Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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China joins the patent trolls; wake up America

STEVE LOHR claims to examine China's new push on innovation, but it is really about the policy to promote issuing more patents link here. The government is actually providing incentives to increase the annual patent harvest, including bonuses, better housing, and tax breaks. Finally, it has set yearly targets, currently rising to 1,000,000 by 2015.

As I thought about this, I realized that patents have become a tool of international competition policy. If you are behind in the patent race, file like mad and be prepared to litigate. You may win or you can make it so expensive for others that they will agree to cross license at modest or no cost. Pretty smart, those guys. They have learned the lesson of Microsoft, Intel, Hewlett-Packard, etc. The road to monopoly riches lies through the kingdom of patents.

Sooner or later, this competitive challenge will force the US, as well as other rich developed countries to make a choice. But first we will have to recognize what is happening, Then we can face the need to decide either to abandon patents or see our lead in new technology disappear and with it much of the gains we derive from such monopolies.

I would expect that the existing patent giants will resist abandoning the patent system. They have a huge stake in its continued existence as it protects them from competition for decades and with clever follow-on invention, permanently. And they may finally decide to work with the Chinese patent holders as they feel better off with an oligopoly than with free competitive markets.

It is difficult to feel confident that our government will make the right choice, given the huge political power of the patent giants. If so, so much the worse for the average consumer. One must be particularly pessimistic because of the hold that the concepts of patents as property (even if it is only intellectual property) deserving of the same respect as physical property and of violations as robbery or piracy, to use the current word of choice in the political battle. It is really hard to convince the average consumer of the huge magnitude of the dead-weight loss they all suffer, most especially from the fees of the patent lawyers.


After writing the above, I found two web pieces suggesting others have concerns about China's aggressive technology acquisition policies.

One is here-- http://politics.slashdot.org/story/11/01/01/0030216/EU-Wants-Power-To-Block-Chinas-Tech-Buying

And the other here-- http://yro.slashdot.org/story/11/01/01/2159203/Chinese-Intellectual-Property-Acquisition-Tactics-Exposed

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