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Against Monopoly

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Monopoly corrupts. Absolute monopoly corrupts absolutely.





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Aharonian on Patent Trolls -- The Invalid Presumption of Patent Legitimacy

My comment posted on this Patently-O blog post: Greg Aharonian Discussed the WSJ's "Idiotic Article on Patent Tr-lls"

Aharonian writes: "Worse, this paragraph completely betrays free markets (something the Journal is glad to do when it is in the interests of its big company buddies), because it forgets the fact that a patent is an asset created by the government in exchange for an inventor's public disclosure of a new and useful invention. When the asset is so created, there is absolutely nothing freakin wrong with people doing with patents what they do with all other financial assets - buying, selling and exploiting them. To attack this practice is to attack free market economics."

In a sense, I agree with Aharonian: IF patents are a legitimate property right, then there is nothing wrong with using them. And Aharonian is right that there is nothing any worse about "trolls" than any normal patent holder. I have noted as much elsewhere: Patent Trolls and Empirical Thinking ("patent law simply does not require inventors to make or produce their inventions. And to attack "patent trolls" as somehow worse than those who do is confused"); The Coming Software Patent Apocalypse ("given a patent system, there's nothing wrong with patent trolls. It's a natural outcome and use of the system. Those who favor the system should stop whining about its predictable results"); Patent Law: Baby Steps ("One of their concerns [of the "Coalition for Patent Fairness" members] is "patent trolls - companies that exist primarily to make money from patents through litigation instead of commercialization"--but as I've noted, the hostility against patent trolls is misplaced. They are no different than any other patentee who takes advantage of the corrrupt and unjust patent system.").

But in another sense, I disagree with Aharonian, because it is not true that patents are a legitimate property right. In fact, they are at odds with genuine property rightss. (See my Against Intellectual Property; and Intellectual Property and the Support of the State). To expect the welfare-warfare state--which taxes, regulates, murders, invades, bombs, hampers, lies, steals, and jails, which impoverishes us and hampers the economy, which penalizes innocent behavior and wastes trillions of dollars--to expect this agency to "create" legitimate property rights or to add "wealth" to the economy--and by setting up a government bureaucracy to grant monopolies to applicants, under the oversight of the federal courts--is naive and confused beyond belief.


Comments

Mr. Kinsella:

I have yet to read your copious articles referred to in your post regarding Mr. Aharonian. However, I do have a different point of view regarding patents and whether those patents benefit the inventor, society, property rights or any other thing you want to point to.

Here is a question, which I ask myself as much as I ask anyone. If it takes ten million dollars to develop a product, innovating along the way, and the payback period for the investment is five years, and a competitor can reverse engineer the product in one year, essentially taking all the innovation that is unprotected because patents do not exist, then why should anyone ever create anything new?

In the manufacturing world there are tiers of companies. In the first tier are those companies that invest heavily in development and innovation. In the second tier are those people that take that innovation, either by stealing it, or waiting until patents expire, and produce lower costs versions because they do not have any payback period for the development of the innovation.

You state in your commentary regarding Mr. Aharonian that "it is not true that patents are a legitimate property right." You also state that "they are at odds with genuine property rightss [sic]."

I assert that if patents were not available to companies, we would not yet have desktop computers that do all the things they do - including your ability to produce this blog. We would not yet have the array of medications we have. We would not yet have hybrid vehicles that get more than 40 miles per gallon. Indeed, the world we have today might well look more like the world of the 1950's or 1960's because there would be a disincentive to innovate and create. Since someone is going to take my innovation that took a decade to develop (I think we could provide hundreds if not thousands of examples of successful products that took more than a decade to bring to market), and essentially prevent me from recouping my development cost because they would make the product without that burden, then why should I incur that burden? There is more incentive for me to steal if from someone else.

Again, I have yet to read your other posts, and it may be that you have other ways of protecting intellectual property that are included elsewhere in your posts. But, in reading this post only, I must admit that I prefer our current, albeit highly imperfect, system.

I agree with most of what Mr. Kinsella says in his post. As a patent attorney, I do not see many "crappy" patents issued to clients that I represent. It is difficult, and getting more and more difficult day by day, to get the PTO to issue a patent. Many times, this involves several years of prosecution, including multiple Requests for Continued Examination (RCEs), continuations, etc., and often an appeal to the Board of Patent Appeals and Interferences. Now the PTO has proposed new appeal rules that will make it even more difficult for the small inventor/company to get a patent.

But this is as it should be. A patent is a very powerful intellectual property asset that should only be issued for inventions that contribute significant innovation (and disclose it to the public).

I don't see much difference between the problem that a patent seeks to solve and the classic "Tragedy of the Commons" that is taught to first-year law students. For those who did not have the benefit of a legal education, the Tragedy of the Commons is like this: when land was commonly owned during medieval times, anyone could graze their cattle on it. Because there was a positive return to each farmer for each animal added, and because the negative returns were shared in common, there was an incentive for each farmer to keep adding animals, resulting in the ultimate destruction of the commons. Here is a link to an article on the Tragedy of the Commons: "Tragedy of the commons." Wikipedia, The Free Encyclopedia. 26 Aug 2008, 04:36 UTC. 26 Aug 2008 .

As Mr. Holder points out in his post, why should he innovate (i.e., contribute to the pool of commonly owned property) absent some assurance that a "free rider" will not use that innovation to compete with him at a much reduced cost? Without a vibrant patent system, the answer is "he shouldn't." This is even more the case when sovereign states, outside easy reach from U.S. law, become free riders. Decreasing the protection offered by patents simply lowers the barrier to entry for those entities that do not (or choose not) to innovate.

