It's The Usefulness, Not The 'Newness' That Turns Ideas Into Innovation
from the more-data-points dept
For years, we've discussed the difference between invention and innovation. Far too often, people assume they're the same thing -- but understanding the differences has a tremendous impact on certain policies. Invention is the creation of something new. Innovation is making something useful in the marketplace (and it doesn't even have to be something new). Against Monopoly points us to an interesting article from last month's New Yorker that explains the same basic concept in a different way. While I disagree with the terms used in the article (he uses "innovation" where we use "invention" and "usefulness" where we use "innovation" -- making it a bit confusing), he's basically talking about the same thing, and providing plenty of examples. The mere creation of a new product isn't particularly valuable. It's making products useful where society truly benefits. Perhaps the most interesting part of the article, though, is in recognizing that it's often a completely different and unintended use of a technology that first makes it really useful. So, how does this play into things like patent policy? Well, all too often, people assume that patents drive innovation (or "usefulness") when that's not the case at all. What the article demonstrates is that the real innovation and the real benefit to society is in making something useful. However, if patents lock up the initial technologies, making them more expensive to use (or impossible to use at all!) then that slows down the potential for those products to be made useful, harming society.
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Initial Technologies
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Re: Initial Technologies
That presupposes a market failure. As you should know, you can't presuppose a market failure. You need to make the proactive case for one, and there's very little evidence that there are market failures if there are no patents. In fact, the evidence seems to suggest the opposite. That if demand exists, then new technologies are created to fulfill the demand.
Second, you assume that the patent holders of these initial technologies can lock them up and not let others invent/innovate based on them.
It's not an assumption. There's plenty of evidence that this happens all the time.
. Even though you may have a blocking patent situation, two rational, profit-maximizing economic actors would enter a licensing situation that would allow one of them a stab at innovation/usefulness.
And here, you make the assumption that an invention is a flash-of-genius from one individual and that patents don't cover broad and obvious ideas that lots of others are working on at the same time. That's exceptionally rare. So in most cases, the "licensing" you discuss isn't licensing the idea, it's a bribe not to sue one company for doing what it had figured out on its own, and which it knows is best for the marketplace.
What you call licensing seems a lot more like extortion in many cases.
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Re: Initial Technologies
That presupposes a market failure. As you should know, you can't presuppose a market failure. You need to make the proactive case for one, and there's very little evidence that there are market failures if there are no patents. In fact, the evidence seems to suggest the opposite. That if demand exists, then new technologies are created to fulfill the demand.
Fine - even if there are no market failures (i.e., every technology will be invented sooner or later to fill demand), if the patent system is the very but for cause of having a specific technology invented earlier than it would have been absent a patent system, then the patent system adds societal value. Or should I know about the evidence disclaiming that too? :)
Second, you assume that the patent holders of these initial technologies can lock them up and not let others invent/innovate based on them.
It's not an assumption. There's plenty of evidence that this happens all the time.
Sure, and there is plenty of evidence that husbands batter their wives. That doesn't mean all husbands are batterers. Just because some patent holders lock up technologies doesn't mean all do.
Even though you may have a blocking patent situation, two rational, profit-maximizing economic actors would enter a licensing situation that would allow one of them a stab at innovation/usefulness.
And here, you make the assumption that an invention is a flash-of-genius from one individual and that patents don't cover broad and obvious ideas that lots of others are working on at the same time. That's exceptionally rare. So in most cases, the "licensing" you discuss isn't licensing the idea, it's a bribe not to sue one company for doing what it had figured out on its own, and which it knows is best for the marketplace.
What you call licensing seems a lot more like extortion in many cases.
I don't think my statement made any assumption about how broad or obvious a patent is. I 100% agree that patents on broad technologies are inefficient, e.g., Amazon's one click patent. A patent that describes one implementation of a broad technology is not necessarily inefficient though. I also 100% agree that the obviousness standard should be set high (which hopefully KSR will effectuate). My original point - that two profit-maximizing, rational actors can cross-license - is not weakened by these distinctions.
Patent trolls are extortionists, because the patents they assert should never have been granted. That doesn't mean that all cross-licensing arrangements are extortion too.
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Re: Re: Initial Technologies
only IF, time and again, the time-period any specific technology is invented earlier in the patent system is longer than the period those inventions are locked up due to the acquired patent(s)
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double-edge sword.
