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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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Patents: Horizontal vs Vertical Innovation

I reprint below (with permission) an email from Prashant Singh Pawar:
Hi Mr Kinsella,

I am a long time opponent of patents and Intellectual Property rights (to a great part because of your work), but something always bothered me and that was the 'innovation' argument by the patent supporters. I could always see both the sides of the arguments, yet was never sure which side is right. I can see that without patents there is no incentive to develop a technology with a large investment, on the other hand, without patents, there is probably no need of a large investment.

I can see that patents make companies develop new things which without patents they wouldn't do, but at the same time patents prevent companies from doing things which they would have without patents. I found this thing common across all the anti-IP and pro-IP work I have read that they both talk about the kinds of innovations they would promote and other side would demote, but there is no clear distinction between the kinds of innovation they are talking about.

So I finally came up with the terms 'Horizontal innovation', and 'Vertical Innovation'. Horizontal Innovation is when a parallel technology is discovered (usually to avoid patent infringement). For example if a company develops a flying car using (say) hydrolic expansion, and they get a patent of it, another company develops (or has to develop) a flying car technology by using Thermo-plazma radiator engine. Both these technologies achieve the same end, they enable a car to fly, so this is horizontal innovation. This is what patent proponents talk about being squashed when they say innovation will be reduced when patents are removed. There will not be Google G1 phone,Blackberry and iPhone if there were no IP rights.

Vertical innovation is when a technology is built top of another technology merely by adding a new element to it. For example if you develop a Car which can travel on water, and I take that car, and add a Sail to it to make it use wind then that's called a vertical innovation. With patents, only the patent holder can think of adding a sail on the boat-car and sell it, without patents, innovations will be done all over the world by every kind of boat and car enthusiast. There will be only one smart phone in this world, but it will be having numerous variants, such as a Google gPhone (synced with google services), a Microsoft mPhone (synced with microsoft services), and so on.

Patents promote horizontal innovation, but restrict vertical innovation. Without patents we will have more vertical innovation but less horizontal innovation. Even if Horizontal and Vertical Innovations are equally good in terms of their merits, one thing is clear, without patents, a lot more people will be able to use the technology, this is some place where a patent-less society will beat a pro-patent society hands down.

Just like if words were copyrighted, and you required a license to use the words, we would have had a LOT of innovation (horizontal) in terms of development of language and you required a license from John Locke's estate to use the term 'liberty', there would have been billions of words in English (a lot of them doing the same thing what others do), but a lot less number of people would be educated, and most of our brain cells would have been wasted on keeping track of 15 different terms for 'liberty', and 'passion'.

I described everything in detail in my article (its completely different from this mail). Please take a look at it, and let me know of your thoughts on it.

Patents: Horizontal vs Vertical Innovation

[Cross-posted at StephanKinsella.com]


Comments

Couldn't agree more though I tend to fall in the camp of abolish software patents. . . . and hardware ones too!
Known problem for science of motivation. Good presentation from Dan Pink @ TED conference: http://www.ted.com/talks/dan_pink_on_motivation.html
I can't see why the absence of patents would prevent any innovation (horizontal, vertical or diagonal). If there is enough people NOW that are willing to pay something for an innovation that allows the innovator to invest in the innovation, then there would be equally enough people even after the abolition of patents. If without patents it would not be profitable to invest in an innovation, then even the addition of patents would not create a sudden interest in people and willingness to pay for it.

The question is only how to secure the payment of those who were willing to pay in the first place, but as it was said earlier (I think it was Mr. Kinsella in some lecture?), it's just a technical problem of business, not a economical or philosophical one.

Samuel:

There have been many papers written on the economic incentive provided by patents, in some fields, particularly in the chemical, mechanical and pharmaceutical fields.

You state, without proof or argument, that providing support for invention (you said innovation, but since innovation as defined by Mike Masnick happens without invention, I focus on invention) is a technical problem of business, not an economical or philosophical one.

However, as has already been pointed out numerous times on this site, that also is not true. Patents do cause an economic distortion. People invest in industries that they would not invest in because of patents. Thus, we have modern aircraft, modern engines, modern transmissions, modern automobiles, etc. Without patents, these fields would have significantly less investment because the returns, without patents, would be lower than many other fields, notably software and electronics. Money follows the return on investment, which on a societal level is an economic issue.

It is true that patents distort the economy by causing investment where it would almost certainly not occur, and that investment would just as assuredly be less or non-existent without patents.

Take for example an inventive new vehicle. The investment can take a decade or more (hybrid vehicles and fuel cell vehicles being a couple of examples, though clean diesel technology has had similar levels of invention). The investments can run into billions. Without patents, the economic risk becomes substantially higher and the incentive to invent and invest becomes substantially lower. The risk may, and there are papers that seem to support the contention, that investment in these technologies would halt with the elimination of patents. The risk becomes too great.

While you can state that the risk is a business one, in fact there is no business risk because the decision will already have been made not to invest. The problem becomes a economic problem because society will have to figure out how to invest in an endeavor for which there is insufficient economic incentive to invest. Some invoke government investment. While government investment can be useful, it has been proven time and again that government investment can be economically inefficient.

Also as Mike Masnick has stated again and again, if patents did not exist and the need exists (e.g., we need a new, high efficiency vehicle, requiring all new technology, i.e., invention rather than "innovation"), then society will find a way.

Question: If the nominal rate of return on innovations is 6%, and the rate of return on a particular field of invention is 3%, will society bother with invention? Interesting question. There are well-supported economic papers that claim in certain fields the incentive will be insufficient to support invention, while in other fields innovation outweighs invention and elimination of patent will help. The question is one of balance.

Regardless of the outcome, we will have phenomenal televisions and video games! So, at least we will be entertained while we are stuck at home.

tl;dr
I was surprised to find this website - I'm very anti-monopoly myself, whether it be private or public (socialism).

Also I can see merits to an anti-copyright stance, especially for computer code. . .however, this attack on IP is, in fact, an attack on the non-monopolists not the monopolists.

Getting rid of IP would be a boon for the monopolists as they could shut the doors on start-ups by immediately copying and mass producing anything the little guy came up with and that's a recipe for disaster.

Also it's not true that someone cannot take a patented invention and make improvements on it. It is a question of whether or not the improvements are significant enough to warrant such as new IP. This is the very reason that all patented IP is publicly published, to speed up innovation and not slow it down. Before IP laws, people held on to their secrets and kept them 'proprietary' - and it's important to note that a lot of IP is 'process' and not 'product', so it would be impossible to ever build on that knowledge if it were proprietary. IP patent laws are in reality the means for sharing ideas, and we all gain from that.

Frankly I'm shocked that such points were overlooked. I do hope you will take another look at these issues and redress. This website would be much more popular I'm certain, if IP wasn't being attacked.

Sincerely,

Tyler Jordan

Of the many awkward logical jumps in the above post, the most interesting perhaps is confusing a big and powerful corporation with monopoly. What is more dangerous? A big and powerful corporation with the market open to competition or a small corporation with a legal monopoly?
Kid:

What Tyler is attempting to explain is the dominance that a large company may have in the market place, regardless of whether legal monopolies exist. A big company may distort a market independent of the existence of intellectual property. Indeed, we have historical evidence for the influence of large companies that frequently had little or no reliance on intellectual property, using instead their dominance. Given that companies of such size still exist, is it not likely that without the protection that intellectual property can provide a small company or an individual inventor that these same large companies will in fact not only continue to dominate their industries, but prevent small, inventive firms or individuals from ever growing? While there are some who claim such practices are impossible, I have seen references to such activities, including a recent post alleging possible predatory pricing (which is supposedly mythical).

