Will We Allow Patents To Lock Up Synthetic Biology?

from the one-hopes-not dept

Thu, Jun 3rd 2010 6:18pm — Mike Masnick

James Boyle has an excellent article worrying about the potential impact of patents on synthetic biology, following the recent news of Craig Venter's supposed creation of "synthetic life." Of course, as with nearly everything involving Venter, there's an awful lot of hype about this. Venter is a master self-promoter, and very good at exaggerating what he's done to puff himself up. He's been talking about this idea of "creating life" for years, but as Boyle notes, what he's done here isn't so much creating life, as it is modifying it:

Though many of the headlines talked of Venter being God and having created life in the lab, that is not an accurate way to describe it. Venter started with a particular naturally occurring cell and effectively, de-compiled, analysed and then painstaking edited and reassembled that cell's genome to create a version of the cell never found in nature. Researchers had already synthesized the genome of the polio virus, creating a genome that would actually "produce" a live virus that infected mice in the lab, but the size of that initiative was several orders of magnitude smaller. The significance of what Venter's team did lay in the scale of the enterprise and the mastery of the code that it demonstrated. It is as if I took your computer, copied the operating system, figured out what each part of that system did, pruned, cut and edited its functions, and then reloaded a substantially edited system back into the computer -- a version which actually proved capable of running it.

That doesn't mean it's not an important step, but it's not quite as big a deal as it's been made out to be. That said, however, Boyle is worried that Patent Offices around the world are going to start patenting the very basic building blocks of synthetic biology, and more or less monopolize the important research that can be done in this field to advance it from the theoretical to the useful:

In an article written for the journal PloS Biology in 2007, my colleague Arti Rai and I explored the likely legal future of synthetic biology. We found reason to worry that precisely because synthetic biology looks both like software writing and genetic engineering, it might end up combining the expansive patent law aspects of both those technologies, with the troubling prospect of strong monopolies being created over the basic building blocks of science itself. Some of the patents being filed are astoundingly basic, the equivalent of patenting Boolean algebra right at the birth of computer science. With courts now reconsidering both business method and perhaps software patents, and patents over human genes, the future is an uncertain one.

In the world of software, the proprietary model faces competition from open source alternatives, free both in price and in that their code is openly available and can be scrutinized and rewritten. Internet Explorer competes with the open source browser, Firefox. Microsoft dominates the desktop operating system market but there is a Linux alternative. Microsoft web server software competes with (and trails) the open source offerings from Apache and others. The same is true in the world of synthetic biology. The Biobricks Foundation is a nonprofit founded by scientists who are keenly aware of the parallels to the software world. They want to create an open source collection of standard biological parts, to make sure in other words, that the basic building blocks, the standard tools of this new world of biological science, remain "open" in a scientific commons. But their efforts, too, are rendered uncertain by the threat of overbroad patents on foundational technologies.

This is a very real threat. Venter has long been a strong advocate for patenting genes, so it wouldn't be surprising to see him try to limit this market quite a bit himself. History has shown time and time again that real innovation happens when there's real competition in the market, as players work hard to one-up each other. Giving the basic building blocks of synthetic biology to one company can lead to a vast decrease in research and development into this emerging field -- exactly the opposite of what the patent system intended.

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Filed Under: patents, synthetic biology

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Anonymous Coward, 3 Jun 2010 @ 6:43pm

in the end, if there is no way to secure rights, the companies that might invest in the field may back away. that would leave universities and governments to very slowly move forward, perhaps taking more than the duration of a patent to even make the same discoveries. do you honestly think that underfunded university labs and government workers are going to get this done in that time frame?
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Anonymous Coward, 3 Jun 2010 @ 6:54pm

Re:
May back away. Not exactly proof that they would back away. Maybe the exact opposite would happen?
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ChurchHatesTucker (profile), 3 Jun 2010 @ 7:12pm

Re: Re:
More like they'll actually do some work, instead of waiting until their patents are about to run out and then making some minor tweak.

And if not, what's the loss?
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Anonymous Coward, 3 Jun 2010 @ 7:30pm

Re:
"in the end, if there is no way to secure rights, the companies that might invest in the field may back away."

Just because you may back away doesn't mean everyone will. Heck, you're likely not to even invest in R&D, just in patents and suing people. However, if some companies do actually back away from R&D, which is unlikely (they are much more likely to back away from getting patents and suing those who do conduct R&D and prevent them from conducing R&D) then other companies who would otherwise not conduct R&D because they will waste money defending against patent suits or are threatened by or afraid of by patent suits, will actually conduct R&D and innovate instead. Those that would allegedly back away were probably never planning to conduct much R&D on most of their patents to begin with (and the fact that most patents don't even make it to product is evidence of this), just enough to allegedly justify a patent (if at all), and then they will simply sue anyone who does invest preventing others from investing.
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Anonymous Coward, 3 Jun 2010 @ 7:39pm

Re: Re:
the thing is the very reason why companies get patents despite the fact that most patents don't make it to market is not because they wish to conduct much R&D on what they have a patent on but it's exactly because they know there are others willing to conduct R&D and benefit from what the patent holder has a patent on and that without the patent others will benefit from the idea. They know that no one needs a patent for others to benefit from the idea, others will independently come up with it all on their own and benefit from it perfectly fine without the alleged help of the patent holder having a patent. They get patents that they do nothing with exactly because they know others will otherwise benefit from what the patent holder has a patent on and because others are willing to conduct R&D and they want to be sure to either prevent others from conducting R&D to prevent them from bringing new competing products to market or they want to make sure the failure patent holders benefit from those who actually succeed in bringing new products to market. Or they want the patent for defensive purposes to counter sue others who sue them because they know that others are willing to independently invest in ideas that the patent holder has a patent on and can counter sue for even without the existence of the patent (and those others who sued probably themselves don't even implement the patent they are suing for but are just suing because they want a money grab and got the patent knowing that others will independently invest in the R&D necessary to make the product). None of which does anything to promote the progress. Holding a patent that doesn't get implemented by the patent holder is a symptom of a bad patent system.
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Mike Masnick (profile), 3 Jun 2010 @ 7:46pm

Re:
in the end, if there is no way to secure rights, the companies that might invest in the field may back away

Ah, right. But, if we're using this logic, then that would also suggest that most companies won't invest in this space either, because once Venter gets his patent, no one else will be able to do research. So all of those companies will back away.

