[ExI] Gene Patents: Good or Bad?

Wed May 26 11:08:37 UTC 2010

Obviously would it be positive for a single entity to gain
government-controlled monopoly on anything it can sell, that's pretty
certain. It is also very certain that this has negative consequence on the
society as a whole.

Certain types of organizations and products probably wouldn't sell as well
in a society without patent laws, but you would most likely have other
products and organizations which would serve other purposes and markets.
Nothing beats the free market, and it's not a positive trend we're seeing
around the global with big governments protecting failing corporations, some
companies and products are just prone to fail sooner or later.

It's a philosophical discussion whether "intellectual property" deserves to
exist in the manner it does today, but that's a whole another discussion.

With this said, I would just like to add an example to your question:

Company X and Y are in the business of developing CRM software. Company X is
first on the market and patent-protects some of it's innovations. This means
Company Y is under the constant treat of being in violation of Company Y's
patents as patents are generally very broad in their descriptions. Hence, X
is stifling Y's ability to innovate and bring competing products to the
market. Then again, you could argue that Y should pay royalty fee to X since
they where there first, but remember that two inventions can happen at the
same time independently but only the first guy to patent it wins. Patent
laws makes it possible for any holder to actually crush a competitor
completely and make it impossible for them to actually sell competing
products.

So then we have X and Y, who are both putting a lot of money into R&D to
develop CRM products. They both spend one billion dollars, a total of two
billion. To cover these costs, they would need to price their products in
the market to earn money back on their investments in R&D. So the market has
to pay a minimum of two billion dollars for CRM software.

If no protection was possible and Y could "copy-cat" some of the ideas and
innovations from X, then we potentially could cut the R&D costs in half, one
billion dollars (for the point of the argument let's make it half, though
would probably be higher). This means the two companies have used only one
billion dollars to create two competing CRM software products, which the
market only have to pay in total one billion dollars for. This means the
market spend less money on CRM licenses and the two companies probably would
earn more money since software generally are cheap anyway so they wouldn't
lower their prices 50%.

Would company X do the initial investments in R&D if they couldn't protect
their innovations? My argument is yes, they would. Wherever there is money
to be made, there will be investments. Would the product be different? Yes,
probably. Would the product be developed in more incremental manner? Yes,
probably. Is this good for the consumers? Yes, very likely.

-- 

Regarding one of the links mentioned on this thread, I seriously doubt
patents is the reason for SAP's problematic issues. I have worked at big
organizations with large SAP-implementations, it's in no way related to
patents that they are having problems now. SAP consultants have generally
been very expensive and very lucrative, with innovations in the open source
space and availability of cheaper resources from countries such as India and
China, few companies are willing to pay the premium and
costly investments that SAP represents. SAPs recent change in view on
patents is in my persona opinion, just a way to gain money where they no
longer are able to stay up-to-date and be a choice for customers:
http://techdirt.com/articles/20060118/0256239_F.shtml

PS: We don't have software patents (which are really process patents) in
Norway, and we've had some pretty big innovations that was very costly.
Opera Software (browser), Funcom (games), Qt (open source framework) and
FAST (search engine). Qt was bought by Nokia and FAST was bought by
Microsoft.

- Sondre

2010/5/26 samantha <sjatkins at mac.com>

>  Rafal Smigrodzki wrote:
>
> On Tue, May 25, 2010 at 1:55 PM, Sondre Bjellås <sondre-list at bjellas.com> <sondre-list at bjellas.com> wrote:
>
>
>  You are exactly right regarding searching for any topic on the web ;-)
> Which is why I'm asking "who and what" is the reason for your statement:
> "Clearly, yes, patenting stimulates innovation"
> The content I read on patents does not clearly say that patent stimulates,
> on the contrary, I must be reading the wrong material.
> Check for instance "Against Intellectual Property" by Stephan
> Kinsella: http://www.scribd.com/doc/7511095/Against-Intellectual-Property-by-Stephan-Kinsella-
>
>
>  ### OK, let's start at the beginning:
> http://www.jstor.org/pss/4132712
>
> Countries without strong patent protection did not produce innovations
> except in the industrial branches where profits from innovation could
> be realized without patent protection.
>
>
>
>
> One can ask, how would the profits be realized if everyone was immediately
> able to legally copy the industrial inventions that would have been patent
> protected before?  Wouldn't the R&D cost be a disadvantage to the creating
> company as all other competitors gut the successful results of that R&D for
> free or only for the cost of implementing the known working design?
>
> - samantha
>
>
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>

-- 
Sondre Bjellås | Senior Solutions Architect | Steria
http://www.sondreb.com/
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