If Innovations Occur To Multiple People At The Similar Times, Does One Deserve Monopoly Protections?
from the if-so,-why? dept
Michael Kanellos over at News.com is disputing Borland and Lightsurf founder Philippe Kahn's claims that he invented the cameraphone by pointing out numerous examples of others coming up with similar ideas slightly before or around the same time as Kahn. While the focus of his column is to note that the press shouldn't just take the word of someone who is rich and famous without doing any additional research themselves, it also highlights another important fact. In the history of innovation, it's often true that multiple parties are coming up with the same or very similar ideas all at the same time -- usually because it's an obvious trend or because there's a clear market demand. That raises, yet again, the question of why the very first of these should get a government-backed monopoly on the idea. It seems quite unfair to everyone else who worked just as hard (and may have even done a better job). The Kahn story doesn't involve patents (thankfully!), but it's still a good way to highlight that innovation doesn't occur in a vacuum -- and it's quite rare that it's a single burst of inspiration that no one else is having at the same time. So why do we give all the rights to one person?
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Re:
And that promotes innovation how exactly?
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are you in software.. have you ever created anything that's digital, that's worth anything to you...
if you have, i demand that you give it away for free!!!otherwise, aren't you stopping innovation?
the 1st guy gets the patent because he was the 1st to get to the office with the application..
the 2nd guy still gets to use his innovation, even gets to sell it.. he's just limited to what he can do with it in the public markets...
my god. how old are you, and have you ever created software!
i've had plenty of software that i, and companies i've worked for have sold, as well as patented.. didn't stop innovation...
peace...
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Re: AC
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Re: to Anon Coward
Patenting "anything digital" doesn't impede innovation, because the innovation has already been done. You're simply manipulating the content already provided to perform other tasks. So obviously you're software isn't going to disturb this process. Now if your software were the very first of it's kind to perform some sort of function that has in no way ever been done before, then we could consider whether or not it should be for your use only. Typically however, those innovations that do benefit everyone have been made generally available by their creators, as was their intention.
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Patents
Also, do you think Dijkstra would have patented his algorithm if he could? No! He gave it away free to the world, because it allowed people to solve problems. That, to me, is beautiful.
No, I do not expect this kind of beauty to come from corporations. Only individuals can be that selfless.
But, I see no reason why an obvious idea like "wireless email" deserves patent protection. I mean, it just makes sense. There's email. There's wireless. A lot of people would probably like to have wireless email. But one company gets to patent it, even if multiple people independently arrive at similar methods to get wireless email to work? Bogus; there was a clear demand and the concept is a relatively simple synthesis of previously existing concepts.
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Re:
No. There's no personal use rights for independent inventors. The onlly reason personal use is special is because inventors ususally don't sue for it but they have the right to.
Mike said: "it's often true that multiple parties are coming up with the same or very similar ideas all at the same time -- usually because it's an obvious trend or because there's a clear market demand."
It is probably more accurate to say that once other developments make an invention possible then the invention is quickly arrived at independently by multiple parties. For example, improved cylinder boring machines made the Watt steam engine possible, the internal combustion engine made the airplane possible etc.
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Re: Re:
You really need to look into updating your reference points. ;)
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Re: Re:
By forcing you to come up with a better idea instead of just copying the ingenuity of someone else.
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Re: Re: Re:
RandomThoughts said:
Mike said:
squik said:
squick, you seem to have totally missed the point.
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Aren't we forgetting the obvious?
OBVIOUS TO EXPERTS SKILLED IN THE ART.
If multiple people come up with the same idea at the same time then by definition it was obvious to people skilled in the art and not an invention.
It's not like patent law doesn't have protections against this kind of thing, it's just that the patent office chooses to downplay them.
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To Squick
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Re: Re: Re:
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Simultaneous invention
If the invention is so obvious that many people invent it simultaneously then 1) the patent will not hold up in court because it is obvious or 2) prior art will exist. Prior art trumps patents. If something an invention is as obvious and widespread as the premise of this blog entry says, then prior art will exist. End of problem.
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Re: Re: to Anon Coward
Hey, dude,
you really need somebody to kick you in the butt... Hard...
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Mikes
are you in software.. have you ever created anything that's digital, that's worth anything to you..."
No dude,
Mike is in public relations...
The only thing that he "created" is this third-rate internet blog, which unfortunately I have to read often enough (it gives me high blood pressure) , along with dozens of other shitty blogs...
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Error Carried Forward...
I must have blocked that out or something... that simply makes no sense.
For example:
Man creates written language. Someone writes a book. Book is not patentable.
Man creates software language. Someone creates software. Software is.. patentable?
I've *got* to be missing something here. Help me!
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You can argue that it's not the best policy. But simultaneous inventions, and huge feuds over whether first-to-file should trump first-to-invent, have been going on long before the current wave of software/tech patent abuse got started.
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I is not I; some I are not I.
This column constantly merges ideas, inventions, and innovations, then draws from that meld to support an anti-patent clause agenda.
