Gene Quinn Declared Patent Twit of the Week

By Gene Quinn
November 4, 2009

I just so happened to stumble across an interesting article declaring me Patent Twit of the Week.  Normally one would not be proud of being declared a “twit,” but I have to say that I am enormously proud of this recognition.  It seems that The Center for a Stateless Society has declared me a patent twit.  Yes, you read the name correctly. These folks are nothing more than anarchists who hold a grudge, which I realize is a redundant characterization. In any event, this is mighty high praise coming from an organization that describes themselves as a project “dedicated to building public awareness of, and support for, market anarchism.” So why do I care? Why do I even given them the time of day? It certainly isn’t to promote them or to even engage in a debate with them. I write only to disclose the biases of those who have an anti-patent agenda. With the ever building assault on intellectual property rights and patents in particular I think it is imperative that decision makers understand the positions and biases of those leading that anti-patent charge. Those leading the charge and cheering from the sidelines are anarchists who make up lies to support their positions and ignore facts.  They would have us dismantle our patent system, our economy and our government.  So allow me to expose the anti-patent movement for what is — utter nonsense.

It is time to put the cards squarely on the table and show for all concerned the philosophy of those in the anti-patent movement. Here is what they wrote about me:

Gene Quinn, a patent lawyer and IP-hawk, has recently challenged the anti-IP movement — in the tone of a belligerent drunk announcing he can lick anyone in the bar– to back up its contentions with facts and arguments.

A belligerent drunk? Quite interesting indeed.  Not the kind of intellectual argument one would expect from those who say they want to discuss the issues with facts and logic.  In any event, the article lambasts me for not having facts to back me up, but the author and those commenting find it necessary to belittle me with school-yard insults.  How curious, and telling!

With the possible exception of David Koepsell, those in the anti-patent movement provide no facts, and when they do they are simply wrong. But this leads me to Mr. Koepsell. It was surprising to read him chiming in on the comment chain to this Gene is a Twit article. I must admit to having lost pretty much all respect for Koepsell.  He got upset that I said those in the anti-patent movement are no different that Hugo Chavez, who wants to put an end to patent rights in Venezuela.  Koepsell was right to take exception because while Chavez is many things he hardly supports anarchy.  I guess I now understand why that barb was taken so personally by Koepsell.

In the comments to this Twit article, Stephan Kinsella, the infamous patent attorney who hates patents and thinks zero years of exclusivity is plenty fine for innovators, and presumably his clients as well, pointed out that in a comment chain here on IPWatchdog.com I took issue with folks who said that the Swiss never had a Patent Office. Apparently Kinsella doesn’t believe that my observation that the Swiss have had a Patent Office throughout the entirety of the 20th century was inappropriate or non-responsive. Excuse me, but Koepsell pointed out that in the early 20th century the Swiss, who were exceptionally innovative, did not have a patent system at all. Of course this is utter nonsense and historically untrue. I pointed out that the Swiss did have a Patent Office and a patent system and that Albert Einstein worked as a patent examiner and devised his theory of relativity while working as a patent examiner in the Swiss Patent Office.

The fact that the Swiss had a Patent Office throughout the 20th century is 100% true, well documented and easily verifiable by anyone who cares enough to seek the truth.  But let’s not get mired in truth, shall we.  The point is not that the Swiss have a Patent Office, but rather that the anti-patent anarchist fringe makes up facts all the time.  They claim facts presented to them are non-responsive, they claim truth is fiction and they have to make up lies to support themselves.  That is the story here, and beware to any who would be swayed by these pretenders.  They will say outrageous and untrue things and then get upset and pout when someone tells the truth, sets the record straight and identifies real facts conclusively proving they lie or are reckless with the truth. Why would anyone take Koepsell or Kinsella seriously if they so carelessly and recklessly rely on provably false assertions as a base to support their major premise.

To demonstrate the depth of the delusional thought processes displayed by The Center for a Stateless Society allow me to direct your attention to another article on the website, which states the following:

Americans are already forced at the barrel of a gun to pay income taxes (the very legality of which has been placed in question by numerous individual researchers, but then all government laws are themselves illegitimate acts of arrogance; opinions of bureaucrats backed up by lethal force)…

This should conclusively display for all to see the lack of credibility and the depth of the intellectual dishonesty found in the anti-patent movement. It would appear as if they are not only anarchists, but they have absolutely no understanding of the law or the US Constitution and live in a fantasy world.  The anti-patent folks who would dismantle the patent system are against everything.  At least they cannot be said to discriminate.  They hate everything and would prefer to dismantle the country.

Those who don’t know what to think, who are on the fence about the merits of a patent system and those who have yet reached conclusions for themselves need to take a long and hard look at the beliefs of those in the anti-patent movement.  Do you want to be associated with such lunacy or trust the economic future of the US to the positions of those who think the government is illegitimate?  That would be a very dangerous and reckless experiment indeed, particularly when historical evidence proves conclusively that a strong patent system is the hallmark of a strong economy.  Simply stated, third world countries have no patent system, developing countries have weak but growing patent protections available and the economic powerhouses of the world have strong patent protections available.

Everyone who reads IPWatchdog.com knows what my position is — patents are essential to innovation. But you don’t have to take my word for it though, you can listen to one of the preeminent innovators of our time, Dean Kamen.  Just yesterday Kamen was quoted yesterday in the Wall Street Journal explaining that a post-grant review system could be “catastrophic for a start-up or small inventor.” Kamen then went on to say: “You get this young guy who quit his job to make this gizmo and he shows up at the bank or to his father-in-law. The first thing the bank or venture capitalist will say is, ‘Do you have a patent?'”  You see, patents are essential to raise funds, and without patents small businesses are targets of large corporations.  Every small business should seek patents, and it is not a coincidence that large tech companies want to make it virtually impossible to get patents.

We can all pretend that there are no costs associated with innovating, but that is a fairy tale akin to the myths propagated by the invention scams. You simply cannot make money selling ideas, if it sounds too good to be true that is because it is too good to be true, and innovating, making inventions and taking products to market costs money, and frequently a lot of money even for simple gadgets. Without funding all you have is an idea, and no reputable businesses will pay you for your idea. The patent system is the great equalizer, and patents are essential to raising funds. This is a reality told every day, in ever city across the United States, yet the anti-patent advocates ignore this market truth, vilify patents and pretend they are not necessary. But these folks are the same ones that think all laws are illegitimate and that the consensus opinion is that income taxes are illegal. Do you really want to tie yourself to these folks? I know I certainly do not and I am proud to be vilified by them. I would never want to have anything in common with such demented thinking.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 77 Comments comments.

  1. Mike Masnick November 4, 2009 8:23 pm

    Gene,

    This is odd. Do you not read your own comments? In the comments to your last post, I explained the Swiss patent system. While there was “a patent system” it was massively limited, and the focus on the research were about the areas that were not covered by the Swiss patent system, such as the chemical industry (the precursor to today’s pharma industry). I pointed this out in detail.

    I’m not sure why you did not discuss that.

    In fact, I pointed this out to you in the past and you ignored it.

    So, yes it’s not true that Switzerland had “no patent system” in the 20th century, for the first 7 years it barely had one. It covered very little. And the studies discussing this are not “made up facts” but based on quite a bit of evidence.

    Brushing that off as being simple lies is intellectually dishonest. I would have expected better of you.

    I tried discussing this with you over email, and your response to me was “we are done.” You don’t seem to actually want to debate these issues. You seem to have a huge blindspot for any facts and evidence that prove your position tenuous.

  2. Attorney Disability Insurance November 4, 2009 10:31 pm

    I’ve bookmarked your blog. Many of the legal professionals we work with will appreciate it.

  3. Jules November 4, 2009 10:51 pm

    Has anyone ever seen the TV show ‘Shark Tank’? There are4 VC’s looking at new inventions by everyday folks.These VC’s are ready willing and able to make a financial commitment to a product they believe in.

    One of the first questions each inventor is asked on the show is “Do you have a patent?”
    No patent – NO MONEY

    That’s the bottom line, ‘Do You Have A patent?’ Need I say more!

  4. David Koepsell November 5, 2009 2:14 am

    Gene,

    What exactly did I do to lose your respect? Is it that I oppose governments? You already knew that, we have had that discussion. “That government is best which governs least, or not at all.” is my motto.

    I’m puzzled.

    best,
    David

  5. Tony McStea November 5, 2009 8:32 am

    Gene,

    Mike Masnick’s comments on the Swiss system are essentially correct. For part of the 19th century, Switzerland had no patent laws whatsoever, but, worried about foreign imitations of Swiss watches, enacted one towards the end of the 19th century. Switzerland was one of the signatories of the original Paris Convention (along with odd bedfellows Belgium, Brazil, France, Guatemala, Italy, the Netherlands, Portugal, El Salvador, Serbia and Spain). However, there was no chemical protection until 1907. The Swiss took advantage of this, the most blatant example being Sandoz (now Novartis) built hard up against the French border in Basel. Chemical protection (initially process protection only) came about because the Germans threatened retaliatory tariff action unless it was introduced.

  6. EG November 5, 2009 9:39 am

    I can’t speak to the Swiss situation, but I can speak to the Soviet one. By a 1919 decree the Bolsheviks abolished patent rights. The expectation was that the Soviet inventor would simply invent out of recognition for what they had done. Needless to say, and without going into the details of the college independent study I did on socialism and invention, the 1919 decree was an unmitigated disaster. Basically, Soviet inventors didn’t invent and foreign investment stayed away from the Soviet Union. Put differently, alruism doesn’t work. In response, the Soviet Union put in place in 1924 a patent law modeled after Germany’s.

    In 1931, the Soviet Union put in place the first true “socialist” patent law, including an item of its own creation called the certificate of authorship to reward primarily Soviet inventors for their inventive activity. In fact, the Soviet law of 1931 (refined in 1941) rewarded Soviet citizens for discoveries that other patent laws (including the U.S.) don’t recognize as patentable. Again, the Soviet laws of 1931 and 1941 are recognitiion that altruism alone won’t stimulate inventive activity, even in a socialist society. Put differently, without some form of reward for inventive/creative activity, you’re doomed to innovative and economic mediocrity (or worse). And Gene is correct that without IP rights, including patent rights, folks (e.g., banks) are not going to invest $$ in unprotectable (and thus freely copyable) technology.

  7. EG November 5, 2009 9:56 am

    I can’t speak to the Swiss situation, but I can speak to the Soviet one. By a 1919 decree the Bolsheviks abolished patent rights. The expectation was that the Soviet inventor would simply invent out of recognition for what they had done. Needless to say, and without going into the details of the college independent study I did on socialism and invention, the 1919 decree was an unmitigated disaster. Basically, Soviet inventors didn’t invent and foreign investment stayed away from the Soviet Union. Put differently, altruism doesn’t work. In response, the Soviet Union put in place in 1924 a patent law modeled after Germany’s.

    In 1931, the Soviet Union put in place the first true “socialist” patent law, including an item of its own creation called the certificate of authorship to reward primarily Soviet inventors for their inventive activity. In fact, the Soviet law of 1931 (refined in 1941) rewarded Soviet citizens for discoveries that other patent laws (including the U.S.) don’t recognize as patentable. Again, the Soviet laws of 1931 and 1941 are recognition that altruism alone won’t stimulate inventive activity, even in a socialist society. Put differently, without some form of reward for inventive/creative activity, you’re doomed to innovative and economic mediocrity (or worse). And Gene is correct that without IP rights, including patent rights, folks (e.g., banks) are not going to invest $$ in unprotectable (and thus freely copyable) technology.

  8. Karl Enevold, PhD November 5, 2009 10:51 am

    Gene:

    I guess as a twit in training, I have to point out the full moon is out and, like always, the lunatics too! Maybe next week will be better.

  9. ODP November 5, 2009 10:52 am

    Does anyone toot their own horn more than you?

    Your blog should be called, “Me, me, me, look at me, everyone.”

  10. Gene Quinn November 5, 2009 11:21 am

    ODP-

    Thanks so much for the comment. I really appreciate your support and how you always add substantively to discussions here!