So, re-ask your question: Which is more dangerous? A big and powerful corporation with the ability to suppress new inventions and innovations by its dominance of the market place or the ability to copy and distribute inventions faster than a small company, effectively limiting competition, or a small company with a legal monopoly that permits that company the opportunity to establish a market for its product before the large company can run them out of business.

The only "awkward logical leap" in Tyler's statement is your inability to see what might happen in a market place that has two or three massive companies and a number of relatively tiny small companies. It is quite logical that their lives will be mercifully short.

Many people when they fist come in contact with the libertarian anti-monopoly stance incorrectly assume that the libertarians claim that the authors and innovators must give their creations away for free. Such is also Tyler's notion of "...immediately copying and mass producing anything the little guy came up with...", however that is not the case. The "little guy" nor anyone else is required by libertarians to give their creations for free. They are free to sell their creations to anyone for a fair price they both agree on, so that they need not to worry about copying.
Samuel:

Your statement is incomplete at best, erroneous at worst. Your statement:

They are free to sell their creations to anyone for a fair price they both agree on, so that they need not to worry about copying.

What you mean is that they, being "the inventor," may sell one copy at a "fair price" "they," whoever "they" may be in this case, agree on. However, what you failed to say is that they inventor sells exactly one copy of his device and from that point forward will likely never make another sale because large corporation with significant resources will make significant numbers of copies at a price lower than the individual inventor would be able to charge, but higher than would be obtained with perfect competition. The large corporation will do so until a second significant corporation copies the invention and reduces prices further.

The large corporations benefit, the inventor does not, and society may not because it is unlikely the inventor will ever make the mistake of giving away his inventions again (i.e., the inventor may stop revealing inventions, and may stop inventing). Without intellectual property protections of some sort it is nearly impossible for an inventor to discuss an invention with a large corporation without having the invention stolen (which is an accurate term since we are speaking of the plans for the design that are not publicly available), the inventor will be unable to have meaningful conversations with a large company. Inventorship will certainly decrease, and may ultimately languish. But, by golly, innovation will thrive!!!

an anonymous person fails to explain how "will likely never make another sale" and "large corporation ... will make ... copies" follow from "sells exactly one copy".
Most people only seem able to think one step ahead, i.e.

"But without a monopoly to protect the little guy a corporation can sell millions of copies of their invention at a considerable profit"

No. It is precisely because there's a monopoly that a corporation can sell millions of copies at a considerable profit.

Without a monopoly, the inventor sells their invention to a corporation desperate for an edge in a free market. And then, like an arms trader, the inventor can sell it to a competitor. The inventor sells their inventiveness, their skill indispensible for innovation, not state granted monopolies.

Monopolies do not represent productivity, but a hindrance to knowledge sharing and technological progress. A monopoly is a king's reward to his favoured merchant, at the expense of others - it is a costly redistribution of wealth, and very alluring to those who would receive it. Arguing for monopolies is understandable by those who want them, but they are either ignorant or have succumbed to corruption.

We thus descend into a war, not of intellectual argument, but of corporate religion and evangelism. It is thus more a matter of indoctrination vs deprogramming than academic uncertainty. Unfortunately, there are a hell of a lot more devout believers in the church of monopoly than heretic freethinkers at liberty outside. Fortunately, the Internet (qv telescopes, heliocentricity) is providing incontrovertible evidence that perhaps monopolies aren't the natural state people have been brought up to believe should exist.

Crosbie & Samuel:

Even with patents, the previous statement regarding big companies and individual inventors has happened multiple times, almost always to the detriment of the individual inventors.

Perhaps the most famous of examples is an inventor who invented a marvelous quick release for sockets. The inventor was told his invention had no value. Not being smart, the inventor neglected to patent his invention prior to attempting to sell his invention to the large company.

The large company went on to incorporate the invention in most of their tools that had attachments, not only earning the company hundreds of millions of dollars, but further enhancing the company's reputation for quality and innovation. Of course, the joke was that the company had misled the inventor as to the value of his invention, and though the company gave the inventor a small amount of money as a "reward" for being inventive, the company reaped tens of millions PER YEAR in profits.

Now, this situation is what happened without patents. This situation has happened before, and it continues to happen. Independent inventors are often lied to or at least misled, to the benefit of large companies, who are under no obligation to give anything to the inventor once they know how the invention works.

With independent inventors who attempt to make their own inventions, the situation is worse. The independent inventor starts manufacturing ten units per year in Smallville, Arkansas. A big company sees a sample at a trade show in Kansas City, Missouri, and discovers the invention is not patented. The following year the big company is producing a copy of the same item for 10% less, and has conducted a nation-wide media blitz for their new product and is prepared to go international.

What happened to the independent inventor? He became bitter. He kept on inventing, but burned his notebook with more than 100 inventions in it in the weeks before his death. Included in his notebook was a novel new system for purifying water (which, incidentally, was reinvented about 20 years later; we lost more then 20 YEARS of benefit that poor countries such as Africa are now benefiting from just because one inventor got screwed by a big company), new features for tools, and a chemical process. Several of these items have been reinvented, ALL HAVE BEEN PATENTED!!! Most have yet to be reinvented. Perhaps they will all eventually be patented, but how many decades of utility were lost because the inventor decided not to reveal to the world, all because the inventor got screwed one time? Had the inventor been more knowledgeable about patents, he would have had some defense against having his idea taken from him without any sort of compensation or incentive.

Unfortunately, this situation happens again, and again, not because of patents, but because many independent inventors have been unaware of the benefit patents have. This is the world you want to condemn us to.

As an aside, there is a recent study that shows that patents reduce the total amount of social utility, or some such nonsense. Let us do the math. An inventor invents a system for purifying water that is cheap and easy to implement. With patents, the inventor's social utility is raised, along with the social utility of those who make and sell the invention, and even those of the people using the invention. Now, because the inventor demands a small royalty for his device, obviously there is a "tax" for each person, but the inventor is encouraged to invent further. So, if we monetize benefit, perhaps the inventor gets 10 units of benefit, derived from buyers, but other than the 10 units of "tax," the remainder of society gets the benefit of the invention.

Of course, without patents, assuming the inventor reveals his invention, society does not have to pay the 10 units of "tax," so society is supposedly better off. BUT, the inventor no longer feels the need to invent. So present value is increased, but long-term value is decreased. Some anti-IP people fail to see that this situation has already happened, and it will only become magnified without patents. No amount of rationalization or independent invention will change that. Inventors are, in spite of what some people think, an unusual creature. They take a great deal of pride in what they do, and they are often easily upset when others fail to recognize the pride they have in their work. That can and has lead many inventors to "take it with them," so to speak.

Some people actively work to make the world hell. Some do so from ignorance. Others do so because it benefits them. Others do so because they are the agents of Satan, or whatever force that works against the long-term benefit of society. In the end it matters not the reason, the results will be the same.

These are the traditional pro-monopoly arguments.

Two obvious counters:

1) You are still arguing in terms of a world in which patents exist (not one in which they have been abolished, and a free market has resumed).