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Re: Because they were the first to file the paten
Europe does use a "first to file" patentssystem.
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Re: Simultaneous invention
It all comes down to the fact that technology has surpassed current patent laws/methods/requirements what-have-you.
Debating over how should profit if multiple unrelated entities innovate on the same concept at the same is good for bringing ideas to the table but the only real soution is going to be a reform of the patent/copyright/trademark process.
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Huge cost to invalidate patents
I believe that during this time infringers are not allowed to use the patented material.
These, taken together, mean that simply assuming poor patents will be invalidated is wishful thinking.
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To Sanquine Dream
Reform is one thing. This Mike character advoates the abolishment of IP law under the mistaken notion that business will some how be stimulated into a binge of innovation, dropping tons of money into R&D once everyone is free to copy.
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Re: To Sanquine Dream
From your very ignorant statement earlier, I'm assuming you have bad comprehension skills. If thats the case, its understandable that you completely missed what Mike is saying. If I'm incorrect about your comprehension, well, I'm finding it difficult to believe that you could interpret his position in such a way.
And by the way, you can put stuff into R&D and still make money without IP protection. It's called competition. It's also known as "what happens after the patent expires." Lots of businesses are based off of creating products that are not patentable. The money they put into R&D to make those products better than they're competitors is returned in revenue generated by more people buying your product because its better.
Don't assume that when you create something, you should be allowed to continue to make money off of it without having to continually work at it. This isn't art we're talking about here. =P
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Re: Mikes
---Mike is in public relations...
---The only thing that he "created" is this third-rate internet blog, which unfortunately I have to read often enough (it gives me high blood pressure) , along with dozens of other shitty blogs...
I'm sorry...it must really suck to be an astroturfer forced to read all those shitty blogs. I'd probably be resentful to if I had to try to counter people discussion points with whiny BS.
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Re: to angry dude
I'm saying software, the very first incarnation of it was INNOVATION, anything there after is simply using something that was already created and manipulating it to perform alternate tasks. Someone created the first calculator, that was innovation, the $4 POS you can buy at target is not. Inventions are not Innovation, that's the point I'm making.
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Re: Simultaneous invention
"If the invention is so obvious that many people invent it simultaneously then 1) the patent will not hold up in court because it is obvious or 2) prior art will exist. Prior art trumps patents. If something an invention is as obvious and widespread as the premise of this blog entry says, then prior art will exist. End of problem."
This is great theory Squik, too bad it doesn't work this way in real life. Obvious patents are granted regularly. These obvious patents are then used to bully other companies into extortion like arrangements for an idea that no-one should have a patent for in the first place.
At any rate, there is no real obvious test for patents or any other piece of IP law. Unless you could show some good examples otherwise?
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Re: I is not I; some I are not I.
Umm maybe because all these concepts are often covered under patents? Yes thats right ideas, inventions, and innovations all find their way into patents. This is obvious to any who takes the time to look over patents that are granted nowadays.
Do you believe everyone has an agenda just because they don't agree with a particular concept?
I think that makes you one of those wacky conspiracy theorist! lol
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Re: Re: Re:
Squik, did you not read the post at all? Did you just go to your kneejerk reaction? The WHOLE POINT of the post was that multiple people usually come up with the same thing at the same time. That's not "copying" anything.
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Re: Simultaneous invention
If the invention is so obvious that many people invent it simultaneously then 1) the patent will not hold up in court because it is obvious or 2) prior art will exist. Prior art trumps patents. If something an invention is as obvious and widespread as the premise of this blog entry says, then prior art will exist. End of problem.
You must live in some alternate universe if you think this actually happens.
That's how it SHOULD work. But the reality is it's not at all how the system works (or has ever worked). Why do we have the teleflex case going on now? Because there is no test for obviousness.
And the idea that multiple people inventing the same concept at the same time would mean there's prior art is wrong. Let's try this again: it's multiple people coming up with the same idea at the same time. There is no prior art... it's just the natural progression of the art.
But, the USPTO doesn't recognize that as obviousness. They still grant the patents. That's a huge problem, because it harms everyone -- including everyone else who don't get the actual patent, despite putting in just as much (and sometimes more) work than whoever got the patent.
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Re: Re: Simultaneous invention
But, the USPTO doesn't recognize that as obviousness. They still grant the patents. That's a huge problem, because it harms everyone -- including everyone else who don't get the actual patent, despite putting in just as much (and sometimes more) work than whoever got the patent.
And this is why we have patent squatting these days. A company will patent a broad idea and then not work on it at all. Then someone else comes along and actually does something that falls under said broad patent then all of a sudden they have to pay a massive settlement to a company that is doing nothing with that broad patent, resulting in an NTP Effect.
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Re: Re: Re: Re:
No. The whole point of the post was to promote your anti-IP rights agenda.
The fact is, people don't come up with the same idea at the same time. Some people come up with ideas sooner or later, though perhaps close to one another in time, for some definition of "close".
There are several flaws in your rhetoric.
