Compulsory Licensing Rather Than Artificial Monopolies?

from the an-idea... dept

A while back Mark Proffitt sent in an interesting blog post that I'm just now getting around to writing up. In it, he wondered what an "abundance-based intellectual property" system might look like:

We already have systems that work like this. The X Prize is a bounty for achieving a desired technological goal. That can provide a one-time payment. But often the value of a new discovery is not realized until some time later. So we might make a slight change to the intellectual property laws.

Instead of the government granting the person that discovers an idea a temporary monopoly, the people as a whole through the government own the right and license it to everyone. Of course the government collects taxes so good ideas would increase tax revenue. The government would pay the inventor a small percentage, maybe 5 - 10% of the taxes collected on income from the idea.

This would eliminate wasteful intellectual property disputes. If you use the idea, you owe the tax and the government has the ability to collect it. And the tax is only collected if the idea is being vigorously promoted. The business and government share the same goal of promoting the idea. Society benefits because new ideas are discovered and brought to market. The inventor benefits because the government is collecting the royalties for them.

This system would drastically reduce the cost of medicine because every medical discovery would be generic from the first day. Companies would compete based on their ability to provide the highest quality products and service at the best price. Researchers could operate independently from manufacturers. This could become a great revenue source for universities.

There's more to the idea than that, but that's the basic summary of the concept. I've seen similar suggestions in the past as well, but I'm not convinced that it makes much sense. Would it be better than the existing system? Perhaps, but even that would require a lot more analysis and modeling. The problem with it, in general, is that you're adding a tax where one probably isn't needed, and the tax is too early in the system -- taxing the use, rather than the income. We already have an income tax and taxing on top of that just seems problematic, taking away the incentive to actually innovate. On top of this, such a tax sounds like a bureaucratic nightmare. How would it be tracked? Who would know when to pay the tax and how it would be distributed? The traditional tax system doesn't involve the government figuring out who to pay as well, and this would add a lot of overhead that makes this whole thing quite inefficient. I guess I just don't see the need for such a system at all, if we can let competition in the marketplace itself focus on rewarding innovators.

Filed Under: intellectual property, theories