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Reality Check: Anti-Patent Patent Musings Simply Bizarre


Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course
Posted: September 29, 2009 @ 6:00 am

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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.

See Prove that Would have been Invented Without Patents.

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.

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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patents, Technology & Innovation

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

49 comments
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  1. I am curious, Gene, what is the “evidence to the contrary” that innovation would somehow not occur at the same rate in the absence of a patent system? And let’s not confuse correlation with causation in the process, ok? I think there is a lack of evidence either for or against the following propositions: innovation would occur more/less quickly absent a patent system.

    And, I’d take issue with your statement “there’s simply no talking” with people who oppose patents. I think you and I have had some great discussions, although neither of us shifted our opinions. Absent evidence on either side, both of us simply believe we are right, as a matter of nearly religious belief. I would love to see a real experiment in which patents are abolished, and we could get evidence for whether they encourage or inhibit innovation. Absent such an experiment, we are left with our (more or less) religious convictions about the matter.

    best,
    David

  2. Actually, David there is extensive evidence that patents increase the rate of innovation. Those countries with the strongest patent laws have the fastest rates of innovation and diffusion of innovation. Those countries with weak or non-existent patent laws have the weakest patent laws. Before patent laws became widespread in the western world, the rate of innovation was slow enough that the per capita income of the west had not changed in centuries. Note that many of the other conditions of a free market, such as low taxes, property rights, etc existed for centuries before per capita income started to increase in Europe. If you believe this is just correlation, the burden is on you to prove it since all the evidence is against you.

  3. David-

    I would love to engage in a debate with anyone who is up for it. In my experience those who do not appreciate the patent system choose to ignore the fact that taking even a simple kitchen gadget from idea to market can easily cost $500,000, and we all know that pharmaceuticals cost easily upwards of $500 million. These facts are simply ignored and the argument is made that innovation will happen even without patents. That is not true, and the economics prove it. I am happy to have a debate, but how about we start with funding for inventions and innovations when there is no expectation of return on investment. If I spend $500K and others can copy me and not have to spend that amount in development then they can under sell me and will, so I invent for the betterment of society and to my own bankruptcy detriment.

    I hope all is well.

    -Gene

  4. Dear Dale and Gene,

    I asked you not to confuse correlation with causation. What you cannot prove, nor can anyone disprove, is that the rates of innovation in strong-patent regimes would have been different without those regimes. There are a nearly infinite number of other potential sources of causation, but it is you religious belief in the patent system that causes you to view the system as causal. Perhaps patents are likely candidates for causing innovation, there may be good reason to believe that they cause innovation, but perhaps not. Maybe it’s coincidental. In science, we demand experiment to prove something, so I suggest an experiment: let’s do away with patents entirely for a couple decades and see how the rate of innovation in the US works in its absence. That way we might better weed out potential causal factors that we hadn’t contemplated before. Perhaps geography is at the root, or something about US culture, or maybe it’s the influx of highly skilled immigrants in knowledge industries. Who knows? My modest proposal to experiment might very well confirm your hypothesis, but for now, there is simply no evidence that patents are necessary for rapid innovation. To prove my point, I’d need to conduct this experiment, and I’m willing to take up that burden. :-)

    best,
    David

  5. David-

    I think there is plenty of evidence and not just correlation. I will have to do some research into it, but I think it can rather easily be proved that when a country moves from no intellectual property rights to a regime that offers intellectual property rights, and then again from a modest regime to a strong regime, that is exceptionally good for the economy, creates jobs, causes investment funds to flow into the country and the country then embarks on an innovative path. So there really is plenty of places to look. Look at all those countries that had nothing, recognized rights and then grew their own innovation culture. I think you might be able to look at China and see that development. I know you can look at US history and see that development, and there are likely scores of developing nations with the same story.

    -Gene

  6. Right, Gene, I see you believe firmly that the correlation is due to causation but the only way to truly test that, since every example you have given is unidirectional, is to reverse one trend and see if the other follows. That’s the only scientifically valid way to test it. Meanwhile, we have our beliefs.

  7. I replied in detail here: http://www.stephankinsella.com/2009/09/29/patent-lawyers-who-dont-toe-the-line-should-be-punished/

  8. David-

    I understand your beliefs, and I respect them, I really do. I think you are wrong, but allow me to state for the record clearly that I appreciate you always engaging in fair debate.

    It would be a dangerous experiment to undertake, and if you are wrong and I am right the consequences would be enormously negative. Is there any other way to test what you say?

    I would love to engage in a debate about whether patent protection is to long, because in many respects it clearly is. Having 20 years after filing for software makes no sense, and when the investment necessary is enormous and there is an FDA process the resulting exclusivity in the market may not be enough.

    -Gene

  9. Quinn: “It would be a dangerous experiment to undertake, and if you are wrong and I am right the consequences would be enormously negative. Is there any other way to test what you say?”

    The experiment is under way now. If you are wrong it is costing billions every year.

    “I would love to engage in a debate about whether patent protection is to long, because in many respects it clearly is. Having 20 years after filing for software makes no sense, and when the investment necessary is enormous and there is an FDA process the resulting exclusivity in the market may not be enough.”

    If 20 yeras is too long, what is the optimal term? And how do you know this? In my view, any term you choose other than 0 (no patents), or in perpetuity (like other property–if inventions are actual property why does title to them expire?) is utterly arbitrary. A perpetual term is clearly insane, however. So the only choice left is the obvious one: implement freedom; abolish state privilege and artificial monopoly grants; let people compete on the free market. Easy.

  10. Stephan-

    Thanks for your comment. I read your response, which is terribly short on facts, but that is par for the course in the debate. Rather than address any of the points I raised you seemed to take the tried and true path of just questioning the question and questioning the one who asked the question. So much for debate. If you care to answer the points I raise rather than ridiculing them and acting as if they are not valid or some “party line” that would be GREAT! Please let me know. I would love to engage in a debate, but you prove my point that there is little hope for a debate when you chose to ignore facts, ignore reality and the facts and my analysis of the facts as me being a puppet for some broader government propoganda machine.

    I did not say you should be punished, and I don’t expect anyone to tow any particular line. While you say what I wrote is disingenuous, I did not mischaracterize your position, like you did with what I wrote. What I did say is I can’t understand why any individual or company would hire a patent attorney with your views. I stand by that, and it is my opinion that anyone who hires a patent attorney that thinks patents are the problem and inventions should be free and not protected is getting the representation they deserve.

    In your article you say: “I oppose patents because they undercut private property rights, not because they are private property rights.” This shows an acute lack of understanding of property rights. It also demonstrates that you believe there is some inherent right in people to ignore intangible rights because if they have to respect them they are somehow giving up personal rights. You are certainly entitled to your opinion, but why would anyone who has an invention and needs rights want someone representing them who doesn’t believe? Would anyone want a surgeon operating on them who doesn’t believe in modern medicine and instead openly questions whether invasive procedures are good in general?

    I knew I won this round of debate when I read this: “But think about it: would you hire only oncologists who were pro-cancer?” Really! Is that the best you can do? Yeah, I was suggesting that hiring a patent attorney who thinks patents are immoral is like hiring an oncologist who doesn’t think cancer is wonderful. Get a grip man. But this is to be expected. Just another typical, absurd debating trick pulled by those who cannot (or won’t) argue the facts. But diverting attention with such a ludicrous statement? That smacks of desperation.

    -Gene

  11. How about the ongoing experiment involving pharmaceuticals? In most countries of the world, patents on pharmaceuticals are either prohibited, closely circumscribed or subject to compulsory licenses, but that is not the case in the United States. Is it merely a coincidence that most pharmaceutical invention takes place here, even in the face of the barriers to entry imposed by the FDA? Is it merely a coincidence that you see so many Indian companies producing only generics? They don’t innovate because the Indian patent laws are about as hostile to pharma as anywhere in the world. US-developed pharma spreads to the world to cure disease and prolong life.