Philippe Kahn did NOT try to patent the "idea". Nor did he try to patent his makeshift technical solution to placing pictures on the web. So, this situation serves only to make some lame point that sometimes people think of things that other people have thought of. Wow! I concede that point.
Other companies had working products years before Philippe Kahn made his little rig. So, in no way was Kahn impeded in his idea or his subsequent business, LightSurf, by the fact that someone else had invented a different solution to the same problem.
Camera phones are legion. Methods of transferring digital photographs are plentiful. Companies with great scale are operating at marginal costs providing products and services to allow people to move and exchange digitial images. It hardly seems like innovation has been impeded in this area.
So what is your point about IP and patents inhibiting innovation? You haven't made it with this example.
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Re: Re: Re: Re: Re:
My agenda is not anti-IP rights. My "agenda" is simply pro-innovation. What's yours?
The fact is, people don't come up with the same idea at the same time. Some people come up with ideas sooner or later, though perhaps close to one another in time, for some definition of "close".
And, again, I ask why one person deserves to get decades of monopoly protection for ideas that others are coming up with in the same time frame? I don't see how "close" vs. "same time" makes any difference in this case.
Philippe Kahn did NOT try to patent the "idea"
Did I say he had? No. I just used this as yet another in an exceptionally long list of examples of concurrent innovation.
So, this situation serves only to make some lame point that sometimes people think of things that other people have thought of.
Did I suggest it served any other purpose? And I question you on why this is a "lame" point? Considering the very purpose of the patent system is undermined by this "lame" point, I find it not at all lame.
Companies with great scale are operating at marginal costs providing products and services to allow people to move and exchange digitial images. It hardly seems like innovation has been impeded in this area.
Did I say this example impeded innovation? No. The sole purpose of the post was to show that mulitple people are coming up with similar ideas at the same time, and it's ridiculous to think one deserves a monopoly over any such idea.
So what is your point about IP and patents inhibiting innovation? You haven't made it with this example.
Hmm. How many times do I need to repeat it? The point of this post is to show yet another example that people come up with the same thing at around the same time. It happens all the time, but people like you who promote the myth of the genius inventor don't want to hear it. That's what I showed with this post. There's a long list of similar stories of simultaneous invention going all the way back.
The steam engine. The airplane. The telephone. The automobile. When do you want me to stop?
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You made no point
I have no agenda. I was pointed at this blog by someone who recommended it as a good source of information. What I found is your continued attacks on IP rights. The best you've been able to muster to assert your opinion that IP rights impede innovation is some work in which the authors misinterpret data and mischaracterize IP law to grind their anti-IP agenda.
You are tenacious. But I find your arguments lacking, particularly your economics analyses.
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Re: You made no point
I'm sorry if you feel I did not make a point, but I'm afraid I did. I pointed out more evidence of yet another example of simultaneous invention. This is a point that you specifically in an earlier comment insisted wasn't very common. The problem is that you're wrong. It's quite common. In fact, it's a lot more common than the other way around.
And, from a policy perspective, that's a problem.
I'll note that you still haven't answered the original question. Why *should* someone who invents something at the same time as others get monopoly protection while the others don't? Why won't you answer that basic question?
What I found is your continued attacks on IP rights.
You make it sound like my attacks are baseless. The problem is that I back up each point I make. I'd like to see you do the same.
The best you've been able to muster to assert your opinion that IP rights impede innovation is some work in which the authors misinterpret data and mischaracterize IP law to grind their anti-IP agenda.
You're clearly new around here. We've got nearly 10 years worth of posts showing how IP impedes innovation.
You are tenacious. But I find your arguments lacking, particularly your economics analyses.
Um. If that's the case, why don't you actually show me how I'm wrong. I'm more than willing to engage in a debate on the economics, but if the best you can muster up is that my arguments are lacking, it's sort of difficult for me to respond.
My guess is that you've never actually looked too deeply at these issues, and so you simply believe the myths about IP protection that have gone around for years. The closer you examine the actual situation and the actual economics, the more you'll realize those myths fall apart.
So far, in this discussion, the only actual point you've made was shown to be wrong (claiming that simultaneous invention was "stealing"). If you want to make another point, please do... but so far, you're not doing so well.
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Re: Re: You made no point
No you didn't. In fact, the article you linked refutes your point by stating Olympus released a camera with uploading capability three years before Kahn got his idea, which means someone at Olympus had the idea at least 4 years earlier, and likely 5 years.
Now, I don't know what you think is simultaneous, but 5 years isn't simultaneous to me. The state of technology had moved quite a bit in those years. For instance, in 1992 when Olympus started working on that upload technology, the internet hadn't been opened for commercialization yet. Digital cameras were not inexpensive consumer products. Mobile phones were bricks and service was so expensive hardly anyone used them. By 1997 when Kahn "simultaneously" invented his makeshift solution, both the internet and digital cameras were legion. And cell phones were popping up everywhere.
So, your point is no point. Its worse. Your point is contradicted by the very article you offer in evidence of your point.
