While I agree with the thrust of Nard & Morriss' response, they make some overstatements. To suggest that the patent laws were the sole cause of the vast improvement in innovative activity in the US in the decades after their adoption is probably an overstatement. That they may have had some positive effect is one thing to claim, but for a complete overview of US innovation look to authors like Rosenberg, Sokoloff, and Mowery. Other factors were almost certainly the primary drivers, with patenting playing at best a modest role. Moreover, while only 1.5% of patents are litigated, some share more are the basis of enforcement, which may or may not end in litigation. Farrell and Merges, in a very nice piece, suggest several reasons why targets may just pay up and not drag themselves into costly litigation. All in all, I think that Nard & Morriss are right, that patents do more good than harm. In any event, the costs of tearing down the system would be much larger than the marginal benefit, assuming Boldrin & Levine are right. But, Nard & Morriss should be more nuanced in their arguments. It is not all black and white, but as in most things, truly gray. Boldrin & Levine could learn from the same lesson.
>> The Founders explicitly recognized the advantages of using intellectual property rights national in scope to replace the state-granted rights that existed under the Articles of Confederation. As James Madison wrote in Federalist No. 43 "[t]he utility of [the IP clause] will scarcely be questioned. The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals."
> ..To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
Only a fool would state that giving someone a monopoly they ask for is a wise thing to do unless perhaps suitable criteria were met. We have to analyze the criteria since it's clearly possible to ask for monopolies that damage society. Some criteria clearly are not sufficient "to promote the progress of science and useful arts"; hence, we need to be sure that the criteria used would in fact promote....
Copyright allows for independent creations. Do patents? If not, then it appears patent law today is not what James Madison had in mind when he likened claims by inventors to claims by writers.
Fortunately, James Madison or whoever wrote that part of the Constitution, was wise enough to word it so that it would be clear that an important prerequisite would be to benefit society.
It's very difficult to see how society benefits when we prohibit the entire world from producing any given product not imagined by the patent author but unfortunately falling "within scope" because of the vague descriptions that form the patent claims. I don't think James Madison was defending such a patent regime as being beneficial to society.
[Yes, most patent claims are successfully written intentionally to be as broad as possible (carefully carving around any possible "prior art").]
It's very difficult to see how society benefits when we prohibit for 20 years (a sizable portion of an inventor's productive years) all the people capable of coming up with an invention from participating on account of a single inventor documenting such invention first. After all, maybe that inventor was the one most motivated to lock in a monopoly over society and hence worked a little faster or took a few extra shortcuts (like leveraging other's open work but not contributing back his/her own research).
The above also suggests that the inventor least likely to provide the best price and terms to society for the invention (ie, the one that most felt s/he needed the monopoly protections to compete successfully) gets the monopoly over any other(s) that would also have come up with the invention.
Haste leads to generalizations and shortage of details or inferior invention details. While one inventor works to iron things out or implement and test it, the one getting the patent wrote broad patent claims with fewer details and hence got monopoly over all that were further advanced but hadn't yet published "properly" or at all. The less details (less talent, etc), the wider the scope of protection granted! [This is so because the general is a superset of the specific, and the USPTO rewards first and general over later and specific.]
I don't think James Madison was defending such a patent regime as being beneficial to society.
Bad monopolies are hurtful (unconstitutional) and should be abolished.
>> There is no question that patent law provides critical incentives for innovation.
Plenty has been invented and gets invented without patents playing a role at all; hence, "critical incentives" is probably in the mind of the beholder.
Again, if we have two different minds, one a bit more generous than the other, why are we giving the less generous one a monopoly over the other(s)?
>> Without the potential economic rewards and ability to facilitate commercialization patents provide, who would invest the millions of dollars needed for the development of new drugs, medical equipment, and medical devices?
For starters, patents are being granted for a whole lot more than "new drugs, medical equipment, and medical devices", so is this statement above implying that inventions that don't require an investment of "millions of dollars" should not be granted patents?
Secondly, a significantly weaker patent system would likely still lead many to consider the above investments worthwhile.
In particular, the small inventor might need a lot of time and protection if s/he were going to try to raise a business from scratch (and this, while fun, is not efficient to society); however, an established group likely has the majority of the investments already made (eg, distribution partnerships, most of the factories in place, personnel to handle this, etc), so this established player would be willing to buy a patent with significantly weaker protections than would someone that had not made those investments already. There is lower risk when you have already committed many of the funds and time required. because not all of the 20 years or full monopoly strength would be needed. So a smart patent system should likely at most protect in a marginal fashion and exclude overhead. Full monopoly controls for 20 years is significant overkill in likely most cases when perhaps 20 years might be acceptable (if ever), and the extent of the overkill is the loss to society.
Additionally, when a single player doesn't want to take particular risks, we usually find that a consortium is willing.