So which scenario is better?

One where multiple smart companies (and universities and gov't agencies) can continue to do research in this field, or one in which only a single company is allowed to do so?

Based on your logic, we clearly should not allow patents here, since it will lead so many companies to back away, right?

hat would leave universities and governments to very slowly move forward, perhaps taking more than the duration of a patent to even make the same discoveries.

And your way would leave just one company, with no market need to speed up the process.

Whereas the way without patents would give incentives to multiple companies to invest in the area because there are market incentives to bring real products to market (something you always seem to ignore as if they don't exist).

do you honestly think that underfunded university labs and government workers are going to get this done in that time frame?

Someone has a reading comprehension problem.
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Anonymous Coward, 3 Jun 2010 @ 7:50pm

Re: Re: Re:
Basically if you have a patent on a product you don't sell or implement in a product it's exactly because you know that others, who don't have your patent, will invest the necessary money to bring the product to market without a patent and you just want to freeload off of them (or you have it for defensive purposes but even then those you are defending against have brought the product to market without having a patent on it despite the fact that the patent holder did nothing). The patent was never necessary for those others you plan to exploit to bring the new product to market, if it were then the patent that you do not sell a product for or implement in a product would have no value to you because no one else would bring the product to market without a/your patent, but the patent has value to you exactly because you know others will bring the new product to market without having your patent and you either want to hold the patent to prevent others who would otherwise bring competing products to market from doing so or you want to hold it to collect money from those others who are perfectly willing to invest in what you have a patent on without having a patent on it themselves and hence would bring the product to market without the existence of patents.

Having a patent and doing nothing with it should automatically invalidate the patent the moment a competitor without the patent enters the market because the fact that the competitor does not have a patent and still managed to enter the market is pretty strong evidence that having a patent wasn't necessary for the product to enter the market.
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Anonymous Coward, 3 Jun 2010 @ 7:52pm

Re: Re:
"And your way would leave just one company, with no market need to speed up the process."

One company who would likely hold the patent and do nothing with it being that most patents never make it to product.
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Anonymous Coward, 3 Jun 2010 @ 7:57pm

Re: Re:
"Whereas the way without patents would give incentives to multiple companies to invest in the area because there are market incentives to bring real products to market (something you always seem to ignore as if they don't exist)." - companies invest where they can make money. without patents, it is an entirely unsure market. worse, they can spend huge amounts of money to develop x or y, and end up with another company coming in, duplicating their results (without the investment) and killing them in the marketplace. real products are nice, but a real product that is much more expensive than a generic copy is unlikely to be a financial winner.

"And your way would leave just one company, with no market need to speed up the process." - i did this backwards because in the end, this points out your error. the patent holder has an incredible pressure to move to market in one form or another, otherwise they are left with no way to pay for the expensive research they did up front. If they spent 100 million to develop something, dont you think they want to go to market? they have no interest in sitting on their patent for 20 years, letting it expire, and not making any money? they can bring an actual product to market, or they can license the technology to those who want to. recovering the investment is a powerful incentive, dont you think? or is that not part of the mba program anymore?
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Anonymous Coward, 3 Jun 2010 @ 8:13pm

Re: Re: Re:
"the patent holder has an incredible pressure to move to market in one form or another, otherwise they are left with no way to pay for the expensive research they did up front."

Then why do most patents not make it to market?
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Anonymous Coward, 3 Jun 2010 @ 8:18pm

Re: Re: Re:
"the patent holder has an incredible pressure to move to market in one form or another, otherwise they are left with no way to pay for the expensive research they did up front."

No, the patent holder has huge financial incentive to gain as many patents as possible and do as little R&D as possible on those patents and to hold those patents either for defensive purposes, to prevent competitors from bringing competing products to market, or to sue others who bring competing products to market. Not only is this intuitively obvious, it's evidenced by the fact that most patents never make it to market.
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Anonymous Coward, 3 Jun 2010 @ 9:13pm

As a general rule, the acquisition of a patent typically confers relatively limited rights to the holder of a patent. Is is limited to the claims, and the claims in turn are limited to what is actually disclosed in the remainder of the patent (the "specification").

It is frustrating to see day in and day out articles and comments by persons who seem to believe that a mere patent truncates further research in a area of technology. I would like to think that cases over the past 3 or 4 years would lay to rest many of these mistaken beliefs. Apparently they have not, and, hence, the diatribe against patents continues...and unnecessarily so.
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Anonymous Coward, 3 Jun 2010 @ 9:13pm

Re: Re: Re: Re:
there are many reasons patents dont specifically make it to market. the most obvious would be that they are not economically feasible. just being able to do something (process, product, whatever) does to assure that it can go to market. it actually hits one of the other keys in the pharma business, they do plenty of research and plenty of initial drug testing that is patentable, but perhaps is not as effective as desired or not market viable. huge amounts of money are spent on research that may not actually pan out for any number of years. it is one of the reasons why it is important that they can recover on the ones that actually do hit, otherwise there might not be enough money around to start the process over again.

economic feasibility is another reason why licensing under the patent system is a very good mechanism. the patent holder may not have the funds to exploit an idea, they may not have the desire to exploit the idea at this time, or they may not see any market for it. another company comes along, licenses the technology because they have an idea how to use it or to bring it to market, and away they go. they avoid the expense of developing from scratch, and pay a fee for that. heck, i am sure that plenty of products you use today would never be in the market without licensing, as they companies selling the technology might never have invested to create the underlying (patented) technologies used in the finished product.
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Anonymous Coward, 3 Jun 2010 @ 9:26pm

Scenario 3:

Company A gets a patent that threats their main product and shelve it to never see the light of day.
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Anonymous Coward, 3 Jun 2010 @ 9:32pm

Re: Re: Re: Re: Re:
Is anything you say at all evidenced based or is it all just mere speculation?
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jjmsan (profile), 3 Jun 2010 @ 9:43pm

Re:
It is because we have seen the results of the cases of the last 3 or 4 years that we object to what patents have begun. Where have you been, East Texas?
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Anonymous Coward, 3 Jun 2010 @ 9:51pm

Re: Re: Re: Re: Re:
"the most obvious would be that they are not economically feasible."