Why *should* someone who invents something at the same time as others get monopoly protection while the others don't? Why won't you answer that basic question?
Because that is not what the patent office protects. As has been amply pointed out above, prior art rules. A patent issued to someone can easily be overturned by showing prior art existed. If there is "simultaneous" invention, then prior art will likely exist.
Further, if the invention is obvious, then such can be shown.
The extent to which you can actually show the patent office issues patents on obvious things is the extent to which the patent office should change their policies on invention examination.
I'm all for some modifications to the way patents are issued. I'm not anti-IP. Patents give companies the kind of protection they need to stimulate them to make large capital investments in new technology. Without patents, the return on such investments would be minimal.
You're clearly new around here. We've got nearly 10 years worth of posts showing how IP impedes innovation.
LMAO. Over the last 10 years, while you were posting that innovation is being choked off, I've been filing patents.
Technology has seen massive innovation over the last 10 years. Thousands of entrepreneurs started companies, got tens of billions of funding, and changed the face of business in the world. Innovation has been bursting out all over the place.
I'm sure Brin and Page will tell you how oppressed they were that with big incumbents like Yahoo, Excite, and Altavista, they had no room to move. Patent law had locked them up and stifled their ability to innovate.
If you have people complaining about not being able to innovate in the last 10 years, it is very sad. While you've sat around whining, other people have made a difference by actually innovating.
Um. If that's the case, why don't you actually show me how I'm wrong.
Um. I have. I've debunked your argument in this posting by using the article you linked. I have debunked your assertions that patents impede innovation by showing a bush-league error in the interpretation of statistical data in the work of Levine and Boldrin, the only real research you've pointed to.
My guess is that you've never actually looked too deeply at these issues, and so you simply believe the myths about IP protection that have gone around for years.
Guess what you will. Meanwhile, my company will continue to protect its IP with patents and we will enforce those patents.
If you want to make another point, please do... but so far, you're not doing so well.
My advice to you is to do something with your life. Create something. Innovate. Don't complain that the man is holding you down. Its so... 1960s.
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Re: Re: Re: You made no point
Wow. You're really going to be a literalist, aren't you? The point was that multiple people were working on different areas of the same idea, and coming up with similar solutions with no knowledge that others were working on the same thing. I can't believe I need to spell it out for you in such a detailed way.
Because that is not what the patent office protects. As has been amply pointed out above, prior art rules. A patent issued to someone can easily be overturned by showing prior art existed. If there is "simultaneous" invention, then prior art will likely exist.
Which patent system are you talking about, because it's clearly not the one in the US. The US patent office accepts very very narrowly defined prior art, and has no real test for obviousness outside of prior art -- even though prior art and obviousness are two seaprate things. And, "easily overturned" isn't true of the USPTO in any situation. If you're talking about someone else's patent system, I'd be curious to know which one -- because I've never seen anything where a patent office allows for patents to be easily overturned -- even in the face of overwhelming prior art or obviousness.
Further, if the invention is obvious, then such can be shown.
How? Seriously. How? The USPTO does not have a test for obviousness. So, please explain how.
Patents give companies the kind of protection they need to stimulate them to make large capital investments in new technology. Without patents, the return on such investments would be minimal.
This is an assertion without proof. There is plenty of historical evidence that you can get tremendous ROI without patents. Again, I point you to the same historical evidence I've suggested before. The growth of industry in the Netherlands and Switzerland during periods both countries did without patents are great examples that proves your assertion completely false.
I would recommend that you stop relying on myths -- especially when we've pointed out why those myths are false.
LMAO. Over the last 10 years, while you were posting that innovation is being choked off, I've been filing patents.
I'm not sure what that has to do with anything. So you're using the system. So what?
Technology has seen massive innovation over the last 10 years. Thousands of entrepreneurs started companies, got tens of billions of funding, and changed the face of business in the world. Innovation has been bursting out all over the place.
Again, what does that have to do with anything? We agree that innovation is busting out all over -- though, I'd argue that this is in spite of patents, not because of it.
I'm sure Brin and Page will tell you how oppressed they were that with big incumbents like Yahoo, Excite, and Altavista, they had no room to move. Patent law had locked them up and stifled their ability to innovate.
You really are into the non-sequitors. What does that have to do with anything? IF Yahoo, Excite and Altavista had been able to write ridiculous patents the way today's patents are written, you can bet that it would have made life a lot more difficult for Google. In fact, Google eventually did have to pay a TON of money to Yahoo over a ridiculous patent concerning ad buying. That was money that Google had to waste that could have gone towards more innovation.
I never said innovation was dead. I just said that it's slowed down by IP. There's plenty of evidence to support that. The fact that some innovation continues isn't evidence that IP helps it. Please try again.
Um. I have. I've debunked your argument in this posting by using the article you linked.
You did not. In fact, at the beginning of this thread, you insisted that anyone coming up with the same idea as anyone else had to be stealing it, making us all question your reading comprehension skills. Are you still making that incorrect claim?