    If the US patent system did not protect pharma, many lives worldwide would be shortened and burdened with disease, in comparison with what American inventors, protected by the US patent system, have been able to achieve. Just think how much more progress could be made if scientists in the other countries had the incentive to invent, too.

  12. Kinsella-

    WOW! All or nothing, huh? And you really don’t understand why an “arbitrary” term is needed. Do you understand nothing about free riders? You want a free market, and what that means is everyone is free to copy, take and be lazy. No one with ambition would ever invest only to be scooped by a copyist. That is why socialism and communism fails everywhere it has been tried. If you take away incentive you take away ambition and that least to lethargy.

    Because I recognize the obvious, that patent term should be set at an appropriate level to provide enough incentive and encouragement to generate maximal activity I am being arbitrary. Do you know anything about economics? Do you know anything about picking the right point on the curve that maximizes revenue based on Price vs. Quantity? The same thing obviously applies to picking the right patent term, and if you choose not to acknowledge that it is because you have an agenda or simply don’t get it. I sense you are a smart guy, and you get it, you are just being obtuse to forward your agenda.

    A patent attorney that thinks 0 years of term is the appropriate solution, now that is someone that any inventor or company should hire!

    -Gene

  13. On this patent term stuff, remember, Stephan, that we are talking about subject matter that the world never knew until the inventor came up with it and indeed subject matter that workers in the field did not consider obvious to them. What a patent does is say that, in addition to 14 billion years since the big bang that you could not make, use or sell the invention at all, the patent tacks on another 20 years during which you cannot make use or sell the invention without the OK of the person who brought it into being.

    OK your premise is that sombody among the rest of us would have thought of it sooner or later, and that may be true. But if sooner or later turns out to be, say, 22 years, then the world is better off with the inventor’s work and his protection for 20 years. During the 20 years of patent term the invention still be discussed, analyzed, and debated, things that would be impossible during the 22 year wait of the hypothetical.

  14. Gene:

    I’ll reply in more detail later (or maybe we will have a different discussion format as we are privately talking about), but a minor point: I note you tout your LL.M. on , but you make the common mistake of writing “L.L.M.” It’s LL.M., because it means “master of laws,” where L means “law,” and LL means “laws” (plural). Sort of how § means section but §§ means sections. :)

  15. Gene:

    I can reply in more detail later or we can discuss later, but let me have brief replies for now:

    “I read your response, which is terribly short on facts, but that is par for the course in the debate.”

    Gene, you can see from my site I have written a great deal on this. I provided plenty of facts, e.g. in the post collecting the results of dozens of studies on this topics. Your emphasis on “facts” seeks to employ the empiristi-scientistic flawed method of using the methods appropriate to the natural sciences, for a discussion of norms. See http://www.stephankinsella.com/tag/engineers/

    “you chose to ignore facts, ignore reality and the facts and my analysis of the facts as me being a puppet for some broader government propoganda machine.”

    What facts did I ignore? As for propaganda–it is true the state and the law schools propagandize us with the pro-IP line. It is true patent attorneys have a financial interest in keeping IP alive. Whether you are immune to this, I cannot say.

    “I did not say you should be punished,”

    Okay. I thought you were implying I should not be hired, and I am not a good patent attorney.

    ” and I don’t expect anyone to tow any particular line.”

    It’s toe. I spelled it right in my post title on purpose. :)

    “While you say what I wrote is disingenuous, I did not mischaracterize your position,”

    Fine. I do not mean to imply you were ill-motived. But I do think it’s disingenuous to imply that people who are anti-IP are anit-technology and innovation. It’s a perhaps unwitting attempt to short-circuit the debate and to sneak in your assumption. the debate is over whether IP *is* pro-innovation. I think it harms innovation–in fact I think every single thing the state does harms innovation, because it robs us and makes us poorer, and that leads to less innovation and free market activity.

    “What I did say is I can’t understand why any individual or company would hire a patent attorney with your views.”

    I frankly find this baffling. My employer doesn’t care what my policy views are, any more than they care what my gender, religion, or sexual orientation is. In fact my dislike of the patent system and revulsion at its use by patentees to harm innocent companies drives me to fight hard to defend them, and to obtain patents they can use defensively. I can assure you I would not hesitte to pull out all the stops to defend my client. They know this. I think it is unfortunate that I have to be paid to obtain patents so that they are somewhat defended from patent suits. But given the system, it’s necessary. If I were a tax defender I would think it unfortuante that the company has to waste money paying me a salary to defend itself from tax evasion charges-since all taxes should be abolished and my job should made unnecessary. If I were an oncologist I would hope cancer would be defeated and all oncologist jobs wither away. If I were a criminal defense attorney trying to keep some marijuana smoker or cocaine dealer from being jailed by the evil state, I would hope that the drug laws would be repealed so innocent people would not have to waste money on defense attorneys.

    “I stand by that, and it is my opinion that anyone who hires a patent attorney that thinks patents are the problem and inventions should be free and not protected is getting the representation they deserve.”

    I never said inventions should be free. I never said they should not be protected. You can do whatever you want with your own knowledge or property. If you seek to make it public, without NDAs or other mechanisms, then you cant expect others not to learn what you know. But I find your comment utterly bizarre. I have never in my life had a client care whether I think the patent law should exist. They want someone who can obtain patents for them and give them advice about the existing law. Why do I need to “believe” the law is just, in order to do this? Do you honestly think most patent attys do this out of passion? No, they do it to make a living, and I guarandamtee you 99% of them would quit tomorrow if they won the lottery.

    “In your article you say: “I oppose patents because they undercut private property rights, not because they are private property rights.” This shows an acute lack of understanding of property rights.”

    Gene. I suggest you peruse my libertarian publications before making such a claim. E.g http://www.stephankinsella.com/publications/#rightsth and http://www.stephankinsella.com/publications/#books

    “It also demonstrates that you believe there is some inherent right in people to ignore intangible rights”

    Gene: do you realize this is known as the fallacy of question-beggin? You are assuming there are “intangible rights.” But this is what our debate is over.

    “You are certainly entitled to your opinion, but why would anyone who has an invention and needs rights want someone representing them who doesn’t believe?”

    Because I believe they need patents to defend themselves.

    American Cowboy:

    “How about the ongoing experiment involving pharmaceuticals? In most countries of the world, patents on pharmaceuticals are either prohibited, closely circumscribed or subject to compulsory licenses, but that is not the case in the United States. Is it merely a coincidence that most pharmaceutical invention takes place here, even in the face of the barriers to entry imposed by the FDA?”

    Read the Boldrin and Levine book if you wnat your eyes opened on this. I respectfully submit you don’t know what you are talking about (very surprising in a nym, I know…)
    Gene:

    “you really don’t understand why an “arbitrary” term is needed. Do you understand nothing about free riders? You want a free market, and what that means is everyone is free to copy, take and be lazy.”

    Gene, do you really think “lazy” is an argument for what property rights exist? What does this have to do with anything?

    I approach this systmatically. First I ask what is the function of law, and what rights do we have. Etc. If you approach it systematically, as I have (http://mises.org/story/3660 http://www.mises.org/story/2291 http://mises.org/story/3682 ) you will see that the state granting artificial monopolies to people cannot be justified and indeed does undercut property rights. I suggest you read a bit of what I’ve written to understnad my position before jumping in with such off-base criticisms.

    “No one with ambition would ever invest only to be scooped by a copyist.”

    You don’t mean that as a serious argument for IP, do you? how does this nonrigorous, controversial, vague observation demonstrate that there are rights in inventions?

    ” That is why socialism and communism fails everywhere it has been tried. If you take away incentive you take away ambition and that least to lethargy.”

    And… law is about giving incentives? Is that your theory of property rights?

    “Because I recognize the obvious, that patent term should be set at an appropriate level to provide enough incentive and encouragement to generate maximal activity I am being arbitrary.”

    What is it then? 7 years? 5? How will we know when it’s a maximum? How do you konw it’s not 6 months? 1 month? How do you know the state can be trusted to ever implement this optimal system?

    How do you know the CURRENT system (which you yourself thing is nonoptimal) is better than NO system?