Then the patent hasn't made it economically feasible hence defeating the purpose of the patent to begin with. If it's not economically feasible for one company faced with a certain set of circumstances then why should they have a patent on it when another company, faced with a different set of circumstances, could bring the product to market without a patent.

"but perhaps is not as effective as desired or not market viable."

Perhaps is a guess, remember, the burden is on you to justify patents, unevidenced guesses aren't justification.

"huge amounts of money are spent on research that may not actually pan out for any number of years."

But if a competitor who spends money on R&D bring a product to market first then the patent wasn't necessary to begin with.

"it is one of the reasons why it is important that they can recover on the ones that actually do hit"

and not get to enforce patents on the ones that competitors, and not the patent holders, hit.

"otherwise there might not be enough money around to start the process over again."

but if a competitor brings the product to market without patents then clearly there was enough money for others to invest and bring a product to market without patents.

"economic feasibility is another reason why licensing under the patent system is a very good mechanism."

Evidence?

"the patent holder may not have the funds to exploit an idea, they may not have the desire to exploit the idea at this time, or they may not see any market for it."

So they should be allowed to prevent others who do have the funds and desire from exploiting the market without paying some parasite worthless patent holder money for doing nothing useful?

"another company comes along, licenses the technology because they have an idea how to use it or to bring it to market, and away they go."

Or the other company can come along and, instead of paying monopoly prices to the good for nothing patent holder, can spend their money on bringing a better product to market without paying these prices.

"they avoid the expense of developing from scratch"

No, the patent holder doesn't get patents for the sake of not making profits, they get patents with the intent of making money from them and making money from those who license them or from suing those who infringe. The other company who wants to make a product has to not only pay for the expense of the first company that started developing it (if they even did that, chances are they didn't begin to develop it they just got the patent for the sake of holding extorting others), they have to pay monopoly prices for profits that the first company wishes to make on top of that. Economically speaking this would generally be the case. I'd rather the second company be allowed to invest their own money and conduct their own R&D. Not to mention, the USPTO does not require a company who wants patents to conduct R&D before granting the patent. Simply asking the USPTO for a monopoly on something is hardly an act of R&D and the idea/design patented is likely to be something that the company that wants to sell the product can come up with on its own. A patent is hardly a document that relives someone from developing from scratch, it's merely a document telling you what you can and can't do without paying some irrelevant third party royalties for no good reason (and looking at a patent hardly relieves anyone of their R&D expenses).

"they avoid the expense of developing from scratch, and pay a fee for that."

No, they avoid getting sued for something they can pay a lot less for if they didn't have to pay unnecessary fees. A patent hardly constitutes a document that reduces the expense of development, coming up with ideas to patent is cheap. I (and anyone) can sit around all day and come up with ideas to get patented, implementation is much more expensive and me coming up with random ideas to get patented in hopes that someone will stumble on it hardly relives anyone of their R&D expenses.

"heck, i am sure that plenty of products you use today would never be in the market without licensing"

Sure, only because patents require them to be licensed for them to enter the market. The more relevant question is, would they be in the market without patents and what evidence do you have?

"as they companies selling the technology might never have invested to create the underlying (patented) technologies used in the finished product."

Again, coming up with a bunch of ideas to patent is hardly an investment.
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Anonymous Coward, 3 Jun 2010 @ 9:56pm

Re: Re: Re: Re: Re: Re:
Instead, if a company were truly interested in selling the products of its existing R&D to other companies it wouldn't just get a patent declaring that you can't do X (which doesn't help anyone since coming up with ideas to patent is cheap and doesn't require much investment), they would gain a reputation as a company that does meaningful R&D, they would conduct R&D and keep the documents internally secret, explain to interested parties the kinds of research they have conducted and sell the various documents to the first person who is interested in their research on something for whatever price. There are better ways of doing things than a broken patent system where little investment is required to get a patent and money that can better to go R&D is instead wasted on litigation and patent acquisitions.
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Anonymous Coward, 3 Jun 2010 @ 9:57pm

Re: Re: Re: Re: Re: Re:
and not get to enforce patents on the ones that competitors, and not the patent holders, hit first *
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Anonymous Coward, 3 Jun 2010 @ 9:58pm

Re: Re: Re: Re: Re:
So your all for a use it or loose it clause for patent holders? If they invest and decide not to goto market, and some other company discovers the same thing, don't you think we as a society should be supporting the party that's progressing?
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Anonymous Coward, 3 Jun 2010 @ 10:08pm

Re: Re: Re: Re: Re: Re:
Usually companies get (or request) patents before they invest much and so the patent itself is hardly a product of investment and it's hardly something that helps others invest any less.
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Anonymous Coward, 3 Jun 2010 @ 10:27pm

Re: Re: Re: Re: Re:
"they avoid the expense of developing from scratch"

So then do you believe in compulsory licensing by those who do not bring a product to market since the lack of such licensing only serves to hinder the progress. and by compulsory licensing, I don't mean being allowed to arbitrarily set any price you choose such that you can set a price that no one can afford, that would be the same as a lack of compulsory licensing. I mean having the government set a reasonable cap that allows you to recover your investment, perhaps make a reasonable (but not absurd) profit, but cap how much you can charge requiring that you license it to those who request a license and are willing to pay a reasonable fee if you don't want to sell the product yourself.
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Anonymous Coward, 3 Jun 2010 @ 10:28pm

Studies clearly demonstrate that the people who do the actual invention expend all the effort, but the profit goes to those who just imitate and don't invent.