I have debunked your assertions that patents impede innovation by showing a bush-league error in the interpretation of statistical data in the work of Levine and Boldrin, the only real research you've pointed to.
Which bush league error was that?
Guess what you will. Meanwhile, my company will continue to protect its IP with patents and we will enforce those patents.
Who cares? Honestly? Who cares. All you're saying here is that your firm wants to stop competition because it's too lazy to compete in the market place.
My advice to you is to do something with your life. Create something. Innovate. Don't complain that the man is holding you down. Its so... 1960s.
Um. I AM innovating. I'm running a company that's doing quite well -- and it's doing quite well innovating and creating something new and powerful without making use of patents. I'm not complaining about anyone holding me down. I'm competing in the marketplace and winning.
What I recognize, though, is that innovation is an ongoing process, and the more we choke off the ability for companies to innovate, the more we hurt everyone.
So, I'm sorry Squik, but all you've done so far is insist that you're right because innovation has occurred in spite of patents. That hardly proves your point, and just makes me question your reading comprehension skills.
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Re: Re: Re: Re: You made no point
You said simultaneous. Five years apart is not simultaneous. The massive technology shift that happened in the five years before Kahn got his idea was enough to make the idea obvious. Regardless of what you'd like to believe, the idea was circulating, Kahn's selective memory notwithstanding.
The point was that multiple people were working on different areas of the same idea, and coming up with similar solutions with no knowledge that others were working on the same thing.
That is possible. It is just that your evidence doesn't prove it as you say it does.
Are you telling me that you know for a fact that Kahn had no knowledge of a digital Olympus camera that had been out on the market for years at that time he got his idea? Are you telling me that having an idea years after someone else has introduced a product qualifies as "simultaneous"?
How? Seriously. How?
Expert testimony. Publications in the technical literature or even popular literature of the idea before the claimed date of the patent.
There is plenty of historical evidence that you can get tremendous ROI without patents.
Of course, you are smart enough to know that doesn't prove your point about IP rights. And it doesn't disprove the conventional argument that investment in innovation increases with IP rights. (More on that below).
Excite and Altavista had been able to write ridiculous patents the way today's patents are written, you can bet that it would have made life a lot more difficult for Google
You are being inconsistent. Before you said you had 10 years of evidence that patents were inhibiting innovation. Now, Google, which is less than 10 years old, apparently had no trouble because patents weren't inhibiting innovation at that time?
If I decided to argue using the same method you are using, I would say: "Of course, you can bet if patents were more restrictive, there would be more innovation." It has as much persuasive power as your rhetoric.
Which bush league error was that?
Here's the one from "Against Intellectual Monopoly", Chapter 8:
"A number of scientific studies have attempted to examine
whether introducing or strengthening patent protection leads to
greater innovation. We have identified seventeen economic studies
that have examined this issue empirically. The executive summary:
these studies find weak or no evidence that strengthening patent
regimes increases innovation; they find evidence that strengthening
the patent regime increases … patenting! They also find evidence
that, in countries with initially weak IP regimes, strengthening IP
increases the flow of foreign investment in sectors where patents are
frequently used."
Studies that find weak or no correlation between innovation and strengthened patent regimes, do not prove that patents inhibit innovation. If anything they indicate it is possible the desired effect doesn't happen. But it definitely doesn't prove the opposite happens. As stated, the studies are evidence against the claim that innovation is stunted under strengthened patent regimes.
To add insult to their mistake, they also admit that there is increased investment in areas protected by patents. This is exactly what conventional wisdom has to say about patents, i.e., they increase investment. Their exclaimed point that the number of patents increases in unremarkable as it proves nothing except that people use the law, as was the reason for passing the law.
Here's a bonus error for you. Levine and Boldrin in "Perfectly Competitive Innovation" model investments in R&D as sunk costs. That is only valid when the investment is already made. Before an investment is made, those expenses are fixed costs that will be used to calculate the NPV of a project. It is not a prudent financial decision to invest if the NPV of your project is negative, which is exactly the case in a perfectly competitive market that forces prices to marginal costs.
So there are two bush league mistakes for you: 1) Asserting patents inhibit innovation when the evidence does not support the assertion; 2) Modeling R&D costs as sunk when prudent financial management would never make that assumption BEFORE making the investment.
Who cares? Honestly? Who cares. All you're saying here is that your firm wants to stop competition because it's too lazy to compete in the market place.
Absolutely not. I'm saying my company will use the laws that exist to protect our investment in intellectual property. We aren't lazy. We are busy inventing and innovating with the money invested in us. We intend for our investors to get a return on their investment. That won't happen if you copy our ideas and force our prices to marginal costs.
What I recognize, though, is that innovation is an ongoing process, and the more we choke off the ability for companies to innovate, the more we hurt everyone.
That statement is correct. You merely haven't been able to prove that patents choke off innovation.
but all you've done so far is insist that you're right because innovation has occurred in spite of patents. That hardly proves your point, and just makes me question your reading comprehension skills.