    “Do you know anything about economics?”

    I’m an Austrian, yes.

    “Do you know anything about picking the right point on the curve that maximizes revenue based on Price vs. Quantity?”

    I know enough about economics to know that people who talk in these terms do not.

    “A patent attorney that thinks 0 years of term is the appropriate solution, now that is someone that any inventor or company should hire!”

    Again: they hire me to obtain patents and give them advice about the system–not for my policy views!

  16. “OK your premise is that sombody among the rest of us would have thought of it sooner or later, and that may be true.”

    That’s really only half of what is required for the patent. The key is to share it, in an understandable way. I’ve thought of lots of awesome ideas, but I certainly haven’t followed through with all of them. To get the patent you not only have to be the one (of possibly many) to have thought of it, but you also have to reduce to practice, and then explain your work so others can reproduce it. The monopoly may be what gets the funding, but it’s the teaching part that actually makes the system beneficial to the public at large.

    The simple fact is that without patents, the only backup most inventors would have is to keep their invention secret. Many inventions couldn’t do this and be sold on the market – the reverse engineering is painfully obvious once you have your hands on one (like say, my clicky top pen). The ones which aren’t so easily reverse engineered would create a totally redundant scientific and engineering community, devoted to wasting their time reproducing things that were already invented. Aside from the exhorbitant cost (every competitive company paying a sizable workforce of reverse engineers, instead of what is probably a relatively modest sum for patent prosecution/litigation), it’s a giant waste of resources. Intel makes a fancy new graphics processor, and now AMD, IBM, Via, ATI, nVidia, and so on are going to have to reverse engineer it to keep up. Redundant work is not progress.

    Before becoming educated on the subject, I too had many doubts about the benefit of a patent system, but you don’t need to consider numbers to realize that there’s a huge public good incentive behind the patent system. That said, there’s still plenty of room for improvement in various aspects of the implementation, but that doesn’t mean that the system as a whole is inherently flawed.

  17. Gene, another question: what is the possible relevance of your view that “why would someone hire an anti-IP patent attorney”? Let’s say they shouldn’t. So what? How does this prove patents are justified? Isn’t this off-topic?

    Another question: are you violating any copyright by your use of that little image http://ipwatchdog.com/images/confused.gif in the beginning of your post? If you respect IP, be careful! :)

  18. Stephan-

    Obviously, I was not trying to prove patents are justified by asking why someone would hire a patent attorney that thinks 0 years of term is appropriate. It is disingenuous of you to suggest that, you know it, I know it and everyone reading knows it. What exactly do you hope to prove by continuing to compare apples with elephants? Patents are justified because of how they encourage innovation, enable investment, build industries that create jobs and otherwise create a disclosure system that tolerates time limited rights in exchange for information. I am not telling you anything you don’t already know, but for some reason you choose to ignore it, which puzzles me greatly.

    Let me ask you this: Why do you help clients obtain patents when you seem to be of the position that they are immoral, or at least unjustified? You railed against me in your post, towing the party line, etc. Everyone who knows me knows that is crap. I tow my own line, period. But it seems that you are a sell-out. You want 0 term patents, yet you are a patent attorney.

    In terms of the copyright image, that is used with permission. If you have other information that suggests it is not being used with permission let me know and I would be happy to review the terms of my permission and investigate whether the rights I believe I have are superseded by another who is actually the owner of the rights.

    -Gene

  19. Stephan-

    I will point out only one thing with respect to your long comment above. You say:

    “I know enough about economics to know that people who talk in these terms do not.”

    Do you realize that is not an answer? You do realize that is not substantive, right? I made a substantive point, which everyone who knows economics to be fundamentally true. I mad a comparison to patent term using this universal truth, and all you can come up with is this? Why is it that you never answer any questions, never provide any facts and simply think that a non sequitur will somehow act as proof?

    -Gene

  20. Gene:

    Let’s try to start over on a more civil, mutually respectful basis. I will assume your views are sincere. It’s just that they seem not well developed to me, and to rely on too many hasty or false assumptions or on nonrigorous reasoning. But who knows–maybe you’re right. So let me try to respond to your points, in a spirit of open inqiry:

    “Obviously, I was not trying to prove patents are justified by asking why someone would hire a patent attorney that thinks 0 years of term is appropriate. It is disingenuous of you to suggest that, you know it, I know it and everyone reading knows it. What exactly do you hope to prove by continuing to compare apples with elephants?”

    I am not being disingenuous. I am pointing out that this question is irrelevant. … are you simply curious? I mean, let’s say you are right: I make a bad patent lawyer because I don’t have the right view on politics. Okay, … so what? Or were you just making an offhand comment, or wondering out loud? I am genuinely curious. Not accusing you of anything. You seem to imply above that the fact (if it is that) that there is some inconsistency between “being” a patent lawyer and “believing” patent law is unjustified, is not after all relevant to whether patent law is justified. If that is your view, then I suppose we both agree that my own possible hypocrisy is not actually relevant.

    “Patents are justified because of how they encourage innovation, enable investment, build industries that create jobs and otherwise create a disclosure system that tolerates time limited rights in exchange for information.”

    Okay–but let me ask you, how do you know patents encourage innovation? I’m serious–how do you know? Even you said 20 years is too long–presumably this means you think the benefits gathered from a 20 year term don’t justify the costs of the patent system… but a shorter term, say 5 years, would. How do you know this? I don’t know it. No patent attorney I know, knows it, as far as I can see. How do you?

    And how do you know that patent law is justified just because it encourages innovation? I’m serious–what is your theory of law, rights, justice, that tells you this? I mean in such a system, let’s say there is overall innovation spurred on the patent law, and overall wealth created–the benefits outweigh the costs. But let’s say one cost of the patent system is that some guy who slaved away for years creating a new device, sunk his life savings into it, independently invented it–let’s say he gets shut down by another guy who filed a patent on the same idea–his life work ruined. This is clearly unjust. Why is such a law justified, just because it encourages innovation? Tell me why you think it is. It apparently seems obvious to you. It’s not to me.

    “I am not telling you anything you don’t already know, but for some reason you choose to ignore it, which puzzles me greatly.”

    I do realize the reasons the state and the patent bar and companies that benefit from the patent monopoly give for such laws. But I do not agree with them. So I do not agree with you that the patent system encourages innovation, nor that it would be justified even if it did. So what exactly am I ignoring?

    “Let me ask you this: Why do you help clients obtain patents when you seem to be of the position that they are immoral, or at least unjustified?”

    The state institution of granting patent monopolies to supplicants is what is immoral. The state gives you a license to use its courts to harm innocent people. What is wrong is to use this license to harm innocent people. It is similar to using a gun to shoot an innocent person. But just as it is permissible to use a gun in defense, it is permissible to use a patent in a countersuit. why? Because it is not aimed at an innocent victim then: it is aimed at someone using the state to aggress against me.

    “You railed against me in your post, towing the party line, etc. Everyone who knows me knows that is crap. I tow my own line, period. But it seems that you are a sell-out. You want 0 term patents, yet you are a patent attorney.”

    Gene, I do not mean any insult. The argument you are giving is the standard one courts repeat and congressmen and that we are taught in law school. It’s a line I disagree with. I think there is no foundation for it. That’s why I’m asking you above to explain why you believe these things to be true. What is your evidence or argument for it? (And BTW it’s toe, not tow.)

    ““I know enough about economics to know that people who talk in these terms do not.”
    “Do you realize that is not an answer? You do realize that is not substantive, right? I made a substantive point,”

    Gene, I didn’t answer you because I didnt think you were asking a sincere question. I thought you were just trying to accuse me of being economically illiterate. But let me wipe such uncharitable assumptions from my mind, and try again: You wrote, “Do you know anything about economics?” Well, yes. My writings are informed by Austrian economics, the radically free market, private property school of economics best represented by economist Ludwig von Mises; I am a Senior Fellow of the Ludwig von Mises Institute http://www.mises.org. My monograph Against Intellectual Property won the Mises Institute’s O.P. Alford prize and is imbued with Austrian economic reasoning and insights.

