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Critic of Software Patents Wins Nobel Prize in Economics

Posted by Zonk on from the wise-man-in-multiple-ways dept.

doom writes "You've probably already heard that the Nobel Prize for Economics was given to three gents who were working on advances in mechanism design theory. What you may not have heard is what one of those recipients was using that theory to study: 'One recent subject of Professor Maskin's wide-ranging research has been on the value of software patents. He determined that software was a market where innovations tended to be sequential, in that they were built closely on the work of predecessors, and innovators could take many different paths to the same goal. In such markets, he said, patents might serve as a wall that inhibited innovation rather than stimulating progress.' Here's one of Maskin's papers on the subject: Sequential Innovation, Patents, limitation (pdf).

39 of 235 comments (clear)

  1. Not Nobel Prize in Economics by CRCulver · · Score: 2, Interesting

    It's the Swedish Bank's Prize in Memory of Alfred Nobel. Nobel's estate doesn't recognize it, and there is much evidence that the old man would have been horrified to see the dismal science being rewarded.

    1. Re:Not Nobel Prize in Economics by MoonFog · · Score: 2, Informative

      Easy mistake to make since they are listed on the Nobel Prize's official web page. They are listed as receiving a price in economics though, not a Nobel price in economics, even though they are under the "Nobel Prizes" banner.

    2. Re:Not Nobel Prize in Economics by CRCulver · · Score: 3, Informative

      Seconded. The Nobel Prize in Economics ... is awarded by the socialist Swedish central bank. Their awards are biased.

      While Sweden is a Scandinavian socialist state, the economics prize is generally awarded to neo-liberal economists. The judges are based, but they are actually biased against the popular values of their own country.

    3. Re:Not Nobel Prize in Economics by djmurdoch · · Score: 4, Insightful

      Honestly any economist who doesn't recognize the value of creating and protecting intellectual property rights in an information economy is a POORLY trained economist.

      As far as I can see, Maskin isn't against IP, only patents. His article says "copyright protection for software programs (which has gone through its own evolution over the last decade) may have achieved a better balance than patent protection." Copyright is IP too.

    4. Re:Not Nobel Prize in Economics by jimstapleton · · Score: 2, Insightful

      there's a value in creating and protecting it, yes, but there is also a penalty in hoarding it.

      In these third world countries, the leadership can be fairly well off - the problem is that all of the wealth is congealed into a very small space.

      A balance is needed, as with anything.

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    5. Re:Not Nobel Prize in Economics by smilindog2000 · · Score: 3, Informative

      As a country develops it's own intellectual property, it becomes important to protect it. For example, India seems to be moving towards proper copyright protection. However, this article is specifically about software patents, not copyrights. Of course software copyrights need to be protected. The authors need to have the rights to do whatever they want with their software, and it should not be stolen from them. Software patents are different. They don't protect your software, but restrict me from writing equivalent software. I can't recall a single example in history where a software innovator was rewarded by their patent - there are probably a few, but they are vastly outnumbered by the software patents that have restricted innovation. Instead of rewarding innovation, software patents make it possible for M$ to attack Linux, while doing nothing to help innovators break into the software market dominated by M$. Don't get me wrong... I'm a big supporter of M$ in general, but lets face it: software patents exist to protect M$ and other huge calcified players, rather than reward innovators.

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    6. Re:Not Nobel Prize in Economics by mmcuh · · Score: 5, Informative

      Seconded. The Nobel Prize in Economics is NOT a real Nobel, and is awarded by the socialist Swedish central bank. Their awards are biased.

      Honestly any economist who doesn't recognize the value of creating and protecting intellectual property rights in an information economy is a POORLY trained economist. Hernando de Soto has pegged a lack of real property rights as the primary issue that prevents wealth from being created in the third world (agricultural economies).

      You do realise that property rights have absolutely nothing to do with "intellectual property"? One says that you are not allowed to steal other people's things, the other says that you are not allowed to create certain things if someone else created it first. Property rights is a rather obvious concept derived from the simple fact that if you take something from someone else, they lose it. "Intellectual property" is a government-sanctioned privately owned monopoly that prevents other people from creating something identical to what you have, or in some cases even just slightly similar.

      As government-awarded private monopolies, "intellectual properties" are artificial barriers for the free market and thus you can certainly be opposed to them without being a "socialist".

      That said, I doubt the Bank of Sweden knew about Maskin's patent critique, or if they did, that they cared about it. They gave him a prize for some neat theoretical work.