2) Patents do not incentivise disclosure of valuable, non-obvious inventions that in the absence of patents would supposedly be kept secret. Society doesn't need to incentivise non-valuable and obvious inventions. And inventors don't need to patent valuable, non-obvious inventions - they still keep them secret and exploit them. And, if they can't be exploited in secret, why keep them secret? Not having the prospect of a patent doesn't make an inventor begrudge publishing socially beneficial knowledge that they cannot otherwise exploit.

You confirm this is a religious war by labelling detractors as agents of Satan.

There is no argument here, simply a collision of corporate bull with the enlightenment.

The argument against monopoly has ended.

Our task is now to remedy the last three centuries of neglect for the natural law governing intellectual work.

Crosbie:

(1) The patents were irrelevant. Inventors have been and are being robbed of their inventions. In a world without patents, this situation merely worsens.

(2) You make several correct statements in a row, but then you take a logical twist that makes zero sense: Not having the prospect of a patent doesn't make an inventor begrudge publishing socially beneficial knowledge that they cannot otherwise exploit. This statement is not supported nor logically led to by your previous, correct statements.

Perhaps a proper response is that "Not having a prospect of being able to obtain a return on an invention, an inventor may [or, as frequently happend] DOES begrudge publishing socially beneficial knowledge." Certainly YOU, and others with your religious belief, would like to think that inventors will reveal socially beneficial knowledge even if they are unable to exploit it. However, history reveals not just a few, but hundreds of instances (possibly thousands, but how many people have died without revealing that they knew something no one else ever did; as you may be aware, some of these cases have been widely publicized) where inventors have literally "taken it to the grave." Good for them. No misguided fascist or socialist [in this case their intent would be the same, the former because they think they can force someone to give up knowledge, the latter because they have a religious belief that the short-term good of society outweighs all other factors, which perversely can include the long-term good of society] can force someone to give up socially beneficial knowledge if they do not wish to do so.

You confirm this is a religious war by labelling detractors as agents of Satan.

I never considered that the debate over intellectual property was a "religious war" until I began reading statements of anti-IP people, who kept using terms that equated with belief and dogma, terms I associate with religion. However, my use of the name Satan was merely a convenience. If it makes you happier, try "Others do so because they are the agents of Chaos, either deliberately or inadvertently." Or, if you prefer, depending on your particular religious beliefs, "Others do so because they are agents of anarchy."

Crosbie:

(1) The patents were irrelevant. Inventors have been and are being robbed of their inventions. In a world without patents, this situation merely worsens.

(2) You make several correct statements in a row, but then you take a logical twist that makes zero sense: Not having the prospect of a patent doesn't make an inventor begrudge publishing socially beneficial knowledge that they cannot otherwise exploit. This statement is not supported nor logically led to by your previous, correct statements.

Perhaps a proper response is that "Not having a prospect of being able to obtain a return on an invention, an inventor may [or, as frequently happend] DOES begrudge publishing socially beneficial knowledge." Certainly YOU, and others with your religious belief, would like to think that inventors will reveal socially beneficial knowledge even if they are unable to exploit it. However, history reveals not just a few, but hundreds of instances (possibly thousands, but how many people have died without revealing that they knew something no one else ever did; as you may be aware, some of these cases have been widely publicized) where inventors have literally "taken it to the grave." Good for them. No misguided fascist or socialist [in this case their intent would be the same, the former because they think they can force someone to give up knowledge, the latter because they have a religious belief that the short-term good of society outweighs all other factors, which perversely can include the long-term good of society] can force someone to give up socially beneficial knowledge if they do not wish to do so.

You confirm this is a religious war by labelling detractors as agents of Satan.

I never considered that the debate over intellectual property was a "religious war" until I began reading statements of anti-IP people, who kept using terms that equated with belief and dogma, terms I associate with religion. However, my use of the name Satan was merely a convenience. If it makes you happier, try "Others do so because they are the agents of Chaos, either deliberately or inadvertently." Or, if you prefer, depending on your particular religious beliefs, "Others do so because they are agents of anarchy."

Samuel Hora writes:

"tl;dr"

What?

Alonniemouse writes:

[a whole load of hooey]

Alternative scenario:

The small inventor invents a widget in Arkansas and sells it locally. Eventually a big company discovers it at a trade show and starts manufacturing it cheaper. They may need the inventor's expertise though, and so may hire him. Failing that, the inventor still made a tidy bundle before this happened, and now has reason to invent something else and make more.

With patents, though, the small inventor invents a widget, sells a patent license for some exorbitant amount to some big company, and retires on the royalty cheques, never inventing anything else again. Not needing the money, unlike in the no-patents case, he has no incentive to do anything now but sit on the beach drinking pina coladas.

Beeswax:

lol...You are funny. You should write more science fiction. The big company would never hire the small inventor, because they filled with engineers and the small inventor likely is not, and they think they are more "innovative" than the inventor is.

As for the "tidy bundle," the guy sold a couple, failed to recoup his time and cost to develop. He is now working alongside you at the local McDonalds.

"Would you like to supersize your meal?"

"Beeswax:

lol...You are funny. You should write more science fiction. The big company would never hire the small inventor, because they filled with engineers and the small inventor likely is not, and they think they are more "innovative" than the inventor is.

As for the "tidy bundle," the guy sold a couple, failed to recoup his time and cost to develop. He is now working alongside you at the local McDonalds.

"Would you like to supersize your meal?""

You're the fiction-writer here. Completely making things up, throwing in random assumptions, and so forth.

I refer you to Mike Masnick's excellent blog, Techdirt (http://www.techdirt.com/), for your continuing education. Mike will set you straight about, in particular, the fact that unless they hire the copy-ee as an expert consultant, the copy-er tends to always be playing catch-up and never becomes market leader.

Beeswax:

You're the fiction-writer here. Completely making things up, throwing in random assumptions, and so forth.

I respectfully disagree. If you have ever spent any time on inventor's blogs, you will recognize how difficult it is for small inventors to get inventions marketed and sold. That is one huge advantage a large corporation has. They have a resident marketing team, advertising channels, distribution, etc., that the small inventor does not have, and has little money to initiate. Speed to market and distribution is why big corporations will always have an advantage over the so-called "first mover," which will always make the "first mover" advantage marginal, at best, for independent inventors. Not only is that a fact, but your characterization of "completely making things up, throwing in random assumptions, and so forth" is at best a mis-characterization, at worst, a heinous, bald-faced lie.

I refer you to Mike Masnick's excellent blog, Techdirt (http://www.techdirt.com/), for your continuing education. Mike will set you straight about, in particular, the fact that unless they hire the copy-ee as an expert consultant, the copy-er tends to always be playing catch-up and never becomes market leader.

lol...That is a falsehood. I think it is nice that Mike has this fantasy, if he actually does, but the reality of the situation is that the inventor or a new fuel injector, die casting technique, or other mechanical device will be unlikely to succeed on his own. Without patent protection, there is no need to hire "the expert." Companies will just wait until the invention is revealed and copy with no problem.

What is interesting is that Mike has said, over, and over, and over, that the whole point of copying is to be able to innovate, which means that the copier will in fact quickly advance beyond the original inventor. He has consistently made this statement for the year I have been reading his blog. Are you now saying he is saying something different? Are you in fact making up more stuff?

Alonniemouse wrote:

"I respectfully disagree."

I don't think you "respectfully" anything, actually, whatever you claim.

"If you have ever spent any time on inventor's blogs, you will recognize how difficult it is for small inventors to get inventions marketed and sold."