    -Gene

  11. Gene Quinn November 5, 2009 11:23 am

    Tony-

    I was not referring to Mike Masnick. What I was referring to was David Koepsell’s statement that in the early 20th century the Swiss did not have a patent system. That is factually untrue. There is a big difference between saying for “part of the 19th century” and Koepsell saying “throughout the 19th century and early 20th century.” When someone uses provably untrue statements to support their position they lose all credibility they may otherwise have.

    -Gene

  12. Gene Quinn November 5, 2009 11:28 am

    David-

    Contributing substantively to an anarchist’s website is beneath you. You and your arguments lose all credibility based on the company you keep.

    Exactly how can you be “free market” if you are an anarchist? Free markets need order, not society in chaos.

    I am sorry I got sick, and I am sorry no one wanted to debate me by exchanging articles or in online radio format.

    You also disingenuously claim to have all this proof that you where going to hit me with during a debate, but now you don’t have any time to even provide a citation. You are a fraud, the company you keep is alarming, and you do yourself no favors by wrapping yourself around such nonsense. It demeans your entire position and exposes it for what it really is, which is a radical anti-government, anti-everything approach to society.

    -Gene

  13. Gene Quinn November 5, 2009 11:31 am

    Mike-

    I was not referring to you. I was referring to what Koepsell said, which is that the Swiss did not have a patent system in the 20th century. That is false, and for some reason Kinsella doesn’t understand why when people base arguments on false statements their arguments lose credibility.

    -Gene

  14. Adam November 5, 2009 12:13 pm

    Gene,

    I’m saddened by how much mudslinging you’ve been doing lately. Just on this page, you insult David Koepsell for writing a comment on that anarchist page, which you yourself wrote a comment on. He offered you all of his source material for the debate, and you claim he’s a fraud with no facts. You write pages about how you’re so absolutely right about a single phrase about the technical status of the Swiss patent system in 1901, written in a comment on your blog days ago, even though it seems there’s good debate to be had about Swiss chemical innovation in spite of no patent protection at that time.

    I’m sure you’ll see the grand irony in all of this, including that you insult David for not citing his sources, even though you almost never do (and certainly haven’t on this page). I think many of your readers, me included, would find your blog much more useful and enjoyable if there was less of this school-yard mudslinging.

  15. Just visiting November 5, 2009 1:17 pm

    “Exactly how can you be ‘free market’ if you are an anarchist? Free markets need order, not society in chaos.”

    Dead on comment. Efficient markets require that certain rules need to be followed. Whether these rules are explicit or implicit, they need to be followed.

    Have a society where 99 people follow the rules and 1 person does not (with impunity), and that 1 person will eventually win out (either in power, money, etc.)

    What the “no government = best government” crowd relies upon is the concept, one described by Ronald Reagan, as the belief that all men are good and to govern with that in mind. We need regulations (i.e., government) because not all men ae good.

  16. Jules November 5, 2009 1:38 pm

    “Have a society where 99 people follow the rules and 1 person does not (with impunity), and that 1 person will eventually win out (either in power, money, etc.)”

    Let’s take Madoff, for example. 60+ billion was it? And this is what he has been reduced to, according to Wikipedia:

    “On October 13, 2009, it was reported he experienced his first prison yard fight with another senior citizen inmate. [96] According to court papers in a civil action against him, Madoff’s new prison friends include Jonathan Pollard, made mob boss Carmine Persico. Madoff shares a prison cell with a 21 year old drug offender. He “eats pizza cooked by an inmate convicted of child molestation.”[97]”

    Not agreeing or disagreeing, just saying…

  17. Mike Masnick November 5, 2009 1:59 pm

    Gene, it’s comments like the one you made to me where it is actually you who lose all credibility. You simply continue to totally ignore the real meat of the question about the Swiss patent system. The misstatement by David was a very minor one, and it was not him making up facts, it was a claim that *for most products* including the major chemical industry, was entirely true.

    And yet you paint it as him making up facts.

    The same was true when you did that of Kinsella. He misread your comment and had responded to something different. He explained that clearly, but you turned it into him being a liar. You know quite well that there’s a difference between a misstatement and making up facts.

    Separately, you continue to insist that no evidence has been presented. Yet, I presented you with a list of studies that support my position, and you ignored them. I, frankly, cannot understand why you continue to do this.

    Finally, to the guy above who used Russia as an example, that’s a bad example. There were plenty of other factors for why Russian inventors had issues — mainly the entire socialist setup.

    But if you look at *capitalist* societies where there were no, or weak, patent laws, and compare them to similar societies at the same time with stronger patent laws, you find no evidence that patent laws increase innovation. If you look at capitalist countries directly before and directly after a patent system has been changed, again, you find no evidence that stronger patent laws increase innovation. Those are the studies I mentioned to Gene. And his response was that he didn’t care about studies.

    It is hard to have any credibility when you ignore the evidence presented to you, Gene, and instead pick up on minor misstatements as if they were some sort of smoking gun. It is beneath you, but only serves to suggest you do not have real support for your argument.

  18. Quigz November 5, 2009 5:49 pm

    “What the “no government = best government” crowd relies upon is the concept, one described by Ronald Reagan, as the belief that all men are good and to govern with that in mind. We need regulations (i.e., government) because not all men ae good.”

    Ah yes, and the regulations will be drafted by a government of “good men.” What a laughable argument. Let’s not let 10,000 years of human history in which the bad men controlled the state get in the way of your delusional political beliefs.

  19. EG November 5, 2009 6:03 pm

    My apologies for the duplicate post. The Captcha Code was doing a number on me this morning when I made my post.

  20. EG November 5, 2009 6:50 pm

    “Finally, to the guy above who used Russia as an example, that’s a bad example. There were plenty of other factors for why Russian inventors had issues — mainly the entire socialist setup.”

    Mike M.

    I don’t think the Soviet Union (that’s what it was called during the time I looked at socialism and invention) is necessarily a “bad example.” It’s the only example I’m aware of where a country in the 20th dispensed with protection of patent rights for even a limited time. And within 5 years the Soviet Union decided to put a patent law in place. If altruistic inventing was working, they wouldn’t have been doing something so “capitalistic” as putting “western style” patent law in place. But they did.

    I also don’t disagree with you that there’s more to the story of why Soviet inventors struggled under socialism. But that’s the problem with socialism vs. capitalism; there’s simply no incentive to be anything other than mediocre. And a similar thing could be said if there were no patent rights to protect innovation; you would have the same mediocre technology being copied and used by all because there wuold be absolutely no incentive to create better technology. That’s been a common complaint about Microsoft Windows because of its dominant position on computer operting systemswhich has nothing to do with patent rights, and everything to do with the size of the company involved. Size, like socialism, breeds mediocrity, including mediocre technology.

    Patents are the “equalizer” for the Davids of Innovation who want to do battle with the Goliaths of Industry like Microsoft In fact, it’s the Davids of Innovation (where we have any hope of job growth) who will suffer greatly if patent rights “go away.” If you want our economy and innovation to fall to the common mediocre denominator, just tell the Davids of Innovation that we won’t protect you from the Goliaths of Industry like Microsoft copying everything you create. And as Jules astutely said above, try convincing a VC to invest in a David of Innovation who has no patent rights. It won’t happen.

  21. EG November 5, 2009 7:09 pm

    Mike M.

    I don’t think the Soviet Union (that’s what it was called during the time I looked at socialism and invention) is necessarily a “bad example.” It’s the only example I’m aware of where a country in the 20th Century dispensed with protection of patent rights for even a limited time. And within 5 years the Soviet Union decided to put a patent law in place. If altruistic inventing was working, they wouldn’t have been doing something so “capitalistic” as putting “western style” patent law in place. But they did.

    I also don’t disagree with you that there’s more to the story of why Soviet inventors struggled under socialism. But that’s the problem with socialism vs. capitalism; there’s simply no incentive to be anything other than mediocre. And a similar thing could be said if there were no patent rights to protect innovation; you would have the same mediocre technology being copied and used by all because there would be absolutely no incentive to create better technology. That’s been a common complaint about Microsoft Windows because of its dominant position on computer operating systems which has nothing to do with patent rights, and everything to do with the size of the company involved. Size, like socialism, breeds mediocrity, including mediocre technology.

    Patents are the “equalizer” for the Davids of Innovation who want to do battle with the Goliaths of Industry like Microsoft. In fact, it’s the Davids of Innovation (where we have any hope of job growth) who will suffer greatly if patent rights “go away.” If you want our economy and innovation to fall to the common mediocre denominator, just tell the Davids of Innovation that we won’t protect you from the Goliaths of Industry like Microsoft copying everything you create. And as Jules astutely said above, try convincing a VC to invest in a David of Innovation who has no patent rights. It won’t happen.

  22. Just visiting November 5, 2009 7:31 pm

    “You simply continue to totally ignore the real meat of the question about the Swiss patent system. ”

    What is the “real meat”?

    There was a time when the Swiss products could not be reversed engineered. However, they later found out that this was not true and they were suffering from cheap imitations — voila, institution of patent system.

    Nobody **invests** time/engergy/money into a technology/product if they think that somebody else will steal it. There was a time when you could make something and it would be hard for someone to figure out how you made it. This isn’t so much of a problem these days.

    The Swiss had protections prior to instituting their patent laws. However, after time, those protections stopped being effective. There are so many different systems of laws on this planet, yet every modern country employs a patent system. Why is that? Why hasn’t some country abandoned the patent system if it isn’t necessary? Some countries have legalized use of drugs, prostitution, and same-sex marriage — much more controversial topics than patents. Why hasn’t someone stepped out of line with world opinion?

    The answer is simple.

    No protection = no investment. Similarly, reduced protection = reduced investment It is a simple business calculus that the intellectual property communists (e.g., David Koepsell) cannot seem to master.

    There may be some people that invest their time/money/intellect for altruistic reasons, but those are few and far between. Nobody gambles (which is what happens why you try to take a new product/technology to market) without an expectation of a high return on that gamble.

  23. Mike Masnick November 5, 2009 7:48 pm

    EG,

    No one has said that without a patent system we expect “altruistic” invention to take place. That was the problem with the Soviet socialist system. In a capitalist economy, invention does contnue to take place, not for altruistic reasons, but for capitalistic reasons: TO SELL PRODUCT.

    The problem is that you seem to think the point is to sell ideas. It’s not. It’s to sell products and you can do that without a patent system just fine.

    So of course the Soviet system didn’t work. They took away *all* the rewards. But the patent system is not the only way to reward invention. In fact, it’s an incredibly inefficient one from any sensible market economy analysis (giving monopolies always distorts a market). A true free market is one where scarce products are sold, not gov’t backed monopolies.

    As for your claim that there would be a loss of incentive to invent without a patent system, why must you ignore all of the evidence? We have already discussed Switzerland, but also the Netherlands and about two dozen other studies that have shown plenty of incentive to invent sans patents. Petra Moser’s research showed no difference in countries with patent systems and those without. Again, the incentive is to SELL PRODUCT.

    “Patents are the “equalizer” for the Davids of Innovation who want to do battle with the Goliaths of Industry like Microsoft.”

    I always laugh when here this explanation. Do you work in a real business? Because in my experience, if you have a truly innovative product, the giants like Microsoft will totally ignore it until it’s too late (witness how they’re now getting crushed by Google in search). The history of innovation shows this over and over again. The big company that should be able to just “copy” an idea and do it better cannot, because they don’t understand the product or the market well enough.

    And, in the cases when they do figure it out, well, that’s the way competition works. What do you have against the free market?

    “And as Jules astutely said above, try convincing a VC to invest in a David of Innovation who has no patent rights. It won’t happen.”

    I work with VCs pretty much every day, and none of them give a rat’s ass about patents. Most of them are fighting to stop patents from destroying their portfolio companies. They all say the same thing: patents are a huge hindrance on innovation. And these are some of the best, most respected, VCs in the world, like Fred Wilson and Brad Feld.

    I trust them a lot more than some make believe TV investors who are really doing small business loans, not high growth investing.

