Once Again: Patents Do Not Equal Innovation

from the lazy-press dept

Tue, Apr 28th 2009 3:15pm — Mike Masnick

It's always disappointing to see reporters who know better assume that patents are somehow a reasonable proxy for innovation. It's pretty common, even though research has shown (many times over) that the two are not linked. Yet, that hasn't stopped Business Week from fretting about the US losing its lead in patents, suggesting that it's a sign of innovation moving elsewhere. Of course, it appears the source for the story is also Ocean Tomo -- the same company that fooled a reporter into believing that patent sales would increase during the recession, just weeks before Ocean Tomo's own patent auction was a disaster.

The real reason for the decline in patenting may actually be buried at the bottom of the article: companies are realizing that patents aren't particularly cost effective, and they're cutting back, focusing on actual innovation rather than throwing money away on the patent system.

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Filed Under: innovation, patents

33 Comments

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DJ, 28 Apr 2009 @ 4:38pm

Dead horse
Dead Horse here!
One dollar per beating!
Beat a dead horse right here!
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Mike (profile), 28 Apr 2009 @ 4:48pm

Re: Dead horse
If it were a dead horse, then why do we see so many people making the mistake of claiming the two are equal?
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Anonymous Coward, 28 Apr 2009 @ 4:52pm

Re: Dead horse
Idiot here!
One dollar per beating!
Beat an idiot right here!
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ChurchHatesTucker (profile), 28 Apr 2009 @ 5:05pm

Year of the Horse
C.F. this NYT article on the exploding Chinese cellphone market.
Looks like there's plenty of innovation/competition going on in "Communist" China, unlike the nanny-state entitlement approach going on, er, here.
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DJ, 28 Apr 2009 @ 5:35pm

Re: Re: Dead horse
With the exception of school-type environments, this article is the first time I've ever even heard of anyone equating the two. Those who do are just plain stupid.
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DJ, 28 Apr 2009 @ 5:36pm

Re: Re: Dead horse
Huh? Where?
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Anonymous Coward, 28 Apr 2009 @ 5:45pm

Re: Re: Re: Dead horse
You must not read much.
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Willton, 28 Apr 2009 @ 5:53pm

The real reason for the decline in patenting may actually be buried at the bottom of the article: companies are realizing that patents aren't particularly cost effective, and they're cutting back, focusing on actual innovation rather than throwing money away on the patent system.

That assumes that entities who use the patent system are not focused on innovation. That is so plainly false that I shouldn't need to give you examples of such entities.
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Mike (profile), 28 Apr 2009 @ 7:02pm

Re:
That assumes that entities who use the patent system are not focused on innovation. That is so plainly false that I shouldn't need to give you examples of such entities.

Not so. I said no such thing. But if you are wasting money on patents, that's less money that can go towards actual innovation.
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ChurchHatesTucker (profile), 28 Apr 2009 @ 7:32pm

Dead Horse
Dead Horse
Dead Horse
Dead Horse
He's Dead!

The Evil League of Pirates
Is coming so beware!
That sorely beaten horse
Will turn up again somewhere!

Hmm Hmm Hmm
I forget the rest...
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bigpicture, 28 Apr 2009 @ 7:50pm

Dead Horse
Patent discussion IS a dead horse, there are basically two camps and the ones who benefit most and have the most lobby money perpetuate this thing forever.

The fact that it is some way tied into the Constitution enables these interests to bamboozle the politicians into thinking that this represents the people. When the consumers/people are the only ones who don't benefit, and would not even notice if there was no patent system.
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Willton, 28 Apr 2009 @ 8:13pm

Re: Dead Horse
The fact that it is some way tied into the Constitution enables these interests to bamboozle the politicians into thinking that this represents the people. When the consumers/people are the only ones who don't benefit, and would not even notice if there was no patent system.

I'd think they would notice when there are fewer innovative products around, like beneficial and possibly life-saving pharmaceutical drugs. I think leukemia patients would notice if there were fewer medicines like Gleevec around. I also think people would raise a stink about the lack of research going into green technology, especially nowadays.

Not all technology revolves around computers.
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angry dude, 28 Apr 2009 @ 8:58pm

mindless and patentless techdirt lemming-punks
innovation my ass
freaking idiots
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angry dude, 28 Apr 2009 @ 9:02pm

Re: Dead Horse
"and would not even notice if there was no patent system."