So far, you've not proven that patents inhibit innovation and neither have the people you've cited as your experts. In fact, the evidence they cite provides weak support for my position.
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Re: Re: Re: Re: You made no point
You shouldn't be so quick to throw insults around. You are the only one who has used the word "stealing" in this thread. Should we question your reading comprehension? Or when you find I used the word "steal" in a different discussion and post that as your rationalization, should we then question your ability to keep track of thoughts?
Why not stick to arguing facts and theories? It isn't personal. Trying to make it personal with ad hominems doesn't advance your case.
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Re: Re: Re: Re: Re: You made no point
At what point does the USPTO allow "expert testimony"?
Publications in the technical literature or even popular literature of the idea before the claimed date of the patent.
That shows prior art. Not obviousness.
Of course, you are smart enough to know that doesn't prove your point about IP rights. And it doesn't disprove the conventional argument that investment in innovation increases with IP rights. (More on that below).
Wow. Squik, you were the one who said "Without patents, the return on such investments would be minimal." I said that was wrong... and your response is that doesn't prove my point? Nice way to shift the topic without admitting that you were wrong.
You are being inconsistent. Before you said you had 10 years of evidence that patents were inhibiting innovation. Now, Google, which is less than 10 years old, apparently had no trouble because patents weren't inhibiting innovation at that time?
Huh? You're arguing two different things here. I never said that innovation was stopped dead. I just said that IP was slowing the pace of innovation. I never said that Google's innovation wasn't slowed by patents -- in fact I noted that it was slowed due to Yahoo's patents. I also noted that it could have been slowed even more had software patents been more popular prior to the State Street decision.
So, I'm not sure what point you think you've proven here. The fact that Google was able to innovate in spite of patents doesn't help your argument any.
Studies that find weak or no correlation between innovation and strengthened patent regimes, do not prove that patents inhibit innovation.
Nice work taking a single paragraph out of an entire book out of context. Read the rest of the book. You might learn something. Then look at the research of Eric Schiff. And Lerner and Jaffee. And Samson Vermont. Then look at the research by Michael Heller and Rebecca Eisenberg. Then look at the research by Petra Moser. Then the research by Mariko Sakakibara and Lee Branstetter. Then there's the research of Robert Hunt. And Fritz Machlup. I could go on...
To add insult to their mistake, they also admit that there is increased investment in areas protected by patents. This is exactly what conventional wisdom has to say about patents, i.e., they increase investment. Their exclaimed point that the number of patents increases in unremarkable as it proves nothing except that people use the law, as was the reason for passing the law.
No, it increases investment in getting patents. That does not mean an increase in investment in innovation. Unless you believe that patents = innovation, which has also been shown not to be true. Increasing investment in patents can be a waste for innovation.
Here's a bonus error for you. Levine and Boldrin in "Perfectly Competitive Innovation" model investments in R&D as sunk costs. That is only valid when the investment is already made. Before an investment is made, those expenses are fixed costs that will be used to calculate the NPV of a project. It is not a prudent financial decision to invest if the NPV of your project is negative, which is exactly the case in a perfectly competitive market that forces prices to marginal costs.
I've actually discussed this at length. You are correct that R&D is a sunk cost only after it's done, but that actually is a point in my favor. Because it shows that there is value in doing research. As long as someone can effectively make up the R&D required then it will be worth doing -- but note that the ROI need not come from directly selling the product that results from the R&D. That's why IBM invests so much in Linux. It's why Sun invested so much in Java. It's why Microsoft invested so much in IE. There are plenty of alternative ways to get the necessary ROI that have nothing to do with patent protection.
The theory behind patents is that, without them, there would not be the ROI necessary to create these new products. But, that's simply not true.
We intend for our investors to get a return on their investment. That won't happen if you copy our ideas and force our prices to marginal costs.
Again, this shows a faulty view of how innovation works. If you continued to innovate, you wouldn't need IP protection. You'd be able to keep selling at a premium by having additional value from the continuous innovation, by being ahead of the pack. What patents let you do is slow down the pace of innovation and rest on your laurels. There's simply no need for the gov't to encourage that type of behavior.
You merely haven't been able to prove that patents choke off innovation.
It's not difficult to find plenty of examples. I gave you one earlier with Google and Yahoo. But how about James Watt and the steam engine. The Wright Bros and aviation. How about NTP and RIM. How about Verizon and Vonage. How about MP3 technology? How about Eolas and Microsoft? How about Acacia? Example after example after example of patents being used to slow down rather than promote innovation.
But, the proof is pretty basic: a monopoly limits the need for the monopolist to innovate. It's that simple.
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yada yada yada
Telling you that you failed to prove your point is not shifting the topic. It is telling you that your argument was insufficient.
Nice work taking a single paragraph out of an entire book out of context.
Out of context? That was the place for Levine and Boldrin to prove their assertions using independent studies of markets in the 20th century. They couldn't. It is not out of context to point out that the best independent research they can find actually contradicts their thesis.