  24. Mike Masnick November 5, 2009 7:51 pm

    Just visiting, you claim that “No protection = no investment. ” but again we have FULL EVIDENCE that this is simply false. You don’t need protection to invest. You just need to be able to recognize a return. And plenty of people have shown they can actually compete against others, rather than rely on the gov’t to stop all competition. I do not know why you ignore all of the historical evidence that proves you wrong. It’s a shame that you guys refuse to cite a single study and simply ignore the ones that all of us bring up that show you were wrong.

  25. Mike Masnick November 5, 2009 8:00 pm

    EG. This is weird. I responded to your comment twice, and when I clicked submit, both times the comment does not show. I do not know if there’s a bug with Gene’s site or what.

    Rather than rewrite it a third time, I’ll just summairze my points:

    1. No one said we expected “altruistic” invention. Why falsely state what David and myself have said. You get invention, even in the absence of patents because the free market where people get to actually SELL PRODUCTS. You don’t need protection to sell products.

    2. The claim that some big company will simply copy you and you’re left out in the cold is laughable. It makes me wonder if you’ve ever worked in a real business. If you have a truly innovative offering you’ll be begging others to recognize you, not worrying about them copying you. Microsoft is having serious trouble “copying” Google. It’s not so easy. Yahoo faced the same problem. And where did Microsoft come from? Well, it came out as a small company and lots of bigger companies (IBM?) tried to copy it and failed. Meanwhile, we’ve seen how well Microsoft was able to “copy” the iPod. It didn’t. It failed. Copying is not so easy. Competing is hard.

    3. VCs: I watch that show Shark Tank and I work with VCs on a daily basis. The guys on Shark Tank are not VCs, they’re angel investors. And the only one who really cares about patent is Kevin, and if you know anything about his background, he’s not at all trustworthy. His big success story, which he touts all the time on the show — selling TLC to Mattel resulted in a lawsuit because Kevin supposedly cooked the books.

    Meanwhile, the real VCs I deal with all the time — folks like Brad Feld and Fred Wilson are vehemently anti-patent. They’ve seen that all patent do is harm their portfolio companies.

    I’d rather trust the real successful VCs than the made up for TV kind.

  26. Renee November 5, 2009 8:41 pm

    Mike,

    My name is Renee and I am the Chief Operating Officer of PWatchdog.com. There is no glitch in the system but sometimes there is a short lapse of time because some comments are screened for inappropriate content such as malicious websites, or foul language and the like. Your comment has been posted.

    -Renee

  27. Just visiting November 5, 2009 8:52 pm

    “You don’t need protection to invest.”

    Au contraire. You need the protection of property laws, of which intellectual property law is a subset. If you make something, anything, you need the law (which is a product of the government) to keep me from taking it. Walk out of Best Buy with your 37″ LCD TV, and what prevents me from taking it from you? I’m built like a linebacker and I have comparable attitude. The answer is property law — or at least the threat of property law being applied against you.

    What prevents me from labeling my caramel-colored sodas “Coce Cola” and selling them at the local 7-11 for half the price of Coca Cola? That would be trademark law.

    Sure, some dumb people invest lots of money of products/businesses/technology/etc without any protection. However, there is a saying for those “a fool and his money are soon parted.” Smart money (i.e., the VC example discussed above) wants protection before investment.

    “You just need to be able to recognize a return.”
    No … you need to be able to recognize a return commensurate with the amount of risk being taken … which for new products/technologies is very high. You’ve got to be able to cover the losses you incur with products/technologies that don’t pay off with those that do. Excessive competition drives down that return, and if the return isn’t big enough, the product never makes it off the ground.

    This is all pretty basic stuff for those of us who have been around technology and startups. However, these seem to be foreign concepts to the alleged “pro-business/anti-government” types who don’t understand what it is to be truly “pro-business.”

    “I do not know why you ignore all of the historical evidence that proves you wrong.”
    Why don’t you explain “all of the historical evidence”? I would love to see your analysis … this way I can shoot it full of holes. Somehow, you seem to ignore all the PRESENT evidence which shows that all modern countries have strong patent protection.

    To be honest, I don’t give a rats patootie about what the Swiss or Dutch or the Swahili did in the eighteen hundreds or early nineteen hundreds. This happens to be the 21st century, and what (allegedly) worked back then has little relevance to what works today.

    “You don’t need protection to sell products.”
    Ahhh … the business ignorant. We aren’t talking about selling products … we are talking about investing time/money/energy into developing new products. Once developed, it costs just as much for A to produce the product as B. However, if A also has to cover A’s development cost, then A will be charger higher for the product than B. Thus, B thrives whereas A’s business declines. Next time, A waits until C comes out with a new product, and then copies C’s product.

    This is what happens when there is no protection. 150 years ago, it could have taken years and years for B to copy A’s product or A to copy C’s product. Not today — a fact readily apparent for those of us who work with businesses. This can happen within weeks — the Chinese are great at it.

    “Meanwhile, we’ve seen how well Microsoft was able to “copy” the iPod. It didn’t. It failed. Copying is not so easy. Competing is hard.”
    Microsoft didn’t copy the iPod, it designed around it. If Microsoft wanted to “copy” the iPod, in a world without patent protection, we would have gotten the WindowsPod that looked identical and worked identical to the current iPod. In fact, Microsoft could have just as well called it an iPod. Additionally, because Microsoft has a bigger war kitty, it would have probably been able to undercut the price of the iPod.

    Microsoft could have probably bought their WindowsPod from the same Chinese company that currently makes the iPod. If not, they could have easily built it elsewhere in China — the Chinese have no compunctions with using data from somebody else.

    BTW — if your VC are hating patents, it is likely that the companies they are invested in are stealing technology from somebody else and are being sued for patent infringement. It is no different than prostitutes complaining about the police — just bigger stakes.

    FYI — Google has 250 issued patents.

  28. Just visiting November 5, 2009 10:22 pm

    Let’s return to basic economics.

    For a company to pricing power (i.e., the ability to raise prices without losing clients), there is a need for some barrier to entry. This can take the place in many forms. However, one of the most common characteristics to a barrier to entry is that it forces a company that wants to compete to spend extra money.

    Why is pricing power important? Certain things, such as R&D, aren’t cheap. If there is only enough money to pay the bills and give investors a minimal return on investment, there is no money to invest back into the company. What pricing power does is allow companies to leverage the “current big thing” in order to develop the “next big thing.”

    For some industries, the barrier to entry may be millions, hundreds of millions, or even billions. Depending upon the product being sold, it may not be worth it for a competitor to enter the industry. On the flipside, if it only costs $10M for Microsoft to enter a segment of the software industry that generates $50M/year in profits, then they will spend the $10M. The problem with these money-based barriers to entry is that they are barriers to the poorer companies, but not the largers companies.

    Unlinke most barriers to entry, intellectual property is a barrier to entry that can be created by small companies. Also, it is a barrier to entry that can withstand the attach of much larger companies (although not always). It is the best tool that a small company can employ in competing against a much larger company.

  29. David Koepsell November 6, 2009 2:32 am

    Gene,

    Your out-of-the-blue insults are worse than uncharitable. I offered to send you the pdfs for you and anyone else to read (the offer stands), but now I have assembled a bibliography with abstracts for you. By the way, being an anarchist is not akin to wanting disorder. Order emerges in markets, it is governments that corrupt the process, and history bears this out. But that’s tangential, you slur me by association, with no regard for all the efforts I have made to engage you in an honest, civil dialogue or debate. So here’s my sources. Have at them:

    Bibliography with abstracts:

    2006 Pollock, Rufus “Innovation and Imitation with and without Intellectual Property Rights, MPRA Paper No. 5025 http://mpra.ub.uni-muenchen.de/5025 Abstract: an extensive empirical literature study indicates that returns from innovation are appropriated primarily via mechanisms other than formal intellectual property rights and that “imitation” is itself a costly activity…

    Debrah Meloso, Peter Bossaerts, Jernej Copic, “Promoting Intellectual Discovery: Patents versus markets” Science, Vol. 323. no. 5919, pp. 1335 – 1339, DOI: 10.1126/science.1158624. Abstract: Because they provide exclusive property rights, patents are generally considered to be an effective way to promote intellectual discovery. Here, we propose a different compensation scheme, in which everyone holds shares in the components of potential discoveries and can trade those shares in an anonymous market. In it, incentives to invent are indirect, through changes in share prices. In a series of experiments, we used the knapsack problem (in which participants have to determine the most valuable subset of objects that can fit in a knapsack of fixed volume) as a typical representation of intellectual discovery problems. We found that our “markets system” performed better than the patent system.

    Torrance, Andrew W. and Tomlinson, Bill, Patents and the Regress of Useful Arts (May, 28 2009). Columbia Science and Technology Law Review, Vol. 10, 2009. Available at SSRN: Abstract: Patent systems are often justified by an assumption that innovation will be spurred by the prospect of patent protection, leading to the accrual of greater societal benefits than would be possible under non-patent systems. However, little empirical evidence exists to support this assumption. One way to test the hypothesis that a patent system promotes innovation is experimentally to simulate the behavior of inventors and competitors under conditions approximating patent and non-patent systems. Employing a multi-user interactive simulation of patent and non-patent (commons and open source) systems (“The Patent Game”), this study compares rates of innovation, productivity, and societal utility. The Patent Game uses an abstracted and cumulative model of potential innovations, a database of potential innovations, an interactive interface that allows users to invent, make, and sell these innovations, and a network over which users may interact with one another to license, assign, infringe, and enforce patents. Initial data generated using The Patent Game suggest that a system combining patent and open source protection for inventions (that is, similar to modern patent systems) generates significantly lower rates of innovation (p<0.05), productivity (p<0.001), and societal utility (p<0.002) than does a commons system. These data also indicate that there is no statistical difference in innovation, productivity, or societal utility between a pure patent system and a system combining patent and open source protection.

    2005 Moser, Petra, "How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World's Fairs" in American Economic Review, Vol 95, Issue 4. Abstract: Studies of innovation have focused on the effects of patent laws on the number of innovations, but have ignored effects on the direction of technological change. This paper introduces a new dataset of close to fifteen thousand innovations at the Crystal Palace World's Fair in 1851 and at the Centennial Exhibition in 1876 to examine the effects of patent laws on the direction of innovation. The paper tests the following argument: if innovative activity is motivated by expected profits, and if the effectiveness of patent protection varies across industries, then innovation in countries without patent laws should focus on industries where alternative mechanisms to protect intellectual property are effective. Analyses of exhibition data for 12 countries in 1851 and 10 countries in 1876 indicate that inventors in countries without patent laws focused on a small set of industries where patents were less important, while innovation in countries with patent laws appears to be much more diversified. These findings suggest that patents help to determine the direction of technical change and that the adoption of patent laws in countries without such laws may alter existing patterns of comparative advantage across countries

    Anthony Arundela, * and Isabelle Kablab "What percentage of innovations are patented? empirical estimates for European firms" in Research Policy, Volume 27, Issue 2, June 1998, Pages 127-141. Abstract: A 1993 survey on the innovative activities of Europe's largest industrial firms obtained useable results on patenting activities for 604 respondents. The data are used to calculate the sales-weighted propensity rates for 19 industries. The propensity rates equal the percentage of innovations for which a patent application is made. The propensity rates for product innovations average 35.9%, varying between 8.1% in textiles and 79.2% in pharmaceuticals. The average for process innovations is 24.8%, varying from 8.1% in textiles to 46.8% for precision instruments. Only four sectors have patent propensity rates, for both product and process innovations combined, that exceed 50%: pharmaceuticals, chemicals, machinery, and precision instruments. Regression results that control for the effect of industry sector show that patent propensity rates increase with firm size and are higher among firms that find patents to be an important method for preventing competitors from copying both product and process innovations. The effect of secrecy is not so straightforward. Firms that find secrecy to be an important protection method for product innovations are less likely to patent, as expected, but secrecy has little effect on the propensity to patent process innovations. The R&D intensity of the firm has no effect on patent propensity rates for both product and process innovations. The sector of activity has a strong influence on product patent propensities but very little effect on process patent propensities, after controlling for the effect of other factors.