Oh yes, you will, pridurok
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Mike (profile), 29 Apr 2009 @ 12:23am

Re: Re: Dead Horse
I'd think they would notice when there are fewer innovative products around, like beneficial and possibly life-saving pharmaceutical drugs. I think leukemia patients would notice if there were fewer medicines like Gleevec around. I also think people would raise a stink about the lack of research going into green technology, especially nowadays

Assumes, incorrectly, that patents are necessary to create these things. Nothing is further from the truth.
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Anonymous Coward, 29 Apr 2009 @ 6:44am

Re: Re: Re: Dead Horse
Actually, no assumption is required. There are abundant studies by anti-IP studies that show a positive correlation between patents and development of new drugs (to my great surprise), in addition to relatively objective studies and studies by industry. Best estimate: 60% of all new drugs created exist only because of patents (that is from the objective study). The anti-IP studies are more harsh (of course, since their studies are biased), but they estimate that somewhere around 30% of drugs exist only because of patents. Of course, industry studies are biased the opposite direction, with their estimates running 80 to 90%. You decide.

Incidentally, the same relatively objective study also indicated that about 14% of all inventions would likely not exist without patents. A bulk of the 14% are drug oriented, followed by chemicals, followed by mechanical. Software is at the opposite end of the range. According to this study, all software existing would have been created without patent protection, and most (but not all) electronic inventions would exist without patents.
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Anonymous Coward, 29 Apr 2009 @ 8:24am

Re: Re: Dead Horse
Troll
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Anonymous Coward, 29 Apr 2009 @ 8:24am

Re: mindless and patentless techdirt lemming-punks
Troll. Do not feed.
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Mechwarrior, 29 Apr 2009 @ 8:37am

We didnt need patents for the innovation of the steam engine, polio vaccinations or powered flight.
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The Mad Patent Prosecutor, 29 Apr 2009 @ 8:41am

Re: Re: Re: Dead Horse
Mike, you say one thing and have data to back it up, I say another and have data to back it up. Except I talk to businesses every day about intellectual property. And, while some of your examples may be reasonable, this one certainly is not.

No rational corporation is going to spend X dollars, especially in the pharmaceutical area, to develop a medicine without patent protection, when it will take a competitor 1/1x10^6 of X dollars to reverse engineer the medicine. This is so plain it is beyond dispute.
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angry dude, 29 Apr 2009 @ 8:56am

I am already fed up with you, punks
Do humanity a favor and become professional organ donors
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Anonymous Coward, 29 Apr 2009 @ 10:07am

Re:
lol...You are funny. Two of the three were heavily patented.
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Willton, 29 Apr 2009 @ 12:30pm

Re: Re: Re: Dead Horse
Assumes, incorrectly, that patents are necessary to create these things. Nothing is further from the truth.

No, it assumes that patents enable or encourage the creation of these things. It is possible that some of these things would be created without patent laws, but likely not in the amount that they are created.

I'm not saying that innovation in these areas would grind to a halt without patents. I'm saying that such innovation would slow down to a snail's pace without patents.
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Ryan, 29 Apr 2009 @ 12:54pm

Progress
I think Progress can be defined as Forced Change, as we would have gotten nowhere in history with the rules they constantly try to enforce.

Forcing them to get past this seems nigh impossible, and yet they make strides, for them anyway, to do better. Google was going to say this in response, but what kind of response is this?

This is like two different Index Card Sections in a Library, one flaunting how much it has that's illegal, and one which says it always obeys the rules, but both point to the same books.

Yeah maybe you could argue they shouldn't flaunt it, but so far that is what seems the be the crime in all of this.

I want a torrent site to come out, which says it obeys everything they say, does takedown requests, and seems friendly to studios or RIAA, but keeps on trucking, so to speak. I'd laugh when they got bought by them.
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MikeIP, 1 May 2009 @ 9:17am

Re: Re:
Or, if the entities are actually enforcing their patents to reclaim royalties, that's additional money that can go towards actual innovation. The only money wasted on patents is the money spent on poor quality patents and, yes, there are too many of those. That is not the fault of the "patent system" that you're constantly denigrating. It's the fault of the entities that pursue those patents.
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JG, 1 May 2009 @ 10:31am