    7. Re:Not Nobel Prize in Economics by richie2000 · · Score: 4, Informative

      The Nobel Prize in Economics is NOT a real Nobel, and is awarded by the socialist Swedish central bank. I'll let the IP-hugging mumbo-jumbo in your post slide, but The Royal Swedish Academy of Sciences was given the task to select the Economics Prize Laureates starting in 1969. The central bank just comes up with the cash, they do not select the winners.
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    8. Re:Not Nobel Prize in Economics by Dunbal · · Score: 4, Interesting

      Honestly any economist who doesn't recognize the value of creating and protecting intellectual property rights in an information economy is a POORLY trained economist.

            Yes and I am going to take YOUR word for it over a published, Nobel Prize winning economist...

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      Seven puppies were harmed during the making of this post.
    9. Re:Not Nobel Prize in Economics by timster · · Score: 5, Informative

      That's partially because, despite what the people posting here would have you believe, the economics prize is awarded by the Royal Swedish Academy of Sciences -- the same organization that awards the prizes in physics and chemistry. It was established and funded by a grant from the Swedish central bank, but the bank does NOT determine the laureates.

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    10. Re:Not Nobel Prize in Economics by A+beautiful+mind · · Score: 4, Insightful

      Seconded. The Nobel Prize in Economics is NOT a real Nobel, and is awarded by the socialist Swedish central bank. Their awards are biased.

      Honestly any economist who doesn't recognize the value of creating and protecting intellectual property rights in an information economy is a POORLY trained economist. Hernando de Soto has pegged a lack of real property rights as the primary issue that prevents wealth from being created in the third world (agricultural economies). It follows that in economies (such as the US/Europe) which derive their wealth, more and more, from intellectual property, that the ability to protect those rights is ultimately to our benefit.
      Not to rain on your parade but you seem pretty biased or to be more accurate parroting certain right-wing dogmas. Intellectual property doesn't exist. It is an umbrella term at best, but mostly it is a word designed to mislead and cause confusion. The value created by creating and protecting patents and to a lesser extent copyrights is seriously outweighed by the bad effects of giving a monopoly on specific information or methods to private companies or persons.

      Copyright and patents do not create wealth, they make all of us poorer, because they tend to inhibit progress as the professor who got the Nobel has shown in the specific case of patents and the IT industry.

      Also, quoting wikipedia:

      The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), usually called the "Nobel Prize in Economics", is a prize awarded each year for outstanding intellectual contributions in the field of economics. The prize is generally considered the most prestigious honor in economics.
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    11. Re:Not Nobel Prize in Economics by djmurdoch · · Score: 2, Interesting

      You do realise that property rights have absolutely nothing to do with "intellectual property"?

      That's a popular thing to say, but it's just not true. IP is not the same as physical property, but the concept of owning an abstract thing (the monopoly granted by the patent) is pretty closely related to the concept of owning a physical thing.

      One says that you are not allowed to steal other people's things, the other says that you are not allowed to create certain things if someone else created it first.

      IP corresponds to a "thing", not to a right. The IP "thing" is the monopoly. The property right is the ability to own that thing.

      I'd argue that software patents should never have been created, but in countries where they were created, they are certainly things that act a lot like other kinds of abstract property. There are lots of other abstract properties, e.g. your bank balance. Would you argue that changing the number on your bank statement to zero doesn't take something from you?

    12. Re:Not Nobel Prize in Economics by Tim+C · · Score: 4, Insightful

      Of course you realise that every single one of those economies started out by vigorously ignoring IP, especially that of other nations, until such time as it had some of its own to protect and only then implemented its own IP-related laws, don't you?

      You do also realise that there are many other factors in why the US and Europe, Japan, etc are more prosperous than third world countries, don't you, and that blaming it all on a lack of IP laws is simplistic almost beyond belief?

      --
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    13. Re:Not Nobel Prize in Economics by djmurdoch · · Score: 2, Funny

      You must bank with Gringott's. With the banks I use, they don't actually keep my gold coins in a vault somewhere. The number on the statement is all there is.

    14. Re:Not Nobel Prize in Economics by pipatron · · Score: 2, Funny

      damn commies want to ban all parents

      Actually I think you're referring to China and their One Laptop Per Child... err.. no.. One Child Per Family policy. You cannot apply that to all communist regimes.

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    15. Re:Not Nobel Prize in Economics by Mr.+Slippery · · Score: 2, Informative

      Honestly any economist who doesn't recognize the value of creating and protecting intellectual property rights in an information economy is a POORLY trained economist.