Given this evidence, it is irrational to invent something without sufficient protection, since imitators will simply (in the words of Daniel Plainview) drink your milkshake. Why do you want to take away this protection and stifle invention?
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Conrad, 3 Jun 2010 @ 10:30pm

the real threat... I think...
I think the real issue here is not who gets a patent over what, or if someone should/shouldn't get a patent.
The problem that no-one talks about is of an ethical nature: should we be creating life?
It is one thing to modify a living organism (we've been doing it for ages - see all the different breeds of dogs, or cows, or varieties of wheat/rice/corn) and a whole different thing to build - in a tailor-made fashion - a new organism that suits our economic needs of the moment. Do we actually know that such an organism will not have an adverse effect on our environment if it gets out of the lab? How do we assign responsibility if the organism mutates and damages our crops?
I don't want to sound like an extremist, but we should be asking these questions, and many more. It is not enough that we are capable of "creating" life, we should also be capable of justifying ourselves when doing so. And it is not enough to come up with an economic justification. We should have a strong set of rules (laws & ethic codes) that serve as a frame of reference for our actions.
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Anonymous Coward, 3 Jun 2010 @ 10:38pm

Re: the real threat... I think...
Technological innovation like life creation cannot be stopped, so you really shouldn't try.

You must be a shill for companies and/or deities that make their living profiting from "natural" organisms rather than synthetic ones. Well guess what, the market for living creatures changes and if you can't adapt your business model you deserve to go out of business. Likewise, if your crops can't adapt their living model to a world inhabited by these new synthetic organisms, they deserve to stop living.

Why do you want to hold back progress? Technological progress always results in greater output from the market, and therefore is an ultimate good. I suppose you would have outlawed cars and subsidized buggy whip production too!

We are free to ignore any problems that an innovation like synthetic life might cause, since they will be far exceeded by the benefits of that technology.
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jjmsan (profile), 3 Jun 2010 @ 10:39pm

Re:
That study has nothing to do with what you are stating.
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Anonymous Coward, 3 Jun 2010 @ 10:48pm

Re: Re:
Liar.

"Most researchers had thought that a mix of learning on one's own (innovation) and social learning (imitation) would be the best strategy. Yet a pair of graduate students won the contest with a strategy heavily tilted toward imitation rather than innovation."

Italicized clarifications mine.
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Mike Masnick (profile), 3 Jun 2010 @ 10:51pm

Re: Re: Re:
companies invest where they can make money. without patents, it is an entirely unsure market. worse, they can spend huge amounts of money to develop x or y, and end up with another company coming in, duplicating their results (without the investment) and killing them in the marketplace

This has been empirically proven to be incorrect. You want to know when a market is "unsure"? It's when if another company beats you to the patent office, you're SOL in bringing your product to market.

Take a market where you have 5 competitors all working on the same concept. Let's say, as you do in your hypothetical, that each is spending $100 million on development. Under the system you advocate, where you insist that those companies need certainty of revenue to invest that $100 million, 4 of those companies will spend the $100 million and be *totally locked out of the market* because of it.

Under YOUR OWN REASONING patents don't make any sense.

i did this backwards because in the end, this points out your error. the patent holder has an incredible pressure to move to market in one form or another, otherwise they are left with no way to pay for the expensive research they did up front. If they spent 100 million to develop something, dont you think they want to go to market? they have no interest in sitting on their patent for 20 years, letting it expire, and not making any money? they can bring an actual product to market, or they can license the technology to those who want to. recovering the investment is a powerful incentive, dont you think? or is that not part of the mba program anymore?

Yes, recovering investment is important. So why is it that you support a system that only lets the very first recover their investment and screws everyone else?
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Mike Masnick (profile), 3 Jun 2010 @ 10:56pm

Re:
Studies clearly demonstrate that the people who do the actual invention expend all the effort, but the profit goes to those who just imitate and don't invent.

Wow. That study actually showed something completely different.

We wrote about it here: http://www.techdirt.com/blog/itinnovation/articles/20100419/0049489071.shtml

The point was not that imitators get all the profit, but that innovation is an ongoing process of companies imitating but *one upping* each other by picking up the best strategies and continually innovating. That actually SUPPORTS what we're saying. Without patents everyone keeps building on the best ideas and innovating more.

Given this evidence, it is irrational to invent something without sufficient protection, since imitators will simply (in the words of Daniel Plainview) drink your milkshake. Why do you want to take away this protection and stifle invention?

Because historical, empirical evidence has shown that's not true at all. The totally false (laughably, ridiculously false) assumption you are making is that the only incentive to invent something is to get a patent.

That's not true at all. In fact, as another recent study showed, most invention takes place not to get a patent, but because the company needs the product itself. So there's plenty of incentive for the invention aspect itself -- and then once you have that, and if you realize that innovation is an ongoing process, it helps (tremendously) to allow free competition in that space, allowing each party to copy ideas from each other to continually innovate.

THAT is what the study you point to says, which supports our position entirely.
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Anonymous Coward, 3 Jun 2010 @ 11:01pm

Re:
"Why do you want to take away this protection and stifle invention?"