Re: Re: Re: Re: Dead Horse
Having worked in biotech, I understand this to be true. It's not necessarily, sufficiently nor uniquely true, but it is often the default truth. Much of this is an artifact of FDA approval cycle times and the methods used in biotech (which remind me of pre-industrial crafts techniques more than they suggest even anything as advanced as industrial revolution techniques). The common theme is "slow business turnover" for products and operations. This makes the lifetime of patents and the time span of the application process a reasonable and possibly inevitable match.
Other businesses I've been in including semiconductor, computers and software, change so fast that patents can be a hindrance to keeping up with the market. The ability to execute and move to the next generation can be more of a competitive advantage than what patents could give. Restricting use can block "fractal expansion" of industries which might otherwise directly raise the originating as much or more than the "competitors". This is how Silicon Valley started with semiconductors. Yes, some patents but but not like biotech. This is aligned with how Open Source originated. Sometimes the right openness can be more deadly against your competitors than "closedness".
My experience in biotech includes having a CTO tell me "With our patent portfolio, our customers have to buy from us, we don't need to innovate". The dissonance with the company's claimed "corporate values" was too much for me to stomach and too much for many others - they have had enormous employee turn-over yet management doesn't seem to understand why.
The fact of the matter was they could have innovated just a little bit allowing for a better price-performance point which would have expanded the market to a size far larger than the reciprocal price change and better achieved the corporate objectives and made more money. But that's the case for most F1000 companies in the US these days - the problem is so many no longer know how or even have the control capability to innovate their products thanks to outsourcing.
The happy karma for this biotech company is they have enormous employee turn-over, financial and stock price problems largely resulting from how it is run. The sad part for humanity is that they have one of the best and more promising technologies but it's largely wasted with people are suffering or dying needlessly as a direct result. In other words, it's managed to become mostly a Lose-Lose situation.
On the other hand, a number of stealth competitors are waiting in the wings with steely knives for when the key patents expire and those folks have plans that go well beyond what was discarded as "unnecessary innovation" 10 years ago.
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JG, 1 May 2009 @ 10:34am

Re: Re: Re: Re: Dead Horse
I have to disagree. Inertia and tacit information asymmetry are sufficient for most innovation to occur and flourish at a surprisingly high rate. I know this from direct personal business experience.
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Bettawrekonize, 2 May 2009 @ 12:00pm

"studies by industry." Studies by industry don't count. They have a vested interest in skewing the data to promote their patents.
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Bettawrekonize, 2 May 2009 @ 12:03pm

"That is not the fault of the "patent system" that you're constantly denigrating. It's the fault of the entities that pursue those patents."

The point here is that the patent system gives these entities incentive to pursue bogus patents. Without the patent system, you don't have bogus patents.
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Bettawrekonize, 3 May 2009 @ 9:40am

and say that we find that the unanimous consensus of six elected officials is too easy (or difficult) to obtain. We can simply tweak the system to add 3 (or whatever) more officials and require all of their unanimous consensus (or say that we find a 2/3 majority among countries is too easy (or difficult) to obtain. We can tweak it to a 3/4 majority). The point is that the system is adjustable, we can tweak with the numbers until we end up with reasonable results. Or we can have twelves elected officials within a country and require a 2/3 majority. Or maybe every country can have their own individual system of approving patents but they only apply locally. Only if they get approved locally (to that country) may the patent owner apply for a global patent. If they apply for a global patent it goes to the system mentioned above (where you have one elected official from each country and you are required a 2/3 vote for the patent to apply to all relevant countries). So each country can have a specific, different system approving local patents, but all the countries have one unified (rigorous) system for approving a global patent (so global patents are very rare though the rarity of local patents may vary from country to country).
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Bettawrekonize, 3 May 2009 @ 9:48am

and, for the most part, most patent requests (in most, though not necessarily all, countries (depending on how each country wants to tweak their specific local patent system)) are turned down. Most global patent requests are denied and not even considered (ie: like a summary judgment) for election. This prevents the patent system from being "backed up", the supreme court isn't really "backed up" since they simply deny most cases from even being considered.

Also, while the patent justices themselves may or may not be engineers, they can certainly consult with various experts in a field (each one can choose who he wants to consult with or they can even consult with the Internet or any blog or anyone they choose). Just like a judge (and jury) can consult with experts in various fields before making a decision about a case.
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Bettawrekonize, 3 May 2009 @ 12:11pm

Another good thing about my system is that it adds transparency. Just like with Supreme Court Justices, everyone should know how every "patent justice" voted and patent justices should also be able to leave comments as to why they voted the way they did (just like with supreme court justices). This way if a bunch of dubious patents are passed everyone knows exactly who to blame. There is also the possibility of impeaching patent justices (ie: for too many dubious patents or conflicts of interest) though, just like with supreme court justices, such cases should be rare.
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Dave Calderone, 27 Jul 2009 @ 11:12am

Patents slow down the growth of innovations. Instead of many companies working to complete one common goal or create the same innovation as quick as possible only one company (The one that creates the patent) wastes lots of money to have the rights to that innovation. Thus instead of multiple companies working to do it first, and do it the best...one company sits on it and may not put as much effort into developing the innovation.
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