    Helios Herrera & Enrique Schroth, 2003.
    "Profitable Innovation Without Patent Protection: The Case of Derivatives," Working Papers 0302, Centro de Investigacion Economica, ITAM. Abstract: Investment banks develop their own innovative derivatives to underwrite corporate issues but they cannot preclude other banks from imitating them. However, during the process of underwriting an innovator can learn more than its imitators about the potential clients. Moving first puts him ahead in the learning process. Thus, he develops an information advantage and he can capture rents in equilibrium despite being imitated. In this context, innovation can arise without patent protection. Consistently with this hypothesis, case studies of recent innovations in derivatives reveal that innovators keep private some details of their deals to preserve the asymmetry of information.

    2008 Boldrin, M and Levine, D, Against Intellectual Property, Cambridge University Press. Reviews: 'One should bear a heavy burden of proof to enjoy a monopoly. Boldrin and Levine have dramatically increased that burden for those who enjoy intellectual monopoly. All economists, lawyers, judges, and policymakers should read this book.' W. A. Brock, University of Wisconsin, Madison 'Boldrin and Levine, highly respected economic theorists, have produced a lively and readable book for the intelligent layman. In it, they challenge conventional wisdom about patents and argue that we would be better off without them. The book will open a fresh debate on the policy on intellectual property protection.' Boyan Jovanovic, New York University 'There is a growing and important skepticism about the fundamental rules we have used to regulate access to information and innovation. This beautifully written and compelling argument takes the lead in that skeptical charge.' Lawrence Lessig, Stanford Law School 'For centuries, intellectual property rights have been viewed as essential to innovation. Now Boldrin and Levine, two top-flight economists, propose that the entire IPR system be scrapped. Their arguments will generate controversy but deserve serious examination.' Eric Maskin, Nobel Laureate, Institute for Advanced Study, Princeton 'This is an important and needed book. The case made by Boldrin and Levine against giving excessive monopoly rights to intellectual property is a convincing one. Monopoly in intellectual property impedes the development of useful knowledge. I think they make the case that granting these monopoly rights slows innovation.' Edward C. Prescott, Nobel Laureate, University of Minnesota 'Boldrin and Levine present a powerful argument that intellectual property rights as they have evolved are detrimental to efficient economic organization.' Douglass C. North, Nobel Laureate, Washington University in St. Louis 'How have we come to view ideas as if they have some physical existence that we can lock up behind a set of property rights laws akin to, but remarkably different from, those we use to protect our physical property? This is the central question in Against Intellectual Monopoly by Michele Boldrin and David Levine. The answer they come to is startling: except in a few rare cases, intellectual property protection does more economic harm than good and ought to be eliminated. The technology of digital computers and the Internet, as Boldrin and Levine show again and again, has exposed long-standing moral shortcomings of current intellectual property laws in a particularly stark way.' Stephen Spear, Carnegie Mellon University

    Fiona Murray, Scott Stern, "Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge? An Empirical Test of the Anti-Commons Hypothesis", NBER Working Paper No. 11465*Issued in July 2005 NBER Program(s): IO PR. Abstract: While the potential for intellectual property rights to inhibit the diffusion of scientific knowledge is at the heart of several contemporary policy debates, evidence for the “anti-commons effect” has been anecdotal. A central issue in this debate is how intellectual property rights over a given piece of knowledge affects the propensity of future researchers to build upon that knowledge in their own scientific research activities. This article frames this debate around the concept of dual knowledge, in which a single discovery may contribute to both scientific research and useful commercial applications. A key implication of dual knowledge is that it may be simultaneously instantiated as a scientific research article and as a patent. Such patent-paper pairs are at the heart of our empirical strategy. We exploit the fact that patents are granted with a substantial lag, often many years after the knowledge is initially disclosed through paper publication. The knowledge associated with a patent paper pair therefore diffuses within two distinct intellectual property environments – one associated with the pre-grant period and another after formal IP rights are granted. Relative to the expected citation pattern for publications with a given quality level, anticommons theory predicts that the citation rate to a scientific publication should fall after formal IP rights associated with that publication are granted. Employing a differences-indifferences estimator for 169 patent-paper pairs (and including a control group of publications from the same journal for which no patent is granted), we find evidence for a modest anti-commons effect (the citation rate after the patent grant declines by between 9 and 17%). This decline becomes more pronounced with the number of years elapsed since the date of the patent grant, and is particularly salient for articles authored by researchers with public sector affiliations.

    Thomas David and André Mach, Institutions and Economic Growth: The Successful Experience of Switzerland (1870-1950)
    UNU-WIDER
    Series:
    WIDER Research Paper
    Volume:
    2006/101
    Title:
    Institutions and Economic Growth: The Successful Experience of Switzerland (1870-1950)

  30. EG November 6, 2009 8:59 am

    Mike M.,

    Thanks for the interesting and lively debate. I think we’ve reached the point where we need to simply agree to disagree and leave it that. Neither of us is going to convince the other. This is pretty much what happens when I talk with those who favor open source code.

    Just Visiting,

    I agree with all you’ve said. Couldn’t have said it better myself. Let’s face, there are those who favor patent systems and there are those who don’t.

  31. David Koepsell November 6, 2009 9:38 am

    I’ll try again… my comments weren’t making it through, for some reason. I had attempted to post a list of references with abstracts, which might have been too long. Instead, here’s a set without abstracts. These are the files I offered to forward to Gene and anyone else who wanted to read up on the sources I had prepared for our debate, that Gene alleges I am somehow a “fraud” for not disclosing, though I have offered the full articles repeatedly… As for commenting a site regarding anarchism, Gene did the same. Anyway, for anyone who wants to read more, please see below:

    for another take on the problem with IP, see my Cardozo talk slides here:
    http://davidkoepsell.com/TheEthicalCaseAgainstIP.ppt.htm

    as well, here’s a partial list of references on our side of the debate:

    2006 Pollock, Rufus “Innovation and Imitation with and without Intellectual Property Rights, MPRA Paper No. 5025 http://mpra.ub.uni-muenchen.de/5025

    Debrah Meloso, Peter Bossaerts, Jernej Copic, “Promoting Intellectual Discovery: Patents versus markets” Science, Vol. 323. no. 5919, pp. 1335 – 1339, DOI: 10.1126/science.1158624.

    Torrance, Andrew W. and Tomlinson, Bill, Patents and the Regress of Useful Arts (May, 28 2009). Columbia Science and Technology Law Review, Vol. 10, 2009. Available at SSRN: http://ssrn.com/abstract=1411328.

    2005 Moser, Petra, “How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World’s Fairs” in American Economic Review, Vol 95, Issue 4.

    Anthony Arundela, * and Isabelle Kablab “What percentage of innovations are patented? empirical estimates for European firms” in Research Policy, Volume 27, Issue 2, June 1998, Pages 127-141.

    Helios Herrera & Enrique Schroth, 2003.
    “Profitable Innovation Without Patent Protection: The Case of Derivatives,” Working Papers 0302, Centro de Investigacion Economica, ITAM.

    2008 Boldrin, M and Levine, D, Against Intellectual Property, Cambridge University Press.

    Fiona Murray, Scott Stern, “Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge? An Empirical Test of the Anti-Commons Hypothesis”, NBER Working Paper No. 11465*Issued in July 2005 NBER Program(s): IO

    Thomas David and André Mach, Institutions and Economic Growth: The Successful Experience of Switzerland (1870-1950)
    UNU-WIDER
    Series:
    WIDER Research Paper
    Volume:
    2006/101
    Title:
    Institutions and Economic Growth: The Successful Experience of Switzerland (1870-1950)

  32. Just visiting November 6, 2009 12:07 pm

    “Let’s face, there are those who favor patent systems and there are those who don’t.”

    Yup — there were those who thought communism was a great idea. Just like the anti-patent crowd thinks inventive concepts belong to the public, the communists thought that the fruit of everybody’s labor should also belong to the public. The problem with both schools of thinking is the belief that the pie will remain the same. It won’t. There are no incentives to work harder than the next guy in a communist system because the reward will not be comensurate with the extra effort. Similarly, there are little incentives to innovate because the potential reward will not be comensurate with the time/energy/money involved in innovating.

    Some people worked hard in communist society, but most didn’t. If we want more innovation, we need to encourage it.

    The FTC published a paper some time ago saying that patents were anti-competitive. They were absolutely dead-on in in a very narrow sense. Patents are anti-competitive for the patented technology. However, patents not only directly encourage innovation (i.e., they reward innovators), they indirectly encourage innovation. When a competitor is faced with a roadblock, the competitor attempts to find paths around that roadblock and this can lead to discoveries that may have never been made but for the roadblock.

    As an engineer, some of your best work comes from being faced with a situation that you cannot use the old tool/method/etc. to solve a problem you’ve always faced for some unexpected reason (i.e., space limitations, material incompatability, etc.) This forces you to look beyond what is old and think about other ways of solving the problem. In the end, you create a tool/method/etc. that is better than the old. However, if it wasn’t for tht unexpected roadblock to using the old, you would have never found the new.

  33. Gene Quinn November 6, 2009 12:22 pm

    David-

    I did not insult you whatsoever and you know that. If what you are referring to an insult it being called an anarchist that is hardly an insult, but rather merely descriptive. Th Center for a Stateless Society on their own website characterizes themselves as anarchists, and you professed here to be anti-government. You also were posting substantive comments to the anarchist site and agreeing with them. So I am not insulting you at all. I merely point out that the company you keep are rather radical, and your positions are tainted by you and then being radical.

    In terms of offering the PDFs, once again you are not telling the truth, which seems to be a disturbing pattern. You said to me that you had the proof and you would have shared it with me if I came to NY. You then said you were to busy to provide the poof.

    You can attempt to vilify me and mischaracterize what I have said and what you have said, but when this is all done out in the open I don’t know who you believe will be swayed by things that are obviously untrue.

    As far as you comments not getting through, that is 100% accurate and I am sorry that bothers you but it will always be that way as long as you include hyperlinks. No one is allowed to automatically post any comment that has a hyperlink and I must approve them before they go live. That is to prevent comment spam and I will not change that policy.

    -Gene

  34. Gene Quinn November 6, 2009 12:29 pm

    Comment from EG sent via e-mail to me for posting to this thread:

    I can’t speak to the Swiss situation, but I can speak to the Soviet one. By a 1919 decree the Bolsheviks abolished patent rights. The expectation was that the Soviet inventor would simply invent out of recognition for what they had done. Needless to say, and without going into the details of the college independent study I did on socialism and invention, the 1919 decree was an unmitigated disaster. Basically, Soviet inventors didn’t invent and foreign investment stayed away from the Soviet Union. Put differently, altruism doesn’t work. In response, the Soviet Union put in place in 1924 a patent law modeled after Germany’s.

    In 1931, the Soviet Union put in place the first true “socialist” patent law, including an item of its own creation called the certificate of authorship to reward primarily Soviet inventors for their inventive activity. In fact, the Soviet law of 1931 (refined in 1941) rewarded Soviet citizens for discoveries that other patent laws (including the U.S.) don’t recognize as patentable. Again, the Soviet laws of 1931 and 1941 are recognition that altruism alone won’t stimulate inventive activity, even in a socialist society. Put differently, without some form of reward for inventive/creative activity, you’re doomed to innovative and economic mediocrity (or worse). And Gene is correct that without IP rights, including patent rights, folks (e.g., banks) are not going to invest $$ in unprotectable (and thus freely copyable) technology.

  35. David Koepsell November 6, 2009 12:34 pm

    Gene,

    I find the term “fraud” both insulting, and misleading, under the circumstances… it’s that term I objected to.
    I am proud to be philosophically anarchistic and have been for nearly two decades now.

  36. David Koepsell November 6, 2009 12:43 pm

    specifically, this bit:

    “You also disingenuously claim to have all this proof that you where going to hit me with during a debate, but now you don’t have any time to even provide a citation. You are a fraud, the company you keep is alarming, and you do yourself no favors by wrapping yourself around such nonsense. It demeans your entire position and exposes it for what it really is, which is a radical anti-government, anti-everything approach to society.”

    I offered you my sources, you never accepted the offer. I doubt you’ll bother to look up the articles I cited, or to read them. You are apparently more intent on trying to personally undermine your opponents, rather than truly debate. It’s a real shame.

