Posts Tagged: "foster innovation"

Today, copyright drives innovation in the creative industries and in other industries as well, providing tremendous economic benefits to our economy. The outputs of the creative industries serve as the inputs that spur the creation of many innovative goods and services. Authors collaborate with technology partners not only to distribute their works, but often to create them. Sometimes storytelling itself leads to scientific discoveries and technological innovation. More and more frequently, the presumed distinction between creators and innovators is vanishing as individuals and firms simultaneously generate creative works and innovative technology.

Consumers benefit most when patents are strongest and act to block actors. When competitors are blocked that means they cannot simply copy and flood the market with knock-offs or products that at their core are essentially identical. Competitors that are blocked by strong patents have a choice. Either they ignore the patent rights and infringe, which is sometimes the choice made particularly when a small company or individual owns the patent and it is believed they can be bullied. Alternatively, competitors must figure out how to design around the patents in place and find new, creative ways to do what they want to do. When patents are designed around that is when paradigm shifting innovation can and does happen. Unfortunately, thanks to the Supreme Court and Congress we have a patent system that today incentivizes copycats and bullying of innovators.

Like a lemming running off a cliff, Fortune author Jeff John Roberts ignores easily verifiable historical truths in what can really only be described as a hit piece on the patent system and patents in general. The lack of intellectual integrity, or even intellectual curiosity, is astonishing… It is absolutely necessary to quash any suggestion that here is a “short supply” of medical miracles today. Medical research is still turning up incredible findings. A quick scan of health news shows plenty of academic innovation leading to tomorrow’s medical miracles. That the author could make such an utterly absurd statement has to call into question the broader motivations. Of course, authors do unfortunately sometimes exaggerate, misrepresent and even lie. What is truly astonishing is how the Editors of Fortune allowed such a falsehood to be published. Do they do no fact checking at all at Fortune?

The patent system our government has created over the last decade incentivizes stealing patent rights rather than engaging in an arm length negotiation. This is antithetical to basic, fundamental principles embedded throughout American law. The laws in the United States are supposed to be certain, stable and understandable. By minimizing externalities and keeping transaction costs low bargaining of rights will ensue, which will lead to an efficient outcome. Obstacles to bargaining and/or poorly defined property rights lead to an inefficient marketplace. To fix the patent system we must return to certainty and strong patent rights, which will push actors into arm-length negotiations rather than into costly patent litigation.

The patent system is not a tool for entrenched interests to stifle competition, as so many professors seem to believe. Patents allow independent inventors and small companies to compete against better funded rivals, who would otherwise simply take away their inventions. Sadly, many publications, including The Economist, base anti-patent articles on the ill-conceived notions of academics. Alas, perhaps one reason our nation is in such distress is that so many policies are based on recommendations from those without any practical experience.

In what can only be characterized as a bizarre, rambling, and intellectually dishonest article, ‘The Economist’ has inexplicably taken the position that patents are not necessary for innovation. The complexity of innovation today and the required investment necessary to innovate, as well as the highly speculative nature of innovation, seems lost on the author. It is surprising, and disappointing, that a publication like The Economist would turn a blind-eye to the underlying financial realities of innovation. Truthfully, The Economist owes its readers a sincere apology for this entire article. Some could, and probably should, call into question the motivations for building an anti-patent argument upon such a rotten foundation.

Confiscating other people’s property is hardly the way to stimulate prosperity or creativity. If it were, Venezuela would be one of the richest, most innovative countries in the world instead of a place where you can’t buy toilet paper. It’s not a coincidence that the handful of countries developing new drugs and the wonders of biotechnology are also those with strong patent systems. Patents and licenses are the life blood of many start-up companies that drive our economy. Rather than being a “tax on innovation,” a strong patent system is even more important today than when the Founding Fathers gave the protection of intellectual property a prominent place in our Constitution, preceding the Bill of Rights.

I recently received an inquiry from an IPWatchDog reader, posing several questions about the links between intellectual property protections, innovation and job creation. (Thank you, Marcus!) The interrelated nature of IP, innovation and jobs is essential to economic prosperity and important enough to explore again. Marcus:   I’m curious about two positions that are taken in your writing. First, you state…

To listen to the critics, one would believe that the Trans-Pacific Partnership (TPP) Trade Agreement marks the end of the world for global health, especially for the poor. They are, in a word, wrong. Admittedly, the TPP Agreement is extremely contentious, but the TPP Agreement contains important provisions regarding intellectual property (IP) rights, especially the standards of protection for pharmaceuticals. If the global community is to truly benefit from the promise of medical progress, we must stop the attack on the IP protections that incentivize innovation and turn our attention to the issues that genuinely inhibit access to medicines.

If a weak patent system were the answer you would expect countries that have a weak patent system, or no patent system at all, to have run away innovation. What you see, however, is the exact opposite. Those that want to dismantle the patent system or further weaken patent rights should bear a heavy burden to demonstrate the veracity of their claims. They should be required to prove that innovation at current levels will at a minimum be guaranteed to maintain at current levels if we are to take a leap of faith and disregard what history, common sense and the law of economics predicts will happen.

IBM is proud to be the top recipient of US patents for the 22nd consecutive year. It should come as no surprise that we believe in a strong patent system. Patents protect and promote the business of all innovators. In addition, patents enhance our economy – indeed, many attribute US economic leadership to the robust US patent system. While the patent system is certainly not perfect, many of the attacks being leveled against it are unjustified and unreasonable. As a whole, the patent system promotes innovation, period. Some self-proclaimed experts argue otherwise. They are simply mistaken.

This survey shows what those in the industry have long known — patent trolls and the need for patent reform are NOT the biggest problems facing the high tech industry in the United States. In fact, 92% of respondents feel that there are other things that are more concerning and a bigger barrier to innovation. But how can this be? The public has been consistently fed the line that patents stifle innovation. How can something that stifles innovation not be the biggest concern, particularly when so many of the tech giants from Silicon Valley have for years blamed the patent system for all their woes? The simple answer is that patents do NOT stifle innovation, and those who are intimately familiar with the industry know that to be true regardless of the lies promoted to advance patent reform, vilify innovators and lay the blame for everything at the feet of patent trolls.

To a large extent Apple, Microsoft and many other Silicon Valley innovators went along with the anti-patent rhetoric perfected by the Google machine. The Silicon Valley elite who have been bemoaning the patent system and patent trolls succeeded beyond their wildest dreams, convincing everyone of problems that don’t exist. So successful has this misinformation campaign been that now patents owned by everyone in the high-tech sector are at least worth less, if not completely worthless. By taking a short-sighted view of the litigation problems they were facing they took direct aim on the patent system, their own patent portfolios and the essence of their competitive advantage. Institutional shareholders in any company that has lobbied for patent weakening policies and court rulings should be appalled and may well want to seek out attorneys specializing in shareholder lawsuits.