[ExI] Problem with Pattents

[Rafal Smigrodzki]

On Mon, Feb 25, 2008 at 11:11 AM, Tom Tobin <korpios at korpios.com> wrote:
> On 2/22/08, Rafal Smigrodzki <rafal.smigrodzki at gmail.com> wrote:
>  > On Fri, Feb 22, 2008 at 11:19 AM, Tom Tobin <korpios at korpios.com> wrote:
>  >  >  Today, the duration of these monopoly periods has been extended to
>  >  >  ludicrous terms: copyright by simply tacking on decades, and patents
>  >  >  by not scaling down the term to account for accelerating rates of
>  >  >  technological change.
>  >
>  > ### So you think that if progress accelerates, you need to make sure
>  >  to pay less for it? We all know that technological change accelerated
>  >  in many fields, shortening the mean useful lifetime of an invention,
>  >  frequently below the duration of the patent itself, thus reducing the
>  >  time in which the inventor may recoup his investment. And you say that
>  >  the inventor should be further punished by making patent duration
>  >  shorter?
>
>  First off, the inventor should consider themselves lucky that they are
>  receiving a patent *at all*.  Second, yes, the useful *chronological*
>  lifetime of an invention is shortened — thus making it all the more
>  important to shorten the patent time.  This is not punishment; if the
>  inventor wants to keep making money off of patents, well, guess what —
>  they need to *keep inventing*.

### It looks like you are saying something like this: "Jeez, these
uppity inventors, stop asking for money, just do some work, will ya?
Be glad that I don't just come and smack you around." You are applying
a gut feeling rather than an explicit analysis of incentives and
inputs that is needed to predict outputs. If your feelings about the
issue are more important to you than the outcome, all you get is a lot
of aggravation. No inventor will offer you an invention if the only
incentive you offer him is a scornful "well, guess what - you need to
*keep inventing".

Just imagine how your baker would treat you if you helped yourself to
his bread and told him to "just keep baking".

Your feelings mean nothing by themselves, what matters are the
incentives you present to others.

--------------------------------
>  >  I see it quite differently - IP, including copyright and patents,
>  >  should be forever. No limits whatsoever. If you invented the wheel,
>  >  your 55th generation descendant should still get the royalties....
>
>  This is one of the most awful ideas I've ever encountered.  (I've
>  encountered it before, but, still.)  I'd rather have zero IP than
>  forever-IP; progress would be *faster* without the chilling effect of
>  having to constantly come up with ridiculous workarounds to avoid
>  running afoul of a patent.

### You mean I beat Christianity and John Maynard Keynes? Wow!

Now, since you seem to speak with a great degree of conviction,
claiming that IP limits innovation, how can you explain the plain fact
that innovation is fastest in countries with strong IP laws? How does
that play into your thesis?

Secondly, the whole notion of perpetual-competitive IP that I am
proposing is designed to put an immediate and perpetual *market price*
on each and every piece of IP, as opposed to the current practice of
temporary monopoly price followed by free availability. Do you
understand what it means in economic terms, and especially in terms of
incentives to innovators and customers?

Your concern about needing "workarounds" is precisely one of the
problems addressed by the proposal: Since currently during the patent
period the price is monopolistic, it will be high, frequently
exceeding the marginal utility of the invention to many users, and
prompting them to avoid using the innovation. At the same time, the
temporariness of the price forces the patent owner to try to recoup
his investment as soon as possible, therefore preventing him from
lowering the price. Under the perpetual IP regime, the owner would use
the market clearing price (see my previous response to Bryan), which
would leave the consumer with a significant consumer surplus. You
would not try "workarounds" because the patented IP would be cheaper
than the workaround (or else the patent owner would give you a
discount so as to entice you to use his patent, instead of something
else).

You might find it easier to think about IP like you do about bread.
Imagine that there was a monopoly on baking bread, but only on
alternating weeks. One week the baker would be able to charge anything
he wanted but the next week he would have to give bread away for free.
Would that be an efficient system? Obviously, no, yet the current IP
system works just like that. The perpetual-competitive IP (PC IP)
system would make the pricing of inventions much more like the pricing
of bread today, and therefore if would make inventors and consumers
better off.

-------------------------------------------------
>
>  So the patent database becomes a black box — *no one* is going to look
>  at it if there's a chance of "contaminating" their own work.  Hell,
>  this is somewhat the case even today, as patent damage awards are
>  increased if the infringement is "knowing", so engineers are
>  instructed to never examine patents, patent claims, etc.

### Of course, if you wish to re-invent something you need to design
the inventor's mind so that it will be perfectly ignorant of the
patented work - but it still can have the advantage of knowing that
the problem it was made to solve actually is solvable. And, you can
freely use the patent database to try create novel IP not foreseen by
the original inventors. In this way one of the prime advantages of
patenting, that is making knowledge available for further progress,
would be preserved.

----------------------------------------
>
>  What's the *point* of this?  Rather than build on each others' works
>  and quickly make progress in a given field, we become fearful
>  paranoids with our ears plugged and eyes covered with blinders?
>  Science is an open discipline, and it's all the better for it;
>  engineering could stand to learn from science's example.

### The point is putting a market price on something that you are now
forced to buy at monopoly prices, while maintaining the public
availability of information needed for further progress. This is the
opposite of what you think would happen, and I am really baffled why
you have such expectations.

-----------------------------------------------
>  There are a few things that would lead me to immediately emigrate from
>  a given nation/state; ultra-strong IP of the sort you describe is one.
>   (Albeit I already consider the IP scheme of the US to be overly
>  strong, as argued above.)
>

### You would miss out on the bargain of your life.

Rafal