    Finally, I am not anti-everything… I am pro-person, pro-freedom, and yes, intensely skeptical of sovereigns exercising either authority over individuals, or attempting to direct the market. Our mutual friend history has shown that in each case, the results are catastrophic. Moreover, you act surprised at my political philosophy, when in fact, we have discussed it here before. I find that odd.

    Anyway, I do hope you’ll read up a bit, each of the articles I cite is based on empirical study.

    best,
    David

  37. David Koepsell November 6, 2009 12:51 pm

    (if anyone is still paying attention, you can scroll up to comments 30 and 32 for the citations)

  38. Just visiting November 6, 2009 1:04 pm

    “I am pro-person, pro-freedom, and yes, intensely skeptical of sovereigns exercising either authority over individuals, or attempting to direct the market.”

    And you think the market is “pro-person, pro-freedom” and will use its power in a positive way? The market is little better (or worse, depending upon your POV) than government. There are few problems in government that you won’t find in any big corporation. Even small companies do some horrendous things. A properly run business looks out for their shareholders — maximizing shareholder wealth. Although in today’s day and age, being a “good corporate citizen” is given lip service (becaus good customer/public relations are perceived as generating business), profit is still the #1 goal of 99% of businesses and profit will roll over your “pro-person, pro-freedom” agenda every day of the week.

    If you are putting all your eggs in the basket of the inherent goodness of the market, then you sorely mistaken.

  39. Just visiting November 6, 2009 1:22 pm

    I reviewed the two references available by link. One was a paper that attempted to model innovation with patents versus no patents and was based upon formulas only. The second was a law review article that was based upon a computerized “patent game.”

    From your presentation:
    Expressed ideas are like genes… it isn’t so much that “they want to be free”

    •They just are.

    You assume that ideas will become expressed. There are plenty of ideas that are not expressed. I cannot tell you how many times I have talked to somebody who has this “great idea” but has never talked to anybody about it because they don’t want to have it stolen.

    It is too bad that you didn’t get a chance to present — your presentation is a doozy.

  40. David Koepsell November 6, 2009 1:29 pm

    Oh, I did present it, to a very receptive audience… that was for my invited talk, not for the debate Gene and I were supposed to have. Thanks! I’ll post the video when I compress it.

    and re: expressions vs. ideas, you’re statement is trivially true… so what? Secret-keeping is a legitimate way to get competitive advantage, but it doesn’t threaten science, which depends upon dispersing information. Scientists will still do that, as they did for centuries.

  41. David Koepsell November 6, 2009 1:35 pm

    and, Just Visiting, if you want to read the others, email me… I’ll send you the zipped pdfs. I appreciate the fact that you are willing to read these studies. You know, the studies that you did read about are empirical studies, using models. That’s science, and it’s an essential part of innovation to model the real world and derive hypotheses from these models, testing them through further experiments. You can’t just slough them off.

  42. Just visiting November 6, 2009 1:36 pm

    “Here, we propose a different compensation scheme, in which everyone holds shares in the components of potential discoveries and can trade those shares in an anonymous market.”

    Sounds very communist to me — everbody owns potential discoveries.

    FYI — for me, I stick with emperical evidence. When I have a client tell me that his 20+ person business would have never been started if the client knew (at the time he started his business) he couldn’t obtain patent rights for his intellectual property, I’m using that as a checkmark for the pro-patent side.

    The reason being for this client is pretty straight-forward. This client has spent millions and many years developing a new product lin. However, if the 800lb gorillas in the industry wanted to reproduce the product line, they can throw money at the problem and reproduce all of this in 3 months. The product line is something that will take 5-10 years to fully enter the market. As such, without patent rights, my client would be no match for the 800lb gorillas.

    My client, being patent sophisitcated, knew this, which is why he has been very diligent with his intellectual property. In the end, he will very likely recover his investment and the investment of his shareholders. If he didn’t have patent protection, he wouldn’t.

  43. Just visiting November 6, 2009 1:41 pm

    “Scientists will still do that, as they did for centuries.”

    You need just look at Leonardo’s writings to understand the paranoia many inventors feel.

    You think Leonardo would have published his writings during his lifetime had there been a patent system he could have relied upon?

  44. EG November 6, 2009 3:16 pm

    I’ll add a bit more to this lively debate from the perspective of what a country’s patent laws (weak or strong) say about innovation, and especially about how innovative that country is in certain technologies relative to other technologies which it isn’t innovative in.

    The Swiss example is very telling in this regard (see Tony McShea’s comment). The Swiss obviously considered their watches to be innovative relative to the rest of the world. And as long as Swiss watches weren’t that easy to copy, the Swiss didn’t care how strong or weak their patent law was. But once the Swiss became worried about imitation of Swiss watches in other countries, up went Swiss patent barriers to such copying. In fact, the Swiss were apparently selective in their patent laws in protecting certain technologies in which the Swiss were considered innovative (e.g., watches), but not others (e.g., chemicals) which were considered innovative in other countries.

    Being an “innovation thief” with weak patent laws is also not without risk or consequences in our current global economy. Some countries, such as China and most recently India, have so lacked innovation in so many different technology areas that they adopted this Swiss model in its entirety. In fact, as long as innovation wasn’t a strong factor and as long those countries had cheap labor, copying innovative technologies from other countries became far more important than having strong (or even any) patent protection in place. But like what the Germans threatened to do to the Swiss over patent protection for chemical process technologies, countries which rely upon innovation (such as the U.S.) have made stronger patent protection in these “copy cat” countries now a global trade issue. Put it this way, you don’t want your country to become a trade pariah by being labeled as an “innovation thief,” especially if that means trade sanctions (e.g., import duties) could be in the offing.

    I also wouldn’t discount too readily the “investment” part of the innovation equation when it comes to patents, especially when you consider the global context. And the Soviet Union is a prime example of why this matters. In addition to providing little incentive to Soviet inventors to invent, the 1919 decree abolishing patent rights in the Soviet Union made it a virtual certainty that foreign investment wouldn’t occur in the Soviet Union. Sure, the Soviet Union could copy the innovative technologies of other countries. But with no manufacturing structure in place to do so, and no foreign investment to make that manufacturing structure happen, having no patent laws became a “luxury” the Soviet Union could ill-afford, not if it was to get this needed foreign investment. Ironically, the Soviet Union later bitterly complained about the theft by other countries of its very innovative metallurgical technologies. Why: the Soviet Union wasn’t a member of the Paris Convention, so it couldn’t protect those innovative metallurgical technologies in those countries which were doing the copying. As the Soviets learned until they joined the Paris Convention (once they got recognition for the Soviet certificates of authorship), “innovation theft” can be a two-way street.

  45. Adam November 6, 2009 3:28 pm

    Just to set the record straight on Gene’s increasingly unbelievable claims, here are the two places where David Koepsell offered to send his sources to anyone who wants them, three days ago:

    “I am happy to send a zip file of all my sources if you’d like, just email me and I’ll forward it on to you”
    http://www.ipwatchdog.com/2009/11/02/quinn-and-koepsell-discuss-gene-patents-on-grittv/id=7087/#comment-8955

    “I have a fat zip file of reading about the “Swiss” miracle, and other important milestones in innovation without IP, for anyone who emails me with a request.”
    http://www.ipwatchdog.com/2009/11/02/quinn-and-koepsell-discuss-gene-patents-on-grittv/id=7087/#comment-8962

  46. Mike Masnick November 6, 2009 5:12 pm

    Just visiting, it is difficult to take you seriously when you claim that we are in favor of a “communist” system. Nothing is further from the truth, and resorting to silly taunts like that suggest both a weak understanding of political philosophy as well as economics.

    You talk about supporting strong protections. I am curious if you favor tariffs and mercantilism. By your definition, the government should just give out monopolies on each product, otherwise what would be the incentive to invest. Why isn’t there a sugar monopoly? A car monopoly? After all, wouldn’t that give the most incentive to invest in your reasoning?

    It’s hard to take anyone seriously who defends a system of bureaucratic central monopolies and accuses those who want to get rid of such things as “communism.”

    It’s even more amusing that you say you “stick to empirical evidence” and yet when I presented you with empirical evidence you said you “don’t give a rats patootie” about it. You don’t stick to evidence. You stick to anecdotes. I prefer actual evidence.

    But, seeing as you are not interested in discussing stuff, but in bullying people, I will bow out of this debate.

    I enjoyed talking with EG, but Just Visting is clearly not interested in an actual discussion or actual knowledge on history, economics or political philosophy. It is not worth wasting time on such people. You make your living off of gov’t granted monopolies, so I understand your need to rationalize that they are a good thing, no matter what actual empirical evidence is presented to the contrary. But given that level of cognitive dissonance, you will simply never realize what you are defending.

  47. Just visiting November 6, 2009 6:30 pm

    “Just visiting, it is difficult to take you seriously when you claim that we are in favor of a ‘communist’ system. Nothing is further from the truth, and resorting to silly taunts like that suggest both a weak understanding of political philosophy as well as economics.”

    I call it like I see it. I’ve been calling anti-patent people communists for years. They suggest taking the intellectual property of individual/businesses and giving it away to the masses. This is communism — pure and simple. Also, the reason why communism failed is why this proposed system will also fail. In communism, the person who does the least amount of work still gets the same benefits. As such, the incentive is for people to do the least amount of work. In a non-patent regime, the company that does no R&D can steal the innovations of the people that do. As such, it is more cost-effective to be a copier than an innovator. Eventually, the smart people realize that spending money on R&D isn’t worth it.

    The Chinese are great at copying. However, you will be hard pressed to get real innovation out of them. Oh … and imagine this … China has really weak intellectual property laws. Who would have thought?

    “By your definition, the government should just give out monopolies on each product, otherwise what would be the incentive to invest. Why isn’t there a sugar monopoly? A car monopoly? After all, wouldn’t that give the most incentive to invest in your reasoning?”
    No … not necessary. If you read one of my pevious posts, I touched on barriers to entry. Barriers to entry also protect profits by making it hard for new competitors to enter the market. Regardless, sugar and cars aren’t monopolies, but they are oligopolies (or very close to).

    “It’s hard to take anyone seriously who defends a system of bureaucratic central monopolies.”
    Perhaps you neglected to read the U.S. Constitution which talks about granting rights for “limited times.” Regardless, do you prefer natural monopolies? Are those any better?

    “I presented you with empirical evidence you said you ‘don’t give a rats patootie’ about it.”
    I’m sorry … anybody who thinks what MAY have been relevant 150 years ago is relevant today is grasping at straws .. then again, grasping at straws sounds exactly what you are doing.
    BTW — what is this emperical evidence you are talking about? Citing a couple of papers with no accompanying analysis is not presenting emperical analysis. It is throwing a wad of paper on the wall in the hope that it sticks … or at least it sticks while somebody is looking at it.

    “But, seeing as you are not interested in discussing stuff, but in bullying people, I will bow out of this debate.”
    Boo hoo. Grow yourself a set. If you cannot take somebody getting in your face, then you won’t ever be successful on this crusade of yours. There are a lot more people, with nastier dispositions and more and state than I. I’m just here to poke fun at you.

    Dude … I spend every day arguing with government employees. I have politely told more government employees in an average they are full of dung than you will in your lifetime. However, unlike you, I have talked with people that have spend years and sometimes thousands of dollars to take an invention from just a spark of creativity to an actual product. Without patent protection, these people will be eaten by the big corporate sharks.

    You are a shill for big corporations that want something for nothing. I am very comfortable defending a system that lets the little guy fight the big guy and gives me an opportunity to rake Federal Employees over the coals on a daily basis.

    IMHO, you are defending thiefs — plain and simple.

  48. Gene Quinn November 6, 2009 6:48 pm

    Adam-

    I realize you do not always like to keep it real and prefer not to cloud issues with facts, but in an effort to keep things grounded in reality I suggest everyone take a look at this:

    http://ipwatchdog.com/images/ScreenShot258.png

    As you can see @ 12:09pm on Nov. 3, I asked for Koepsell’s sources. Koepsell then said at 1:38pm on Nov. 3, that he would send a zip file but that he was too busy to do so presently. He pointed out that he would have provided them at the debate. So I am 100% correct to have said that I asked for a citation and none was provided because he was too busy.