Granted your statement is true, however the majority of the evidence in how many husbands do or don't beat their wives lies with those who don't. Same is true for patent holders, except it falls upon the opposite party. Most patent holders have patents solely for the purpose of monopolizing a market and prohibiting growth of the good or service it's trying to protect for their profit gaining agenda.
If the patent system didn't exist you would have a variety of companies producing the exact same product, and the one who would succeed would be whoever offers the most practical (useful innovative) good or service (invention) at a price the consumer is willing to expend. And, if that good or service were truly original in nature, you wouldn't have trouble proving it to anyone else, as you'd be the first to bring this concept into light. Only then could I see any real benefit in issuing any rights to exclusivity.
I believe Howard Aiken said it best: "Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats."
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Actually - it's what did IBM in and Sony on Betamax.
IBM refused to give up it's Microchannel bus - so the industry responded with ISA. It's obvious which made more money. I can only guess who made more money off of PC sales if you were to compare IBM to Compaq. Heck, where I work we still have many Compaq servers up and running. Out of the many IT departments I have worked in - IBM isn't the more popular brand of server. HP and Dell far outnumber them even today.
Sony refused to give any rights to anyone on Betamax. How many people owned a Betamax compared to VHS? It's obvious here as well, which made more money.
Patents are good to a point - but only to a point.
You know - Henry Ford said he could give away cars and make millions on replacement parts. He practically did too.
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Re:
when you are a small entity patent is the ONLY thing you have
Trust me on this
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Re: Re:
when you are a small entity patent is the ONLY thing you have
Yup, that's why so many small companies have come along and beat their larger, slower competitors who are stuck on legacy systems -- and did it all without relying on patents. That would seem to prove you wrong.
Anyway, while you're stopping by, can you explain why you refuse to answer the basic questions I asked the other day (after you demanded I answer your questions -- which I did).
What amuses me most, angry dude, is you show up here and insult me every time I post about patents, and I respond to you and make my point... and you never seem to want to respond after I point out why you're wrong. It's not very convincing when you can't even respond or answer a few basic questions.
It just confirms that you really don't have much to add.
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Usefulness divided by Complexity
Enjoy!
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Re: Usefulness divided by Complexity
You just put the words I said into an equation, coincidence or not, two people purportedly came up with the exact same "idea." Therefore if this feedback forum worked the same the USPO did, considering I was the first to post this 'thought process equation' I could now extort your for licensing fees or sue you outright for infringement. However, it doesn't and is a damn shame because I could really use the money.
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1) He, moreso, that anyone, including Washington or Jefferson was a guiding force in our breaking away from Britain and forming a new republic of our own bases on the principles we've come to hold dear.
2) More importantly, he was an inventor/innovator who created numerous products and made numerous discoveries in his lifetime. He, moreso than most, had a vested interest in "protecting" those interests and discoveries. Yet he quite adamantly refused to patent most of his discoveries and innovations (his typesetting and Franklin stove come immediately to mind), and simply went about the process of continually both inventing and innovating. Yet despite his refusals to patent, he still died one a very wealthy man and one of the most influential men on the planet.
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Re: Initial Technologies
To put it another way, patents provide for the progress of science and useful arts by encouraging those that would not ordinarily do so to follow the path of invention. The encouragement is in the form of a limited time right to recompense for the distribution of the patented invention.
The number of new patents issued compared to new products in the marketplace is not a good indicator that the patent system is stifling innovation. Just because you have a new patent does not mean you have a product that can, or should be brought to the marketplace.
In addition, having a patent does not prohibit anyone from using that invention. It merely provides a method for treating the invention like any other resource. The market failure is when a company cannot successfully bring a product that includes a license fee as part of its fixed cost to market. But then, this is no different than failure to market because the price of any other fixed cost is too high.
I think it is just plain stupid to paint patents as the reason people in companies stifle competition. This sort of thing has gone on for far longer than patents have been around and would continue unabated if patents were done away with.
History has clearly shown it can be profitable to invent new things. History has also shown it can be profitable to not invent as well as delay the usage of a new invention. As a patent holder it is up to you to decide which course is best for your business, if you have one. Choose correctly and you can make a lot of money. Choose incorrectly and you can loose out on a lot of money. Business as usual.
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