That playing field is rapidly being leveled by the Internet, and by Craigslist, eBay, and the like.

"Speed to market and distribution is why big corporations will always have an advantage over the so-called "first mover," which will always make the "first mover" advantage marginal, at best, for independent inventors."

Nonsense. See above. Also, note that a proper free market will provide marketing "guns for hire" or similar tools to allow smaller businesses to outsource.

Remember also that the costs of inventors and small businesses go down drastically if IP is abolished.

""I refer you to Mike Masnick's excellent blog, Techdirt (http://www.techdirt.com/), for your continuing education. Mike will set you straight about, in particular, the fact that unless they hire the copy-ee as an expert consultant, the copy-er tends to always be playing catch-up and never becomes market leader."

[calls me a liar]

No, you're the liar.

None of the nasty things that you have said or implied about me are at all true.

"the reality of the situation is that the inventor or a new fuel injector, die casting technique, or other mechanical device will be unlikely to succeed on his own."

Post evidence or STFU, Lonnie.

"Without patent protection, there is no need to hire "the expert." Companies will just wait until the invention is revealed and copy with no problem."

Nonsense. Copying isn't as easy as you make it out to be; not with physical machines and similarly.

"What is interesting is that Mike has said, over, and over, and over, that the whole point of copying is to be able to innovate, which means that the copier will in fact quickly advance beyond the original inventor."

If so, then the copier isn't merely a copier; the copier is an innovator too. The two of them end up in an innovation arms race. This benefits the consumer and the product being developed.

If the copier does merely copy, then the original innovator can stay ahead by continuing to innovate, and otherwise can stay abreast by doing so.

"He has consistently made this statement for the year I have been reading his blog. Are you now saying he is saying something different? Are you in fact [insult deleted]?"

No, you're the liar.

None of the nasty things that you have said or implied about me are at all true.

I don't think you "respectfully" anything, actually, whatever you claim.

Beeswax, you are entitled to your opinion, regardless of how wrong it may be.

If you have ever spent any time on inventor's blogs, you will recognize how difficult it is for small inventors to get inventions marketed and sold.

That playing field is rapidly being leveled by the Internet, and by Craigslist, eBay, and the like.

lol...I will enjoy seeing your evidence of that. IF you think that through carefully, you will realize there is no way for an inventor to find a buyer for his invention that will not lead to copying of his invention, if it has real value, and copying will likely be by a large and big company.

Speed to market and distribution is why big corporations will always have an advantage over the so-called "first mover," which will always make the "first mover" advantage marginal, at best, for independent inventors.

Nonsense. See above. Also, note that a proper free market will provide marketing "guns for hire" or similar tools to allow smaller businesses to outsource.

You would like to believe this statement, would you not? Thousands of inventors everywhere wish it were true. Unfortunately, as much as the idealists of the world would like to believe things might work this way, typically they do not. However, keep fantasizing.

Remember also that the costs of inventors and small businesses go down drastically if IP is abolished.

Ah, but you neglect to point out that the typical "cost" of IP for most inventors and small businesses is the cost of patent protection, which for inventors and small businesses is a few thousand dollars. That cost is less than most other things they will ever pay for, including advertising, utilities, and rent. Yet, the benefits IP provides far outweighs the nearly negligible cost.

[Deleted repeat of a previous, incorrect statement.]

[Calls me a liar.]

You have FAILED, FAILED, FAILED to support your point. That is TRUTH. You should learn what TRUTH means.

[Makes a paranoid statement.]

[Advocates violation of my first amendment rights.]

Incidentally, Beeswax, you post evidence, then I will. In the meantime, why should I rebut your lack of facts with my own? I have provided facts in the past and you have conveniently ignored them.

[Deleted a Beeswax expletive and insult.]

Without patent protection, there is no need to hire "the expert." Companies will just wait until the invention is revealed and copy with no problem.

Nonsense. Copying isn't as easy as you make it out to be; not with physical machines and similarly.

Once you have a copy of the machine, you have about 80% of the effort involved in creating the invention. The copying is typically the easiest part. Of course, if you have actual evidence otherwise, we would all love to hear it.

What is interesting is that Mike has said, over, and over, and over, that the whole point of copying is to be able to innovate, which means that the copier will in fact quickly advance beyond the original inventor.

If so, then the copier isn't merely a copier; the copier is an innovator too. The two of them end up in an innovation arms race. This benefits the consumer and the product being developed.

But it is also disincentive for the inventor. It will also be disincentive for other, current inventors and future inventors. Ultimately, the balance will shift to innovation and away from innovation. So, we will have TONS of innovation, and almost NO new invention. Nice future you and Mike Masnick envision. I hope to never live there.

If the copier does merely copy, then the original innovator can stay ahead by continuing to innovate, and otherwise can stay abreast by doing so.

Except the copier will be getting all the sales, because the original inventor does not have the marketing and distribution capability of the big company. You keep ignoring this important point, over and over and over.

[Calls me a liar without basis or evidence.]

[Makes another paranoid statement.]

None of your statements is worth the time you took to make them. You have failed to provide a shred of proof that supports your points. On the other hand, I at least provided anecdotes of where these things have happened in the past. I contend that nothing has changed. Without a patent to protect an invention, copiers will ignore rewarding the inventor and just take the inventions, disincentivizing invention. PROVE OTHERWISE.

Alonniemouse writes:

"Beeswax, you are entitled to your opinion, regardless of how wrong it may be."

Nothing that I have stated is "wrong".

""That playing field is rapidly being leveled by the Internet, and by Craigslist, eBay, and the like."

lol...I will enjoy seeing your evidence of that."

Just visit the named sites. The barrier to marketing and selling things is much less than it once was.

"IF you think that through carefully, you will realize there is no way for an inventor to find a buyer for his invention that will not lead to copying of his invention"

True, but copying is irrelevant. That has been explained repeatedly to you.

""Also, note that a proper free market will provide marketing "guns for hire" or similar tools to allow smaller businesses to outsource."

[calls me a liar]"

No, you're the liar.

None of the nasty things that you have said or implied about me are at all true.

""Remember also that the costs of inventors and small businesses go down drastically if IP is abolished."

Ah, but you neglect"

I neglect nothing.

None of the nasty things that you have said or implied about me are at all true.

"the typical "cost" of IP for most inventors and small businesses is the cost of patent protection, which for inventors and small businesses is a few thousand dollars."

That's onerous enough, but it's also not what I was talking about. I was talking about the higher prices they must pay for various things due to other people's intellectual monopolies and attendant royalty, license fee, or other similar demands. Particularly a problem with physical inventions and patents; unlike copyrights, you can't generally dodge having to license patents by "rephrasing in your own words" or otherwise avoiding verbatim copying.

"Yet, the benefits IP provides far outweighs the nearly negligible cost."

Balderdash.

"[Deleted repeat of a previous, [insult deleted] statement.]"

No, you're the stupid one.

None of the nasty things that you have said or implied about me are at all true.

"You have FAILED, FAILED, FAILED to support your point. [insult deleted]"

I do not fail.

None of the nasty things that you have said or implied about me are at all true.

"[Makes a [insult deleted] statement.]"

No, you're the crazy one.

None of the nasty things that you have said or implied about me are at all true.

"[Advocates violation of my first amendment rights.]"

Bull. I advocated this privately-run forum running trolls like you out on a rail, which is a very different thing.