Finally, the government can help (and does help) by giving grants to those with promising research or who have proven themselves in the past. A grant helps overcome the risk problems. It's an example of a way to incentivize some without infringing on the rights of other inventors and consumers (who perhaps require significantly fewer incentives than a 20 year monopoly or even a large grant).
A great bunch of 20 year monopolies that you don't own but which do block you or cost you is a very real disincentive.
>> The issue the IP Clause settled was not whether there should be patents and copyrights, but which government would provide them
Again, it's easy to come up with a patent regime that clearly does not promote the progress of science and useful arts (just look at what we have today -- and it can be worse); hence, the details of the patent system do matter, and we need to check to see if in fact progress is being promoted. This requirement is of highest importance and is orthogonal to the question of which government should manage any given monopolies.
If there were going to be a granting of monopolies which were shown to benefit society, then it can be argued that having a fairly homogenous system across states, at least for some such monopolies, could be a good idea.
An example of possibly a smart federal monopoly grant would be any of various allocations from the electromagnetic spectrum to companies entrusted with serving the public under a set of guidelines. Here we still have the requirements of benefiting society, and, further, we have the context of a limited resource being partitioned. Monopolies in limited resources tends to be easier to justify.
I suspect James Madison did not envision people laying claims to ideas and to wide concepts but rather getting some protection for particular tangible, well-defined, narrowly-defined inventions that likely would not be "independently" derived.
>> The system worked: Americans were inventing and patenting at a rate that astonished European observers within a few decades of the first patent act.
There were a number of factors at that time that could have promoted inventions to a greater degree here than in Europe (assuming the US was inventing more).
For example, there was plenty of unclaimed land, fewer laws and restrictions, greater risk-taking as a part of ordinary life, a greater need to resolve issues (necessity is the mother of invention) -- in short, Americans at that time likely had a mindset and context that promoted innovation to a greater degree than would be the case for Europeans.
In fact, wasn't the US noticeably more democratic (and capitalistic) than the average European state at that time? I think these two properties, by themselves, would account for greater innovation, at least when we contrast to countries that were less democratic and capitalistic.
And where you have greater innovation, you have people wanting to exploit that (or perhaps slow it down to lower risks from competitors). The patent system leeches most successfully whenever you have a lot of innovation that would happen regardless (or which is happening).
Another thing to keep in mind is that any new toy attracts attention (relative to the population size and sophistication) to a greater degree than does an old toy.
However, one of the most important ingredients that could ever lead to really useful inventions would be that whenever there is much to be invented (necessity), it tends to get invented.
Even if we give benefit of the doubt to patents. The law has been changed a number of times since those first few decades. Those examples from the past may not apply today to the same degree.
Finally, there is the loophole issue. How do we define inventions? It's a sad reality that the looser we define inventions (or anything), the easier it is to come up with them, but (as stated already here and as we all know) the less useful is any such invention. Would James Madison be proud of how some are defining "inventions" and "innovation" today?
>> this right to exclude is limited in time and scope. As a result, it balances rewarding early innovators and enabling later ones to create improvements.
The "balance" is horrendous, except to a patent owner interested in living off royalties from other's work, to a very large company interested in raising the bar to competition, or to lawyers making money off litigation or adjacent functions.
20 years is an awfully long time to wait to create your version of an invention covered by someone else's broad scope. At any given time, many inventors might be capable of inventing many things that overlap with each other, but they won't be able to freely (or at all) participate in many of these if a single inventor beats them to the particular invention or other (as described broadly in the patent claim).
Assume for a second that inventing was a limited resource [it clearly isn't and sharing/collaborating leads to a greater degree of development], eg, like a selection of 200 pastries and the ingredients to make more, then what the patent system leads to is that a small number of inventor-chefs go around the kitchen licking as many pastries and ingredients as possible so as to lay claim to these and control the creation of future pastries. Clearly, not the first to lick a pastry or ingredient or tool is the one most capable of managing that limited resource or most capable of creating the best pastries. And by monopolizing some of these items, new types of pastries or improved pastries will not get created.
An actual balance would not consider anything but a few years of a head start (at most) and then only in some areas but even less time in others. This way, if 10 other inventors had better ideas, they could get to work without losing too many years. More importantly, society would benefit much more with 10 people competing rather than having a single person have a monopoly.
A balance would allow independent inventions no matter what (this solves most of the above problems).
Where is the balance in the high costs to patenting? This means many people with great ideas can't lay claims in order to gain future leverage against attacks. Prior art does not gain you much leverage at all. Others can block your growth in many directions. Further, they can completely not share their patented contributions while they can take all of yours (giving them a terrific competitive advantage). It seems only the very wealthy can reasonably state (or pretend) that they patent for defensive purposes only. Would James Madison liken today's very expensive patenting to $0 copyrights?
