Do We Really Want The First To Come Up With An Invention To Own The Market?
from the does-that-make-sense? dept
Tim Lee has another excellent post on the state of the patent system these days, taking on the claim by Michael Mace that software patents are good because it stops big companies from competing with him, by questioning whether or not there's a reasonable policy rationale for this. Lee's point is that it's not at all clear that letting the "first" own the market makes much sense:Companies have other ways to protect their innovations. They can use copyrights, trade secrets, and the head start that any inventor has over copycats. Mace objects that these protections aren't adequate to guarantee that the original inventor will win in the marketplace. But that's the point: consumers benefit from the robust competition that results when inventors have only a limited advantage over competitors. The first company to enter some market shouldn't be able to simply rest on its laurels. Remember, Facebook was a "me-too competitor" in the social networking space; it's a good thing that Friendster and MySpace weren't able to stop Mark Zuckerberg from entering its market.This is a big point that is all too often ignored in these debates. People seem to think that the entire purpose of the patent system is to maximize the benefit of whoever got their first. But that's simply not the case, and any argument based on that is faulty.
The function of the patent system isn't to maximize the profits of inventors. Rather, it's to provide inventors with sufficient incentives to ensure they continue innovating.
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Filed Under: competition, first, markets, monopolies, ownership, patents, social benefit
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Patent system function
The function of the patent system is to make a nice living for patent attorneys. A secondary effect is profits for lobbyists and campaign contributions for politicians.
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Animal Planet Videos: Weird, True and Freaky: Shark Cannibalism ...
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Re: Patent system function
I'd say that the political effect is the primary purpose. It is, after all, the reason why the patent system is there in the first place. Patents are simply a systematic form of the patronage that governments have always bestowed on selected citizens in return for their loyalty. (Same is true of copyrights).
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Do patents help startups
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Re: Do patents help startups
Patents wouldn't provide much defense: the big company could just go ahead and do the same thing and then drag things along in court (because they have tons more money than the small company) and either kill off the small company with increasing legal costs or simply force them to settle for a pathetic amount. Even if the small company wins, they would have lost the competitive advantage by the time the dust settled.
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Another much worse scenario is the big company initiating the hostilities for no good reason. For example: little company starts to become "dangerous" (eating up market share from big company), so big company unleashes it's (extensive?) patent portfolio on little company. Boom! Little start-up is gone because they don't have enough resources to defend themselves from that kind of assault.
If they're lucky, big company will give them pocket change for their patents...
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It should be among the easier things related to patent law to get a lot of constituents to support such a variation of the law.
Once we do this, large firms will really really dislike patents (because of patent trolls), and will be more likely to back significant patent reform.
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Re: Do patents help startups
Citation needed. This is an urban myth.
Big companies are almost always too slow, too bureaucratic, too unresponsive, suffering from "Not Invented Here" syndrome, full of their own importance and held back by bad management. Big companies tend to be led by corporate psychopaths who are focused on office politics and short term quick fixes. They are not paying proper attention to actually running the business. Look at the big record companies. They have had people screaming at them for a decade to fix their business model, yet they are still just as lost as they were a decade ago.
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Another good example is AOL, who at one time had like 25+ million subscribers. Most of my friends had AOL (in fact I met a large percentage of my friends through AOL). Yet where are they now. Almost nobody I know uses AOL anymore, they all moved to MySpace and later to Facebook.
While big companies can and do sometimes use their clout and muscle to "reverse-engineer" new tech and push upstarts out, if this were true in all cases then we'd still all be using AOL and IE. In reality, when monolithic companies use their clout and muscle to drive smaller competitors and upstarts out, it is not usually through "reverse-engineering" it is usually through political means like overly broad patents, overextensive copyright reforms, and other "regulations" that merely protect legacy players.
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Re: Re: Do patents help startups
Maybe so but that doesn't seem to stop them coming up with some vague patent they claim to own and "legalling" the smaller startup out of existence if they perceive competition, whether they eventually come up with a product themselves or not.
A strong, focused, agile patent system might offer the little guy protection. The current one seems biased way in favour of the mammoth.
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Or, should she just publish the method and be done with it?
Without patent protection, as this example shows, it would only be economically feasible for academics and mid-to-large companies to be in the businesss of inventing stuff.
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Re: Do patents help startups
Off course it is, look at Facebook and Google both where the Yet-Another-Social-Network and Yet-Another-Search-Engine respectively.
Where is the problem in that really?
If business was futeball players would be patenting their moves so no other player could use them how is that cool?
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Word For The Day: “Mercantilism”
Later, it was realized that businesses actually did better, and served their customers’ needs better, if competition was allowed to thrive.
And so the older mercantilist era gave way to the modern capitalist era.
Patents are a hangover from the mercantilist era.
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First inventor doesn't "own" the invention.
Framing patents as "own the market" is a straw-man. You've kicked the stuffing out of it, ending with a Freudian projection, but have only filled space here. System remains intractable.