      Honestly, anyone who doesn't recognize that using the term "intellectual property" to refer to several very different types of purely artificial monopolies created by government action is highly problematic, is ignorant on the subject. Copyrights are not patents and neither are trademarks; refering to them all as "intellectual property" is obfuscatory. And the obfuscataion is usually deliberate, as someone stands to benefit from fooling people into thinking that ideas should be treated the same way as objects, that learning or copying is theft. But it ain't so.

      And anyone who believes that patents should apply to mathematical algorithms is a POORLY trained computer scientist.

      Hernando de Soto has pegged a lack of real property rights as the primary issue that prevents wealth from being created in the third world (agricultural economies). It follows that in economies... which derive their wealth...from intellectual property, that the ability to protect those rights is ultimately to our benefit.

      It does not follow at all, since ideas are a very different thing than land. You distort the issue by using the term "property" to refer to ideas.

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    16. Re:Not Nobel Prize in Economics by Otter · · Score: 2, Informative
      As far as I can see, Maskin isn't against IP, only patents.

      He's not against patents either, just against certain application of patents. To the degree that you believe that receiving this prize confers total authority, the anti-patent people certainly aren't coming out ahead on this one.

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    17. Re:Not Nobel Prize in Economics by russotto · · Score: 4, Informative

      Hernando de Soto has pegged a lack of real property rights as the primary issue that prevents wealth from being created in the third world (agricultural economies). It follows that in economies (such as the US/Europe) which derive their wealth, more and more, from intellectual property, that the ability to protect those rights is ultimately to our benefit.


      No, it does not follow. The differences between real property and IP have been hashed out over and over again; what holds for one does not necessarily hold for another.

      Major relevant differences --
      1) Lack of exclusivity. One user of intellectual property does not interfere with another.

      2) Less limited resource -- with few exceptions, no one is making more land. New IP is created all the time

      And a difference in the systems protecting them
      3) With real property, a whole system of rights-of-way has been developed to prevent my use of my real property from interfering with your use of your real property, even if my real property stands between yours and some shared resource you need. With IP, it's the opposite -- your patent on your invention can easily prevent me from implementing mine.
    18. Re:Not Nobel Prize in Economics by SgtChaireBourne · · Score: 5, Interesting

      -1 disinformative for you there.

      Sweden has never been socialist. It has, during nearly all of the previous century, followed a policy of the "Middle Path" choosing the elements from the free market where they are best applied and elements from socialism where they are best applied.

      Nowadays it is following a Bush/ Bliar/Thatcher-style neoliberalism with heavy emphasis on buracracy, privatization and corporate welfare.

      Go look at the statistics. During the years Sweden prospered economically, had low debt or a surplus, had good services such as health care, low unemployment, it was during the periods of closest adherence to the middle path. Look at the times where services are few and of poor quality, the budget is in shambles, lots of debt and high unemployment, it is during times when deviation from the middle path has been strongest -- such as the last 15 years.

      The Swedish banks are the worst examples of failure of unrestrained capitalism. They have collapsed and been bailed out twice. However, normally when one buys out the debt from a failed company, the buyer then owns the company. Stupidly in the last case, the buyer (the Swedish government) simply handed the banks back to the same asshats that bankrupted them in the first places. These are the clowns that then pick the recipients for the Swedish Bank's Prize in Memory of Alfred Nobel. To try to lend credibility to their scam they, to their credit, have schmoozed into the Nobel celebration. However, the Swedish Bank's Prize in Memory of Alfred Nobel is to the Nobel Prize what films like Ernest in the Army is to fine cinema.

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    19. Re:Not Nobel Prize in Economics by DanielJosphXhan · · Score: 2, Insightful

      It would follow if the two were remotely the same thing.

      But of course they're not. Intellectual property is only useful and valuable when it assists in the creation of real-world value, the very thing that third-world countries neglect.

      Other than that, intellectual property has no value. No scarcity, none of the properties that make real-world property valuable.

      The only value it can have, then, is the value that we (or they, or whomever) force upon it. IP can have value only by collective agreement. And, unlike real property and real things, that agreement very easily be broken and cannot be easily enforced, making even the agreement worthless.

      Unless, of course, everyone is completely honest and law-abiding.