    So… just to set the record straight on Adam’s incorrect and increasingly unbelievable claims, everyone can see that Koepsell said that had I been able to come to NY he would have given me a citation but was unable to do so until some unspecified time in the future.

    I would also like to point out that in an effort to make me look bad Adam quoted the part of the comment that David said he would send the sources, but did not quote the part that said he was too busy to do so. How shocking that Adam would focus on only part of the quote and present it here out of context to the point that the meaning was completely changed.

    -Gene

  49. Mike Masnick November 6, 2009 6:58 pm

    Just Visiting,

    Don’t flatter yourself. I have no worries in debating you, since the facts are on my side, it’s just clear that you have no interest in debating, but prefer sticking your fingers in your ears and shouting “nah nah nah” any time evidence is presented.. So why waste the time, when I can spend my time doing more important things, such as actually helping innovators?

    Good luck to you.

  50. Gene Quinn November 6, 2009 7:30 pm

    David-

    You simply cannot be pro free market and subscribe to an anarchistic philosophy. They are incompatible. A free market cannot and never will exist without a level playing field and anarchy and the abolition of government will not result in anything other than chaos. A free market without government regulation to ensure a level playing field results in monopolies that prey on individuals, which was the American experience prior to Teddy Roosevelt.

    And just to be clear, patents are not monopolies.

    -Gene

  51. Adam November 6, 2009 11:51 pm

    Gene,

    This is just getting weird. First you claim that calling someone a fraud isn’t insulting, and now I’m questioning my own reading comprehension abilities, because what you’re saying doesn’t match up with what you’re quoting. I’m going to give you the benefit of the doubt and assume that you’re a busy man and you don’t have time to read well enough to parse the sentences correctly, so I’ll help you. Here are the first two sentences David wrote:

    “I was available for a full blown debate last week and no one showed up. I don’t blame Gene for getting sick, but I made the time then, and haven’t got the time now, the quarter is finishing up here and I have a pile of grading.”

    The meaning of the second sentence here is clear: he didn’t then have time for a “full blown debate” because of his professional responsibilities.

    Here’s the entire rest of his comment:
    “I am happy to send a zip file of all my sources if you’d like, just email me and I’ll forward it on to you, then you can read to your heart’s content.”

    Here, he is clearly offering an alternative to the “full blown debate” that he just said he can’t do. There are no time restrictions mentioned in this offer. There is no mention of being too busy to answer the email he requests.

    Nowhere does he say he’s too busy to send you the sources. Nowhere does he say he would have given you citations in the debate. Are these things from private communication between you two?

  52. Gene Quinn November 7, 2009 12:58 am

    Adam-

    What is weird is that you put words in my mouth, and I am getting sick and tired of it. Koepsell is the one who says he is an anarchist and pro-free market. You simply cannot be both and it is intellectually dishonest to claim that you can be both. It is intellectually dishonest for Koepsell to continue to argue that the patents in the ACLU case patent genes. He refuses to read the claims, he refuses to acknowledge that methods that require human interaction are not naturally occurring, he refuses to acknowledge that the claims specifically claim methods for screening and methods for determining and methods for isolating. You tell me what that is. It is certainly intellectually dishonest, and his constantly saying things that he knows to be untrue seems fraudulent to me. He has tried to hijack this issue for his own anti-government, anti-patent purposes, and rather than deal with reality he is spreading fear and lies. No one owns your genes. Do you really believe that? Get a grip!

    Do you realize that Koepsell and I communicate via e-mail and Facebook private message on a regular basis? I naively thought we could discuss these things in a sophisticated way, which obviously cannot happen when he refuses to read the claims and makes facts up without care of the truth. In any event, I asked him for a citation and he said he didn’t have time to get into it, but to send him an e-mail and he would send me a zip file. HE HAS MY E-MAIL BECAUSE WE E-MAIL ALL THE TIME. What he said was blowing me off. I did not ask for a “full blown debate” I asked for a citation to his source, and he conveniently was too busy to provide that and played like I was demanding a full blown debate. Just like Kinsella did when he said here that I never offered a debate and I never offered to answer questions. I did and I produced the e-mail to demonstrate he was not telling the truth. I would prefer to answer the same question and let everyone decide who has the best answer. They don’t want to do that because they know they cannot hide when forced to put words into writing.

    I have been offering to debate these folks in writing, swapping articles, I have offered to talk via Internet radio and none of those offers have been taken up. Koepsell wanted me to travel to NY and since I didn’t he and his cronies are all over the Internet calling me a coward and saying I don’t want to debate them. They are the ones refusing to engage in debate. For crying out loud Koepsell has even said the Swiss did not have a Patent Office in the 20th century. I point that is false and then I get creamed across varies sites because proving the factual assertion that is the basis for the premise is false apparently does nothing to demonstrate the premise is false. Of course it does. If you have the facts on your side you don’t have to make them up. They don’t want to talk about reality because they prefer to fear monger.

    What would you call it when people continue to ignore truth, make up facts and then through innuendo imply things that are false?

    -Gene

  53. Mike Masnick November 7, 2009 1:55 am

    Gene,

    Chill out.

    1. It is perfectly reasonable to be both an anarchist and a believe in the free market. I am not, but it is quite natural. Perhaps you are unfamiliar with anarchists, but there is a large group of them who are strong free market believers. There is no contradiction there. The quintessential free market is one where no gov’t is needed.

    2. Why do you keep accusing David of making up facts? We already addressed that. He did not. He misspoke slightly in saying that there was no patent system, when the truth is there was a very weak one and there was none for the products of interest. You know what he meant. I’ve explained it to you 3 times already. Why must you keep claiming that he makes up facts?

    3. As Adam pointed out, he was also more than willing to provide the citation, and I note that he provided citations above. Why do you ignore all that?

    4. David, Stephan and myself are all willing to “debate” you. In fact, that’s what I thought we were doing here. I tried to do it on my site, but you told me you didn’t want to talk to me any more. I’m not sure what to make of that.

    5. I am unsubscribing from this thread. I am about to leave for two weeks of travel and this is filling up my inbox with ridiculous statements and accusations that are not the place of reasoned debate. I will be posting more on Techdirt in the near future. If you wish to debate, I hope to see you take part there.

  54. David Koepsell November 7, 2009 2:38 am

    Thanks Adam and Mike for taking the time to try to keep the record straight here. I am still in the midst of grading, and preparing lectures for next week, but I did take the time to try to compile the above bibliography (though it’s not good MLA style, sorry) from the articles I had gathered. Gene, I didn’t send them to you without your approval, I suppose I could have, but some people don’t like to get large files via email without notice. I know I don’t since it generally trips my spam filter and ends up getting missed. Nonetheless, based on our previous dealings, I never expected you to accuse me of “fraud” or be so uncivil for apparently no reason. I never called you a twit, afterall, and still bear no hard feelings for you. I think you were just lashing out. I hope you’re well and recovered from your illness.

    all my best,
    David

  55. Gene Quinn November 7, 2009 11:58 am

    Mike-

    If David misspoke that is fine, but what about his misspeaking with respect to the Myriad Genetics patents covering genes, when they clearly do not? They clearly relate to methods, yet he continues to fear monger and say that Myriad Genetics owns people. You see the problem is there is a pattern of “misspeaking.” I don’t believe you do it, but so many say careless, inaccurate and flat out incorrect things and then when called they say they misspoke. No one is perfect, but the this is happening at an alarming level, to the point where it is difficult to accept mistake as the answer. Arguments based on falsehoods are disingenuous and when I point out the factual errors I am told that I am not forwarding the debate and ridiculed. In a debate that is exactly what you do. You point out where the opponent is wrong, explain truth and make your arguments. You simply cannot base arguments on falsehoods and then act as if the person who points out the falsehoods is engaging in misdirection. That is intellectually dishonest.

    It is also intellectually dishonest to say that one can rationally and reasonably be a free market anarchist. The quintessential free market is indeed one where no government is needed, and like a horse with wings and a horn sticking out of its forehead that type of free market does not exist, never has and never will. In order for their to be a market there need to be rules. Anarchists are against government and against rules. Chaos cannot and will not ever lead to fairness or any market, let alone a free market.

    In terms of a debate, I would love to engage in a debate as best we can. I still see no reason why we cannot pose questions to each other and answer them in writing. That is what I suggest long ago and was ridiculed.

    Safe travels to you.

    -Gene

  56. Gene Quinn November 7, 2009 12:08 pm

    David-

    And I never expect to see you commenting on an anarchists website and agreeing with an article declaring me a twit. So you can act like it is uncivil to characterize your arguments as fraud, but I find it uncivil to engage with civil e-mails and discourse with me and then elsewhere on the Internet where truly crazy and radical ideas are professed you agree with those who are taking pot shots at me.

    Do you think it is civil to make fun of someone being sick? You don’t know me, and you have no idea. You continue to say “I was there, but Gene didn’t show up, but if he did…” And then others openly question me and you agree? I have stood up on this forum here for you, I have helped promote your book and I know many people who never would have purchased your book now have as a result of my debating you and recommending that others read your work so that we can at least know your positions and address them. I was shocked to see that website and you chiming in.

    Perhaps saying you are a fraud was too much, but I don’t know how else to characterize your arguments. You can read the claims in the Myriad patent and you do, presumably, and then you misrepresent what they say in order to forward your argument. Methods are not laws of nature and are not like gravity. You can disagree with the law, but when you base your arguments on false statements and refuse to acknowledge the obvious and then side with those who crazies on the Internet, it is obvious I don’t know who you are.

    I believe you to be passionate. You are fighting a losing fight on the ACLU case and associating with those who are anarchists, anti-government and believe income taxes are illegal does nothing but weaken your arguments. Your judgment is also clouded and your rhetoric about companies “owning individuals” does nothing but spread fear without justification and without facts.

    -Gene

  57. David Koepsell November 7, 2009 3:06 pm

    for the record, here’s all I said at the site:

    “Excellent points, Kevin, and the revolution in production is part of the basis of my latest work in progress on ethics, IP, and nanotechnology. You might check out The Scientist this past month too, which has an interesting article on a home-brew biotech startup that capitalized its infrastructure to the tune of about 40k, rather than the many millions others spend. They estimate they can bring new pharms to the market for $10 mil. each, rather than the usual $100 Big Pharma alleges each new drugs costs.

    I had lots of great ammo for Quinn, had he only shown up. Instead, I gave a lecture to the students on innovation without IP, and they got it. They aren’t mired in old modes of thinking. Hell, as we know from the Carnegies study and others, IP only covers about 12-15% of innovation now, which forces people like Quinn to have to somehow defend the idea that ONLY that 12-15% is innovative, important, or is somehow the crux of our economy.

    best,
    -d”

    my agreements were substantive, not to any name-calling. Moreover, you really need to re-read the claims in the Myriad patents, which although prefaced often with the words “a method” are over naturally-occurring mutations to naturally-occurring genes.

    anyway, Gene, when you want to discuss issues, I’m always up for it. You were on the GritTV spot because I suggested it to the producers who had booked me solo. I had been invited on alone, and mentioned I’d be debating you live, in-person, at Cardozo before the TV shoot, and would they want you to come along and they said sure. And even when you couldn’t show up for the live debate, and you asked me if I would prefer you not be on the TV spot, I insisted, as you’ll recall. So I’ve given you a bit of promotion too, because I like you, and respect you. I hope you’ll calm down and put things back into perspective, if you’re a victim of something, it isn’t because of me.

    all my best,
    David

  58. Gene Quinn November 7, 2009 3:54 pm

    David-

    I know what the patent claims say, and the fact that you choose to read out the word “method” from them and conveniently assert that they protect nature and laws of nature like gravity is disingenuous.

    How many times have I stood up for you hear on IPWatchdog and told people I respect you and to keep in mind that you are well meaning, even if we think you are misinformed? It was a shock to that anarchist twit digging into me and you remaining silent after I went to bat for you.

    Do you have any idea how much crap I take for having stood up for you?

