappy job, and thereby drum up more business!
Mike, you chide your opponents (real or imagined) for not giving time its due, but you are yourself lax in this regard.
The price of goods are generally pushed towards the marginal cost, but rarely do they immediately reach that value, and it is in the area under the curve that 'monopolistic competition' works. It is an unstated assumption in your own description of the concept, with its 'fleeting competitive advantage'.
Furthermore, you are right to point out that it is this way in every competitive market. It is this way for Honda and Toyota, and that is a good thing for society.
These are competitive enterprises by your own definition, but if there were some circumstance that forced their prices to immediately fall to the marginal cost for anything they did (every now and then, some misguided government enacts a law with this effect in some market segment), then in practice, they couldn't even operate, making the question of whether they could compete moot.
Time and rates of change are relevant factors, and so there are circumstances involving prices at marginal cost where companies that are otherwise competitive could not compete. Consequently, the premise stated in the title of this article is false.
This doesn't settle the broader issues of competitiveness and public policy, but it takes this particular argument out of play.
"The point is that there is still demand to get across the river, right? Therefore, it is in someone's best interest to build that bridge -- but they need to realize that they won't profit directly from the bridge, but from additional services. And, even if others can take a lane for free and copy, the originator can still do quite well just by being the first and having the associated brand."
Then a bunch of well-armed guys show up and take over the operation, taking all the revenue for themselves. Then another bunch sets up a roadblock at the other end and impose a toll of their own, and the span of the bridge turns into a free-fire zone and the situation becomes indistinguishable from Somalia. What's to stop this? Don't say the law, imposing an artificial concept of ownership on the situation...
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