I agree with most of what Mr. Kinsella says in his post. As a patent attorney, I do not see many "crappy" patents issued to clients that I represent. It is difficult, and getting more and more difficult day by day, to get the PTO to issue a patent. Many times, this involves several years of prosecution, including multiple Requests for Continued Examination (RCEs), continuations, etc., and often an appeal to the Board of Patent Appeals and Interferences. Now the PTO has proposed new appeal rules that will make it even more difficult for the small inventor/company to get a patent.

But this is as it should be. A patent is a very powerful intellectual property asset that should only be issued for inventions that contribute significant innovation (and disclose it to the public).

I don't see much difference between the problem that a patent seeks to solve and the classic "Tragedy of the Commons" that is taught to first-year law students. For those who did not have the benefit of a legal education, the Tragedy of the Commons is like this: when land was commonly owned during medieval times, anyone could graze their cattle on it. Because there was a positive return to each farmer for each animal added, and because the negative returns were shared in common, there was an incentive for each farmer to keep adding animals, resulting in the ultimate destruction of the commons. Here is a link to an article on the Tragedy of the Commons: "Tragedy of the commons." Wikipedia, The Free Encyclopedia. 26 Aug 2008, 04:36 UTC. 26 Aug 2008 .

As Mr. Holder points out in his post, why should he innovate (i.e., contribute to the pool of commonly owned property) absent some assurance that a "free rider" will not use that innovation to compete with him at a much reduced cost? Without a vibrant patent system, the answer is "he shouldn't." This is even more the case when sovereign states, outside easy reach from U.S. law, become free riders. Decreasing the protection offered by patents simply lowers the barrier to entry for those entities that do not (or choose not) to innovate.

Lonnie E. Holder: what you just said run counter to real world history. Most of the things that have exists thrive in spite of patents, not because of patents or were a byproduct of the free market operating without the state imposed monopoly rights.

The various variants of GNU/Linux) for example, which most of the internet run on is not protected by patent or copyright monopolies, but freely available with very little restriction. Without these operating systems, it is probable that it wouldn't be as reliable as useful as it is today.

Now, much of the innovation in the software industry occurs in the competitive fringes of free software, where copyright and patent monopolies are shun, even hated.

The pharmaceutical industry in Italy and India for example, has innovated for decades without the patent system. The agriculture industry, for example, has produced an agricultural revolution without the use of patents.

There are of course, many more examples of innovation without patent

Lonnie Holder:

Here is a question, which I ask myself as much as I ask anyone. If it takes ten million dollars to develop a product, innovating along the way, and the payback period for the investment is five years, and a competitor can reverse engineer the product in one year, essentially taking all the innovation that is unprotected because patents do not exist, then why should anyone ever create anything new?

No one seriously maintains no one would ever invent anything new, absent patent law. They just argue (with no evidence) that there would be fewer things invented, and that we would be worse off overall--i.e., that the money saved would be spent on or invested in projects less valuable than the marginal innovation forgone. They have no evidence for this implicit claim.

Moreover, suppose in today's world, with patents, it takes ten million dollars to develop a product, but the 17 year monopoly of the patent is not quite enough to induce me to do this. Suppose I can only expect to make exactly ten million dollars revenue, using the 17 year patent monopoly. Well, I won't do it; and there's another innovation wasted. So why not just make the term 50 years? Why not impose quintuple damages, instead of merely treble? Why not impose criminal penalties, not just civil? Any combination of these things is sure to make patents even more valuable, and thus push even more marginal innovations into existence. Why not do it? And hell, what if this isn't enough--then why not use taxpayer funds to give cash prizes to innovators?

Where does it end?

Let's think about this. To expect the welfare-warfare state--which taxes, regulates, murders, invades, bombs, hampers, conscripts, lies, imprisons, steals, and invades--which impoverishes us and hampers the economy, which penalizes innocent behavior and wastes trillions of dollars--which imposes antitrust, tort, FDA regulations and penalties on companies--to expect this agency to "create" legitimate property rights or to add "wealth" to the economy--and by setting up a state-run bureaucracy to grant monopolies to "applicants," under the oversight of the bunch of federal "judges"--is naive and confused beyond belief. It is certainly not a libertarian view.

But the point here is: you can't just have a patent system. You have to have one set up by a state, run by a bunch of federal employee bureaucrats, subject to political pressure, and under the framework of a set of rules passed by a government agency and a set of laws enacted by a corrupt Congress, reviewed by a bunch of federal judges appointed by whatever idiot President we currently have in power. It will always be inefficient, arbitrary and corrupt. And the only way to get it is to have a large state with wide legislative powers. Such a state will also give you FDA regulations, taxes, regulations, conscription, the business cycle, war, depression, manipulation, corruption--things that hamper and harm business. You want the federal government to help businesses that want to innovate? How about dropping the over 50% in taxes paid by corporations, investors, shareholders, managers and employees? How about dropping ridiculous FDA and other regulations. How about reforming tort law. How about abolishing anti-trust law, which prevents businesses from forming private arrangements as an alternative to suicical, pointless, destructive patent procurement programs, licensing, and lawsuits? How about not trusting this mafia that rules us to benevolently "enhance efficiency" and "promote innovation" with a government bureaucracy that hands out state-granted monopolies to those is arbitrarily deems worthy?

I assert that if patents were not available to companies, we would not yet have desktop computers that do all the things they do - including your ability to produce this blog. We would not yet have the array of medications we have.