Even in this experiment innovation still occurred perfectly fine. and there are a lot of things that this overly simplified experiment doesn't consider, like how those who copy a new behavior would naturally help fund those who innovate upon figuring out that it's in their best interest to fund them (ie: each person pay a faction of the fixed costs but receives the benefit as a whole) and benefit from the innovation that they helped fund.

and studying a video game hardly constitutes a serious study in the matter. The fact is that those who innovate do benefit from their innovation, and everyone else also benefits, but those who innovate have incentive to innovate because without innovating they would be worse off (along with everyone else). But with innovation everyone, including the innovator, is better off. It's just that those who only focus their attention on observing, in this specific video game, and not innovation would probably be better off in this game than those who innovate because they spend time using all the methodologies that others have tested (and those others also benefit from conducting those tests and so they have incentive to conduct them) while not spending the time necessary to test anything themselves. But that's not to say that if they didn't spend time innovating they would be worse off. Many would be better off but they would also make others, and especially the observers who spent more time learning from others, even better off than they made themselves. So in this game the innovator is better off than s/he would have been had s/he not innovated but everyone is else is even better off than the innovator because of the innovators innovation. The innovator still has incentive to innovate because the innovation makes the innovator better off, just because it makes everyone else even more better off than it makes the innovator doesn't mean it doesn't make the innovator better off. Also, in reality not everyone has the same needs and focus on a common idea of what constitutes innovation, people have different needs and desires and what maybe innovative to some may not be to others (ie: if one person has gene X an innovation for those who have gene Y may not help the person with gene X). So in reality people will have incentive to ensure innovation happens within their specific needs and those who innovate will receive funding for staying ahead of the market. This game hardly considers the sale of products and how innovators sell new products in a market to receive money for further innovation in order to stay ahead of the curve. In other words, this game hardly considers the interdependent nature of an economy in terms of how goods, services, and R&D are funded.

but the fact that you have to resort to a silly video game to try and make a point just shows how much of a faith based religion defending the alleged benefits of IP has become.
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Anonymous Coward, 3 Jun 2010 @ 11:11pm

Re: Re:
I've never seen this study before, but I did find it interesting. Wow, didn't even know you discussed it already, wish I had read all that before posting. I'll read it now.
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Anonymous Coward, 3 Jun 2010 @ 11:14pm

Re: Re:
You know, I may have read the first half of that but not the rest. Well, the rest is also interesting as well.
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Anonymous Coward, 3 Jun 2010 @ 11:25pm

Re: Re:
What the study says is that the optimal strategy for success is to imitate what inventors (who are more-or-less suckers) expend their effort creating. Your writeup doesn't contradict that in the slightest. As long as there is an ample supply of suckers to do the difficult and risky work of creation, the imitators can flourish and the overall system output improves.

You assert that the current patent system reduces total output. Fine. You propose no specific solution to this problem, you only complain that the status quo - the existing patent system - is broken. (Rage against the status quo seems to be the driving theme behind the lion's share of articles here anyway).

If you want to retain competition, why not encourage the investigation and development of a reasonable mechanical licensing scheme? While you may have studies that indicate that some extrinsic factors can encourage some amount of sucker-production...sorry, new inventors...to feed the imitators, there is no evidence that these extrinsic factors create the optimal number of suc...err, inventors. Perhaps transferring a small bit of the risk and cost (not all of it) from imitators to inventors would shift the balance slightly, create a few more inventors, and raise the overall output even higher.
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Anonymous Coward, 3 Jun 2010 @ 11:33pm

Re: Re: Re: Re:
"4 of those companies will spend the $100 million and be *totally locked out of the market* because of it."

This assumes that those companies spent the money before the patent requester asked for a patent or, in the case of something being patent pending before the money was spent, those spending the money couldn't have been aware of the patent pending product before money was spent. But it would make sense that the first company to invest would have already requested a patent before anyone else if only to prevent anyone else from getting the patent first (which of course doesn't promote the progress) or the first company to invest would try and ensure that no one else has a patent before investing (in the highly likely case that the first entity that receives the patent won't actually use it to bring any products to market). The patent itself would be granted before any serious investment is made (which shows how patents delay investment, companies are scared of competitors locking them out of a market with patents and so would insist upon getting the patent before investing) which just means that the patent itself is not a product of any serious investment and hence is practically worthless to society.

But patents do add risk in that there are so many broad patents out there that it's impractical to keep track of them all or to know who is and who isn't willing to enforce them so when a company does invest they are uncertain regarding whether or not they will get sued and if they do how much will they end up having to pay in lawsuits, judgments, or settlement fees. This adds a huge risk that deters investment.
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Anonymous Coward, 3 Jun 2010 @ 11:37pm

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Even in this experiment innovation still occurred perfectly fine.

Due to some of the players acting sub-optimally by inventing rather than copying, yes.

You assert that there will be an ample sucker supply because...well, there just has to be! Is that an optimal sucker supply? Maybe these random incentives you're talking about are creating too many suckers, and we've hit a point of diminishing returns! Maybe we should tax invention and incentivize copying even more!

but the fact that you have to resort to a silly video game to try and make a point just shows how much of a faith based religion defending the alleged benefits of IP has become.

Better tell Mike that.
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Anonymous Coward, 3 Jun 2010 @ 11:38pm

Re: Re: Re: Re: Re:
or the innovative entity would ignore patents altogether or may randomly apply for a patent (in case it can get the patent first to prevent others from getting it and suing) and ignore the issue after that (ie: if the patent isn't granted) in an effort to avoid being accused of intentional infringement (but of course, such avoidance just shows that patents aren't necessary for the innovative entity to innovate). Then again, applying for a patent might mean that the USPTO tells you that someone else already has the patent which will prevent the innovative entity from being able to use the idea, so the innovative entity might even avoid applying. None of which promotes the progress.
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Anonymous Coward, 3 Jun 2010 @ 11:45pm

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"You assert that there will be an ample sucker supply because...well, there just has to be!"

Now you are just being dishonest. I said no such thing and neither did I call innovators suckers. But I don't really expect honesty from IP maximists, that would be asking too much.

"Maybe we should tax invention and incentivize copying even more!"

No, we should let the free market manage it.

"Better tell Mike that."

Well, I am not Mike so he can defend his position. I don't think this simulation really shows anything one way or another in terms of whether or not IP is good or bad.
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Anonymous Coward, 3 Jun 2010 @ 11:46pm

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"Due to some of the players acting sub-optimally by inventing rather than copying, yes."

It's not sub optimal, the inventor is still better off for inventing than for not inventing, it's just that everyone else is even better off as a result of the inventors inventing. Everyone, including the inventor, would be worse off without the inventor inventing.
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Anonymous Coward, 3 Jun 2010 @ 11:50pm

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"Perhaps transferring a small bit of the risk and cost (not all of it) from imitators to inventors would shift the balance slightly, create a few more inventors, and raise the overall output even higher."