"Incidentally, Beeswax, you post evidence, then I will."

I already have posted and pointed to lots of evidence; numerous times over the last several months. I still await yours.

"In the meantime, why should I rebut your lack of facts"

I have no lack of facts. You just keep pretending that I do because those facts are not on your side, and therefore you'd rather not face them.

"I have provided facts in the past and you have conveniently ignored them."

No, you have provided myths, unsubstantiated claims, insults, and assorted other bollocks and I have consistently debunked them.

"[insult deleted]"

No, you're the rude one.

None of the nasty things that you have said or implied about me are at all true.

""Copying isn't as easy as you make it out to be; not with physical machines and similarly."

Once you have a copy of the machine, you have about 80% of the effort involved in creating the invention. The copying is typically the easiest part."

Understanding it and getting it to work is that other 20%, the hard part. That's the part the experts are for.

Once again, read what Mike Masnick has to say on the subject over at Techdirt.

""What is interesting is that Mike has said, over, and over, and over, that the whole point of copying is to be able to innovate, which means that the copier will in fact quickly advance beyond the original inventor.

If so, then the copier isn't merely a copier; the copier is an innovator too. The two of them end up in an innovation arms race. This benefits the consumer and the product being developed."

But it is also disincentive for the inventor."

What is, having to compete in a free market? A monopoly is an even bigger disincentive: it lets you get one single hit product, milk it for royalties, and never innovate anything again; from now on all your budget goes to marketing, producing your gadget, and lawyers.

"Ultimately, the balance will shift to innovation and away from innovation."

Quite clearly, Lonnie doesn't know if he's coming or going. Really, continuing this would be to engage in a battle of wits against an unarmed man. Grossly unfair.

But then again, if he's left alone to mislead an unsuspecting public ...

""If the copier does merely copy, then the original innovator can stay ahead by continuing to innovate, and otherwise can stay abreast by doing so."

Except"

Except nothing. If the copier does merely copy, then the original innovator can stay ahead by continuing to innovate, and otherwise can stay abreast by doing so.

"[multiple vicious insults deleted]"

No, you're the crazy one, the worthless one, and the failure.

None of the nasty things that you have said or implied about me are at all true.

"I at least provided anecdotes"

Anecdotes.

Please don't bother to post comments to this blog again until you have actual *evidence*.

"Without a patent to protect an invention, copiers will ignore rewarding the inventor and just take the inventions, disincentivizing invention. PROVE OTHERWISE."

Already done. Boldrin and Levine did so in Against Intellectual Monopoly, noting that all measures of invention and productivity were higher in places, times, and sectors without patent protection than in otherwise-comparable ones with patent protection. Mike Masnick posts counterexamples to your faith-based assertions almost daily at Techdirt, as well. I think that is why when I mention either source you ignore it and insult me instead of addressing what is said by those sources.

Hey guys the whole point of my classification of innovation as vertical and horizontal is that in a society without patents there will not be much (or need of) horizontal innovation.

But you guys are still thinking in terms of Horizontal innovation and pointing out why nobody will have the incentive to produce alternate technologies.

The point is no small guy from Arizona is developing a G1 phone which is a radically parallel technology than iPhone, and then have his G1 copied by google and being sold everywhere.

I agree if he develops a G1, then a Google like company can copy it and start selling it and will always outsell this small guy's company. But there is no reason for him to develop a G1 to start with. Infact consider it this way if there is no issue of patent infringements the whole exclusive deal of Apple with AT&T is a bust, and HTC, Motorola, Nokia have been long jumped into a business of producing their iPhones.

So the question is why is someone developing an alternate iPhone when there are 200 different versions of iPhones in the market. What that small guy needs to work upon is how to enhance iPhone and develop something new OVER it.

Why would this guy spend his time to develop something new on the top of iPhone, because now there are 20 companies in the market(HTC, Motorola, Apple, Nokia, Google) who all want to get an EDGE over their competitor. Of course the edge is never long lasting because soon it will be copied by their competitor.

So there can never be a One time 'heist' of an idea in a society without IP. If that small guy from Arizona really develops a G1 phone despite of everything, and his idea is stolen by a big company like Google, the Microsoft will have an edge by coming to this guy, hiring him and make him work on Microsoft M1(the MS version of G1) and constantly add new features on it.

The only way a company in IP less world can have an edge is by: 1) Producing the product for cheap and provide it for cheap 2) Provide consistently new(marginally) features to their products(this would result in creation of more software based hardware, like an Internet up datable washing machine)

An insect byproduct writes:

"Beeswax, you are entitled to your opinion, regardless of how wrong it may be."

Nothing that I have stated is "wrong".

Of course, little that you have said is "right," so perhaps being wrong is not the same thing as not being right.

Just visit the named sites. The barrier to marketing and selling things is much less than it once was.

That is true, once you have something, like an invention on which to build an innovation, to market and sell.

"IF you think that through carefully, you will realize there is no way for an inventor to find a buyer for his invention that will not lead to copying of his invention"

True, but copying is irrelevant. That has been explained repeatedly to you.

Copying is irrelevant to you, it is NOT irrelevant to me.

[Statements of paranoid delusion and insults deleted.]

Ah, but you neglect"

I neglect nothing.

Yes, you did, and saying "nuh uh" changes nothing.

[Statement of paranoid delusion deleted.]

"the typical "cost" of IP for most inventors and small businesses is the cost of patent protection, which for inventors and small businesses is a few thousand dollars."

That's onerous enough, but it's also not what I was talking about. I was talking about the higher prices they must pay for various things due to other people's intellectual monopolies and attendant royalty, license fee, or other similar demands.

Prove to me that there are "higher prices" for various things. Just because there is a royalty or license does not mean there is a "higher fee," it can mean that there is a product that exists only because the inventor decided to market an invention. Which is better, having an invention to license, or no invention at all? I choose the former.

Particularly a problem with physical inventions and patents; unlike copyrights, you can't generally dodge having to license patents by "rephrasing in your own words" or otherwise avoiding verbatim copying.

An invention is an invention. If someone invents an airbrake for a diesel truck, it is difficult to copy that airbrake in a non-infringing way. Of course, given that it took the original inventor decades to develop the brake, and years more to get someone interested in pursuing it, I would expect that the patent would cover the air brake, and it did for 17 years from the date of issuance. Congratulations to the inventor for developing a mechanism that has been a huge improvement to large truch safety.

"Yet, the benefits IP provides far outweighs the nearly negligible cost."

Balderdash.

I appreciate the substantial evidence you have provided in response. Clearly you have the facts on your side...roflmao.

[Deleted unprovoked personal insult.]

[Deleted statement of paranoia.]

I do not fail.

That statement is not logical, nor is it supported by your track record. You have managed to piss off a number of people on various sites - obviously you FAIL to make yourself understood.

[Statement of paranoia deleted.]

[Deleted unprovoked personal attack.]

[Statement of paranoia deleted.]

"[Advocates violation of my first amendment rights.]"

Bull. I advocated this privately-run forum running trolls like you out on a rail, which is a very different thing.

This site is an open forum for the debate of certain issues. If anyone is a "troll," it is you. I have enjoyed the debates on this site, though often misguided and rarely supported by objective study. However, hope springs eternal. You, on the other hand, frequently claim others are attack you when they are not, and you have rarely, and perhaps never, provided an actual fact.

"Incidentally, Beeswax, you post evidence, then I will."