    -Gene

  59. Just visiting November 7, 2009 7:44 pm

    “You might check out The Scientist this past month too, which has an interesting article on a home-brew biotech startup that capitalized its infrastructure to the tune of about 40k, rather than the many millions others spend. They estimate they can bring new pharms to the market for $10 mil. each, rather than the usual $100 Big Pharma alleges each new drugs costs.”

    Talk to us when they actually do it. Saying you can do it, and actually doing it are two totally different things.

    The thing about non-scientists is that they think innovation is easy — just throw money at the problem … and voila, problem solved. A lot of innovation involves going to wrong paths that lead to dead ends. Occassionally, you’ll go down a wrong path and find something interesting. If my memory serves me correclty, ibuprofen, viagra, and rogaine were all drugs originally intended to treat something other than what they are used for today.

    Anyway, innovation can be very hard. What seems promising in rats may not work in humans. What shows promise in humans in treating a particular diesease may have side effects that are worse than the original problem sought to be fixed.

    Although I don’t work in pharamaceuticals I’ve read enough press over the last few decades to realize that many of the supposed cures for a variety of ailments never came to fruition.

  60. Just visiting November 7, 2009 8:37 pm

    An excerpt from Boldrin & Levine: “Case Against Intellectual Monopoly.”

    “We are not arguing that while stealing potatoes is bad, stealing ideas is good.”

    Why would Steven King write a book if after he sold the first copy, the copy could be copied by somebody else and resold? This type of regime would place a premium on being the best copiers and not the best innovators. The one making the most money would be the one who could copy the fastest and the cheapest. Unfortunately, the concepts used to copy the fastest and the cheapest can also be copied so that all one needs to do, to be successful, is to wait until something good is innovated and the copyists have found how to copy it the cheapest and then leach off of their energies and do it yourself. A good book has a lifetime of years, if not decades. The same for a good product. Let the first movers blow their wad, and then step in and pick up the pieces.

    The example used by Boldrin and Levine in their first chapter is an improvement to a steam engine by one James Watt. The describe that how, after the expiration of these patents, that the eventual use of steam engines skyrocketed after 15 years. From this, they make a whole bunch of conclusions about the evils of patents.

    However, they ignore a multitude of potential factors. First, by its very nature (particularly back in the late 1700s), technology takes awhile to gain steam. The use of a particular technology starts very slow and then starts to increase exponentially as people become aware of the technology. Second, the business environment is totally different in the 1700s than it is today. Back then, I’m sure Watts didn’t try to license his invention to other manufacturers. Instead, as stated, he set out to produce them himself. Today, a smart owner of IP looks to maximize profit, which oftentimes involves licensing the product to other manufacturers. In a more sophisticated environment, more steam engines employing Watt’s invention would have been made. Finally, there is no telling what innovations also led to the exponential increase in use of steam engines. Sometimes, it isn’t just a single innovation that causes the explosion. In many instances, it is a combination of inventions that really make a difference. The authors, however, assume (without factual basis) that if it wasn’t for the presence of these patents, then the numbers of engines would have increased.

    Another tidbit:
    “In the case of Watt, the argument goes, he would never have invested the time and effort to create his invention without the prospect of a patent. But that case is weak. Even after their patent expires, Boulton and Watt are able to maintain a substantial premium over the market by virtue of having been first, despite the fact that their competitors have had thirty years to learn how to imitate them.”

    They ignore the critical point that had Watt never received the patent, they would not have had the leg up on their competitors. In fact, since Watt came up with the idea repairing a steam engine, he likely wasn’t in the position to manufacture the engine at the very beginning. If he had disclosed the idea then – or even attempted to start manufacturing himself, he would have very likely been beaten to the punch by other manufacturers. With no advantages, and already at a disadvantage, Watt wouldn’t have even warranted a footnote in history.

    BTW – I take anything from the “Carnegie Study” with a grain of salt.

    This is their take on copyrights:
    “Ironically, a limited form of slavery is still allowed in the music and sport industries, where long-term contracts binding the artist or the athlete to a particular studio or team are commonplace.”
    Apparently, the attorneys employed by the musicians and athletes are incompetent. Why let your client sign a long-term deal? Well … what the ignoramuses writing this don’t realize is that a long-term contract protects musicians and athletes, and it can be a detriment to the studio or team signing them. Popularity and skill with musicians and athletes can be fleeting. As such, a long term deal protects the musician and athlete. Conversely, marketing an artist or developing a team with an athlete takes time, and it is not in the studios/artists best interest to let an artist/athlete walk after a year. This is simple, basic stuff … but these basic concepts eludes the authors.

    There is a reason why people derisively talk about academicians in their ivory towers. It seems that sitting way high up in their perch, they really don’t have the faintest clue about what is happening in the real world.

  61. Just visiting November 7, 2009 8:53 pm

    “So why waste the time, when I can spend my time doing more important things, such as actually helping innovators?”

    I help innovators, ON A DAILY BASIS, for real. What you seem to care about is how you can get your movies and songs for free. Regardless, in the end, your side is up the proverbial creek without a paddle.

    The basis for intellectual property is in the U.S. Constitution, and there is no way that the US will open water down their IP laws. These are all nice little academic arguments, but in the end, they are moot. My side has won, is continuing to win, and will continue to win.

    Few people like theives, and it is all to easy to label you as theives, since that is what your are proposing.

    My suggestion to Mark, David, and the rest of their clan is to go visit one of the invention conventions that occur throughout the country. Go talk to REAL inventors. Talk to the people who actually spend time/money inventing. As them how much time/money they’ve spent on their ideas. Ask them what they know about intellectal property law and patents. Ask them if they think that giving their ideas away for free is a good idea.

    I’m sure you’ll find the altruistic few that don’t mind giving their ideas away. However, I’m sure you’ll find a great many that would not have spent the time/money/energy they did without any expectation of a potential payoff at the end.

  62. Just visiting November 8, 2009 12:08 am

    I found this interesting site … talks about communism and patents. Gee … I thought I was the first to come up with that idea. I should have patented it.

    http://www-cs-faculty.stanford.edu/~eroberts/courses/cs181/projects/2007-08/communism-computing-china/intelproperty.html

    A couple snippets:
    “In this thought framework, no programmer is compensated personally for their work: the entire society benefits by making source code available because everyone will collectively work on the software as well as collectively reap the benefits. Communist theory about software is similar to traditional open source arguments: that source code sharing can provide greater access my multiple people, and therefore the greatest minds can all work on it at once, thus producing higher quality software.”

    “Thus in traditional communist theory, there is no justification for personal reward in public achievement. In addition, they also think communist theories argue against the other common justification for patents: they provide incentive for inventors to spend their time developing new technology. The two states patents as incentive is contrary to traditional communist thought as “the incentive offered is a monopoly which increases the private profits realized from the invention rather than the benefits to society in general.” Communism therefore argues against all patents, and because of this also argues against the patent protection of intellectual property, including software. Patents on algorithms, interfaces, and ideas are all incompatible with traditional communist theory.”

    Here is an article from a communist website that is dripping with admiration for the free software movement:
    http://struggle.ws/wsm/rbr/rbr10/communism.html

    It looks like I wouldn’t be the only one who think both Mike and David are “patent communists.”

  63. David Koepsell November 8, 2009 3:01 am

    Gene,

    I’ve been called a lot worse than a twit here, and elsewhere, and I now let it slide off me. I stick to the issues, focus on empirical evidence (real studies, not anecdotal evidence), and logical argument. I’m sorry someone called you a twit, I never did, and I don’t agree that you are. I have never lied, I mis-spoke slightly about the Swiss experience, but not much, and the record is corrected on that now. You need to read the Myriad patents: US Patent 5,747,282, the contested claims include the following:

    1. An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.

    2. The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO:1.

    5. An isolated DNA having at least 15 nucleotides of the DNA of claim 1.

    6. An isolated DNA having at least 15 nucleotides of the DNA of claim 2.

    and I, patent attorney Luigi Palombi, author of Gene Cartels, the ACLU, the Public Patent Foundation, and others, have always argued that the mere isolation of naturally-occurring genes and mutations is not an inventive step warranting patent. So don;t say I’ve lied, mischaracterized the patent, or impugn my character. We have made legitimate arguments, and backed up those claims. I have given you multiple analogies, and my book and my blog have all those arguments. If you wish to address those arguments, and tell me why the act of isolation of those genes somehow warrants a 20 year monopoly over those genes, fine, but stop with your personal attacks. I haven’t sunk that low, and you really ought to try not to as well.

    Anyway, I think you felt piled-upon, I have too in the past, and you lashed out. So let’s let it go at that, ok?

    all my best,
    David

    p.s.: Just Visiting, your example of Leonardo above really just shows you don’t know the difference between science and invention. What principles or laws of nature did Leonardo da Vinci discover? Now Newton, he discovered laws of nature, and published them. That’s science.

  64. Just visiting November 8, 2009 12:40 pm

    “Just Visiting, your example of Leonardo above really just shows you don’t know the difference between science and invention. What principles or laws of nature did Leonardo da Vinci discover?”

    Your statement is an example of your poor reading comprehension. You may have been talking about the difference between science and invention with Gene, but an exploration of that distinction has been absent from my arguments — which have been directed to other topics.

    “tell me why the act of isolation of those genes somehow warrants a 20 year monopoly over those genes”
    Well … genetics isn’t my “thang” but if the isolation of these genes have a utility (i.e., the isolated gene is useful), then we reward patents to people who find any new and useful process, machine, manufacture, or composition of matter.

    To Gene’s comments, a claim to an **ISOLATED** DNA cannot be infringed by a human nor is it naturally occurring. Ownership of a patent gives the patent owner the right to exclude others from making, using, offering for sale, selling, or importing into the United States the invention claimed in the patent. A human body does not make an isolated gene sequence. A human body does not use an isolated gene sequence. A human body also does not offer for sale, sell, or import into the US an isolated gene sequence. Pray tell, explain to me how patent ownership in an isolated gene sequence could be used to “own” somebody? Inferring that a person is somehow “owned” by asking the question “Who owns you?” because of gene patents is irresponsible. It is unwarranted fear mongering.

    FYI — in 4 years, 7 months, the patent you cited will expire, and whatever that was “owned” by anybody will expire along with it.

    The problem with your side is that anytime you find a poster child patent that resonates with some people, by the time you find it, crank up your fear mongering machine, and get this patent into the general public’s concious, the patent will be close to expiring. At which point, our side will say — “look, that patent expired — show’s over, everybody can go home and sleep peacefully.”

  65. Mike Masnick November 8, 2009 1:06 pm

    Knew I should have unsubbed when I originally said I would. Ok. One final word, because Just Visiting apparently has decided that responding on emotion rather than actual knowledge serves his position in a debate. After this I am unsubbing, so I can continue this trip without having to keep responding to someone who seems to enjoy bullying rather than informed debate.

    “Why would Steven King write a book if after he sold the first copy, the copy could be copied by somebody else and resold? This type of regime would place a premium on being the best copiers and not the best innovators.”

    Just visiting, since you keep insisting that you believe in empirical evidence, rather than just theory, I find it odd that you would defend your position entirely with a hypothetical. Even worse, you do so with a hypothetical that is easily proven wrong with actual empirical evidence.

    You quoted Boldrin & Levine, but it appears you didn’t actually read their work, because they actually have an example that proves you wrong. They looked at different *public domain* works such as the 9/11 Commmission Report that was published as a book. The gov’t gave a deal to one publisher to be the first to publish it, and even though others can and did copy it, the original publisher retained a huge part of the market, just by being first.

    And that’s a case where the author doesn’t matter and gets no benefit either way.

    In cases where there’s an actual author, the impact is even stronger. Top selling authors like Paulo Coehlo and Cory Doctorow have chosen — on purpose — to give their books away for free, and both found that doing so increased the number of physical books they sold. Filmmaker Nina Paley gave away her movie so that anyone could download it or show it without paying her, and found that she was able to get more attention and money because of it.

    There is empirical evidence that people still want to support the authors of books they like, and will buy the “official” versions when they can (Paley’s movie can be obtained from a variety of different sources, but the one from her directly sells the best because buyer’s know they’re supporting the artist).