So are you in favor of compulsory licensing where the government sets a licensing cap?
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Anonymous Coward, 3 Jun 2010 @ 11:50pm

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No, we should let the free market manage it.

Ah yes, the infallible free market, which would never do anything to harm us and always produces optimal solutions.
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Anonymous Coward, 3 Jun 2010 @ 11:53pm

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You have a $1 token to spend. You can put it in Box A, and $2 will come out of the box. You can put it in Box B, and $10 will come out of the box.

Pop quiz hotshot: which strategy is optimal and which strategy is sub-optimal?
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Mike Masnick (profile), 3 Jun 2010 @ 11:54pm

Re: Re: Re:
What the study says is that the optimal strategy for success is to imitate what inventors (who are more-or-less suckers) expend their effort creating.

Wow. You have totally misread that study despite people explaining it to you. The inventors are not suckers. They are increasing the overall pie -- including for themselves. What you ignore (and for the life of me, I can't figure out why) is that those same inventors *also* get to copy from others and profit from that. So they kick off the market, and get a huge first mover advantage for that (which plenty of studies have shown -- so don't rely too much on the limited simulation of a very specific case in that study), and then they all get to benefit from the larger opportunity.

You assert that the current patent system reduces total output. Fine. You propose no specific solution to this problem, you only complain that the status quo - the existing patent system - is broken.

Um. I know you're not new here, so it's rather dishonest of you to suggest that when you know that's not true. I have detailed, repeatedly, better systems, including the potential of no patent system at all.

If you want to retain competition, why not encourage the investigation and development of a reasonable mechanical licensing scheme?

Because that would be worse.

While you may have studies that indicate that some extrinsic factors can encourage some amount of sucker-production...sorry, new inventors...to feed the imitators, there is no evidence that these extrinsic factors create the optimal number of suc...err, inventors.

I don't know why you call them suckers other than blatant ignorance of reality.

And yes there is plenty of evidence that the market creates the optimal amount of inventors, because it sets up a system where if there's a need it gets fulfilled. That's a good thing.
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Anonymous Coward, 3 Jun 2010 @ 11:58pm

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To call them suckers is disingenuous. The innovators also benefit from their innovations, which is why they do it (in real life), it's just that others also benefit from the innovation of the innovators (and in this study, the others benefit moreso, but the innovators still benefit and are better off because of their innovation than had they not innovated). What's wrong with that?

"You propose no specific solution to this problem"

Not true, and dishonest, one possible solution is to destroy the current patent system.

"If you want to retain competition, why not encourage the investigation and development of a reasonable mechanical licensing scheme?"

So then you agree that the current system is not reasonable.

Perhaps the reason why not is because Mike thinks that no patents is more reasonable than some allegedly reasonable licensing scheme?

"there is no evidence that these extrinsic factors create the optimal number of suc...err, inventors."

If you want a patent system to exist, a system that restricts the rights of others, the burden is on you to provide evidence of its justification. Despite the fact that there is plenty of evidence that fewer IP restrictions promote innovation the more relevant question is, do you have evidence to the contrary? The answer, of course, is you have no evidence or you would have presented it by now. Instead, you have some video game that really shows nothing. and patents do cause a loss in aggregate output and the goal should be to maximize the overall amount of aggregate output so any innovation that patents are allegedly responsible for must produce enough additional aggregate output to overcome the loss in aggregate output that patent monopolies cause and I want evidence that they do.
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Mike Masnick (profile), 3 Jun 2010 @ 11:58pm

Re: Re: Re: Re: Re:
You have a $1 token to spend. You can put it in Box A, and $2 will come out of the box. You can put it in Box B, and $10 will come out of the box.

Pop quiz hotshot: which strategy is optimal and which strategy is sub-optimal?

Pop quiz time: what benefit is setting up a totally meaningless bogus hypothetical that has nothing to do with the real world?
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Mike Masnick (profile), 4 Jun 2010 @ 12:01am

Re: Re: Re: Re:
To call them suckers is disingenuous. The innovators also benefit from their innovations, which is why they do it (in real life), it's just that others also benefit from the innovation of the innovators (and in this study, the others benefit moreso, but the innovators still benefit and are better off because of their innovation than had they not innovated). What's wrong with that?

The other anon coward (and, seriously, it would help if you guys chose names -- even random ones -- to help keep you straight) still fails to understand the concept of positive externalities and spillovers -- or the idea that the originator need not capture all of those positive externalities. It's a typical reaction from someone who doesn't quite understand economics.

In fact, there have been psychological studies on this, where some people actually believe that if an originator can't capture the entire positive value of a creation, that the world is better off without the creation.

It's kind of shocking, but it seems this anon coward suffers from that sort of ignorance.
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Anonymous Coward, 4 Jun 2010 @ 12:05am

Anywho, I'm tired of debating this, I think we've been debating this WAY TOO LONG and have been wandering in circles for so long I feel I'm in a desert.
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The Groove Tiger (profile), 4 Jun 2010 @ 1:21am

Re: Re: Re: Re: Re:
So, according to you, if the company that monopolizes a patent sucks, well, tough luck humanity! I guess we don't need those artificial life thingies after all.

Remember that time when the first timepiece design was patented? Yeah, that company wasn't able to do anything with its patent since the owners were fighting all the time and spending their money on booze. However, no other company could do it, since it was patented! It's a good thing nobody really needed clocks or watches, we can watch the sunrise and sunset and guess the time from that!
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Richard (profile), 4 Jun 2010 @ 1:21am

Re:
It is frustrating to see day in and day out articles and comments by persons who seem to believe that a mere patent truncates further research in a area of technology.

What the patent definitely does do is to shift the emphasis away from the research and into the legal side.