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      [ think ]
  2. Has anyone else noticed... by neokushan · · Score: 4, Informative

    The similarities between software development and Evolution are striking. As this article states, software tends to progress slowly, building upon the previous generation, improving on it and occationally adding new features to give it the advantage over it's competition.
    But when a software product progresses with little or no competition to speak of, it's innovation stops, it gets bigger, slower and more bloated.

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    1. Re:Has anyone else noticed... by jimstapleton · · Score: 3, Interesting

      I'd argue that software in general tends to get bigger, slower and more bloated.

      Typically, new releases of software tend to have more features - these added features are what cause the bigger-slower-bloatier effect, as the take space to store, time to execute, and not everyone wants them. I don't know of one piece of software that has managed to avoid this fate.

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    2. Re:Has anyone else noticed... by allcar · · Score: 2, Informative

      At risk of starting a religious flame war, software engineers like to think that they design software. Evolution, as we know, requires no designer, but simply proceeds by trial and error.

    3. Re:Has anyone else noticed... by Comatose51 · · Score: 3, Informative
      Yochai Benkler[sp?] called it the "Shoulder of Giants" effect in his book the "Wealth of Networks". He noted that innovations is one of those processes where the output serves as an input for the next cycle, meaning when you innovate your discovery can be used for more innovations. Needless to say, he argues against patents and this is coming from a law professor who gained an incredible insight into open source software development. Highly recommend his book.

      In the "Myth of Innovations", the author, who I forgot, also talks about innovations are not inevitabilities but as a tree with different ideas branching off. A lot of them will be pruned and turn out to be failures in their environment but a few will survive. His insight was that innovations are more like trees, not lines, and their success depend on the environment they were developed in. The right solution for the wrong problem is still a failure. The two makes it sound awful lot like evolution like you mentioned.

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    4. Re:Has anyone else noticed... by knight24k · · Score: 3, Insightful

      But when a software product progresses with little or no competition to speak of, it's innovation stops, it gets bigger, slower and more bloated.
      I guess that explains Vista.
    5. Re:Has anyone else noticed... by foniksonik · · Score: 4, Insightful

      Have you looked at DNA lately? In the ancient bacteria, fossil fishes and fungi of the world the DNA is svelte and cleanly coded.... all streamlined to do a few tasks very efficiently, then move forward a few billion years and you get rats and primates.... all bloated with junk and things like consciousness that are completely unnecessary to survival, just bells and whistles really.

      I'm not sure what it is you're arguing against.. sounds like you're agreeing with parent post 100% ;-p

      p.s. so when is the bloat in our software going to self-actualize and become our computer's soul? I hope it's not based on Windows... what a freakin mess that would be, all freaked out about security, indecisive and completely self-conscious about being genuine... ugh it probably WILL be windows, that sounds like 99% of the people I know.

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  3. Thats all nice, but by should_be_linear · · Score: 3, Insightful

    since when geniuos minds play any significant role in politics? I imagine politician thinking "This guy would would give me half a million if I support software patents BUT there is this famous research study... Oh god, if I only could support both!".

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  4. Re:Nobel Validity by richie2000 · · Score: 3, Informative

    So, if the Nobel committees can so blow this prize, going back to giving it to the dictator Yasser Arafat, do the other prizes have meaning? Are they better vetted than the Peace Prize? How and Why? Because the peace prize is awarded by Norwegians, the others are all awarded by Swedes. http://nobelprize.org/prize_awarders/
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  5. Re:Nobel Validity by Anonymous Coward · · Score: 2, Insightful

    Here is a quote from the official statement put out by the committee on why Gore was selected:
    "Extensive climate changes may alter and threaten the living conditions of much of mankind. They may induce large-scale migration and lead to greater competition for the earth's resources. Such changes will place particularly heavy burdens on the world's most vulnerable countries. There may be increased danger of violent conflicts and wars, within and between states."

    One point a lot of people are missing is that often the prize has gone into people's efforts towards peace and not their accomplishment at providing peace. It is almost a sort of encouragement to continue their work. Sometimes it doesn't always go that way.

    Another point is that Arafat was not a dictator, he couldn't have been as their is no Palestinian State. He was handpicked to lead the Palestinian Authority by the west and Israel (big mistake). He was given the prize for his combined efforts with Israeli leaders back then towards trying to form a peace deal - it was an acknowledgement and encouragement for his efforts. In the end he failed woefully. That in no way diminishes or invalidates the prize.

  6. I guess I'll be devils advocate... by distantbody · · Score: 2, Insightful
    (emphasis mine)

    He determined that software was a market where innovations tended to be sequential, in that they were built closely on the work of predecessors, and innovators could take many different paths to the same goal. In such markets, he said, patents might serve as a wall that inhibited innovation rather than stimulating progress.