I already have posted and pointed to lots of evidence; numerous times over the last several months. I still await yours.

Ah, yes. Evidence. Okay, here is evidence:

Patents help provide greater dispersion of technology than non-patented products.

Sokoloff, Lamoreaux and Kahn showed that patented innovations "tend to be traded more than those that are not, and therefore to disperse geographically farther away from the original area of invention."

Patents encourage foreign investment.

Boldrin and Levine provided a summary of 23 studies on patenting and innovation, "strengthening IP increases the flow of foreign investment in sectors where patents are frequently used."

Patents can lead to more spending on R&D as a portion of GDP, which many researchers correlate with increased standards of living and technological advancement.

Kanwar and Evanson have data for 31 countries in the period 1981-1990. They found a correlation between higher patent protection and increases in R&D as a fraction of GDP.

Park and Ginarte studied 60 countries from 1960 to 1990 and found that the strength of intellectual property rights (including pharm) led to growth of R&D in developed countries.

Chun-Ya Tseng and Cheng-Hwai Liou in "Valuation of R&D and Patent: An Economic Value Added Perspective," found a positive correlation between R&D and patents and the financial success of 219 Taiwanese electronic companies sampled from 1990-2003. This paper also provides references to quite a few other papers supportive of the value of patent to the economic health of companies.

Patents have been shown over and over and over and over again to help some small businesses to become established in the market place.

Hall and Ham noted "The results suggest that stronger patents may have facilitated entry by firms in niche product markets..."

Though authors disagree as to the scope, study after study after study has said that patents are an important part of providing motivation for investing.

Cohen et al/Levin et al found that patents were valuable in securing returns in the pharmaceutical industry.

A study by Edwin Mansfield (I believe this paper is "Patents and Innovation: An Empirical Study," Management Science, Vol. 32, No. 2. (Feb., 1996). pp. 173-181) concluded that 60% of pharmaceutical inventions and 38% of chemical inventions would not have been developed without patents. Mansfield also concluded that while 86% of all inventions would have been developed without patent protection, the reverse is true as well. 14% of all inventions would not have been developed without patent protection. Furthermore, Mansfield did not study the relative value of the 86% and the 14%, so it is possible that the 14% of inventions were far more valuable than the 86%.

Arora et al also found that increasing the "patent premium" correlates with increased R&D in pharm and biotech.

Bessen and Meurer: "the patent system provides positive incentives in some industries like pharmaceuticals."

Bessen and Meurer: "we find that small publicly traded firms get small positive R&D incentives from patents. This is also very likely to be true for small, non-publicly traded firms and non-profit inventors."

Ruth Suehle in Redhat Magazine: "I have to admit, it's easy for me, and I suspect others, to forget that patents can work quite well outside of software."

Roberto Mazzoleni and Richard R. Nelson: "The collection of small and medium sized firms in the American biotechnology industry is, of course, a striking example of enterprises that would not have come into existence without the prospect of a patent, and which depend on patent protection to make their profits, and to attract capital, through one or another of these strategies."

I also have found it interesting that at least one researcher has pointed out the flaw with many of the studies that conclude that patents add no value to companies.

Mazzoleni and Nelson, on reviewing an array of studies that concluded patents were not helpful to studied companies:

"On the other hand, as we also noted, an important limitation of the studies reported above is that they all have been focused on a particular class of innovators, typically large firms with an established presence in their product markets and thus having access to the complementary assets needed to commercialize the end-product of their innovative efforts."

"Nor do these studies get at the question of whether the prospect of patents motivates firms and other organizations outside of a particular industry to undertake inventions which would be used inside that industry. This class of inventors, call them industry-outsiders, is likely to lack the complementary assets needed to appropriate the returns from innovation by being first to market or by rapidly moving down the learning curve. Studies such as that by Jewkes et al. (1969) have documented the importance of such outsiders to technical advance in a number of industries. For such outsiders, the prospect of a patent may be essential if there is to be incentive to invent."

These two researchers also concluded:

"In some areas, patent rights certainly are economically and socially productive in generating invention, spreading technological knowledge, inducing innovation and commercialization, and providing some degree of order in the development of broad technological prospects."

Patents tied to economic growth:

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/04/AR2007050402691.html

06 May 2007

The notion that patents are tied to growth is not entirely new. A study published last year by the Federal Reserve Bank of Cleveland found that the single best predictor of how a state's income will grow is the number of patents in the state per capita. Education ranked second.

From:

http://www.clevelandfed.org/research/trends/2008/0308/03regact.cfm

14 Mar 2008

Education and innovation contributed more to income growth at the state level than other potential factors, according to research conducted at the Federal Reserve Bank of Cleveland. Educational attainment, for example, increased a state's average per capita personal incomes relative to other states by 8 percent, but innovation "measured by patents per capita" boosts personal income nearly 20 percent. Given the importance of innovation to economic performance, we investigate patenting activity in the Fourth District and compare District trends with those across the nation.

Albert G.Z. Hu and I.P.L. Png, in their extremely well researched paper "Patent Rights and Economic Growth: Cross-Country Evidence," found a positive mathematical relationship between patents and economic growth. From their conclusion:

Using an ISIC 3-digit industry level database that spans 54 manufacturing industries in 72 countries between 1981-2000, we found evidence that stronger property rights were associated with faster industrial growth measured by value added. The impact of stronger patent rights was both statistically and economically significant in three of the four periods we analyzed: 1981-85, 1991-95, and 1996-2000, and had become stronger in the 1990s compared to the in the 1980s.

Our analysis also showed that the stronger patent rights promoted industrial growth through technical progress in the 1981-85 and 1996-2000 periods and through more rapid factor accumulation in the 1991-95 period.

In another, related area, here is a study showing the incentives from the Plant Act:

http://www.patenthawk.com/blog/2005/04/patent_economics_part_5_theori.html

As an example, the Plant Variety Protection Act of 1970 provided patent protection for sexually reproducing plants. In the 1960s, about 150 new plant varieties were developed in the U.S. In the 1970's, after providing patent protection, over 3000 new plant varieties were developed. Truly, patents provide the seeds for innovation.

"In the meantime, why should I rebut your lack of facts"

I have no lack of facts. You just keep pretending that I do because those facts are not on your side, and therefore you'd rather not face them.

I just provided you with reference after reference after reference...all supporting my position. Care to ignore them again, or claim persecution at the hands of un-named individuals? That seems to be your standard response to facts.

"I have provided facts in the past and you have conveniently ignored them." d

No, you have provided myths, unsubstantiated claims, insults, and assorted other bollocks and I have consistently debunked them.

Well, above are numerous studies. De-bunk them, if you can.

[Unprovoked personal attack deleted.]

[Statement of paranoid delusion deleted.]

""Copying isn't as easy as you make it out to be; not with physical machines and similarly."

Once you have a copy of the machine, you have about 80% of the effort involved in creating the invention. The copying is typically the easiest part."

Understanding it and getting it to work is that other 20%, the hard part. That's the part the experts are for.

lol...You have never worked in an engineering environment, as I can tell from your statement.

If so, then the copier isn't merely a copier; the copier is an innovator too. The two of them end up in an innovation arms race. This benefits the consumer and the product being developed."

What is more likely to happen is that the small inventor will be shoved out of the market and will stop invention. The consumer loses the benefit of additional invention.

But it is also disincentive for the inventor.