    Austrian economics is individualist and maintains that value is subjective, ordinal not cardinal, and not interpersonally comparable. This is just one reason your utilitarian approach is flawed, as I elaborate at length in my monograph Against Intellectual Property, which is at my site. It also treats the social sciences — the study of human action, teleological behavior — differently than the natural sciences and the study of causal laws. It realizes that scientism has corrupted most of modern economics and that it goes off track when it apes the methods of the natural sciences and speaks in terms of “picking the right point on the curve that maximizes revenue based on Price vs. Quantity”–which is why I derided this comment of yours as un-economic. I meant no offense; my apologies for being too blunt or brusque. BUt you can see that this comment was anchored in a certain view of economics.

    Coming back to your comments about economics–you seem to think that if one understands economics, it is obvious why patent law is justified. (Am I incorrect in this assumption?) The problem is, as I pointed out in my links above, that study after study, based on standard economic paradigms and assumptions, does not conclude what you do. I’d sincerely be curious to know why you disagree with all these economic studies, and how you know that the patent system is indeed justified.

  21. Gene Quinn wrote “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”.

    This example actually demonstrates the opposite of what he concludes about the value of patents. Edison didn’t even do that, Joseph Swan did. It was just that Edison worked the US patent system to block Swan, after adopting Swan’s developments. With a “proper” patent system, Swan would have gained. With no system in the USA, everybody there would have gained. With no system anywhere, Swan would have manufactured on a trade secret basis and Edison or others would have reverse engineered his product and sold it cheaply to the world. As it was, Edison gained.

  22. Cowboy:

    The US has a high rate of public funding for science, much higher than many places (except Europe which is now surpassing it in some sectors), which is likely why much of the basic science that produces pharmaceuticals comes from the US. Lately, however, pharma invests inordinate sums in blockbusters that are frankly not life-saving drugs. They do this to get valuable patents, rather than meaningful drugs that could save lives. What’s the last, big blockbuster that actually was medically necessary? I’d love to hear about it. We can defer the costs of investments by eliminating this scramble for patentable blockbusters (like new impotence drugs, baldness cures, or a new pain reliever – aspirin works and it’s been off patent for a long damned time) and pool public resources into the public science from which good drugs (like the polio vaccine that never got patented) came from. To satisfy libertarians, we could make donations to the pool entirely voluntary. I think the experiment isn’t that dangerous, and could potentially save more lives by shifting the focus toward basic science regarding life-saving drugs. Life saving drugs will never be profitable blockbusters because the target market is generally way too small. Of course, pharma justifies their marketing costs and research costs on medically useless blockbusters by claiming they generate the funds they use to investigate actual life saving drugs, but much of that research occurs firstly with public funds in universities, and secondly the costs of the entire process would go down if pharma’s focus wasn’t on the next big impotence drug or anti-depressant.

    David

  23. “Because I recognize the obvious, that patent term should be set at an appropriate level to provide enough incentive and encouragement to generate maximal activity I am being arbitrary. Do you know anything about economics? Do you know anything about picking the right point on the curve that maximizes revenue based on Price vs. Quantity?”

    As someone who knows quite a bit about economics — especially the economics of IP law, I have to ask: what if the models show that the optimal societal benefit is when patent terms are set at zero? Because there’s a fairly stunning amount of evidence that says just that. I’m not sure why people here keep insisting that the evidence says otherwise, because I’ve read tons of studies on patents and innovation, and never seen any that shows patents lead to more optimal innovation. I’ve seen studies that show that a lack of patents increases the rate of innovation. I’ve seen studies that show that patents distort the nature of innovation. I’ve seen surveys that show how a lack of innovation sped up innovation in certain industries.

    The only thing I’ve seen concerning what patents do is that they distort the market, and drive money into certain endeavors instead of others. But that’s no surprise. Give someone a monopoly and they’ll look to use it. But that doesn’t mean more innovation or optimal output at all.

    Why do you assume that a monopoly leads to more optimal societal output, when pretty much *all* of economics has shown that monopoly rents are inefficient?

  24. Dear Gene,

    reading your posts made me think that your views are professionaly deformed (i.e. biased) and prevent you from analysing the situation objectively. For example, you assert that “This shows an acute lack of understanding of property rights.” (towards Stephen Kinsella). If you investigated more instead of just making assumptions based on your work experience, you would know that Dr. Kinsella has written extensively about property rights. Not just the positivist view that is taught at schools.

    You are making an assumption, that there is allegedly “evidence” that supports the patent system, and that opposition is against the “laws of economics”. So let me ask you, what is this evidence that you speak about? What are these laws of economics that you speak about? If you take a step back, could it be that you are just making an assumption without a solid foundation? It is a very natural thing for people to believe that their area of expertise is crucial for the whole mankind and when they don’t have special privileges, the whole world is doomed. I would not blame you if it turned out that this is the case. It doesn’t make it true though.

    If you allow, let me show an opposing view. I have been a software engineer my whole carreer (a bit of businessman too), and I have some amount of formal education in economics and law too. As far as I know, neither copyright nor patents were at any stage relevant for me for earning money. Does this baffle you? I simply use a different business method than a monopoly rent. That’s all.

    The utilitarian justification for IP (both copyright and patent) is that a (temporary) monopoly is necessary for a business to be profitable. So what are the primary features of monopoly? The price goes up and supply goes down. Any economist will confirm that. This is good for the supplier and bad for the consumer. Of course the supplier is happy.

    Let’s switch to the cost accouting perspective. A supplier has costs and revenues. He is trying to increase his revenues. If exposed to competition, that puts a check on his revenues, so he is also trying to decrease his costs, otherwise he goes out of business. If he has a monopoly, there is no pressure to decrease the costs. There are no “inherent” costs for their output, it is a matter of entrepreneurial skills. If it costs too much, it doesn’t necessarily mean that he needs a monopoly. It could also mean that the monopoly made him a lousy businessman (i.e. it could be that the argument is confusing the cause and effect).

    So, if we have an IP system, the revenues increase. But IP doesn’t only apply to the outputs, it also applies to the inputs. Therefore, the costs will increase too, for example by having a defensive patent portfolio. Another reason why using the costs as a justification is a bad argument.

    In my opinion, the progress of society is characterised by increasing productivity. This results in decreasing market prices and increasing supply. IP is the exact opposite of that.

    Another implicit assumption of IP proponents is that monopoly rent is the ideal (or, only) way of earning money off immaterial goods. There are plenty of ways of earning money with immaterial goods even without a monopoly, for example: being the first on the market, selling services or derivative trading (if you invent something, buy options to your competitors’ shares and than make an announcement). Arguably, these are more difficult to pull of profitably than a monopoly rent. But that is not a sufficient argument for a monopoly justification. Anyone in any industry can make the claim that without special privileges, it would be more difficult to be profitable. So what? That’s competition. Deal with it or go out of business.

    I understand the need of patent attorneys to defend the patent system. Without it, they would go out of business and have to do something else. So, I’m a bit sympathetic. But it is a big argument leap to say that because of this, the society would be worse off.

    So, let me summarise:
    – monopoly rent is not the only business model for immaterial goods
    – high costs could also be the result of IP and not the cause (increased pressure on input prices from the bottom and decreased pressure from the top)
    – if someone is better off, it does not necessarily mean that the whole society is better off
    – competition is good, suppliers don’t like it but it forces them to behave
    – everyone likes special privileges, that doesn’t make them “necessary” though

    Therefore I find the arguments for IP unsubstantiated. To become persuaded, I would need:
    – hard evidence of net benefit to society
    – transparent and objective evaluation criteria to the former

    I see neither of these.

    Cheers,
    Peter

  25. amen, Mike Masnick. Do you have a list of those studies with links? I can always use more as further ammunition. Stephan has a good collection of references as well.