There is a real opportunity cost for every inventor that cannot freely expand in any direction, in particular if it is in an important direction or one where s/he would do a better job than the monopoly holder. And with some types of inventions, we find that we have a great many number of inventors. Many times even the ordinary user will manage to contribute innovation [eg, software, business, poetry, marketing, etc].
>> Nor are patents "simply a ticket to lifelong litigation against a giant," as only 1.5 percent of patents are litigated.
A diluted definition of "invention" can account for a low percentage.
Plus, any patent that affects your ability to invent or pursue what you are capable of inventing is one patent too many for you and perhaps for society (especially if you provide your product under terms very beneficial to society, eg, as is the case with open source).
Also, with the (very) small player being excluded from getting very much patent protection for defensive purposes for their ideas/inventions (see paragraphs above this one) and because (at least in some areas of high innovation rate) some products almost imply you are violating numerous patents, we find that to survive/profit you must either be very large already, hope for favorable treatment from larger competitors that own patents, or else become a patent troll. This result is one important reason why the very large companies like patents: it raises the bar to competition, especially from nontrolls (who actually do want to compete).
>> Patents' limited scope means they rarely provide their owners with an economic monopoly as there are almost always viable substitutes.
Viable substitutes don't exist in some areas and, in general, the broader the scope, the less likely we will find viable substitutes.
Patenting in the area of genes is problematic partly just for this reason. The same goes for computer algorithms, business methods, and many other things that happen to be a significant improvement over what existed or where innovation and progress would happen quickly absent intervention from patents. The Internet has made collaboration much easier and cheaper. Computers have really grown our abilities to innovate and discover and do so cheaply. Some inventions can be replicated ad infinitum without much cost. For just these reasons (coming into existence these last few decades), if for no other, the 20 year patent term should be revised downward significantly.
Most importantly, if an invention is among the number that is truly worth something, you hold society back if you don't unleash that invention. Precisely the best inventions are the ones that should be the most open.
Reward the inventor somehow (prize, grant, etc, .. even if others were a short time from reaching the same goal or already had but did not yet go public), but unleash the inventions.
And a final very important point here. We should keep in mind that society requires standards. Frequently we don't have viable alternatives to something that gets standardized or which people grow to expect.
Rather than guessing that we tend to have viable substitutes, why not condition any patent enforceability upon the existence of such viable substitutes? I think James Madison would like this safeguard (criteria test).
>> Recent studies of start-up companies reveal that patents can play an important role in securing venture capital, capturing revenue through licensing, and enhancing reputational value.
When the law of the land is determined by whoever wields the largest machine gun, having a machine gun "can play an important role" in "securing", "capturing", or "enhancing" just about anything.
>> A recent National Academies of Science survey concluded that in both ‘‘the number of projects abandoned or delayed as a result of technology access difficulties is reported to be small" and that few investigators had to "revise their protocols to avoid intellectual property complications or pay high costs to obtain access to intellectual property.''
Did this study look at open source software development, where any licensing costs and even various restrictions can kill development and uptake?
Did this study at all cover "products" which can be replicated "instantaneously" an "infinite" number of times at "$0"?
How did this study try to account for what was not "reported"?
Did this study look at groups that have none or tiny financial resources and work independently form any academic organization (eg, the private individual participating in research/development but not in that business)?
Did this study attempt to account for the projects that weren't even started because of awareness of potential problems down the road?
If we like what this study concluded, then why not find a way to enshrine that best practice into the law? Condition any patent enforceability upon the patent owners behaving as described above so that other research does not suffer? I think James Madison would like this safeguard (criteria test).
>> But destroying widely held and valuable property rights in pursuit of short-term gains would truly be a case of killing the goose that lays the golden eggs.
This might be true from the perspective of those with the (unconstitutional) patents.
The other side of the coin is that we'd be killing the goose that had monopolized gold mines in order to produce those golden eggs. Freeing the gold mines would allow more geese to compete.
>> Neither the American economy nor the world's poor could afford such an ill-conceived up-rooting of rights deeply embedded in Anglo-American jurisprudence.
Again, if progress is not promoted (as I believe to be the case, today, at least in a number of cases), then not only could the American economy and the world's poor afford this, but these groups would gain.
Some good links to read:
http://www.againstmonopoly.org/index.php?perm=593056000000001904 Independent defense
http://www.againstmonopoly.org/index.php?perm=593056000000001949 Artificial scarcity
Bad monopolies are hurtful and should be abolished. It's our loss (opportunity costs and liberty abridgment) until this gets remedied.
You cannot get any other response from people who do use the patent system as a method to get rich. But if you talk to inventors and scientists to whom this is simply the love of their life - and I know these people - you will understand very clearly that to them patenting is not very important and is not an incentive at all. In fact, I cannot imagine an inventor saying - there is no chance I'll get a patent on this, so I'll just stop my work and go drink beer instead.