What is, having to compete in a free market? A monopoly is an even bigger disincentive: it lets you get one single hit product, milk it for royalties, and never innovate anything again; from now on all your budget goes to marketing, producing your gadget, and lawyers.

lol...How many companies that invent and produce products actually do what you claim? Since the number of lawsuits per year involving patents has remained stable over the last six or seven years, and the percentage of suits at the federal circuit involving patents is tiny, this entire argument revolves around a teeny fraction of the U.S. GDP. Further, invention seems to beget more invention. Few inventors invent one invention and then "milk it," but if you have FACTS that prove otherwise, bring them on.

[Ad hominem arguments deleted. Outright lies deleted.]

Except"

Except nothing. If the copier does merely copy, then the original innovator can stay ahead by continuing to innovate, and otherwise can stay abreast by doing so.

Again, you failed ECON 101. As noted in the references I provided, the small inventor loses out to the power of the copier. The large copier will always overwhelm the small inventor, regardless of how many inventions or innovations the small guy develops.

[Libelous statements deleted.]

[Statements of paranoid delusion deleted.]

"I at least provided anecdotes"

Anecdotes.

Please don't bother to post comments to this blog again until you have actual *evidence*.

I pointed out anecdotes because an anecdote, which is a true story, is better than what you have provided, which is NOTHING!

"Without a patent to protect an invention, copiers will ignore rewarding the inventor and just take the inventions, disincentivizing invention. PROVE OTHERWISE."

Already done. Boldrin and Levine did so in Against Intellectual Monopoly, noting that all measures of invention and productivity were higher in places, times, and sectors without patent protection than in otherwise-comparable ones with patent protection. Mike Masnick posts counterexamples to your faith-based assertions almost daily at Techdirt, as well. I think that is why when I mention either source you ignore it and insult me instead of addressing what is said by those sources.

Except, other papers that were more objective than Boldrin and Levine disagree with Boldrin and Levine. Mike Masnick may have provided anecdotes, but you have a low opinion of those, so we can discount them.

So, instead of insulting me time and time again, and claiming that someone is out to get you, perhaps you should point out specific statement and facts from multiple sources that support your position, as I did above. Until then, go away and leave people with a factually supported position alone.

Prashant:

One of my favorite case studies is that of Clessie Cummins and the development of the engine brake, also known as the Jake Brake. Cummins originally toyed with the idea in the 30's, I think, but arrived at an actual invention in the 1950's.

Cummins noted multiple times that obtaining patents were important to him, as reported in "The Diesel Odyssey of Clessie Cummins" and in a history of Cummins, Inc. Before Clessie Cummins went to speak with any large companies regarding production of the brake he made sure he filed a patent application.

Cummins eventually found a company interested in licensing his invention (small inventor achieves success!). The Jake Brake became a huge success, providing significantly improved safety for large trucks.

Now, here is a key point. This invention is essentially the same invention that Cummins originally created in the 1950's, even though the patent expired more than three decades ago. So, anyone has had the ability to "innovate" this product for three decades and yet it remains nearly the same as the original design invented five decades ago.

Question: Where is all this "incremental innovation" we hear so much about? Here is an invention with three DECADES of opportunity for innovation, and yet, the invention remains about the same as it was. Indeed, now there are lots of companies MAKING THE SAME BRAKE...the only [barf] innovation is reduced price from the copyists. Woo hoo. Good thing they actually had something to copy, since they brought little else to the table other than copying what someone else spent decades developing and perfecting.

Alonniemouse writes:

"[insults deleted]"

No, you're the stupid one.

None of the nasty things that you have said or implied about me are at all true.

""Just visit the named sites. The barrier to marketing and selling things is much less than it once was."

That is true"

Well, there you go, then.

""Copying is irrelevant. That has been explained repeatedly to you."

Copying is irrelevant to you, it is NOT irrelevant to me."

Because you are wrong.

"[insult deleted]"

No, you're the crazy one.

None of the nasty things that you have said or implied about me are at all true.

""I neglect nothing."

Yes, you did"

No, I did not.

"[insult deleted]"

No, you're the crazy one.

None of the nasty things that you have said or implied about me are at all true.

""That's onerous enough, but it's also not what I was talking about. I was talking about the higher prices they must pay for various things due to other people's intellectual monopolies and attendant royalty, license fee, or other similar demands."

Prove to me that there are "higher prices" for various things."

Ridiculous. It's obvious; it's Econ 101. Anything covered by copyright or patent is going to be being sold at monopoly prices, at least much of the time. Software costs hundreds that has a marginal cost of nearly zero. All kinds of manufactured items cost as much as 30% over the odds due to various patents.

"Just because there is a royalty or license does not mean there is a "higher fee," it can mean that there is a product that exists only because the inventor decided to market an invention. Which is better, having an invention to license, or no invention at all? I choose the former."

False dichotomy. The "we must have IP or nothing will get created!" myth has been debunked quite thoroughly on this site, Techdirt, Question Copyright, and others by now.

"An invention is an invention. If someone invents an airbrake for a diesel truck, it is difficult to copy that airbrake in a non-infringing way. Of course, given that it took the original inventor decades to develop the brake, and years more to get someone interested in pursuing it, I would expect that the patent would cover the air brake, and it did for 17 years from the date of issuance. Congratulations to the inventor for developing a mechanism that has been a huge improvement to large truch safety."

And shame on the inventor for making it more difficult for others to use it. By monopoly-pricing it, he ensured the number of buyers (and thus the proportion of safe trucks -- not spelling) would be smaller than had they been sold at or not much above cost.

Shame also that independent reinvention is infringement; it's a significant disincentive to R&D that one might spend substantial R&D dollars to develop something only to find someone else did likewise and beat you to the patent office.

"I appreciate the substantial evidence you have provided in response. Clearly you have the facts on your side."

Why, thank you.

"[insults deleted]"

Why, fuck you.

You're the crazy one.

None of the nasty things that you have said or implied about me are at all true.

""I do not fail."

[insults deleted]"

No, you're the liar, the crazy one, and the stupid one.

None of the nasty things that you have said or implied about me are at all true.

""Bull. I advocated this privately-run forum running trolls like you out on a rail, which is a very different thing."

[insults deleted]"

No, you're the troll.

None of the nasty things that you have said or implied about me are at all true.

""I already have posted and pointed to lots of evidence; numerous times over the last several months. I still await yours."

Ah, yes."

Well, there you go, then.

"Patents help provide greater dispersion of technology than non-patented products."

Bullshit. Patents inhibit dispersion. Patents are monopolies; monopolies encourage higher prices than competitive markets would bear; and when price goes up, sales volume goes down. All of that is Econ 101, Lonnie.

"Patents encourage foreign investment."

Foreign investment in unproductive pursuits such as patenting and litigation, perhaps.

"Patents can lead to more spending on R&D as a portion of GDP"

Perhaps; but there is an optimum portion of GDP to spend on R&D. Spending more than that amount means spending less than optimum on food, clothing, shelter, health care, and numerous other things. And it seems more likely that the optimum will be found by the invisible hand of a free market than that it will be found by politicians deciding by fiat or handing out monopolies that distort the operation of the market in that area.

"Park and Ginarte studied 60 countries from 1960 to 1990 and found that the strength of intellectual property rights (including pharm) led to growth of R&D in developed countries."