    ...That still leaves the opposition with plenty of wiggle room; they don't exactly sound like the words for an open-and-shut case...
  7. This may not lead to patent reform very soon by Anonymous Coward · · Score: 2, Insightful

    The USofA makes a lot of money selling its IP to the rest of the world. Getting countries like China to play nice with our copyrights and patents is a 'big deal'. It is therefore unlikely that Uncle Sam will soften his position on either. Mickey Mouse will be copyrighted forever. Ridiculous patents will still be granted and enforced. Patent trolls will continue to get rich.

    The trouble with the above is that innovation will move to other countries and America will be left behind. I can easily envisage a scenario where Linux is driven out of America by a patent troll for instance. The rest of the world will abandon Microsoft and that revenue stream will dry up.

    The only way we can keep ahead of the rest of the world is by fostering innovation. That requires a lot of legal reform. I just don't think the entrenched interests are willing to let it happen in a timely manner.

  8. What is obvious to the dev community... by zullnero · · Score: 5, Insightful

    Is mindblowing to the average person. This is the sort of paper that really needs to be distributed as much as possible (but rewritten to be understandable to the layman), because there really needs to be a great deal of political support for such an exemption from the patent process here. The biggest problem is that the software industry has already defined a piece of software as a patentable product, similar to a car or a monitor, and the general populace believes that to be true. However, you don't make a new car by tearing out the carburetor of a 1995 Ford, clean it up, add a couple parts from a 2002 Chevy to it, and stick it into your new car. However, that is precisely how software is generally made. There's your layman's explanation right there.

    1. Re:What is obvious to the dev community... by Darren+Bane · · Score: 3, Interesting

      You say that "the software industry has already defined a piece of software as a patentable product". This is only the _American_ softare industry--if you want to destroy your own international competitiveness, nobody will stop you. Software patents are illegal in Europe (although we're fighting hard to keep it that way).

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      Darren Bane
    2. Re:What is obvious to the dev community... by Husgaard · · Score: 2, Interesting

      Yes, this paper is mindblowing, and more people should know about it. But this paper is also theoretical, so it can be disputed by IP fundamentalists as having little to do with the real world.

      But Research on Innovation has a lot of other interesting papers.

      In particular I like the paper AN EMPIRICAL LOOK AT SOFTWARE PATENTS. This paper is an empirical investigation of the effect it had on innovation in the IT industry when software patents were legalized in the US.

      From the abstract:

      We find evidence that software patents substitute for R&D at the firm level; they are associated with lower R&D intensity.
  9. Re:Well Duh! by AusIV · · Score: 2, Interesting

    He didn't get a nobel prize for researching software patents. He got a prize for research into a new Economic theory, it just happens he's applying that theory to his research of software patents.

  10. Analogy is not identity by Nicolas+MONNET · · Score: 2, Insightful

    IP is not the same as physical property, but the concept of owning an abstract thing (the monopoly granted by the patent) is pretty closely related to the concept of owning a physical thing.

    Analogy is not identity. Although I guess it depends on what the meaning of "is" is. Or something.

    And the analogy breaks even more when you try to stretch it.

  11. Re:Great, but not an actual Nobel Prize by gerf · · Score: 3, Interesting

    http://nobelprize.org/

    Um, looks like Medicine, Chemistry, Peace, Physics, Literature, Economics. Further digging in their site shows that the Economics Prize was started in 1968. Well, perhaps Nobel didn't originate it, but it is selected by the same method as the others. Not that I'd consider that spectacular; They gave Al Gore and Jimmy Carter Peace Prizes after all.

  12. Hmmm.... let's see... by idontgno · · Score: 3, Interesting

    On the side opposed to software patentability, an eminent Nobel-prize-winning economist.

    On the side supporting software patentability, we have Steve Ballmer.

    Which side seems more credible to you? I'm going with the Nobel-winner myself. Even if Dancing Monkeyboy meanaces me with chairs while screaming "DEVELOPERS!" at me.

    --
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  13. Now a Major Motion Picture! by Doc+Ruby · · Score: 3, Interesting

    Even though TV is packed with "business news" shows, I don't expect to see this strong argument against SW patents even mentioned anywhere near people who determine the rules that govern inventors, who drive the entire economy.

    All we'll ever hear about is "incumbent economics", which is how the rich always get richer, despite the actual economic values.

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