You can assert it, but if we did not have the patent system and the costs it imposes on the economy--if we did not have the massive bureaucratic, regulatory, and legislative federal infrastructure that gums up the works, the infrastructure that is necessary for a patent system--if those wasted trillions of dollars could have been spent on private, productive investments--there is no telling how much better off the entire human race would be.

As it is, we have a massive, expensive, harmful monopoly-granting state agency, that its proponents attempt to justify by hand-waving and "assertions." They simply assume that the net effect of the patent system is positive. Why? Do they have any idea of the cost of the system? Of its "benefits," if any? of the net? Whether it's even positive? No. None of them have a clue. They are not serious or sincere. They say they favor a patent system because it increases overall wealth--yet not a single one of them even pretends to have a clue as to what the costs and benefits are. (See my There's No Such Thing as a Free Patent.)

We would not yet have hybrid vehicles that get more than 40 miles per gallon. Indeed, the world we have today might well look more like the world of the 1950's or 1960's because there would be a disincentive to innovate and create.

No one has yet shown that the patent system even creates a net incentive to innovate, even ignoring its costs. For example it lets some companies rest on their laurels, collecting royalties and/or selling at monopoly prices, innovating less than they otherwise would, since they have a lock on the patented market. Or, they avoid innovating in certain areas, for fear of patents that would block the marketing of any products developed.

And even if you showed that patents have a net incentive on innovation, this does not show it's worth the cost. Is Tang worth $1 trillion in tax dollars? I'm not an expert, but I'd say not. Nelson Capes:

I don't see much difference between the problem that a patent seeks to solve and the classic "Tragedy of the Commons" that is taught to first-year law students. For those who did not have the benefit of a legal education, the Tragedy of the Commons is like this: when land was commonly owned during medieval times, anyone could graze their cattle on it. Because there was a positive return to each farmer for each animal added, and because the negative returns were shared in common, there was an incentive for each farmer to keep adding animals, resulting in the ultimate destruction of the commons. Here is a link to an article on the Tragedy of the Commons: "Tragedy of the commons." Wikipedia, The Free Encyclopedia. 26 Aug 2008, 04:36 UTC. 26 Aug 2008 .

As Mr. Holder points out in his post, why should he innovate (i.e., contribute to the pool of commonly owned property) absent some assurance that a "free rider" will not use that innovation to compete with him at a much reduced cost? Without a vibrant patent system, the answer is "he shouldn't." This is even more the case when sovereign states, outside easy reach from U.S. law, become free riders. Decreasing the protection offered by patents simply lowers the barrier to entry for those entities that do not (or choose not) to innovate.

Yes, this is the kind of thinking lawyers are spoonfed in law school: utterly unprincipled, pragmatic, ad-hoc, utilitarian wealth-maximizing and un-economic. It's sad the law has devolved to this: trying to "set rules" that avoid "free rider" problems or the "tragedy of the commmons" so as to lower "barriers to entry" so as to maximize wealth for us all. Mirabile dictu!

I absolutely love the responses by kiba and Stephen Kinsella. Essentially, the responses are that patents cannot work because... and there is no proof that not having patents would thwart innovation.

Okay then, my response to the second point is as reasoned as the response to my comment: there is no proof that a system without patents would INCREASE or FOSTER free trade and innovation. Indeed, more on that later.

As to Kinsella's comments regarding corruption, arbitrary, etc., I am unable to answer each point. To the extent that corruption may exist, I believe there are safeguards in the system (reexamination, reissue, litigation, code of ethics, etc.) that are attempts to limit the extent of corruption. I would like to see an example of corruption.

Are patents arbitrary? Here I have to agree that there has been a subjective nature to patents for about as long as patents have existed. On the other hand, there are processes for challenging patents that often work, even if the process can be time consuming and expensive.

Now, let's go back to the "free trade" argument.

Prior to the existence of patents, the world creeped along in advancing its knowledge of technology. Why? Because those who had the knowledge (one example would be England's knowledge of how to fabricate textiles, which was a closely held technology until it was stolen) would prevent others from gaining that knowledge, often by using extreme force. Such protection of knowledge was fostered by governments, who used their power to silence and even kill those who would take that knowledge. Their "justification" was that they werre protecting knowledge that the government of a particular country or empire held to be critical. This was the way of the world up to the creation of patents.

Since patents were initiated in the modern world, we have seen an explosion of technological advances that is several orders of magnitude greater than all the advances ever made in history. Can we attribute all these advances to patents? Perhaps not. But, at least you will no longer be killed by a corrupt government if you copy someone's invention, you just get sued.

I liken the arguments against patents to others that seem to follow in a similar vein. We did fine without fluoride in the water. Evidence is that tooth decay is substantially reduced by fluoride, but paranoia indicates that fluoride is a plot by unscrupulous government officials to_____[fill in the blank], in spite of the fact that these same government officials are drinking water with fluoride and using toothpaste with the same. Vaccinations are yet another government plot and the result does not justify the risks, in spite of the fact that diseases such as measles have killed and would once again kill far more people in one year than measles vaccines have ever killed.

Rather than turn back the clock to the time when we lived in caves and tried, typically unsuccessfully, to bring down a nearby mastodon, perhaps we should attempt to replace the current system with something better. Incidentally, trade was not "free" then either, because cave men were quite territorial.

Since there is no such thing and never has been any such creature as "free trade" [extending well before the existence of patents, I might add] and patents are only one small reason why, for what reason have some people singled patents out as a culprit?

Lonnie E. Holder:

As I recall, the patent system did not disclose any significant secrets. If anything, it shift resources away from inventions whose secrets can't be discovered that easily to inventions whose secrets will be discovered in very short time.

