I stumbled across an interesting article today from The Post and Courier regarding how interest in US patents is picking up in Cuba. First, it was interesting enough to learn that it is possible for companies and individuals in Cuba to obtain a US patent given how Cuba and the US have been on rather inhospitable terms for many decades. It was also interesting today to see this article, which discusses how since 2000 there has been a steep rise in patent applications from Cuba, on the same day that the typically anti-patent blog Tech Dirt published What Kind of Innovations Do Patent Encourage? In all fairness to Tech Dirt, which I rarely if ever agree with, the post today was extremely even-handed and even solicited input from those who disagree with the thesis that patents do not promote the right kind of innovation. The belief is that patents prevent “vertical innovation” and instead promote “horizontal innovation.” Apparently, patents prevent from building onto patented technology so innovation never really advances with patents and all you can hope for is modest improvements. Never mind that the thesis ignores reality and that those with a sophisticated understanding of patent laws and a strategy understand that companies build on patented technology constantly, and that is in and of itself a strategy, and a wise one at that. Never mind that blocking patents exist in every technology and that causes fragility of a patent portfolio and causes every company to continue the invention march or risk obscurity. See, when you ignore facts and what actually happens such a thesis makes perfect sense.
It caught me by surprise that on the day when there is a news story regarding how a communist country with little economic activity has a growing biotech community thirsty for US patents there would be questions from within whether patents are appropriate and actually lead to greater innovation. I suppose the many hundreds of thousands of dollars required to protect, prototype, manufacture and distribute even simple consumer gadgets will simply materialize absent any ability to exclude others from copying. Yeah, forget about the free rider problem why don’t you and focus on the fact that the person who invents without rights will have his investment lost, others copying him and competing for a price lower than he/she could ever approach given the need to recover invested costs. But what has me really wondering is how and why a patent attorney who is openly hostile to the patent system can get any work in the industry? Why would any inventor or company want an anti-patent patent attorney like Stephan Kinsella, who seems to be the genesis of this story, and so many other anti-patent patent stories.
My intention is not to get into a back and forth joust with those who believe the patent system does not spur innovation. In my experience there is simply no talking to people who hold those beliefs. They will hold those beliefs forever despite any and all evidence to the contrary, despite the laws of economics, the sensibilities and demands of investors and with total disregard for history itself. Yet, I have to confess at being extremely interested in knowing how a patent attorney could come to such beliefs. Kinsella is used as a propaganda tool by anti-patent folks everyone who point out “even a patent attorney knows patents stifle innovation.” How is it possible that a patent attorney could believe that innovation would occur faster without patents? That just perpetuates paranoia and plays to those who think everything in life should be free. Don’t get me wrong, I would love everything in life to be free, I would love to not have to pay taxes, live in a beach mansion without a mortgage, drive fancy cars and travel the world with plenty of cash in my pocket. It won’t happen though, and such dreams are as unrealistic as it is to believe that a world without patents would create more innovation.
Here is an excerpt of what Kinsella wrote on his Against Monopoly blog on July 10, 2009:
I’d say that almost any invention that comes will come eventually–maybe even sooner, absent the patent system, absent the state. In my experience, this view is almost universal among inventors and engineers. We would have had transistors by now without Shockley, Planck, and Schrödinger; we would have had light bulbs without Edison; and one-click purchasing on web sites without Jeff Bezos. Maybe a bit later, but eventually. And maybe even earlier–patents slow things down too, after all.
First, I believe that we would have eventually come up with the transistor, sooner or later, but is that something to aspire to? Edison did not invent the light bulb, he just invented light bulbs that were far superior to the point where his original light bulb is still lit after being continuously lit for decades. If only GE could make a light bulb like that think of the impact, green and otherwise, but I digress. Is innovation and invention something to be allowed to develop if and when it happens, or is it something to be encouraged?
The truth is that every civilization that dominated had advanced technology and innovation when compared with competing civilizations. Whether there were patents or not, advanced technology and innovation is something to be aspired to. Rather than choosing to tax the people and require free labor by unfortunate classes of people our nation has evolved to tap into one of the most fundamental and powerful motivation forces — greed! Because of greed individuals, investors and companies will devote substantial amounts of time, energy and funding to come up with whatever is next, whatever is better and whatever will make them money. If we don’t want a patent system and we still want the jobs innovation creates, the lifestyle advances that innovation creates and the life-saving drugs and treatments that innovation creates we need to dig deep into the greed gene and exploit it.
How many folks with incurable diseases think that we should wait for innovation and if it happens slower, oh well. At least when it happens it will be free. And how many people really believe that there are altruistic multi-billionaires who are willing to invest a cool billion or so for a single new drug or biologic that may never reach the market? For crying out loud the ACLU is suing Myriad Genetics to invalidate their patents so that the tests they perform can be performed by others. No mention of the fact that if that happens no one in their right mind will ever develop those kinds of tests, and drugs and medical advances will come to a screeching halt. There simply are not enough folks with free time on their hands, no need for income and billions of disposable income to promote a utopian agenda where innovations are free to be stolen as a result of the fictitious and absurd. Without a greed motivated patent system we won’t get the same level of innovation unless the government is willing to raise taxes by an extraordinary level to take the place of the trillions of dollars spend on the chase for the brass invention/patent ring.
I find it difficult to rationalize that a communist country like Cuba allows companies to obtain US patents, and I find it flat out bizarre that anyone could be of the opinion that patents stifle innovation. The truth is patents stifle innovation by the lazy, who would have never innovated anyway. Innovating is not for the faint of heart, and certainly not for the lazy, so why do we at all care what the anti-patent zealots think would happen in an unrealistic fantasy world where everyone simply works hard for the betterment of mankind and to assist others without regard to their own well-being or financial interest?
We all know that the anti-patent crowd takes one look at the title of the patent, maybe a look at a drawing and if they are really energetic the read the Abstract. After that sum of due diligence they throw up their hands and say that they can’t innovate around the patent and the patent is standing in the way of a hard working honest company from expanding or competing. No, no and no! The patent is standing in the way of an ignorant, lazy, under achieving individuals and organizations that doesn’t care enough to educate themselves. No company like that will ever succeed, even if there were no patent system at all.
Whether you like it or not, patents are barriers to entry. If you see it as an insurmountable hurdle then we ought not care about your point of view, because you clearly don’t understand the incentive structure. Patents are fragile, easy to get around and susceptible to paradigm shits in technology, generational advances and being blocked by even a modest innovation patented by another. That is why innovators need to continue to push the envelope and continue to obtain exclusive rights, otherwise even the best technology or patent portfolio will be inadequate. Patents dig deep into the greed gene. When a company or individual is blocked by a patent they operate to get around through further innovations, moving forward with better technology. The march of innovation continues.
Those that see a patent as anything other than a detour or a roadblock are not to be worried about or taken seriously. The march of innovation depends on the ambitious, not those so lazy they can’t read more than the face page of a patent.