If you don't believe me look at the patent war between the Wright brothers and Curtiss and then ask yourself why the US (which in 1907 led the world in aviation) had NO SERVICEABLE AIRCRAFT available when they entered world war 1 just 10 years lare - whilst the europeans, unencumbered by patents, had forged ahead.
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Anonymous Coward, 4 Jun 2010 @ 1:27am

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Um. I know you're not new here, so it's rather dishonest of you to suggest that when you know that's not true. I have detailed, repeatedly, better systems, including the potential of no patent system at all.

That's not a specific system. That's a panoply of specific systems. You won't even advocate abolishing the patent system entirely here: you only talk about the "potential" of no patent system.

We are going to have one system in this country at any given time. If you were solely in charge and could make that system anything you want, what is it going to be? I know you get annoyed when you feel that people misrepresent you, so why not clear that up and tell us what the status quo should be in affirmative terms?
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Anonymous Coward, 4 Jun 2010 @ 1:30am

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(and, seriously, it would help if you guys chose names -- even random ones -- to help keep you straight)

Sorry, no benefit - no "RtB."
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Anonymous Coward, 4 Jun 2010 @ 2:10am

Re: Re: Re: Re:
And yes there is plenty of evidence that the market creates the optimal amount of inventors, because it sets up a system where if there's a need it gets fulfilled. That's a good thing.

Invention sans regulation is a public good with massive positive externalities that often, if not usually, far exceed private benefit, and you're saying that the free market is optimally able to produce that public good because need exists?
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Mike Masnick (profile), 4 Jun 2010 @ 2:14am

Re: Re: Re: Re: Re:
That's not a specific system. That's a panoply of specific systems. You won't even advocate abolishing the patent system entirely here: you only talk about the "potential" of no patent system.

I see. So just showing variations that are better isn't allowed unless I have "one true answer"? Suggesting we try a few different things and see what works best, given evidence of poor performance from the existing system isn't allowed? Weird!

If you were solely in charge and could make that system anything you want, what is it going to be? I know you get annoyed when you feel that people misrepresent you, so why not clear that up and tell us what the status quo should be in affirmative terms?

Again, I don't know what the *best* system is, which is why I recommend a series of improvements, with key metrics in place to see if they work well.

But, if I could just change the system overnight, I would do exactly as I've said many times (odd that you claim I haven't said this, since I've addressed it multiple times):

* Independent inventor defense
* If there are independent inventors on the same idea, those patents automatically get thrown out as obvious to those skilled in the art.
* Patent examiners actually have to ask those skilled in the art to weigh in (not define, but weigh in) on obviousness
* In litigation settings, the defendant has the right to explain why an injunction (or even compulsory licensing) would serve to hinder progress, rather than promote it.

That would solve a lot of problems.
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Anonymous Coward, 4 Jun 2010 @ 3:22am

Re: Re: Re: Re: Re: Re:
I see. So just showing variations that are better isn't allowed unless I have "one true answer"?

It's easy to throw darts at the status quo. It is difficult to have a productive discussion when nearly every single article is framed in terms of "the status quo sucks and we need to do anything but that," because there's nothing to produce. It's also easy to dodge darts if you never take a firm position.

Suggesting we try a few different things and see what works best, given evidence of poor performance from the existing system isn't allowed? Weird!

Sure, you can suggest that. From a practical perspective, given how glacially slowly patent law changes, you can try one change in every five or six years. You also need to define your metrics with this strategy and explain how they're not confounded.

But, if I could just change the system overnight, I would do exactly as I've said many times (odd that you claim I haven't said this, since I've addressed it multiple times):

So given basically ominpotent power, you'd keep the existing patent system more-or-less intact, with a few minor changes. That's interesting.

* Independent inventor defense
* If there are independent inventors on the same idea, those patents automatically get thrown out as obvious to those skilled in the art.

What's your standard of proof for independent invention? What's your test for equivalence and who determines it? (Doctrine of equivalents by the patent examiner? By a judge? Jury?)

Doesn't this put the burden on the independent inventor to prove a negative: that they had no awareness of the existing patent or the work that was patented? Tough to do when patents are, by nature, public, and competitors in a field generally keep an eye on each others' products that embody patents, if not their patents themselves.

* Patent examiners actually have to ask those skilled in the art to weigh in (not define, but weigh in) on obviousness

Weigh in how? How do you intend to frame the discussion to eliminate hindsight reasoning? Until recently, the obviousness standard (as applied) depended very little on the opinion of the examiner; it was largely based on documentary evidence: in general, it was "can you find pre-existing evidence of elements plus a motivation to combine?" This is pretty conservative. Now it's a little more ambiguous, but it does a fairly good job of limiting the possibility of hindsight reasoning.

* In litigation settings, the defendant has the right to explain why an injunction (or even compulsory licensing) would serve to hinder progress, rather than promote it.

Do you really feel injunctions are that much of a problem in the current system? As long as an infringer can show a decent degree of burden, they can usually avoid the injunction (although not compulsory licensing). Being able to argue "hinders progress" as a way out of compulsory licensing would be a big change. I guess the trier of fact would have to deal with that. I am not sure that you'll get a whole lot of different verdicts from an East Texas jury even with this change. How would you set the legal standard for measuring progress (i.e., what do you write in your jury instructions?) What's the burden of proof?
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AC1, 4 Jun 2010 @ 7:07am

Re: Re: Re: Re: Re:
Another thing this study ignores is the fact that in real life products are being sold and that it does take at least some time and cost for the second mover to enter the market. These two factors combined are very significant. The simulation assumes that entering the market is practically free and immediate and that no products are being sold. However, in real life where products are being sold and there is a latency delay between the time the first mover enters the market and the second mover, in order for customers to benefit from the product the first mover is selling s/he must either buy the product from the first mover (a factor this study ignores) channeling money to the first mover or s/he must wait for the second mover, an inconvenience to the customer, especially those who would most strongly benefit from the product in the meantime. This enables the first mover to initially be able to charge a premium to those customers who most desperately benefit from the product immediately and by the time the second mover enters the market the first mover has already sold the product to those who want it most and first, so those who want it most/first already have the product and have less reason to buy another product from the second mover. The second mover now must compete with the first mover with those who don't want the product as much because the first mover already captured much of the market who wants it most desperately. So overall the first mover gets a larger market and gets to temporarily charge a premium to recover from its costs whereas the second mover only gets the market of those who don't care for the market as much and doesn't benefit from the initial lack of competition premium that the first mover gets to charge so the second mover has a disadvantage in terms of being able to recover its costs.
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Anonymous Coward, 4 Jun 2010 @ 7:10am