  26. Gene,

    Often in such discussions (on this and other blogs), studies proving or indicating some finding or another are bandied about as “truth”. My limited research indicates that often the anti-patent crowd incorrectly takes a study or faulty paper as proof of their paradigm without rigorous or critical review of the merits of the paper (the somewhat recent computer program model comes to mind that had egregious errors in its base programming).

    I have noted on Patent Docs and Patently-O that many of the studies purporting to show the harm of patents on innovation have been debunked. Perhaps it might be a good topic for an academic paper to collect the various purported studies and create a master list. When I have pointed out the debunked papers that serve as the cornerstone of proof in personal discussions, I am met with silence – until the next person with the same studies is engaged.

    David K., I believe that we have had this conversation. I thought you retired from dancing at that point.

    This master list could then be used as a base point of conversation, rather than the often times cross posting that satisfies neither camp.

  27. To you anti-patent posters who are patent lawyers, a couple of questions:

    Have you ever had a client come to you indicating that he was motivated to invent what he invented because he expected he could get a patent that would protect him from having his invention stolen?

    Have you ever had a client come to you saying that he had to get a patent to attract the investment needed to take his invention from the lab to the market?

    I have clients like that all of the time, which I consider completely adequate evidence that new inventing and the commercialization of new inventions are indeed driven and made possible because of the existence of the patent system. Assuming that you have had similar experiences, how do you think those clients would react in a regime of no patents or patent term=0?

  28. Bread, Gene, and Cowboy,

    Still, I come back to my original comment above, that when it comes down to it, neither the pro-patent nor anti-patent “crowd” has proof one way or another. There is suggestive evidence on either side, but nothing conclusive given the problems of proof in historical events. What I have proposed is a modest experiment that might give us more convincing evidence. So far, I have seen nothing other than correlations, on either side, and none of these so far has shown causation. Moreover, there’s plenty of anecdotal offerings, which are worse than statistics. So, to make more modest my proposed experiment, let’s choose a sector of innovation for which we could eliminate patents for a time period, and see what effect this has on “innovation”… once we figure out how to measure that (not an easy task either).

    My arguments against patent are founded, as I have admitted, on beliefs which I thank Gene for recognizing are sincere. My beliefs are similar to Stephan’s but not identical, and they are based on a strong appreciation for property rights in moveables and real property, and a belief about the wrongness of usurping, via government-sponsored monopolies, peoples’ rights to profit as they wish from ideas. Yes, it’s true, I value ideas above real property. Our minds are the last bastions of our individual autonomy. So much so that I am unwilling to accept the morality of granting a governmental monopoly over the use of one’s ideas based upon something so arbitrary as filing something with a bureaucracy and getting that bureaucracy’s imprimatur. This isn’t the place to expound on this argument, but I wanted to point out that ultimately, points of view regarding the morality or even the efficacy of patents are not yet substantiated by empirical evidence. My particular arguments are not utilitarian, so I won’t be swayed by evidence either way regarding the degree to which “innovation” is encouraged or discouraged by patents.

    So, I maintain, this is ultimately a religious debate for most of us. I might try to convince you of the truth of my axioms, but they are not prone to falsification or substantiation by traditional means. Thus, I am swayed by studies that tend to support my conclusions, as the “patent crowd” is swayed by those that tend to support theirs. I have yet to see anyone change their mind, however, based on any of these studies.

    best,
    David

  29. Breadcrumbs: “This master list could then be used as a base point of conversation, rather than the often times cross posting that satisfies neither camp.”

    I assembled a pretty large collection of them here: Yet Another Study Finds Patents Do Not Encourage Innovation http://blog.mises.org/archives/010217.asp
    I am aware of NO study that unambiguously concludes the patent system is “worth it” in utilitarian terms.

    Keep in mind the burden of proof is on the proponents of IP. IP is an artificial monopoly granted by the state–as Jefferson recognized–and is justified (according to the utilitarian logic of its proponents) ONLY if it DOES “increase the size of the pie.” Does it?

    Let me not again, however, that not everyone agrees with the utilitarian argument in the first place. Utilitarianism is incoherent, as an understanding of Austrian economics shows. Even if it was not economically incoherent, it is morally problematic: it is wrong to harm A, just because this benefits B and C. And even if it were not morally problematic or economically incoherent, the fact remains that IP proponents have not carried their burden of proof.

    I also note this interesting fact: some IP advocates sloppily trot out the off-the-cuff argument “well patents are good because look at the economic progress in America over the last 200 years.” What is curious about this is their “evidence” for the value of patents is America’s prosperity since 1790, when the first Patent Act was introduced (on the heels of the 1789 Constitution and its patent clause). Does this mean that when the patent clause was put in the Constitution, *before* “patent-induced” American prosperity had happened, the founders had no reason to include it in the Constitution?

    American Cowboy:

    “To you anti-patent posters who are patent lawyers, a couple of questions:
    Have you ever had a client come to you indicating that he was motivated to invent what he invented because he expected he could get a patent that would protect him from having his invention stolen?”

    No, for a couple reasons. First, that would be irrelevant. Why would they say this? They want someoen to help them patent an idea. Why would they need to explain their reasons for inventing? They are completely irrelevant. So even if someone had, I would not expect them to say this. Second, most of my clients have always been large corporations. They are too sophisticated to get all emotional about this.

    Finally, let me say that even if they had said this–so what? All this proves is that some innovation is engaged in partly for the lure of patent monopoly profits. That does not show that overall innovation is encouraged, or, even if it is, that it’s worth the cost of the patent system. For example, it could be that resources are shifted from basic R&D, which is not (as) protectable by patent law, toward invention of practical gizmos. Why is it good that the state distort the structure of innovation in an economy? The distortion could lead to reduced societal wealth and/or even reduced overall innovation. And it could also be that once someone obtains a monopoly, they have less incentive to continue innovating, leading to less innovation. Further, suppose we assume that the patent system does increase the overall amount of innovation. In this case, how do we know that the value of this extra innovation is greater than the cost of the patent system? Suppose the costs of the patent system are $100B and the value of extra innovation is $10B. So society is $90B worse off. To make this clearer, consider that instead of the patent system we had a system of tax funded prizes for innovation (a socialistic program which many IP proponents unfortunately support, see http://www.stephankinsella.com/2009/08/04/whats-worse-80-billion-or-30-million/ , http://blog.mises.org/archives/008396.asp , and http://www.againstmonopoly.org/index.php?perm=593056000000000206 ) Suppose there was a $1triillion “innovation award fund” funded with tax dollars. Would this spur more innovation? I’m sure it would. Lots of people would scramble to invent things, to apply for state welfare handouts. Would this be good for society? No. First, the theft of taxpayers is not good, period–from an ethical standpoint. Second, if the value of the new innovation is $100B then we have wasted $900B. Right?

    “Have you ever had a client come to you saying that he had to get a patent to attract the investment needed to take his invention from the lab to the market?”

    Yes. And this is because in our system, if you don’t protect your ideas with patents, investors are wary since you are not availing yourself of all legal protections. They are afraid you have not minimized your risk of being sued, etc. But that does not mean the patent system is justified. It means this state intervention has indeed succeeded in distorting the market. Consider: suppose the state socialistically taxed everyone to establish a $1Trillion annual innovation fund, that tech companies could apply for. Now, do you think a VC would fund a company who didn’t apply for this? No, because they would be at a competitive disadvantage with respect to other companies who do. So you would have to apply for the welfare handout in order to get VC funding. Does this mean the welfare program is a good idea? No. It only means it affects incentives in society (for the worse).

    “I have clients like that all of the time, which I consider completely adequate evidence that new inventing and the commercialization of new inventions are indeed driven and made possible because of the existence of the patent system.”