Also, you must remember that the state has committed many crime over the centuries.

Some of our government's most recent crime is the escalation in surveillance power and the invasion of Iraq for example. IF that's not convincing, you must remember that we have violated many treaties with the Native Americans and took away their land. We also went to war with Mexico and took their land.

One final note:

We are the skeptics and you're the asserter. Please provide a very good reason why we should let the patent system live. This is your burden of proof. So far, you have not provide any convincing reason for the status quo.

Kiba,

Seriously? "Most of the things that have exists thrive in spite of patents, not because of patents or were a byproduct of the free market operating without the state imposed monopoly rights."

Do you have any basis for this statement? The massive innovation that began with the industrial revolution and grew exponentially in the 20th century was accomplished hand-in-hand with the patent system. How much did it contribute, I do not know, but people like Edison and Bell were definitely motivated by the patent system.

"The various variants of GNU/Linux) for example, which most of the internet run on"

Source?

"is not protected by patent or copyright monopolies, but freely available with very little restriction. Without these operating systems, it is probable that it wouldn't be as reliable as useful as it is today."

Ignoring the fact that this is a bald-faced assertion without any evidence to back it up, I do believe software is an area that has thrived in spite of and not because of patents. However, how about some electromechanical or pharmaceutical examples? Liquid paper and silly putty are the only two I can think of off the top of my head.

Kiba:

The patent system does not "shift" anything anywhere. People continue to work on products and processes necessary to accomplish their purpose. Trade secrets will continue to be such. Patents are applied for when the opportunity arises and when appropriate.

You then note that "the state" has committed many crimes over the centuries. Question: How does the "crimes" of various states (you are obviously speaking of more than the United States because of the length of time you to which you refer) relate to patents? I guess you put into that category the ownership of cars and land, both of which are documented and in many cases controlled by the government. So, if anything the state does is bad, then land ownership is bad. Where is your house? I want it. Since ownership of land is a state defined function, and since the state is evil, then you should have no objection to me moving into your house.

Beyond the silliness of moving the discussion from patents to the evil of governments, then you begin talking about our government's recent "crimes." Again, how do those "crimes" relate to building of highways and establishment of a system to permit aircraft to fly? Non sequitur my friend. I am the skeptic and you are the asserter. Prove how these relate to each other.

I have already told you the facts regarding innovation throughout the centuries. Until about the time patent systems were established, technology creeped along, and technology was prevented from movement outside political boundaries by governments (talk about crimes!). Incidentally, the United States suffered because of the lack of movement of technology. Historical fact. Look it up.

Once the patent system was developed, governments permitted movement of technology and technological growth exploded throughout the world. These are facts. Would we have had the same technological growth without patents? Maybe, but only if we invented another means of dissiminating knowledge with the same scope and depth of patents. My belief is that people would not have readily shared that knowledge and technology would disseminate much more slowly, and technological progress would be much less than it is today.

I have historical facts that support a contention that patents have helped the world. Now, explain to me how technological progress would have progressed at its current rate without a system comparable to the patent system to help establish a central repository for technology.

While you are at it, you can also explain how we would have an interstate highway system without a central government. I would also enjoy hearing that one.

Lonnie E. Holder:

I believe I was responding to the fact that you defended the state and also defending the patent system. I was addressing the two points separately. If this is not the actual point, than I apologize for the mis-transmission of ideas.

Now, it is indeed a crime for the state to enforce monopolies. Not that it matter that laws and property rights would exists after the collapse of the state.

It is also probably likely that the interstate highway system won't be built in an anarchist society. I won't attempt to argue how such a system will be built except that it it presumptive to think that the interstate system need to be built in the first place.

I believe that air traffic control would be developed privately since aircraft companies probably will realize the benefit of not losing their assets due to collision.

Now on to the matter of "shifting". I believe that these shift are real or otherwise countries that don't have patent system wouldn't focus on specific type of technologies.

Also, please tell me a story of how the government get involve controlling access to technology then to granting patent and copyright and then opening up technological growth. The history I am familiar with is that it started as an unholy alliance between monarchies and rent-seekers.

Kiba:

I can see part of the problem here. What everyone needs to consider is how "monopoly" is being defined in this context.

If I write a song, let us say "Don't Let the Sun Go Down on Me," then that property belongs to me in all its various forms for a specific period of time. However, I do not have a monopoly on music. There are other songs to hear, admittedly many of which are also covered by monopolies, but there are many songs that are not covered by monopolies. I can either choose an unprotected song or a protected one, but that is my choice, and the price of that song (or the penalties for stealing it) will be commensurate with its status.

Similar is any other intellectual property. Toyota holds many patents related to hybrid vehicles. However, not all hybrid vehicles use those patents, and there are competing technologies (bicycles, all-electric vehicles, etc.). Toyota's "monopoly" is quite limited and still permits the production of vehicles that are not infringing on Toyota's property rights. We always have a right to choose a technology that is no longer someone's property right or a technology that does. Thus, there is no monopoly in the strict sense because a monopoly implies lack of choice. As a side note, if you own a piece of land you have a "monopoly" on that piece of land. However, you do not have a monopoly on land because I can choose other land. The same with any other property.

Now to digress: The interstate highway system was built to address the difficulty of moving military forces around the United States to respond to an invading force. We realized that we have no way of quickly moving forces to any point during WWII within the continental United States if we needed to do so. If there were no states, then the need would never have been identified, and what few highways were built would likely all be toll roads. Incidentally, they would probably all be covered by trash because many people thing that throwing crap out the window is another "right."