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Oh, and as I've already mentioned ad nauseum, the study only seems to measure relative/comparative advantage, it doesn't seem to measure or consider absolute advantage (the fact that the innovator is absolutely better off than s/he would have been has s/he not innovated, though not necessarily relatively better off compared to others) and it assumes that people/entities only seek relative advantages and not absolute advantages.
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Anonymous Coward, 4 Jun 2010 @ 7:14am

Re: Re: Re: Re: Re:
"That's not a specific system."

You assume that a "specific system" consisting of government regulation is better than "no system" consisting of no government regulation. Perhaps that assumption is false.
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Anonymous Coward, 4 Jun 2010 @ 7:17am

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and patent examiners must only grant patents on new solutions to old problems, not new solutions to novel problems.

http://ideas.4brad.com/archives/000061.html

New solutions to new problems tend to be obvious. Give the free market a chance/some time to solve the problem first and then if it can't then the government can intervene somehow (ie: by either trying to solve it itself, offer to money to the first to solve it, offer to fund people to fund it, or, and I'm mostly against this last idea, offer a patent to the first to solve it).
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Anonymous Coward, 4 Jun 2010 @ 7:27am

Re: Re: Re: Re: Re: Re: Re:
"What's your standard of proof for independent invention? What's your test for equivalence and who determines it? (Doctrine of equivalents by the patent examiner? By a judge? Jury?) "

What's your standard of proof for non obviousness? What's your standard of proof for non independent invention? Things that can be independently invented by those without patents should not receive patents, not being able to answer the questions you ask is a criticism of the patent system.

"Doesn't this put the burden on the independent inventor to prove a negative"

What? Do you know what proving a negative means or are you just blatantly incompetent.

"Weigh in how? How do you intend to frame the discussion to eliminate hindsight reasoning? "

By presenting documentary evidence. Those skilled in the art would be more capable of doing so.

"Until recently, the obviousness standard (as applied) depended very little on the opinion of the examiner; it was largely based on documentary evidence: in general, it was "can you find pre-existing evidence of elements plus a motivation to combine?""

That's another criticism of our system, this would be a good way to find prior art, not obviousness. There is a difference.

The law says that it should be non obvious to those skilled in the art, so not consulting with those skilled in the art makes it more difficult to make such a determination. I do not expect those who don't know how to turn on a computer to know what kinds of computer programs are obvious or to be able to tell what software patents should have merit being that they've never programmed a day in their life. But when IP maximists hold such ridiculous positions it is difficult for anyone to take them seriously.

"Do you really feel injunctions are that much of a problem in the current system? As long as an infringer can show a decent degree of burden, they can usually avoid the injunction (although not compulsory licensing)."

But the constitution says that patents are designed to promote the progress, so yes, the defender should have a right to explain why they feel an injunction is a problem.
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Anonymous Coward, 4 Jun 2010 @ 7:30am

Re: Re: Re: Re: Re: Re: Re:
"How would you set the legal standard for measuring progress (i.e., what do you write in your jury instructions?) What's the burden of proof?"

Again, this is a criticism of patents. Monopolies cause a definite harm in aggregate output, if you want a monopoly the burden of proof is on you to show that they promote the progress. Not being able to measure how much progress is promoted or hindered with and without patents is only a criticism of the patent system because we are trading an unknown (potential progress hindrance or advancement or neutrality and probable hindrance with our current system) for a known (a definite loss in aggregate output due to monopolies and a restriction of everyone's right to make what they want without worrying about who has a patent on what).
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Anonymous Coward, 4 Jun 2010 @ 7:33am

Re: Re: Re: Re: Re:
strawman alert. No one is saying that we should have anarchy and that there shouldn't be laws against fraud and murder and whatnot.
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Anonymous Coward, 4 Jun 2010 @ 9:10am

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"Under the system you advocate, where you insist that those companies need certainty of revenue to invest that $100 million, 4 of those companies will spend the $100 million and be *totally locked out of the market* because of it.

Under YOUR OWN REASONING patents don't make any sense."

this is just wrong for any number of reasons. first your assumption is that all 5 companies will come to exactly the same solution. for the most part, there is always more than one way to get a job done. second, you are assuming a "winner takes all, everyone else goes away" scenerio that just isnt true. more often than not companies license their concepts to others, and just as often cross license related patents with other companies, and both of them end up in the market place.

your basic failure is that you take what a few patent bandits do, and broad brush the entire system with their methods. it is sad to see, because it is both misleading and just not supported by what is seen in the marketplace.

after all, do we only have one computer operating system? one browser? one pain pill? one high blood pressure medication? one type of car? one house design? one cookie, one snack, one type of toilet paper? do we only have one smart phone, one wireless carrier, one video website, one official sports league, one airline, etc?

the market reality shoots your concept down.
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Hephaestus (profile), 4 Jun 2010 @ 9:34am

Re:
here is everything in a nut shell ...

Patents are currently being used to prevent any competition that affects the bottom line, and to sue companies that actually manufacture or create products. This need to change. The questions we should be focusing on is, how ahould the patent and copyright system be reworked to bring it back into line with what the framers of the constitution had in mind. A healthy public domain and scientific knowledge being furthered.

Now that the problem has been isolated and defined we can find a way out of your desert ... I hope that helps
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btrussell (profile), 4 Jun 2010 @ 10:20am

Re: Re: Re: Re: Re:
Is this in the middle of the desert, when you are dying of thirst, and need exact change to buy the $2 bottle of water from the vending machine?
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