    Yes, it is evidence that if you offer someone the ability to extract monopoly profits from others, they have an extra incentive to do what is needed to obtain this monopoly position. So sure, *some* innovation is done in response to this incentive. But as noted above, this is at the expense of other innovation–such as basic R&D. And it is as the expense of innovation that is not done by patent-holders resting in their laurels, since they are now commanding monopoly prices. Further, if the patent system as a whole, and the state apparatus that is necessary for it to exist, makes us all poorer–as it certainly does — then everyone has less wealth remaining to invest in innovation in the first place. See on this, e.g., Rothard’s Toward a Reconstruction of Utility and Welfare Economics http://mises.org/story/2205 . What you are doing is seeing only a small part–you are seeing the results of state stimulation of part of the economy but you are not counting the costs, you are not seeing the costs; in fact the innovation lost or forgone is not even seen, since it does not exist. but it is a cost. For more on unseen costs, See Bastiat, and Hazlitt http://mises.org/story/2698 , http://mises.org/story/2868 )

    “Assuming that you have had similar experiences, how do you think those clients would react in a regime of no patents or patent term=0?”

    I think some of then would invent anyway; some may not; some would use trade secrets or other mechanisms; some would not; some would invent even more, after the initial invention, because they would not be able to rely on a monopoly protecting them from competition; some would invest more simply because they were richer, because they were in an overall richer society.

  30. Great article! I just wanted to point out that even though there are many hurdles invnetors and companys face when creating a new product, there is a website that helps with all those problems. It’s http://www.invent.us Go and check it out.

  31. David-

    Can you explain what you mean by “problems of proof in historical events”?

    Not to be too cute, but I am all for the experiment you propose. I recommend it be tried first in a European country though. It seems there are a lot of candidate countries who would openly welcome the abolition of a patent system. I think they should go first, put their chips on the table, money where their mouth is, etc. etc. If it goes well then I could be persuaded. I am not unreasonable. We just have so much to lose not to get this right. The US is the dominant market in the world, and the most innovative country on the planet. Even if we are not industry leaders in certain areas, we are in the top 5, and being in the top 5 across all industries, plus being clearly No. 1 in some, perhaps many, indicates that we are doing something right and others are chasing us.

    I agree this is ultimately a religious debate on many levels. I would also agree that free markets are the way to proceed, monopolies are evil and even socialism makes sense (although I don’t think you are socialist and am not saying that you are). All kinds of things make sense on paper, sound great and just don’t play out in life for many reasons. If we could get innovation on the same level there would be no justification for a patent system, but history has shown that no patent system or weak patent system means no innovation and no investment.

    I would really love for someone to explain where the hundreds of billions or trillions of dollars in research and development will come from when there is no reasonable expectation to obtain monopoly rents. Innovation costs money, even simple inventions are enormously expensive and unless and until there is any kind of rational, reasoned argument that suggests it is likely that those with money, who are greedy by nature, will part with money on an altruistic base for the betterment of society and without expecting a return on investment. This just goes against human nature, or so it seems to me.

    Maybe we could test your theory with a Big Brother or Survivor like experiment, where we throw some folks on an island, maybe Gilligan’s Island. I am only half tongue in cheek here. I suspect it would wind up more like the Island of Dr. Moreau or The Lord of the Flies, rather than the Garden of Eden.

    -Gene

  32. Gene: “I would also agree that free markets are the way to proceed, monopolies are evil and even socialism makes sense.”

    I am not sure what you mean by the last clause–socialism makes sense? is that a typo?

    In any event, I agree with you: free markets good, monopolies bad. It is mystifying then why you would favor socialism and monopolies. A free market means an economy in which private property rights are respected. Period. A patent is a grant by the state that gives license to its holder to use the state’s courts and police to force competitors not to use their own property in certain ways. A patent manifestly undermines and violates property rights. It is contrary to the free market. It is socialistic.

  33. Stephan, I refer to you by name, not to be personal, but to focus the argument so that the points I make are considered in light of the points you make and are not intended as personal attacks.

    The fact that Stephan usually has big corporations as clients may color his thinking. Big corporations have less need of patents than little guys, because they have financial, market place, and staffing advantages that the little guys don’t have and can out-compete the little guys in a patent-free world. Patents are the thing the little guy has that can make the government side with him against big business.

    Stephan says that his clients would invent anyway in a non-patent regime because some would use trade secrets or other mechanisms. What other mechanisms come to mind? John D. Rockefeller was in a commodity business (which is what would be much more common in a patent free world) and his way of staying comptetitive was to send out goons to attack competitors.

    In a non-patent world the other kinds of barriers to entry to a market become more valuable, such as having a bigger bank account than an innovator, a brand name that attracts a customer following, and an established network of users. Each of these tends to aid the success of incumbents against startups, allowing the incumbents to be able to rely on a monopoly protecting them from competition — just the sort of complacency that Stephan accuses of patent holders.

  34. Breadcrumbs,

    You waste your time. David Koepsell isn’t buying any rational arguments because he would lose any rational discussion. Thus he must engage in a false reductio ad absurdum – a tautological thrust to equate his failed view into an unassailable one. “It’s religion now – and thus I cannot be wrong”.

    Sorry, David, you are still wrong.

    Gene’s point (if I may be so bold to venture), is that it is useless to try to reason with someone who believes a point is religious and beyond reason. David, you have proven him correct with your statements here.

    You then have the audacity to post under the guise of science – More meaningless pontification. Lovely how such an impossible (but modest??) task is the only way you set to prove or disprove something. It appears that your level of understanding of science approaches your level of patent law. No wonder you want to phrase everything as a matter of religion.

    As for Stephan – his views are clearly immersed in a politcal bent that obscures anything but his own view from being understood , much less “right”. His burden of proof is NOT as he states – it is up to him as he wants to change how the Law actually is. Sorry Stephan, the burden is on you.

  35. Gene:

    Thanks for keeping a somewhat open mind about it. Please also note that my deontological argument precludes changing my mind unless you can successfully convince me about the injustice of my axioms. That said, I think the US is the best place to try the experiment, perhaps one technological or scientific sector that is already well funded through public funding. In fact, it’s the only way since it is the leading “innovator” according to your standards. The problem of proof in historical events are simply that: we can only see one thing following or proceeding another, but unlike physics, we cannot prove causation, we can only suggest it through correlation.

    And no, I’m certainly not a socialist. Clearly, since I don’t think governments should be in the business of providing monopolies to anyone, I oppose statism. I think science ought to be funded through voluntary public pools of money as well. All systems of government involving privilege will tend toward injustice, so I oppose patents and other legal artifacts that skew the free market.

    best,
    David

  36. wow, Noise, you continue to live up to the first half of your moniker, and to hide behind your anonymity.

  37. I see Gene has posted a followup. http://www.ipwatchdog.com/2009/09/30/responding-to-critics-my-view-on-patents-innovation/id=6421/ I do not see any serious attempt to discuss this issue, or even to really understand what we are saying, so I see no reason to respond there.

    Cowboy: “Stephan, I refer to you by name, not to be personal, but to focus the argument so that the points I make are considered in light of the points you make and are not intended as personal attacks.”

    I didn’t say they were. I answered you calmly and dispassionately.

    “The fact that Stephan usually has big corporations as clients may color his thinking.”

    My current client is a small company. I am continually on the lookout for threats to us from competitors. It’s a terrible thing, the patent system. It can put small companies out of business.

    I’ve represented individual inventors before but I dislike it. For one thing, they are usually very cheap and nickel and dime you. For another, they think their invention is the most important thing in the world so if they get a rejection, they are too stubborn to accept it–big companies know it’s a numbers game and are more sophisticated. Third, it’s often a waste of their money–they get the patent, and it papers their wall. $15k wasted.

    “Big corporations have less need of patents than little guys, because they have financial, market place, and staffing advantages that the little guys don’t have and can out-compete the little guys in a patent-free world.”

    They need patents to ward off suits from big competitors.

    “Patents are the thing the little guy has that can make the government side with him against big business.”

    You really think the government is on the side of the small businessman? This is insane. You know how the state can help the small businessman? How about not stealing half his income? Abolish the FDA. Abolish antitrust and minimum wage law. End the stupid drug war. Stop attacking other countries. To count on the criminal state which harms individuals in innumerable ways to “be on his side” is sheer lunacy.