Yes, air traffic control would have been privately developed, probably in regions, so we would probably have a dozen different systems and would have to switch airlines several times to cross from one coast to another. I am sure it would work, just not well.

I must admit to failure in understanding your comment regarding "shifting." Probably because I am unaware of any country that does not have patents.

History of patents and copyrights: These two are not (to the best of my knowledge) tied together. The history of copyrights extends to the creation of the printing press and the production of various versions of books. Authors were not paid and thus were discouraged from creating new works. Also, versions were different between publishers, especially unauthorized publishers. Instead of throwing in the towel, Venice granted its first "privilege" for a book in 1486, to prevent inaccurate versions of the book, a history of the city of Venice. By 1492, privileges were being granted on a regular basis. Interestingly, the purpose behind these privileges was to encourage printers to undertake projects that would benefit society, since unrestricted competition would stifle the benefit of producing books of relatively low volumes.

The first genuine copyright law dates back to 1710, and it just expanded from there to what we have today, though the United States has the most ridiculous copyright laws in the world because of the length of time that works are protected. However, as strange as U.S. laws are, other countries may be following the U.S. lead. We will have to see.

I am not going to attempt to address patents, but will note that the first patent system is believed to date back to about 500 B.C. There have been variations of patents, but the goal remains to permit a limited monopoly for new and useful devices to encourage the disclosure of technology, thus encouraging even more technology. While it has been documented elsewhere that the founding fathers of the United States debated the benefits of patents and copyrights, they ultimately provided for both.

Samsung employs 2,000 scientific PhDs and 8,000 scientific Masters degrees to research and develop new products and technologies. I have a hard time believing that they and other companies like them would continue this level of investment without the ability to protect the resulting advances.
Benevolent:

I know! I know! *raises hand* THEY WOULDN'T!!! Indeed, intellectual property built Samsung. They learned their lessons from the Japanese and became a powerful force for high quality, low cost products, bringing neat products into existence, all because they were able to profit from their investments. Take away the protection they get from intellectual property and what do you get? Well, no X-Box, no WII, perhaps no video games at all, except the online freebies. Good luck with that. No movies, no LCD, no hybrid cars. No fuel cells. No wind power. No solar cells. We would still have horse and buggies! We would probably have the greatest horse and buggy technology you could think of!

Ludicrous. Who let the shills and trolls take over this site's comment section? :P

Samsung or something like it would still exist, just like Red Hat is able to function without using copyright restrictively to extract rents.

None of Your Beeswax:

This site is like a free market, open to all. Are you advocating controlling the free market?

"Samsung or something like it would still exist, just like Red Hat is able to function without using copyright restrictively to extract rents."

That is your hypothesis. Now, back that up with proof.

I see we have run into a "burden of proof" circle. I have no proof, but let me add that the patent system does obvious damage in various forms, and it's not good enough to assume that it doesn't hurt innovation (I think it does, though). You need to show that it actively fosters innovation, and in such a manner that the considerable costs of the system are offset.
Kid:

Re "Burden of Proof": I was directed by several individuals to the book "Against Intellectual Property" by Boldrin and Levine as being the "proof" that intellectual property is bad. I still have a goodly way to go through that book, but I have already seen significant factual errors, distortions, name-calling, sarcasm, and completely inappropriate scientific method. In short, I am unimpressed.

I remember the days when someone called Reaganomics "voodoo economics." I see that the frequent contributors to this site all "know" (I am assuming via osmosis, universal communion, or "natural rights") that intellectual property is bad. Okay, so be it. I "know" a lot of things are bad (including name calling, conclusions without factual basis, apartheid, and price gouging). I have personal beliefs that some of these are bad (meaning no real factual basis) and factual support for others. If the general source of knowledge that intellectual property is "bad" just because people inhabiting this site think it is, well, bully for them, they do not need facts to back up their religious belief.

You state that the patent system does damage in various forms. Perhaps it would surprise you that I agree that sometimes the patent system does damage in various forms. However, I also think that the patent system has done good things in various forms.

You also said that "You need to show that it actively fosters innovation, and in such a manner that the considerable costs of the system are offset."

First, the "costs" of the patent system are relatively insignificant in comparison to a lot of things, such as the highway system that crosses the United States or the war in Iraq. Indeed, the number of federal lawsuits involving patents has remained at 1% between 1975 and 2005 (Source: Dr. Ron D. Katznelson) and the total amounts of the suits were relatively negligible in terms of the revenues of the companies involved (Pat Choate estimates that four companies in the Coalition for Patent Fairness paid approximately one quarter of one percent of their revenues on patent settlements). How is a fraction of a percent in revenues and zero growth in patent lawsuits stifling innovation?

Further, Katznelson also has a beautiful chart that shows that the duration of effective "monopoly" prior to the entry of innovations has decreased from more than 30 years at the turn of the 20th century to about 3 years at the beginning of the 21st century. Wow! I guess the patent system, stronger than ever, has really stifled innovation! (See charts at http://www.whitehouse.gov/omb/oira/0651/comments/460-presentation.pdf).

Is the patent system perfect? No. Have there been abuses of the patent system? Yes. Has innovation thrived and increased under the patent system? Yes. Proof has been offered for all of these comments.

"Has innovation thrived and increased under the patent system? Yes."

I would say this is subjective. In either case it says nothing of the effect the patent system has had on innovation. Perhaps a lot has been gained for man-kind because of it, and perhaps a lot has been lost for mankind because of it.

"First, the "costs" of the patent system are relatively insignificant in comparison to a lot of things."

The real question is if the benefits of the patent system are relatively insignificant in comparison to its considerable costs, as many here believe, or not.