It doesn't matter how elaborate and logically compelling you find their arguments if the foundation is false. If their theories were valid, they would have found strong negative correlation. They didn't. Something must be wrong in their assumptions.
I've actually discussed this at length. You are correct that R&D is a sunk cost only after it's done, but that actually is a point in my favor. Because it shows that there is value in doing research.
No. It is merely the statement of fact that up-front fixed investment is not part of the recurring cost. After an R&D investment produces an innovative good or service, whether to go into production is determined by exceeding an operating margin threshhold, which is based on marginal cost. However, BEFORE any such R&D investment is made (by rational investors), the NPV of the project will be calculated using the up-front fixed costs.
If a large investment is required to invent new technologies or processes and those will immediately be copied by one's competitors, thus resulting in compeiition at marginal costs, the original investment will NEVER be reclaimed. In otherwords, the NPV of the project BEFORE the investment is made will be negative. No financially prudent company would invest in such projects.
This is basic stuff covered in microeconomics, managerial accounting and capital markets courses. Surely your MBA from Cornell covered such material.
As long as someone can effectively make up the R&D required then it will be worth doing -- but note that the ROI need not come from directly selling the product that results from the R&D.
And there is the rub. The R&D costs are far less likely to be recovered.
That's why IBM invests so much in Linux.
They do it because they need the technology. If they didn't believe they could make their investment in Linux back through sales of servers and software that runs on Linux (all of which are protected by patents), then they wouldn't make the investment. Note that the investment in Linux is an investment in maintaining the value of their patented technology.
It's why Sun invested so much in Java.
Java was an attempt to build a technology that would break the near monopoly hold on the application market built by Microsoft by the ubiquity of its installed base. You can bet that someone at Sun at least did a back of the envelope calculation of the option value of building Java.
It's why Microsoft invested so much in IE.
Microsoft invested so much in IE so that Netscape would not create a new application framework that would obviate the value of Microsoft proprietary technology. In other words, they did it to protect their business and thus had a profit motive.
Netscape was a parallel attempt to build a technology to break the effective monopoly Microsoft has been able to build through a combination of just-good-enough technology and anti-competitive practices. It wasn't their patents that created the Microsoft monopoly. Rather it was a licensing deal with hardware manufacturers that was anti-competitive and built an effective barrier to entry by competitors. They consented to stop AFTER they had built market share that establishes a new barrier to entry through network effects and high switching costs.
There are plenty of alternative ways to get the necessary ROI that have nothing to do with patent protection.
Actually, both Sun and Netscape were trying to create new environments in which they could give value to proprietary technologies by breaking Microsoft's effective monopoly. If you think they went into their projects with the idea that they would just sink hundreds of millions of dollars and never reclaim the investment, then you are wrong. Don't confuse their bubble-driven land-grab-mentality money-losing efforts with actually having accomplished their goals and increased their profits. Netscape is no more, having sold itself off for the value of its portal, and Sun keeps shrinking.
The theory behind patents is that, without them, there would not be the ROI necessary to create these new products. But, that's simply not true.
Your characterization is false. The theory behind patents is that with them there is far more opportunity to make a return on investment in technological invention. This drives more money into the creation of new technology.
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Re: yada yada yada
I think I've found the root of your confusion on my position. You think my position is completely different than what it really is.
If you think they went into their projects with the idea that they would just sink hundreds of millions of dollars and never reclaim the investment, then you are wrong.
I NEVER said that. I NEVER implied that. I said exactly the opposite.
I said that there was clear ROI, which is why they invested in it. I would never suggest that a company do something without clear ROI. Never. And I'm BAFFLED that you think I ever did. I said exactly the opposite. That there was clear ROI for all of these companies (and you say exactly the same thing, supporting MY point). There was ROI that wasn't about selling that exact good. There was ROI that had nothing to do with IP protection. There was ROI in making these investment decisions and there was simply no need for IP protection.
So, your disagreement with me isn't a disagreement at all. You simply supported my point that there are plenty of examples where IP is not necessary to create incentives.
And yet... then you bust out this laugher:
If a large investment is required to invent new technologies or processes and those will immediately be copied by one's competitors, thus resulting in compeiition at marginal costs, the original investment will NEVER be reclaimed. In otherwords, the NPV of the project BEFORE the investment is made will be negative. No financially prudent company would invest in such projects.
This is factually wrong. Flat out wrong. It shows a huge misunderstanding of both innovation and economics (though one that others have made as well).
It's funny that you show how companies like IBM invested huge sums of money knowing that anyone could copy it. That shows that your statement above is simply false. A prudent company absolutely can and will invest in such projects -- but they will do so intelligently, recognizing that there are many other ways to recoup the investment and to profit (greatly, in many cases).
If you recognize that innovation is an ongoing process, and the firms continually innovate, then you absolutely can invest in projects even if someone can copy them immediately. Copying isn't as easy as you seem to think it is, and even when it's frictionless to make identical copies the leader in the market still does well by being first. Also, the leader in the market is also the most likely to continue to innovate, so there are benefits to going with them and sticking with them -- even if others can make identical copies.