    So, the empirical evidence suggests that plenty of authors can actually make more money by freeing up their works, and since you’re such a big fan of empirical evidence, and not theory, I assume you’ll admit to your mistake?

    “I help innovators, ON A DAILY BASIS, for real.”

    Yes, you help them by giving them a crutch (patent) due to a broken bone (business model). I teach them how to avoid having broken bones at all and how to run marathons. I think I’m adding more to society, but it’s a matter of degree, I guess. And, yes, I help them on a daily basis too. I’m not sure why you think otherwise. You don’t know me.

    “. What you seem to care about is how you can get your movies and songs for free.”

    Again, it is clear you do not know me. I have no interest in getting movies or songs for free. I pay for all of my music and movies happily. I’m not sure who you think I am, but your assumptions are sadly mistaken. I work with many artists and innovators and help them adopt smart business models, but I do not and have never supported the concept of file sharing content that is not authorized by the content creators.

    You can review my writings on this topic if you wish, because I put my name on things and stand behind my writing. I can only take a guess as to why you are afraid to stand behind your words. Perhaps because you have so little basis for them?

    “The basis for intellectual property is in the U.S. Constitution, and there is no way that the US will open water down their IP laws.”

    Indeed. The basis for IP laws is the US Constitution, which clearly states “To promote the progress…” meaning that such laws are only valid inasmuch as they promote the progress. When the intellectual property laws are used not to promote the progress, they are no longer constitutional.

    “Few people like theives, and it is all to easy to label you as theives, since that is what your are proposing.”

    Indeed. I do not support stealing at all, and it is intellectually dishonest of you to suggest otherwise.

    “My suggestion to Mark, David, and the rest of their clan is to go visit one of the invention conventions that occur throughout the country. Go talk to REAL inventors. Talk to the people who actually spend time/money inventing. As them how much time/money they’ve spent on their ideas. Ask them what they know about intellectal property law and patents. Ask them if they think that giving their ideas away for free is a good idea. I’m sure you’ll find the altruistic few that don’t mind giving their ideas away.”

    Again, I work with innovators every day, helping them put in place smart business models. If you feel threatened by where the market is heading and want some help, feel free to contact me. My rates are reasonable.

    As for your final line, it is incredibly intellectually dishonest for you to state that again. No one here is suggesting altruism is why things will continue. I already explained that to you above. For you to repeat that we expect people to give away things for free due to altruistic purposes is intellectually dishonest, because no one has suggested that at all. What we are saying is that (a) there is little to no evidence that such monopolies actually increase innovation (b) even without IP there are great business models from which innovators can and do make money.

    No one’s talking about altruism at all. So why even bring it up other than that you don’t have a real argument?

    “However, I’m sure you’ll find a great many that would not have spent the time/money/energy they did without any expectation of a potential payoff at the end.”

    Again, this is intellectually dishonest. The whole point of what I do is to help those innovators get a bigger potential payoff at the end — by actually selling products in the market place.

    Again, please feel free to contact me for hourly rates if you are unable to figure this out yourself. Of course, to do so, you might have to reveal who you are. In the meantime, I enjoyed this debate, but would suggest that in the future, you try to actually address the issues rather than think you can simply misdirect and bully others. It doesn’t lead to much respect for your position. It just convinces me that you haven’t thought through your arguments carefully.

    And with that, I’m going back to my business trip.

  66. Just visiting November 8, 2009 5:39 pm

    “And that’s a case where the author doesn’t matter and gets no benefit either way.”

    The “book” (i.e., the 9/11 Commission Report) was never written with the intent to make money on it – it is a public report. Nice try – next time, use a more relevant example.

    As for “Paulo Coelho” and “Cory Doctorow,” I’ve never heard of either. I did find their websites, and that still didn’t ring a bell. I did, however, find a great many of both their books on sale at Amazon. In fact, Cory Doctorow has a book on sale that was published on October 27, 2009 (just 12 days ago). It is a hardcover on sale for $16.49 (list of $24.99). Paulo Coelho has a book that I can pre-order for $9.44 that is due to be published on April 10, 2010.

    Apparently, they are still making money off their intellectual property. FYI – it is easy to be altruistic when you have money. Just ask Gates and Rockefeller.

    Giving items away from free is a pretty long-standing practice in many business. Go to the local grocery store and you’ll find some table set up with somebody cooking up something to give away for free in the hopes someone may buy more of it. However, the fact the something is given away for free for marketing purposes does not prove your point.

    “Filmmaker Nina Paley gave away her movie so that anyone could download it or show it without paying her, and found that she was able to get more attention and money because of it.”
    How did she make her money. What did she sell? Using Nina’s own words to describe one of her works “Nina’s Adventures was a labor of love, but it didn’t pay the rent.” Hmmm … it seems that the ability to “pay the rent” is important. BTW – if you read her bio, she isn’t in it to make money. As I’ve said before, the fact that you can find some altruistic soles out there willing to give away their IP for free doesn’t mean that everybody else will continue to create when they are forced to give away their IP under your regime.

    “So, the empirical evidence suggests that plenty of authors can actually make more money by freeing up their works.”
    Uh no. The empirical evidences suggest that giving away some stuff for free is good marketing. However, you still have to pay the rent. Whether or not Nina could have made more money by going through a distributor has not been proven. If this is the type of evidence you are relying upon, I have nothing to fear for you or your ilk.

    “Again, it is clear you do not know me. I have no interest in getting movies or songs for free. I pay for all of my music and movies happily.”
    As do I. However, the culture you are knee deep in loves their free stuff – free software, free movies, free songs. It is easy for the 99 non-creative people to call for all creative works to be free. However, the 1 creative person who’s job is to be creative still needs to pay the rent. Nina allegedly made the first cameraless IMAX film. However, by her own admission, she could have never done it without donations from Kodak and CFI labs to make this possible. The fact that one artist can scratch out a living on donations does not establish that all artists can do the same.

    Do you really want to go back to the 1500s and 1600s when artists needed well-to-do patrons in order to create their works? This is what will happen if you eliminate copyright laws. People with money will be able to pay for the best artists. Sure, some of that will leak out (either purposeless or not), but many artists will be forced to sell their works to the well-to-do or face doing something other than being an artist.

    “When the intellectual property laws are used not to promote the progress, they are no longer constitutional.”
    Patent and copyright laws always promote progress. This is such a basic concept that even the average person on the street can readily recognize. A patent or a copyright can easily be analogized as a reward. Do something special, and you get something for it. Some people save lives and don’t want any reward at all for it. However, there are many people that save lives (and are required to go through significant training and expense to do so) and want to be rewarded for it. The fact that some random guy performs CPR on a drowned girl and refuses any type of reward doesn’t mean that if you stop paying nurses and doctors, they won’t find new lines of work. I can come up with hundreds of easy to understand examples that illustrate the same points. People understand the concept of getting paid for doing things.

    The last 100 years have been a time of unprecedented explosion of invention and art available to the masses– times when a strong copyright/patent system has been in place. The empirical evidence, as a whole (as opposed to isolated data points), points to a strong copyright/patent system playing an important part of this. Try refuting that empirical evidence.

    “My rates are reasonable.”
    My rate is awfully expensive (and I’m a bargain these days). Then again, you get what you pay for.

    “No one’s talking about altruism at all.”
    Then what do you call giving away something for nothing?

    BTW – no comments about your communist leanings?

  67. David Koepsell November 9, 2009 3:14 am

    Just Visiting:

    “”isolated genes don’t exist in nature””: sure they do, this is how individual proteins are made.

    “Transcription, or RNA synthesis, is the process of creating an equivalent RNA copy of a sequence of DNA[1]. Both RNA and DNA are nucleic acids, which use base pairs of nucleotides as a complementary language that can be converted back and forth from DNA to RNA in the presence of the correct enzymes. During transcription, a DNA sequence is read by RNA polymerase, which produces a complementary, antiparallel RNA strand. As opposed to DNA replication, transcription results in an RNA compliment that includes uracil (U) in all instances where thymine (T) would have occurred in a DNA compliment.”

    protein synthesis occurs because nature has devised the rules that allow RNA to recognize the beginning and end of a gene, ignore the introns, and make a protein. Nothing new or inventive about it.

    “Messenger ribonucleic acid (mRNA) is a molecule of RNA encoding a chemical “blueprint” for a protein product. mRNA is transcribed from a DNA template, and carries coding information to the sites of protein synthesis: the ribosomes. Here, the nucleic acid polymer is translated into a polymer of amino acids: a protein. In mRNA as in DNA, genetic information is encoded in the sequence of nucleotides arranged into codons consisting of three bases each. Each codon encodes for a specific amino acid, except the stop codons that terminate protein synthesis. This process requires two other types of RNA: transfer RNA (tRNA) mediates recognition of the codon and provides the corresponding amino acid, while ribosomal RNA (rRNA) is the central component of the ribosome’s protein manufacturing machinery.”

    Neither scientists nor inventors created this process, the isolation of genes is part of the natural process of cell metabolism, and there is simply nothing inventive involved in isolating particular genes once we’ve identified them. Isolated wings of birds don’t occur in nature either, and if I chop one off I hardly become the inventor of a bird wing now, do I? Should I be able to patent isolated bird wings?

    As for asking the question: “Who Owns You?” Scientific American asked the very same question as the title of a piece about the very same debate in March 2002. If they were irresponsible and fear-mongering too, then I’m in good company.

    best,
    -d

  68. Doug Calhoun November 11, 2009 12:14 am

    There is always an Oscar Wilde quote. The one that is relevant here goes: “If you can’t answer a man’s argument, don’t despair. You can always call him names.”

  69. James Carlin April 12, 2012 1:29 am

    Hi Gene-

    I thought you might be interested in discussing this topic from a slightly different perspective. For expedience you’d probably classify my perspective as a “voluntarist-anarchist, who is a strong advocate of property rights including copyrights and patents.” I am also a successful artist, programmer, designer, inventor, and game developer by trade. In the early years of my trade, I was sadly naive, and as you might imagine – easily easily exploited. I couldn’t afford a lawyer, so I did the sensible thing and read the U.S. Copyright Laws (Title 17) and to a lesser extent Patent laws, which has saved my ass many times since.

    Like I said, I’m a voluntarist (anarchist) and understand where these people are coming from. Anarcho-Capitalists are basically “property rights anarchists.” Here are a few things worth note:

    1) These anarchists generally support polycentric law, common law, arbitration, dispute resolution, property rights, homesteading, and land ownership. I wrote a brief overview of the subject of anarchist-law at the link below, a quick skim should be sufficient. In short, it is sometimes useful to highlight how copyrights and patents (and even property-law) read like common law is useful in showing how the law as it exists today is a compromise.

    * http://jamescarlin.wikidot.com/private-security-and-dispute-resolution-in-a-free-society

    2) Anarcho-Capitalists have very few mentors, meaning they trust most of what comes out of Mises.org. Stephan Kinsella somehow slipped past their quality control, and as a “Senior Member” has been able to propagate his anti-I.P arguments, as well as his distracting and disrespectful debate tactics with impunity. Sadly, many of my fellow
    “anarchists” have adopted no only his arguments, but his debate tactics as well. I’ve written on this subject here:

    * http://jamescarlin.wikidot.com/intellectual-property:squishing-toes
    * http://jamescarlin.wikidot.com/intellectual-property:in-kinsella-s-words

    3) Their primary attempt to debunk I.P. is a focus on their “Scarcity theory of property” which basically goes “If X is not rivalrous, X is not property.” That is of course silly, divorced from reality, and contrary to most property rights theories, but nonetheless I’ve written on that subject here:

    * http://jamescarlin.wikidot.com/intellectual-property:is-ip-scarce
    * http://jamescarlin.wikidot.com/intellectual-property:scarcity-and-conflict
    * http://jamescarlin.wikidot.com/intellectual-property:theft-fallacy

    As one of the rarer “anarchist I.P. supporters,” I would be more than happy to discuss this topic in more detail. I’ve done a lot of writing on the subject, as well as faced the same fierce attacks that you’ve experienced. Since this is a broad topic, let me know if there is something specific you would like to focus on.

    – James