"I see that the frequent contributors to this site all "know" (I am assuming via osmosis, universal communion, or "natural rights") that intellectual property is bad"

I can't speak for everyone, but I don't "know" intellectual property is bad. It just strikes me as an unelegant system - and at the same time I find the arguments for it unconvincing. To me the default, if we can't decide if the patent system is good or bad, would be not to have one.

Kid:

I think you have defined the crux of the problem with your statements. However, no one has the answer, least of all Boldrin and Levine.

The real question is if the benefits of the patent system are relatively insignificant in comparison to its considerable costs, as many here believe, or not.

The problem is one of belief. Fundamentally, who cares what anyone believes? The real answer should be in the proof. There have been lots of studies that show the value that intellectual provides to companies versus the cost (the ratio is quite high). However, I am unaware of a single objective study that quantifies the cost to mankind of intellectual property versus the benefit. I am doubtful of the procedure by which one would go about such a study. Regardless, belief is insufficient to make any changes.

I can't speak for everyone, but I don't "know" intellectual property is bad. It just strikes me as an unelegant system - and at the same time I find the arguments for it unconvincing. To me the default, if we can't decide if the patent system is good or bad, would be not to have one.

There are a lot of things we do that are inelegant, so let's not go down that particular road.

As far as deciding whether the patent system is good or bad, there are far more people who believe the system is good versus those who think it is bad. I would venture to say that a minority believe the system is bad, and a significant majority believe it is good. In a democracy, the majority usually have the sway, and the majority have put their faith in IP. You mission, then, is to convince enough people that IP is bad to get them to ask their congressmen to abolish IP. Good luck!

This is ludicrous.

"That is your hypothesis. Now, back that up with proof."

I pointed to the continued existence of Red Hat. It's all the proof you need that a company with an easily-copied product can thrive without monopoly protection.

Numbers of lawsuits means little, except that the shakedowns of would-be innovators involve such effective intimidation that most pay up or scram right away, without the big thug holding the bat having to break anything first.

You would be just as remiss in saying that the harm done by the Mafia to business owners was highly overstated because there were relatively few instances of businessplaces being torched and kneecaps broken, but meanwhile tons of people were quietly and meekly paying protection to avoid exactly that.

"There have been lots of studies that show the value that intellectual provides to companies versus the cost (the ratio is quite high)."

Baseball bats and Molotov cocktails are similarly very valuable to Mafia thugs and protection goons, but that isn't evidence that they (let alone that particular use of them) are much of a benefit to society as a whole!

Here you betray your bias, and strong evidence that you are indeed some corporation or another shilling on this forum; you implicitly defined something as being automatically good if it is, specifically, desirable to large corporations, without reference to its effects on everybody else (consumers, small businesses, etc.) -- so it's pretty clear who you (are probably being paid to) sympathize with here.

"As far as deciding whether the patent system is good or bad, there are far more people who believe the system is good versus those who think it is bad."

And at one time there were far more people who believed the earth was flat versus those who thought it was round.

(Despite the evidence, and to a significant extent because of large and powerful organizations pushing THAT belief.)

"faith in IP"

That's exactly the problem. So-called "IP" is a faith-based solution to an apparently-nonexistent-to-begin-with "insufficient innovation" problem.

This is the 21st century. There's no excuse for hocus pocus, voodoo innovation policy, or similarly; one critical test for whether a policy (or method of formulating policy) should be acceptable or not should be whether or not it is evidence-based, and, in particular, subject to modification or removal if it demonstrably backfires with respect to its stated, official purpose (however successful it is at making lobbyists' sponsors rich!); we should no longer consider faith-based methods of decision-making to be "good enough". Would-be representatives that believe in big angry men in the sky, magical unproven benefits of snake oil or copyright laws, or anything else of the sort should not be elected. A 21st-century populace simply should not vote for such charlatans!

Nobody:

Humorous post; I enjoyed it.

(1) I am not paid for posting, directly, indirectly or otherwise. However, I am a registered patent agent, which anyone could easily discover. It is not a secret.

(2) The existence of Redhat neither proves nor disproves anything. If your proof is that Redhat is doing fine, then my proof is that the top patenting companies are doing fine, and there are way more of them than there are of companies like Redhat, which is also not proof of anything.

(3) Would be innovators? I think I have read too many of these posts. Are we talking about real inventors or plagiarizers who could not create a mess?

(4) Your mafia example was cute and humorous, and would be even more relevant if the mafia brought something to the table other than intimidation. The mafia knocks on your door and says give me money and we will protect you from ourselves. A patent holder displays its technology for the world to see. A non-creative entity is free to determine whether the patent holder is willing to license their technology for a nominal fee (and most fees are nominal). The patent holder brings an invention to the table and merely seeks to maintain control of its creativity for a limited period of time.

(5) Value of patents: People will continue to believe in the value of patents until someone can objectively prove that patents are not valuable. Some people (though not as many as your school teacher might like you to believe) did believe the world was flat until it was irrevocably proven otherwise. However, some people continue to believe the world is flat. Some people believe patents are harmful. I wonder how close those two numbers are to each other?

(6) Re hocus pocus in the 21st Century: I am from Missouri. Show me the money. Show me that patents are in aggregate more harmful to society than beneficial with definitive, objective proof.

Well, at least now you've admitted to being a patent industry shill.

The existence of Red Hat (note spelling) proves that "IP" laws are unnecessary, because business models not dependent on restricting copying are proven viable.

Plagiarism is not at issue here. Mere copying is.