This is a simple argument, but I think it is also the strongest. Same goes for authors who allegedly have copyright as a "critical incentive". I can imagine Bach stopping work on his music and saying - "nah, this country gives me no copyright, so I'll just break off this cantata in the middle and go trade apples since this brings me more money." Although if you ask musicians who do benefit from copyright, they no doubt will tell you they do music only because they are well paid. And indeed - those musicians who are in music today are actually there for the riches.
Louigi (and, of course, Anonymous),
It's not just about "love". This word can be mocked a bit, so let's get more to the point.
People have a *need* and a *want* to do certain things during their lives. Included in these, for a significant percentage of society, is to create and also to share.
Have patents been needed to get people to build or solve puzzles and many many many other problems out there or to write interesting stories or engage in interesting practices of all sorts or take up interesting building hobbies (putting in their own dollars)? There is genuine intellectual gratification (which works out to physical gratification in essence) in these actions. You can call it "love", but we could also say there is a **need** to invent and discover. Having a healthy life and gaining power in a number of ways (many of which work their way back to your paycheck) come about from using your brain, the more effectively, the better.
People that can and want to invent should likely never ever be barred. At a minimum, independent invention should always always be an acceptable defense against a patent, and this defense should be very inexpensive and quick to execute. Remember that a monopoly grant assumes that the work done by one person for 20 years can match what is being done by the world during those 20! And this no matter how broad was the scope of the patent! This latter part means, for the same "contribution" to society, you can bar even more people for the same long period of time if you word your patent more generally and/or ignore more prior art that you know exists but is not likely to play a factor in court. Remember that you aren't just barring the people that work on that particular class of invention, but on all the people (including geniuses that had not hit their stride in this field when the patent went into effect) who would work in the future on this and on inventions that would have sprung up and motivated tangential development. You also likely remove from the chatter conversations that now will not take place but from which you would have drawn more inspiration (even subconsciously).
Is it fair reward one (pretty much) maximally while hurting maximally all those that played a role in leading to that invention? How much more work does the person crossing the finish line is a relay of 4 (or even 400) people do than the other 3 (or 399)? How strong will the team be the next time out (next week) if we only allow the 1 person to run that next race?
Does it make sense to remove (with every single patent claim) from legal play a nonscarce resource that can be very important to inventors everywhere over the next 20 years?.
Very few people contribute things to society that are truly apparently ahead of their peers by any significant amount. The problem here is that, to attempt to make such discoveries (short of pure dumb luck), it requires such a focus on a particular and narrow set of topics that one must leverage a lot from the rest of society in order to succeed. Put differently, if you spend an inordinate amount of time on topic A, then you neglect topics B, C, D, and many others proportionately, likely requiring others to do the heavy lifting for you in these other complementary and supplementary areas. This is unavoidable. You must gain at a low intellectual and time cost to yourself in many areas in order to be able to focus particularly aggressively in particular areas. This doesn't just apply to geniuses working at the forefront of science. We all borrow a ton of brilliant concepts for most of our lives, even while we give back hardly anything, and this applies even if we lower the bar. No man is an island. No one should be crowned king/queen of any; otherwise, a great many legitimate prince/-ess (and even lucky stiffs) will have their potential contributions be cut short. The "greatest" of us simply carry the ball for a little bit of the trip. Surely, no one dominates consistently for 20 years and has little to gain from everyone else during those years. [And note we are not talking about sports but of the intellect, which depends on new ideas and not just on maximal (re)training of existing "ideas" (aka muscles).]
And before objections are raised, let's cover one more myth: that those that don't want to exploit this broken antisocial patent system or don't have money or know-how somehow don't mind giving their inventions up for free to (essentially) leeches who will leverage this and then use it against the earlier inventor. The patent system is not set up to allow share-alike licenses (like the copyright GPL and CC Share-alike licenses), which, as was shown for copyright, would be very very popular, especially among those inventors/creators that tend to provide society with the best terms of all. Patents are not automatic and free of charge; hence, you have to be wealthy and/or very greedy to leverage this game to your benefit (and the wealthier, the better). We empower the wealthy or overly ambitious at potentially a huge cost to everyone else, in particular, at a huge cost to those that invent and share at great terms with society. Thus "society" is highly rewarding those greediest of us that are likely to work just a little harder in the short-term in order to be able to lay back for most of 20 years and milk society with high costs and/or horrible terms. At the same time we handcuff the charitable or simply those that follow the attitude of live and let live. We trade a great set of terms "tomorrow" for a horrible set of terms today and for the next 20 years.
A new interesting posting: http://againstmonopoly.com/index.php?limit=10&chunk=0&perm=593056000000002211
But patents aren't a goose that lays golden eggs. In fact they limit and impede innovation, as studies have shown.