In other words, your claims that IP is somehow needed or companies wouldn't invest is false. Laughably so. If there's demand in the marketplace, there will be business models that allow for the creation of the product in demand that don't require IP protection.
You seem to believe that... so I'm not sure how you square that with your belief that IP protection is somehow needed. Why is the free market okay in some cases, and in others suddenly you want gov't monopolies?
Your characterization is false. The theory behind patents is that with them there is far more opportunity to make a return on investment in technological invention. This drives more money into the creation of new technology.
This is a myth. It sounds nice, but there's not much support for it. There's lots of research on the topic. I pointed you to some of it, though you seem to have ignored it. There are two counter forces in any IP protection regime. The first is the added incentive to invest in that area in order to gain the supposed benefits of IP protection. That's all you seem to be focusing on. The second is the dead weight that comes along with that monopoly protection that prevents (or makes costly) for others to continue innovating in that space.
All we are saying is that that second force outweighs the initial force. Pointing out that the first force happens doesn't disprove the second force.
But, you're wrong by the way about the theory behind patents. It's not a welfare system for inventors. It was designed with the belief that without it, there wouldn't be the necessary ROI for investment -- and what we're saying is that basic free market economics says that's ridiculous. If there's demand, the clever company can create the business model to fill that need -- without artificial monopolies from the local gov't.
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IBM et al.
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries"
That is what is in the US Constitution. It sure doesn't look like your characterization.
It's funny that you show how companies like IBM invested huge sums of money knowing that anyone could copy it.
As I said, it is an investment in protecting the value of other patented hardware and software systems. You seem to have ignored the fact that IBM's investment in Linux is to provide it a platform on which to field patented work.
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Re: IBM et al.
That is what is in the US Constitution. It sure doesn't look like your characterization.
Um. Yes it is. The point of the patent system is "To promote the Progress of Science and useful Arts." The reason to do that "by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries" is because without that exclusive right some believe that there's isn't the necessary ROI for investment. Otherwise, there's no need for the monopoly protection.
Go look at the writings of Thomas Jefferson on the rationale for the patent system.
You seem to have ignored the fact that IBM's investment in Linux is to provide it a platform on which to field patented work.
Heh. IBM's investment in Linux has a LOT more to do with the services revenue it drives -- which has nothing to do with their patented work. Either way, you seem to have lost the thread here. You indicated that without patent protection something like Linux would be a bad investment. I proved you wrong. But, rather than admitting it, you change the subject.
Convenient.
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Re: Re: IBM et al.
Not so fast. The latest IBM 10-K supports my view, not yours. It mentions Linux as contributing to sales of IBM software and hardware products. It doesn't say anything about Linux and its service business.
It is true that IBM does provide education and consulting services for Linux. But if you care to look at their site, you'll see they are more interested in selling you servers that run Linux, middleware that runs on Linux, and development tools that help you code on Linux.
I proved you wrong.
The evidence from IBM suggests you are wrong.
You indicated that without patent protection something like Linux would be a bad investment.
IBM didn't develop Linux. It didn't drop billions of dollars into developing Linux the way it did on DOS, OS/2, AIX, Workplace OS and Taligent. IBM would not have intentionally spent the man hours that went into developing Linux merely to release it to the world for use.
Look into IBM's contributions to Linux. You'll see that they are all geared towards making Linux an environment to supports sales of patented IBM hardware and software technology.
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Re: Re: Re: IBM et al.
How? Just because Linux is used to support the sale of some proprietary products (and if you watch their strategy you'll see that 10-K notwithstanding, the strategy is much more about services than software and hardware... but that's a different debate), that doesn't prove me wrong. It actually proves you wrong.
You insisted (repeatedly, scroll up) that without proprietary control, there's not enough incentive for a smart company to invest in things without IP control. Yet, even you admit that there -- by tying that non-scarce good to a scarce resource. So, there ARE incentives to produce such goods, even if they can immediately be copied.
So, again, your point was proven wrong. You don't need IP protection to invest.
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Re: Re: Re: Re: IBM et al.
I insisted that no company will invest in a project that they will not be able make a profit on. For the record, I never said that companies only invest in IP protected technology. Very clearly, IBM's investments in Linux are designed to make IBM products run Linux and run better on Linux. This is in support of sales of patent protected products.
While I don't disagree that IBM might also makes money off of consulting services that may involve Linux, they do not have to invest money in open source development to big able to provide those services. If you care to actually look instead of presuming, you'll find IBM invests in Linux projects that help sell IBM products.
You are tenacious. You just aren't proving your points by repeatedly stating your opinion as fact instead of offering verifiable evidence.
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Privileges instead of patents
Patent holders certainly would not like being perceived as privilege holders. But that's what they are, holders of privileges granted by the state as a public policy of offering incentives to reach certain gains that wouldn't be achievable if the privileges weren't offered.
It isn't a matter of property nor of protection, but of incentives by the means of temporary privileges granted by the state with the public interest in mind above all.
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