The mafia brings nothing to the table but intimidation. The same is true of the RIAA, and of patent lawyer types like yourself. None create value for the economy. The RIAA screws the musicians that do create value, then turns right around and screws the consumers, supposedly in the name of the musicians. Then turns to lobbying and tries to screw the entire population in one go by limiting innovation and killing our property rights in our computers and iPods.

Real value-creators don't need to use "IP" law or similarly to extract money and keep themselves going. Only parasitic organizations and leeches like "IP"-focused law firms and **AA organizations need to.

A patent holder "merely" seeks control over others' creativity? Creativity fluorishes best in the absence of any kind of controls. Another reason why "IP" law actually hinders progress of science and the useful arts.

As for people continuing to believe that patents are valuable, well it depends what you mean by "valuable". Patents are very valuable to some rich corporations and fat cat CEOs, I am sure, but that is not a justification for their continued existence. Only if their existence was outright necessary for the functioning of society could their impositions on our liberty be justified, and only if this necessity had been proven beyond a reasonable doubt. That IS the standard here for restricting liberty, is it not? That the necessity of doing so has been proven beyond a reasonable doubt?

Show me the money. Show me that patents in aggregate are more beneficial to society than harmful with definite, objective proof. Beyond that, show that they are absolutely necessary, and we really couldn't get by as an industrial economy without them, because only then can the imposition on my liberty be justified.

Well, at least now you've admitted to being a patent industry shill.

I consider "shill" to be a pejorative term. At least I am open regarding my motivations.

More broadly, I am interested in the value of IP. I got interested in the discussions here and I am looking for revelations. Kinsella's paper is the best I have seen so far. I find his arguments regarding copyrights compelling and troubling. Boldrin and Levine have numerous issues with their book, which I am still making my way through - that thing is close to 300 pages long!

The existence of Red Hat (note spelling) proves that "IP" laws are unnecessary, because business models not dependent on restricting copying are proven viable.

You have said things are absurd, where here's your stab at absurdity. A more accurate statement would be that "the existence of Red Hat proves that a business model not based on IP laws can work." Generalizing one example to the rest of the world is a dangerous thing. I will not bore you with hyperbole, but I am sure you can think of many examples where something worked for one business or country, but not for another.

Plagiarism is not at issue here. Mere copying is.

In the real world, many copiers (I am speaking of businesses, but I would be willing to bet individuals do it too), copy someone else's work and then market it as their own. Now, they cannot admit that they plagiarized someone else's design, but they have - and copying and presenting a work as your own is plagiarizing.

The mafia brings nothing to the table but intimidation. The same is true of the RIAA, and of patent lawyer types like yourself. None create value for the economy. The RIAA screws the musicians that do create value, then turns right around and screws the consumers, supposedly in the name of the musicians. Then turns to lobbying and tries to screw the entire population in one go by limiting innovation and killing our property rights in our computers and iPods.

I read Kinsella's paper about copyrights, and as I noted above, I find his discussion disturbing and eye-opening. More so because he has actual FACTS to back up his viewpoint. The RIAA seems like a very disturbed and dangerous organization.

Real value-creators don't need to use "IP" law or similarly to extract money and keep themselves going. Only parasitic organizations and leeches like "IP"-focused law firms and **AA organizations need to.

A patent holder "merely" seeks control over others' creativity? Creativity fluorishes best in the absence of any kind of controls. Another reason why "IP" law actually hinders progress of science and the useful arts.

Question: How many copiers would have "created" the invented device? Based on what I have seen, creativity is a fancy word used by many (not all!) to mean, "I took your invention and now I am selling your invention and since I do not have to pay back the $10 million you invested in developing your invention, I can kick you out of the market with you own idea!"

As for people continuing to believe that patents are valuable, well it depends what you mean by "valuable". Patents are very valuable to some rich corporations and fat cat CEOs, I am sure, but that is not a justification for their continued existence. Only if their existence was outright necessary for the functioning of society could their impositions on our liberty be justified, and only if this necessity had been proven beyond a reasonable doubt. That IS the standard here for restricting liberty, is it not? That the necessity of doing so has been proven beyond a reasonable doubt?

I have yet to work for a "rich" corporation. No comment on CEO's.

Show me the money. Show me that patents in aggregate are more beneficial to society than harmful with definite, objective proof. Beyond that, show that they are absolutely necessary, and we really couldn't get by as an industrial economy without them, because only then can the imposition on my liberty be justified.

Well, let me think. We have a patent system and you are advocating to eliminate it. I know you would love me to take on the burden of proof to keep the system, but I am looking for evidence that says I should even been looking to justify the elimination of the system. I am reading, but I have yet to find it.

Well, as fun as these posts are, I have Boldrin and Levine and Kinsella papers to finish.

Lonnie, why did you go this many pages back and then post a new comment? You're not supposed to do that. If I post way back here and debunk some crap you wrote, you're supposed to not notice it because it's nowhere near the front page, and your not noticing it is supposed to save me the bother of having to repeat myself as I am doing now because you were rude enough to go deliberately trolling.

"I consider "shill" to be a pejorative term."

Yes, indeedy.

"At least I am open regarding my motivations."

So are most sociopaths, once they have their victims alone.

"More broadly, I am interested in the value of IP."

Why? It has none. Actually, its value is net negative. It's like taking an interest in feces or vermin where you claim to want more of it, rather than trying to figure out how to get rid of it.

Your behavior just doesn't make sense. Except as pure self-interested lying your ass off, of course.

"I find his arguments regarding copyrights compelling and troubling."

Then please just admit that you were wrong, come out in favor of IP abolition, and quit trolling this blog's comments.