    Noise:
    “As for Stephan – his views are clearly immersed in a politcal bent that obscures anything but his own view from being understood , much less “right”. His burden of proof is NOT as he states – it is up to him as he wants to change how the Law actually is. Sorry Stephan, the burden is on you.”

    You seem to believe the current law is presumptively valid, since you think the burden is on anyone who wants to change it. There is no reason to presume current positve law to be valid–it is just a statute enacted by a bunch of politicians. Why in the world would you presume it to be valid? Did Abolitionists have to prove slavery was wrong to want to change the law allowing slavery?

  38. Dear Gene:

    Thanks for keeping a somewhat open mind about it. Please also note that my deontological argument precludes changing my mind unless you can successfully convince me about the injustice of my axioms. That said, I think the US is the best place to try the experiment, perhaps one technological or scientific sector that is already well funded through public funding. In fact, it’s the only way since it is the leading “innovator” according to your standards. The problem of proof in historical events are simply that: we can only see one thing following or proceeding another, but unlike physics, we cannot prove causation, we can only suggest it through correlation.

    And no, I’m certainly not a socialist. Clearly, since I don’t think governments should be in the business of providing monopolies to anyone, I oppose statism. I think science ought to be funded through voluntary public pools of money as well. All systems of government involving privilege will tend toward injustice, so I oppose patents and other legal artifacts that skew the free market.

    best,
    David

  39. Stephan-

    It is getting extremely old for you to say I am not discussing the issue. It is you who ignore facts. It is time for you to address facts, rather than blow them off as if they are meaningless. How can you actually read what I write and see no discussion of the issues?

    I know this will come off as rude, but I am going to say it anyway. I am starting to question your intellectual abilities and honesty. Ignoring facts, dodging issues and then repeating pat non-answers is hardly intellectually honest. Either you have nothing to say and resorting to liberal debating tricks and tactics or you are a lightweight. I don’t know which it is, but it is obvious to everyone that there is no substance and you simply ignore valid points, facts and logic. Very sad indeed.

    By way of further answer…

    You say: “You really think the government is on the side of the small businessman?”

    REPLY: I did not say that, you know I did not say that and it is absurd for even you to insinuate that is what I said. Businesses need to look out for themselves and use what tools the government provides to their advantage. No one is on the side of anyone, which is why businesses and individuals need to stand up for themselves and be accountable for their decisions. A decision to knowingly not seek patents because of a philosophical objection is flat out stupid.

    You say: “My current client is a small company. I am continually on the lookout for threats to us from competitors. It’s a terrible thing, the patent system. It can put small companies out of business.”

    REPLY: Once again I am baffled. You say 0 years of term is preferable, the patent system is a terrible thing and yet you look out for threats from competitors. Obviously, these things are mutually exclusive. Why not practice what you preach? Patents are evil and should be 0 years of term, so that means your clients should not seek patents and enjoy the 0 years of term that come with no patents. Looking out for competitors is silly if you want no exclusivity, with unchecked competition that allows complete and total copying and rip-offs.

    -Gene

  40. David-

    I understand your causation vs. correlation argument, I really do. I also know you are not a socialist, and maybe I should have even gone there. I was just trying to point out that on paper a lot of things look good. Who wouldn’t want socialism if it worked? Living in the Garden of Eden where everyone gets along and does things that better society for the fact that it betters society. Who wouldn’t want to live in Utopia or Heaven? That was my point. I just don’t think it can exist given the human condition.

    I think a public funding model works VERY well in instances. Bayh-Dole is one of them, and in sponsoring research that is pure science and may not lead to anything is another. But how much money would need to be spent to equal that which is spent now? A public funded model just couldn’t approach those amounts, which would mean less spending, less looking and that has to lead to less discovery and innovation. I think Bayh-Dole works so well because it primes the pump and then gets out of the way.

    Let me try this. I know you don’t want to talk about history because of correlation vs. causation. Nevertheless, is there any evidence at all that you can point to of an historical, objective proof that could even suggest no or limited rights would be better? I can think of none. This is the same problem I have with the Obama agenda. Will it work? Who knows for sure, nobody knows. What can be said with great authority is that it has never worked at any point in history, and has repeatedly failed when tried. That being the case, why do we call plays from a playbook without any historical success. Doesn’t make any sense to me. Where it is causation or correlation, why deviate in hopes?

    The fundamental thought process of an engineer is that if it is not broken don’t fix it. What separates engineers from scientists is that engineers factor in reality and if theory says it can’t or won’t happen, but it does, then it does and that is to be accepted and factored into things, particularly when it is repeatable.

    -Gene

  41. Gene:

    “It is getting extremely old for you to say I am not discussing the issue. It is you who ignore facts. It is time for you to address facts, rather than blow them off as if they are meaningless. How can you actually read what I write and see no discussion of the issues?”

    Gene, I am sorry to annoy you, but that is how you come across to me. You keep saying “address the facts” like a scientistic monomaniac, even though you are giving no facts at all; the only facts in issue are studies that almost universally support our view not yours; you just ignore these.

    I have carefully and systematically explained what is wrong with the various arguments in favor of IP. You have ignored every one of them. In fact, to be honest, I am not sure you even understand what I’m saying. You seem to be so mired in engineers’ syndrome and scientism (and I would guess you don’t even know what I mean by scientism, or why it’s a pejorative) that my normative reasoning sounds like babble to you. It is understandable many engineers have trouble following coherent, systematic, normative and political reasoning without resorting to their inadequate empiricist comfort zone, but why they think they ought to weigh in on matters in which they are out of their depth is beyond me.

    As the great Murray Rothbard once wrote, “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a “dismal science.” But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.” http://mises.org/story/2197

    “I know this will come off as rude, but I am going to say it anyway. I am starting to question your intellectual abilities and honesty. Ignoring facts, dodging issues and then repeating pat non-answers is hardly intellectually honest. Either you have nothing to say and resorting to liberal debating tricks and tactics or you are a lightweight.”

    I don’t mind. But out of charity I will refrain from characterizing you. I’m certainly happy to let your comments speak for themselves, and for readers to judge which of us is the intellectual lightweight. But I might refer you to the Rothbard comment above.

    “You say: “You really think the government is on the side of the small businessman?”

    REPLY: I did not say that, you know I did not say that and it is absurd for even you to insinuate that is what I said.”

    Gene, as you can see from my reply, that was a reply to Cowboy.

    ” Businesses need to look out for themselves and use what tools the government provides to their advantage.”

    Sure, I agree. But that does not mean the state should provide the system in the first place.

    ” No one is on the side of anyone, which is why businesses and individuals need to stand up for themselves and be accountable for their decisions. A decision to knowingly not seek patents because of a philosophical objection is flat out stupid.”

    Sure. Did I imply otherwise?

    “REPLY: Once again I am baffled. You say 0 years of term is preferable, the patent system is a terrible thing and yet you look out for threats from competitors.”

    Yes, the patent system is terrible, because it lets people threaten my company (for example). Because of these threats. I have to look out for them. There is nothing here to baffle anyone.

    “Obviously, these things are mutually exclusive. Why not practice what you preach? Patents are evil and should be 0 years of term, so that means your clients should not seek patents and enjoy the 0 years of term that come with no patents. Looking out for competitors is silly if you want no exclusivity, with unchecked competition that allows complete and total copying and rip-offs.”

    Now you seem once again to be making a (lightweight, amateur) hypocrisy argument yet again. Your reasoning is laughable but let’s say you’re right. Okay, I’m a hypocrite. How, pray tell, does that show that the patent system is justified?

    Your response here is all beside the point. What is the relevance of whether or not I’m a lightweight, or a hypocrite? You have not responded to my careful reasons about flaws in the IP case; you have not responded to the dozens of studies we pointed you to nor provided any of your own (you only said to ignore the studies and focus on “the history”). You continue to presuppose a host of (false) normative assumptions (about the nature and purpose of law and rights, for example; the nature of science and economics) without, apparently, even realizing you are doing this or the need to make these explicit and to justify them. You continue to speak from a hampered scientistic perspective where norms collapse into “facts” (which you don’t have anyway) until you want to re-assert them back as norms again, using some crude intuitionism.

