Economists suggest patent system should be abolished

[living sounds]

http://www.huffingtonpost.com/2013/02/05/patent-reform-economists_n_2623537.html

 

[gyraf]

Very interesting angle on the system...

 

[dmp]

I think patents are one of those situations without a good solution.
Personally, I disagree with the article. I think strengthening the system with a better level of pier review is the best route, like the intention of the recent law.

Without a patent, the only competition is on cost. How do you recoup an investment for developing an innovation when the first person you sell it to can copy and manufacture it in direct competition with you?
It is hard to study the lack of something - meaning how many innovations have NOT been developed because the incentive was not sufficient to make the investment.

For general amusement:
A 1997 patent granted for a crustless peanut butter and jelly sandwich.
http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=6004596.PN.&OS=PN/6004596&RS=PN/6004596

 

[ruffrecords]

I think patents are one of those situations without a good solution.
Personally, I disagree with the article. I think strengthening the system with a better level of pier review is the best route, like the intention of the recent law.

Without a patent, the only competition is on cost. How do you recoup an investment for developing an innovation when the first person you sell it to can copy and manufacture it in direct competition with you?

Lot's of ways. Software is copyright so you have legal recourse if someone copies that. ASICs are a good way to hide IPR. In the old days people potted their electronics and scraped the numbers off chips and scrambled data and address buses to name but a few. The recipe for Cadbury's chocolate is still a closely guarded secret.

Cheers

Ian

 

[dmp]

Copyright does not protect an innovation - it protects a brand.  It's a very different thing, in my opinion.
I suspect the days of hiding IP for high value technology are over. Software can be reverse engineered; it's not a matter of 'pirate' / copying it. You reverse engineer the code and adopt the innovation.
Applying it to a audio example - say you invent a awesome plugin that is a game changing innovation. Without patent protection, a company like Waves buys the first copy, gives it to their coding guys, who reverse engineer it, and make a version that has the same innovation. Viola - they release it and have the market dominance to take it and run. You are finished after selling 1 copy. And they have done nothing illegal. To make it worse, imagine you invested 3 years of research and effort in coding to develop the innovation.

The recipe for Cadbury's chocolate is still a closely guarded secret.

As is the recipe for Coca Cola. But nowadays, I think it would be simple to create an indistinguishable copy of these products without needing the recipe. What's important is the brand name, which is copyright. But again, copyright does not protect innovation. 

 

[JohnRoberts]

http://www.huffingtonpost.com/2013/02/05/patent-reform-economists_n_2623537.html

Thanks for posting that, I wouldn't normally read posts from Ariana's blog.

I guess in a "perfect" world all property belongs to the community, not the individuals? I have been a participant in the patent system for decades and won 9 patents myself personally or doing work for hre, so I am far from a disinterested party.

The system has many flaws, the largest IMO is that enforcement of the exclusive use granted by a patent must be secured by the inventor through expensive court cases, making the benefit preferentially enjoyed by deep pocket large companies. 

A relatively new development is patent trolls, who accumulate war chests of patents precisely, so they can extract a toll from other businesses.

The entire premise of the patent system is to grant the inventor exclusive use, in return for publication of the technology so the rest of those skilled in the art can learn and take it to the next level. The ridiculously short product cycles make the longer term duration of patents perhaps worth inspection.

Don't throw out the baby with the bath water, in the american culture individual inventors and individual businessmen have created great wealth and product innovation we all benefit from, we don't need to lose the magic that got us to this point... ignoring the recent years down a questionable path.

If government wants to fix the patent system, step-up and stay involved in the process, after the patent issues, don't just kick it over the wall for the lawyers to argue in open court. I would expect a far more rational process with the PTO mediating between inventors and challengers, rather than who can afford the the most expensive lawyer. Then stay involved and help police infringement, without putting all the burden on the individual inventor.

The libertarian in me says, get government completely out of it, but this is one example where the government can benefit humanity by promoting creativity and innovation. Government isn't smart enough to create and innovate by itself, but it can provide the infrastructure to help support it.

In that article they claim that the patent system is a risk to public health by making novel drugs more expensive. Why in the world would anybody invest in the years long very expensive development and test regimen for drug approval, with no payback at the end of that journey?

JR

PS: I just checked the status of a lawsuit between Peavey and Behringer over one of my patents (FLS the LEDs over sliders in a GEQ to indicate feedback). I just read through a 29 page legal opinion from the judge where he decided "not to rule at this time", i.e. neither side proved their case (Behringer was trying to void my patent too).  The entire arguments centered on convoluted descriptions of what a peak hold was, or other "means" means.  I find this very frustrating, but it reinforces my judgement that it is worth paying a lawyer the big bucks to write the patent claims because each single word is extremely important. Peavey's patent lawyer apparently dropped the ball, but this challenge was hard to anticipate. 

My judgement about the case is much simpler. I invented FLS, Peavey manufactured it first. Behringer dissected my invention and filed for their own patent by re-arranging the order of the key elements. In my judgement Behringer deserves an improvement patent, since their approach of using one capacitor at the compound differential comparator instead of one cap at each bandpass peak detector uses less parts, so is even cheaper to accomplish the EXACT same function. However re-arranging the order of similar means does not make it functionally different. IMO this does not give them the right to use my basic invention. Just like adding a 4th leg to a three legged stool could be deemed an improvement, the 4 legged stool patent holder still must respect the three legged patent. But....  I am not a patent lawyer and IMO they distracted the court with different arguments about what some means means in the claims language...    arghhhhh.
 

 

[PRR]

> I wouldn't normally read posts from Ariana's blog.

Me neither; and this was a waste of time and ink.

The actual paper: http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.1.3