"Boldrin and Levine have numerous issues with their book, which I am still making my way through - that thing is close to 300 pages long!"

Lazy prick. It took me less than 4 hours to absorb it all.

"""IP" laws are unnecessary, because business models not dependent on restricting copying are proven viable."

You have said things are absurd, where here's your stab at absurdity."

No; it's a perfectly true statement that I wrote.

"a business model not based on IP laws can work."

Which proves that IP laws are not necessary, and then, since they restrict freedom unnecessarily, that they should be abolished.

Glad that's settled, then.

"In the real world, many copiers (I am speaking of businesses, but I would be willing to bet individuals do it too), copy someone else's work and then market it as their own."

They really should preserve proper attribution, of course.

"I read Kinsella's paper about copyrights, and as I noted above, I find his discussion disturbing and eye-opening. More so because he has actual FACTS to back up his viewpoint. The RIAA seems like a very disturbed and dangerous organization."

Well, there you go, then.

"Question: How many copiers would have "created" the invented device? Based on what I have seen, creativity is a fancy word used by many (not all!) to mean, "I took your invention and now I am selling your invention and since I do not have to pay back the $10 million you invested in developing your invention, I can kick you out of the market with you own idea!""

Which they certainly can, if you just sit there and wait for the money to pour in instead of continuing to innovate and improve your product.

The patent system, of course, encourages just sitting there and waiting for the money, and sending the lawyers after anyone who dares try to sell the same thing as you!

How very promoting of innovation. :P

"Well, let me think. We have a patent system and you are advocating to eliminate it. I know you would love me to take on the burden of proof to keep the system"

You HAVE the burden of proof to keep the system, since the system restricts liberties without providing any proven benefit.

The burden of proof is ALWAYS on the side promoting less liberty, and NEVER on the side promoting more liberty.

"but I am looking for evidence that says I should even been looking to justify the elimination of the system."

See above re: where any free society must place the burden of proof for such things.

"Well, as fun as these posts are, I have Boldrin and Levine and Kinsella papers to finish."

Oh, so you'll be shutting up now, I take it?

Lonnie, why did you go this many pages back and then post a new comment? You're not supposed to do that. If I post way back here and debunk some crap you wrote, you're supposed to not notice it because it's nowhere near the front page, and your not noticing it is supposed to save me the bother of having to repeat myself as I am doing now because you were rude enough to go deliberately trolling.

Go whine to your mommy, I have better things to do.

"I consider "shill" to be a pejorative term."

Yes, indeedy.

I have noticed that you tend toward name calling. Seems to be your way to make up for your lack of logic.

"At least I am open regarding my motivations."

So are most sociopaths, once they have their victims alone.

Well, we are not alone now, are we? And you are still resorting to name calling. How sad for us all.

"More broadly, I am interested in the value of IP."

Why? It has none. Actually, its value is net negative. It's like taking an interest in feces or vermin where you claim to want more of it, rather than trying to figure out how to get rid of it.

Your behavior just doesn't make sense. Except as pure self-interested lying your ass off, of course.

Your motives are completely altruistic and for the betterment of mankind, I am sure, name caller.

"Boldrin and Levine have numerous issues with their book, which I am still making my way through - that thing is close to 300 pages long!"

Lazy prick. It took me less than 4 hours to absorb it all.

Arrogant ass. I am studying Boldrin and Levine, not skimming it. Studying requires far more effort than flipping through the titles and seeing what you want to see.

"Well, let me think. We have a patent system and you are advocating to eliminate it. I know you would love me to take on the burden of proof to keep the system"

You HAVE the burden of proof to keep the system, since the system restricts liberties without providing any proven benefit.

The burden of proof is ALWAYS on the side promoting less liberty, and NEVER on the side promoting more liberty.

Wrong again. The system will remain as it is until a preponderance of proof indicates that the system yields a net negative. How many congressmen are running to submit bills to eliminate patents?

""Lonnie, why did you go this many pages back and then post a new comment? You're not supposed to do that. If I post way back here and debunk some crap you wrote, you're supposed to not notice it because it's nowhere near the front page, and your not noticing it is supposed to save me the bother of having to repeat myself as I am doing now because you were rude enough to go deliberately trolling."

[insult deleted]"

NO. YOU WILL STOP POSTING ATTACK COMMENTS TO THIS SITE. YOU WILL MEEKLY ACCEPT THAT YOU ARE WRONG. YOU WILL LET MY RESPONSES TO YOU BE THE FINAL WORDS ON THE SUBJECT. YOU WILL MOVE ON.

HAVE I MADE MYSELF CLEAR?

YOU ARE NO LONGER WELCOME HERE.

YOU WASTE MY TIME WHEN YOU KEEP REPEATING YOURSELF AND FORCING ME TO KEEP REPEATING MYSELF.

DO NOT DO SO AGAIN!

""Yes, indeedy."

[insults deleted]"

You are wrong, Lonnie.

""So are most sociopaths, once they have their victims alone."

[insults deleted]"

You are wrong, Lonnie.

""Why? It has none. Actually, its value is net negative. It's like taking an interest in feces or vermin where you claim to want more of it, rather than trying to figure out how to get rid of it."

[insults; calls me a liar]"

You are wrong, Lonnie.

""It took me less than 4 hours to absorb it all."

[insults deleted]"

You are wrong, Lonnie.

I did not skim it. I absorbed it, as I said in material you even quoted.

You're a liar.

""The burden of proof is ALWAYS on the side promoting less liberty, and NEVER on the side promoting more liberty."

[more insults]"

You are wrong, Lonnie.

I found a great resource on the patent process, for those of you interested:

Patent Process


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