Bessen and Maskin have a lovely paper about sequential innovation. I have reviewed this over at Najecon. There are two key ideas in this paper about why patenting may lead to less rather than more innovation. First, innovators will generally have more information about the value of their invention than existing patent holders whose licenses they will need to build their own project. This prevents efficient licensing by existing patent holders. Second, competition is not likely to dissipate all profitability from a new invention - this is a point that Michele and I have emphasized. Michele and I have also pointed out how the need to license many different patents further inhibits innovation.

The relevance of sequential innovation is brought home by the patenting of the human gene. Consider Jensen and Murray's empirical investigation. Money quote:

Our results reveal that nearly 20% of human genes are explicitly claimed as U.S. IP. This represents 4382 of the 23,688 of genes in the NCBI's gene database at the time of writing (see figure, right). These genes are claimed in 4270 patents within 3050 patent families (28). Although this number is low compared with prior reports, a distinction should be made between sequences that are explicitly claimed and those that are merely disclosed, which outnumber claimed sequences roughly 10:1. The 4270 patents are owned by 1156 different assignees (with no adjustments for mergers and acquisition activity, subsidiaries, or spelling variations). Roughly 63% are assigned to private firms (see figure, above). Of the top ten gene patent assignees, nine are U.S.-based, including the University of California, Isis Pharmaceuticals, the former SmithKline Beecham, and Human Genome Sciences. The top patent assignee is Incyte Pharmaceuticals/Incyte Genomics, whose IP rights cover 2000 human genes, mainly for use as probes on DNA microarrays.

Imagine if you will the not unlikely case of a new pharmaceutical product that requires rights to the entire human gene.

From today's New York Times:

Do not bother hitting the "reload" button or clearing the cache in your Web browser it will not help. Tuesday's hauntingly familiar headlines about a patent-infringement lawsuit against BlackBerry maker Research in Motion are, in fact, new. The lawsuit, filed by software company Visto, seeks to shut down the popular (and, for some, near-addictive) BlackBerry wireless e-mail service less than two months after a similar suit from patent holding company NTP was settled. . . . There is an important difference between the NTP suit and the latest suit against Research in Motion. Unlike NTP, an entity that lacked business operations, Visto actually competes with Research in Motion, as Forbes.com points out.

Visto co-founder and senior vice president Daniel Mendez was quoted saying, "We're not seeking a royalty, we're seeking an injunction."

According to the Boston Herald, Royal Philips Electronics has filed a patent application for a device that would permit broadcasters to stop television viewers from channel surfing to avoid commericials. The channel would freeze up for the duration of the ads. Sounds pretty bad. But have no fear. According to the Herald, "The company also said it had no plans to use the technology in any of its products."

From CNET News.com:

In the past year or so, Intellectual Ventures has emerged as one of the more controversial companies in the tech industry. The company is filing patents, but also buying patents from defunct companies, independent inventors and others. It has amassed a portfolio of over 3,000 patents, according to some sources--an extremely large number for a company with only a handful of employees.

Many in the IT industry worry that the patent portfolio will become a vehicle for patent suits.

Not so, said Nathan Myhrvold, founder and CEO of Intellectual Ventures. Although lawsuits may result, the company primarily exists to devise inventions that can generate new markets.

Primarily? Shall we start a pool over when the first suit is filed?

The Philadelphia Inquirer reports that city plumbers are blocking new waterless urinals since they require less pipe and hence less work. In the story the reporter, Inga Saffron, contacted mayoral candidates to find out where they stood on the issue. Typical answer: no comment.