"it's a good thing that Friendster and MySpace weren't able to stop Mark Zuckerberg from entering its market"
No, it's not a good thing. -- And that completely overstates and misunderstands the patent system; Mace disproves his own premise by exampling that the current system does NOT let anyone "own the market", but of course he blunders on because has FIXED notions and is blind to all else.
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Re: First inventor doesn't "own" the invention.
There are 250.000 patents for mobile phones, who do you think control most of those patents?
Little guys? thousands of companies?
Nope a dozen companies holds the majority of patents in the area.
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Re: First inventor doesn't "own" the invention.
Are you saying that you want to be limited in options (as consumer or as developer) for 20 years and be forced into whatever that one group wants to do or negotiate?
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It's All About Service
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Sorry to nitpick.
Should be there.
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Why is the only choices a totally open market with no IP, or some sort of lazy IP holder lying on the sofa for 20 years collecting checks? That is entirely unrealistic, it's false, and it's misleading.
By that standard, we would only have one cell phone, one cell phone network, one flat screen TV, one type of car, and so on. We don't. It's because except in rare cases (and they are rare) that an overly broad patent is granted, enforced, and supported by a court of law, there is always competition.
More importantly, there is always actual innovation. Companies and individuals who attempt to get the same (or often better) results using other methods, other ways to get things done. It's why we have the patent h.264 video format, and then WebM, html5, flash, and many other ways to encode, store, and watch a video. We didn't just get one player in the market getting a patent, we got multiple players, multiple patents, and plenty of good old fashioned innovation, where people didn't just take an existing product and tack on a worthless extra "feature", but whole new ways of doing things.
So Mike, if you are going to make a strawman, at least try really, really hard not to make it so easy to blow down.
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Yeah, I would say that there is only one company in that market. RIGHT.
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There may be one main company, but there is still plenty of space in the marketplace for true innovation, which is what is happening, Mike's strawman aside.
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Technically any professional use of a consumer camcorder is illegal according to MPEG-LA.
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Once again, Mike is trying to paint a single section of fence as the great wall of China. You don't like the fence, just walk around it. It doesn't go far in either direction. Almost everyone finds their way around it, except perhaps those who want to be stopped by it.
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However, I am still skeptical about your claim to their being many viable codecs that are not controlled somehow by MPEG-LA. HTML5 is its own patent mess. WebM may be in trouble (it has several defensive patents).
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That may be sort of true - but guess what MPEG -LA really hates that and tries to do everything it can to get control of every format. The moment any other format starts to get some traction MPEG-LA will put put out a call to try and find a patent that they can hobble it with!
Plus - you tell me which camcorders I can buy that don't use an MPEG LA covered format and therefore can be freely
used professionally.
What you say is technically true - but for almost all practical purposes MPEG-LA has a monopoly.
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They could easily choose not to be. If someone came along with a better codec and a better way to do things, they would move if the market wanted to go there.
HTML5 and WebM are signs that things are moving, and there are others out there bubbling under. Even with MPEG-LA's virtual strangehold on the marketplace through a significant patent collection (not just a single patent, also important to understand), there is still room for others to try their luck.
It's amazing, but it's true.
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Another way of looking at that is we have a bunch different ways of achieving the same thing, instead if the best way. Differing video formats have been a PITA for years. Imagine if instead those multiple players had been free to try a few different methods and pick the one they think worked best, then between them the best method (or maybe methods) rise to the top and become dominant.
I can't see how developing multiple methods of achieving the same result can be considered an efficient use of resources.
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But if there was only a single codec, how would you know it's the best?
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"Do We Really Want The First To Come Up With An Invention To Own The Market?"
Does the first person to arrive at a banquet acquire the right to turn back all the chairs and claim that no other guests can eat the food unless they agree to the first person's terms? Does the first person with a ticket at the theater have the right to shut the doors and have the performance go on for him or her alone? Does the first passenger who enters a railroad car obtain the right to scatter baggage over all the seats and force all subsequent passengers to stand?
Thanks for the pointer Nicedoggy!
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Purpose of Patents; Software Patents?
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Purpose of patents
While the purpose of patents is not maximize the profits of inventors it also is not to provide inventors with incentives to invent.
The purpose of patents is to encourage inventors to PUBLISH the details needed for someone else to recreate their non-obvious invention.
The idea is that in return for a limited time monopoly, the details of the invention are made public for everyone to use and build upon after a time. Otherwise inventions would always be closely guarded trade secrets, and many would be (in the past, probably not as much now) when the person guarding the secret dies without passing it on.
This is why patents should only be granted for tangible non-obvious inventions. (and this is where our current system has become incredibly broken).
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Re: Purpose of patents
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patent bill is bad for America
"patent reform"
Just because they call it “reform” doesn’t mean it is.
The patent bill is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated the bill will help them steal our inventions. Who are the supporters of this bill working for??
Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. The bill will make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. Yet small entities create the lion's share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.
Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors.
Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
http://docs.piausa.org/
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who is Masnick working for?
One shill promoting another!
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