The widely held false belief that IP is needed to "protect" one's investments could be skewing people's behavior, you know. Were IP abolished across the board, there might be some grumbling and whining but they'd adapt, and invest just as heavily as ever once they'd done so.

"A positive correlation between ... patents and the financial success of 219 Taiwanese electronic companies sampled from 1990-2003."

Financial success is certainly easier to attain when one has a monopoly on something.

"Patents have been shown over and over and over and over again to help some small businesses to become established in the market place."

Hmm. "Some". While hurting nearly all of the rest, and plenty of other actors in the market place.

Hall and Ham noted "The results suggest that stronger patents may have facilitated entry by firms in niche product markets..."

Let me guess: industry shills? An awful lot of the studies that have had pro-patent results have been produced using the dollars of big patent interests, like big pharma or practicing patent lawyers.

"Though authors disagree as to the scope, study after study after study has said that patents are an important part of providing motivation for investing."

Bought studies. And honest study after honest study after honest study has found the opposite, as recently remarked upon at Techdirt.

"Cohen et al/Levin et al found that patents were valuable in securing returns in the pharmaceutical industry."

Maybe, with their current business models. They need better business models. They will especially need them when their monopolies are eventually taken away from them.

I've taken the liberty of deleting the rest of the biased studies you referenced.

"As an example, the Plant Variety Protection Act of 1970 provided patent protection for sexually reproducing plants. In the 1960s, about 150 new plant varieties were developed in the U.S. In the 1970's, after providing patent protection, over 3000 new plant varieties were developed."

You mentioned this already, before you became too cowardly to sign your name to your posts. I debunked it then, too; as I recall, the final result of that debate was a conclusion to the effect that that "over 3000" was the result of a one-time patent gold-rush fueled more by the prospect of litigation than by the prospect of bringing useful new products to market. Stockpiling nuclear weapons and the like.

""I have no lack of facts. You just keep pretending that I do because those facts are not on your side, and therefore you'd rather not face them."

I just provided you with reference after reference after reference...all"

easily debunked by me.

""No, you have provided myths, unsubstantiated claims, insults, and assorted other bollocks and I have consistently debunked them."

Well, above are numerous studies. De-bunk them, if you can."

Did so already; see above.

"[insults deleted]"

No, you're the crazy one.

None of the nasty things that you have said or implied about me are at all true.

"""Once you have a copy of the machine, you have about 80% of the effort involved in creating the invention. The copying is typically the easiest part."

Understanding it and getting it to work is that other 20%, the hard part. That's the part the experts are for."

[insult deleted]"

None of the nasty things that you have said or implied about me are at all true.

Care to actually address what I wrote instead of saying "lol" and slinging "you thises" and "you thats" around? Or is presenting an actual cogent argument simply beyond your meagre intellectual capabilities?

""If so, then the copier isn't merely a copier; the copier is an innovator too. The two of them end up in an innovation arms race. This benefits the consumer and the product being developed."

What is more likely to happen is that the small inventor will be shoved out of the market and will stop invention."

Prove it. That seems more likely if the small inventor's costs are tripled by having to pay monopoly prices for some things and the small inventor's at risk of being sued for infringing some overly-broad, obvious patent.

"""But it is also disincentive for the inventor."

What is, having to compete in a free market? A monopoly is an even bigger disincentive: it lets you get one single hit product, milk it for royalties, and never innovate anything again; from now on all your budget goes to marketing, producing your gadget, and lawyers."

lol"

Look, up there! It's a bird! It's a plane! No, it's another excellent rational argument from Lonnie!

Er, what was that again?

*sigh*

"The number of lawsuits per year involving patents has remained stable over the last six or seven years"

The number of patent infringement defendants has grown exponentially. There has been a trend toward suing large batches of defendants in single actions, prompted by an earlier trend of defendants trying to get patents invalidated by the USPTO, causing patent trolls to want to do as much as they can with their patents before potentially losing them. Another reason is to include an East Texas defendant in each lawsuit to make it harder for the other defendants to get the case transferred out of that patent-friendly jurisdiction.

Both of these reasons were the topics of heavy discussions over at Techdirt.

"[calls me a liar]"

No, you're the liar.

None of the nasty things that you have said or implied about me are at all true.

""If the copier does merely copy, then the original innovator can stay ahead by continuing to innovate, and otherwise can stay abreast by doing so."

Again, you [vicious insult deleted]"

No, you're the stupid one.

"[false accusation and other insutls deleted]"

No, you're the criminal and the crazy one.

None of the nasty things that you have said or implied about me are at all true.

""Anecdotes.

Please don't bother to post comments to this blog again until you have actual *evidence*."

I pointed out anecdotes because an anecdote, which is a true story, is better than what you have provided"

An anecdote is better than real evidence? Only in your twisted mind, Lonnie.

"""Without a patent to protect an invention, copiers will ignore rewarding the inventor and just take the inventions, disincentivizing invention. PROVE OTHERWISE."

Already done. Boldrin and Levine did so in Against Intellectual Monopoly, noting that all measures of invention and productivity were higher in places, times, and sectors without patent protection than in otherwise-comparable ones with patent protection. Mike Masnick posts counterexamples to your faith-based assertions almost daily at Techdirt, as well. I think that is why when I mention either source you ignore it and insult me instead of addressing what is said by those sources."

Except, other papers that were more objective than Boldrin and Levine disagree with Boldrin and Levine."

You misspelled "less objective".

"Mike Masnick may have provided anecdotes, but you have a low opinion of those, so we can discount them."

Masnick has provided much more than anecdotes: references to studies, for starters.

"[insults deleted; claims to have a "factually supported position"]"

I laugh in your general direction.

None of the nasty things that you have said or implied about me are at all true.

"Cummins noted multiple times that obtaining patents were important to him, as reported in "The Diesel Odyssey of Clessie Cummins" and in a history of Cummins, Inc. Before Clessie Cummins went to speak with any large companies regarding production of the brake he made sure he filed a patent application."

Because he wanted a monopoly; he wanted to have his cake and eat it too. Had patents not existed he would have simply talked to large companies straight away and his invention would have become available to the world that much sooner.

"The Jake Brake became a huge success, providing significantly improved safety for large trucks."

Of course, the monopoly meant the brake was priced way above cost, and as we all know from Econ 101 a higher price means lower sales volume. So there were fewer trucks whose safety improved than would have been the case without the monopoly.

"Now, here is a key point. This invention is essentially the same invention that Cummins originally created in the 1950's, even though the patent expired more than three decades ago. So, anyone has had the ability to "innovate" this product for three decades and yet it remains nearly the same as the original design invented five decades ago."

A cul-de-sac invention. An unusual case. It's far more common for there to be substantial further improvements, in materials, in workmanship, and often in the details of the design and operation of a machine.

One unusual case is proof of nothing much.

Just so you know, words ARE automatically copyrighted by law in a sense that the expression they convey has intellectual property though not the words per se.
Nonsense, Lonnie. Ideas can't be copyrighted, nor can such short texts as single words.
None of your beeswax you are nuts. Who writes stuff like that, that long that incomprehensible. It doesn't look like you are arguing with a point, you are arguing with individuals. IF you really really really care anyone but yourself to read that lengthy prose you wrote please at least do a bit of formatting, press the quote button, use bold, italics, something.
Alonniemouse writes:

"None of your beeswax you are [insult deleted]. [more insults deleted]"

No, you're the crazy one.

None of the nasty things that you have said or implied about me are at all true.


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