    Again, I will note that you need to show how you know that the patent system generates more wealth than it costs. If you know this, tell us how, and tell us what the net gain is–say, in billions of dollars. Until you do this, you are quite obviously just repeating the state’s own propaganda that it uses to defend its actions.

  42. Gene,

    By retuning to the issue of whether something else “works” you are ignoring my claim that utilitarianism doesn’t justify IP rights, but nontheless yes, I can point to periods of significant innovation in which there were few enforced IP rights. Specifically, at the beginning of the Enlightenment in Europe, and the burgeoning scientific age, plenty of innovations were created, a flourishing of industry and growing economy followed, and IP rights very still only modestly pursued. Similarly with a preceding age, the Renaissance. These were great times of art and industry, and the modern era essentially sprung from them, yet who can point to a single patented item or group of items or arts that caused this growth? Rather, it was science and empiricism as working paradigms for discovering truths that paved the way for the modern era. Only later, in the twentieth century, did industries begin to rely so strongly on IP rights to protect their market shares.

    Nevertheless, my argumetns against IP remain untied to utilitarian issues.

    best,
    David

  43. Stephan-

    I am not going to play by your facts, which are not facts whatsoever. I have presented questions for you, and you ignore them. We all know that is because you cannot answer them without agreeing with me, so you simply change the questions and claim you are answering me. This is old, tired and I have no interest any more. Arguments are not facts, and ignoring reality, human nature and laws of economics while asserting your credentials as a response to substance is nothing more than smoke and mirrors.

    I get it, we cannot have a debate. That is fine. The fact that human history on my side is obviously not facts you would support. Go ahead and be a patent attorney who believes 0 years of patent is appropriate. If that is your view you are entitled to it, but don’t get on your high horse because I have the audacity to point out that you are a hypocrite and sell out. Stand up for what you believe, practice what you preach, or leave us alone. Acting on beliefs and facts is not immoral, although participating in a regime you fundamentally disagree with to the detriment of your clients is exactly immoral if not unethical.

    -Gene

  44. Gene,

    It is bizarre to see your umbrage here. You have the majority opinion, and you have won: your favored system is in force, and it is foisted on us dissenters. I am part of a small minority, and have no choice but to comply with the unjust rules that you favor and that your state is foisting on me. All I’m doing is disagreeing, inefficaciously. It’s not enough for you that you are part of the majority and are *getting your way*? I assure you, I’d be happy to have the tables turned: to have the immoral patent system abolished, and have a few interventionists whining about it–I wouldn’t begrudge this to you.

    Your attempt to turn this personal doesn’t work, I”m afraid, because I don’t take the bait, and because it’s plain to anyone that the normative fabric of the universe does not depend on the actions of a 44 year old attorney in Houston, Texas. It’s not about me, man. It’s about whether patent law is justified. (But on that score: calling me a sellout and hypocrite is bizarre; I’ve taken a stand contrary to my financial interest; if anything, it is the pro-patent opinions of those who have a financial interest in the patent system that should be suspected of bias.)

    Anyone reading can see that I’ve given ample, systematic, thoughtful reasons for doubting the IP case. I’m happy to let them read my careful, sincere, informed arguments, and your own scattershot offerings, and decide between them.

  45. Do you know anything about picking the right point on the curve that maximizes revenue based on Price vs. Quantity? The same thing obviously applies to picking the right patent term.

    Even if you assume that the curve in question is just a nice “bump”, rising monotonically to a maximum at some point and then falling again (which we have no particular reason to believe), and that the maximum point doesn’t change over time, how can you determine where it is? You’d can change the term, and then wait and see the effect…but how long do you have to wait? It’s going to have to be at least several decades, right? And meanwhile you can’t account for many other variables that would affect the outcome (like the rate of potential innovation — new inventions don’t happen on a schedule). And if the curve is a wiggly line, even if there’s a global maximum, you can’t even tell if you’ve moved toward it or away from it (even if the total innovation, other variables accounted for, goes down, you might have moved to a locally lower point on the curve in the direction of the global maximum, so the right thing to do is to adjust the term further in the same direction, but if you think it’s a “bump” you’ll move it in the other direction instead!)

    {Many economists make the same error, with the so-called “Laffer curve” stupidity}

    Because I recognize the obvious, that patent term should be set at an appropriate level to provide enough incentive and encouragement to generate maximal activity I am being arbitrary.

    No. But if you claim that 20 years is closer to that level than 1000 years, or 0 years, or any other number, you’re being arbitrary, because you have absolutely no way to know that. Besides, it’s only “obvious” if you’re a utilitarian — even if you could know that a patent term of x (for non-zero x) would “generate maximal activity”, that doesn’t make enforcing patents moral.

  46. Peter: Good points, all.

    You wrote: “Even if you assume that the curve in question is just a nice “bump”, rising monotonically to a maximum at some point and then falling again (which we have no particular reason to believe), and that the maximum point doesn’t change over time, how can you determine where it is?”

    Not only that–why would you trust the state to be able to–or even try to–find this optimum, even assuming it exists?

  47. I said “Patents are the thing the little guy has that can make the government side with him against big business.” and Stephan replied: You really think the government is on the side of the small businessman? This is insane.

    Stephan, you misconstrue my argument. The courts and the enforcement mechanisms of the courts are the parts of government that I had in mind. I agree with you that the Congress/Administration complex can be very destructive.

  48. Stephan, you seem to be opposed to the government backing individuals claims of intellectual property rights, and simultaneously champion rights in other forms of property like realty, personal property, money and finance. Do you endorse the government aiding those property claimants from those who would threaten to take them away from the claimant? Should we tell the government to stay out of the way of theives and fraudfeasors? I assume your answer is no, but I don’t see your argument for why the line should be drawn to allow that sort of government aid but not aid to those who document that their new developments meet the standards for a patent.

    Do you favor protecting the rights of authors of novels? photographers? painters? companies that we now call trademark owners?

  49. Cowboy:

    “I said “Patents are the thing the little guy has that can make the government side with him against big business.” and Stephan replied: You really think the government is on the side of the small businessman? This is insane.

    “Stephan, you misconstrue my argument. The courts and the enforcement mechanisms of the courts are the parts of government that I had in mind.”

    I repeat my comment: you think the (courts of the) government are on the side of the small businessman?

    “I agree with you that the Congress/Administration complex can be very destructive.”

    CAN BE? How about ALWAYS IS.

    “Stephan, you seem to be opposed to the government backing individuals claims of intellectual property rights, and simultaneously champion rights in other forms of property like realty, personal property, money and finance. Do you endorse the government aiding those property claimants from those who would threaten to take them away from the claimant?”

    The state is inherently criminal and thus the only thing I “endorse” it doing is closing its doors. I’m an anarchist libertarian. But we can still distinguish between the state doing things that are not inherently wrong, such as protecting property rights, and doing things that are inherently wrong, such as committing aggression (taxing, bombing Iraqis, jailing pot smokers, granting patents). The problem with the state doing the latter is not that it is the state doing it–it is that these things violate rights, no matter who does them. The problem with the former is not what the state is doing, but *that* the state is doing it–it has no right to monopolize the justice system.

    ” Should we tell the government to stay out of the way of theives and fraudfeasors?”

    Yes, it should stay out of it and let people alone.

    “I assume your answer is no, but I don’t see your argument for why the line should be drawn to allow that sort of government aid but not aid to those who document that their new developments meet the standards for a patent.”

    Because if the state is going to outlaw competition and monopolize the business of law and security, at least it shoudl stick to things that are legitimate–protecting property from invastion is a legitimate type of thing to do; the state should not assume the sole role of doing this, but if it does, it should stick to protection of actual property rights. It should not commit aggression, which it does when it enforces others types of laws, such as IP law.

    “Do you favor protecting the rights of authors of novels? photographers? painters? companies that we now call trademark owners?”

    I explain this in detail in my Against Intellectual Property. Try doing a bit of reading.