Patents Vs Innovation - the Tabarrok Curve

New submitter Optimal Cynic writes "Slashdot likes to argue about intellectual property and patents, and it's clear that both extremes are undesirable. Dr Alex Tabarrok has tackled the question — what is the right level of patent protection? His answer is the Tabarrok Curve, which applies the Laffer Curve methodology to innovation."

Comments

Some fundamental, unchecked assumption here ?

[vikingpower]

Tabarrok seems to tacitly assume that innovation can be regulated via legislation. It seems to me that this non-proven, basic assumption has been proven wrong more than once, e.g. during the few years preceding the internet bubble of the '90s. The tip of the curve, then and there, lay completely to the left. ( Where IMHO it should be, but I am trying to separate facts from discussion from personal opinion here. )

Re:Some fundamental, unchecked assumption here ?

[stenvar]

Tabarrok seems to tacitly assume that innovation can be regulated via legislation.

Where in the world do you get that idea from?

He just says that too much patent protection has a cost that, at some point, must outweigh any benefits, so the optimal level of patent protection is not the maximum one. What the optimum level is, he doesn't know

If you're of the school that believes that patent protection is always bad, then his argument isn't meant for you. He isn't arguing for more patent protection with people like you, he is arguing against more patent protection with people who say "since some patent protection is good, more must be better".

Re:Some fundamental, unchecked assumption here ?

[vikingpower]

Where in the world do you get that idea from?

From TFA, as in these lines:

So, we’ve constructed the patent system: people have a 17 year exclusive right to such public goods. That is, we’ve made them excludable by law

I am not necessarily of the "school that believes that patent protection is always bad". I am of the school that believes that patent protection is, sometimes, a necessary evil, and bad at all other times.

Re:Some fundamental, unchecked assumption here ?

[stenvar]

And how does that translate into "regulation of innovation"???

Re:Some fundamental, unchecked assumption here ?

[bickerdyke]

No via legislation, but via money. That goes for the innovation that is a result from a controlled R&D process.

It does NOT effect the innovation that comes from pure serendipity, and that's why that curve neither starts nor ends at zero. But note that the right minimum is lower than the left one. Both ends describe a point where no money is invested anymnore, either because there is no money to make with inventions or inventing is to expensive because an invention would contain and base on an existing, patented invention. Too strict patent laws still may block serendipituous (is that even a real word?) improvements of existing inventions.

Re:Some fundamental, unchecked assumption here ?

[Cenan]

If you're of the school that believes that patent protection is always bad, then his argument isn't meant for you.

Him having a different audience in mind does not exclude "us" from using his ill thought out arguments against him. Using the curve he presents, we could easily argue that zero strength patents yield the same amount of innovation as we see today (draw a horizontal line from the "we are here" point to the Y axis), but with the added benefit of having no patent trolls and litigation that produce nothing of value to society. If we factor in the side industry of patent litigation (and assume that patent litigation is bad), we are better off with no patents than with.

He is arguing for trying to find a theoretical global maximum somewhere along the curve "behind us". This, of course, assumes that we buy into his premise and accept that the matter can be simplified to the point of being a curve on a napkin. It also assumes that there is only one point on the curve with a global maximum value for innovation, yet is see no argument from him as to why that would be the case. In fact, there is nothing in the article that remotely constitutes a "proof" that this is how the curve should look.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

He just says that too much patent protection has a cost that, at some point, must outweigh any benefits, so the optimal level of patent protection is not the maximum one. What the optimum level is, he doesn't know

Well this is true but tautology.As you do use Krebbs reaction please pay $100 per day or face consequences.

Re:Some fundamental, unchecked assumption here ?

[narcc]

To be clear, he said "Tabarrok seems to tacitly assume that innovation can be regulated via legislation". Which, to answer your question, he supported by quoting the article: "So, we’ve constructed the patent system: people have a 17 year exclusive right to such public goods. That is, we’ve made them excludable by law".

I honestly don't see how you could possibly still be confused, having read both the article and the parent's posts.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

What the optimum level is, he doesn't know

Woohoo, there may be a curve, which we cannot measure and for which we have no data, may exist. And the guy who made it up and named it after himself knows nothing about it. This is going to be so useful.

Re:Some fundamental, unchecked assumption here ?

[jythie]

I think they are disagreeing on the specific phrasing of 'regulating innovation'. Both are agreeing that the piece talks about regulation that has an impact on innovation, but not on if that means innovation is being regulated.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

Which is handwavy bullsh*t, but still bullsh*t.

Let's say there were no patents. Innovation only comes from serendipity? Um, no. No it doesn't. It comes from pure raw desire for competitive advantage. I may not be able to PATENT my innovation, but I will innovate anyways - I will gain a temporary advantage when I have new tech and my competitors don't. Competitors may "me too!" copy my advantage, but they cannot do it instantly. Which means I need to keep innovating. Product cycles will be shorter. But that doesn't mean no innovation. Quite the opposite, actually. The ONLY way to build a brand that stands out is to be a leader.

Oh, and since we're handwaving at key concepts, I reject the lack of any concept of brand loyalty or first-mover advantage in TFA.

Frankly, I question the assumption the early parts of the graph are upward sloping - I expect they're largely flat. The difference between no patents and very weak patents is minimal-to-nonexistent. In both cases, the real barrier to competitors is the friction to observe the competition, evaluate which innovations customers want, and produce them, whether that's "no patents exist" or "patents are easy to work around."

I also question the assertion that the far right (very strong patents) is necessarily the lowest point. Let's say patents were strong and eternal. This could easily lead to land grabs - there's a rush to discover new areas that people aren't even thinking about right now and bring them to market so that they can be patented. The value of a patent portfolio is high, and so companies may innovate to create such portfolios. Cross-licensing would be the order of the day in that environment, but it would hardly mean innovation would be dead.

Obviously, the point chosen by the author (and the only relevant fact about it is the assertion we are at a point where we are PAST the maximum) is arbitrary. Proof by assertion. You can draw a graph all you want, but if you want to use it to prove a point, you need a better argument than the "none, really" provided to assert the things that lead to a policy recommendation.

The most important salient issue TFA misses, and the single most important issue with current patent regime (at least for technology) is the distinction between "strong patents" and "vague patents." Changing the patent period from 15 years to 10 years would have minimal effect on the current patent nuclear warefare. Most of the patents being asserted aren't OLD. They are BAD because they are VAGUE. Patents allow a patent holder to claim vague "methods of operation" (at least pre-Bilski, which is changing, but slowly). They allow incredibly broad interpretation of claims. Also, there's huge cost that can be foisted on an inventor with no recourse - you can be sued for anything, no matter how vague or unlikely for the notional patent holder to prevail. THAT'S the barrier, not patent length.

Oh, and by the way, the other major point the author misses is that there's no single actor whose actions matter here. We live in a global economy. If the US ABOLSIHED patents, global companies will go to war in other countries where patents laws are more favorable. They will close off markets, block production or shipping of parts or finished goods, etc. Look at Apple and Samsung doing battle in three countries at the same time.

This is C- material in an intermediate economics course.

Re:Some fundamental, unchecked assumption here ?

[Savage-Rabbit]

Tabarrok seems to tacitly assume that innovation can be regulated via legislation. It seems to me that this non-proven, basic assumption has been proven wrong more than once, e.g. during the few years preceding the internet bubble of the '90s. The tip of the curve, then and there, lay completely to the left. ( Where IMHO it should be, but I am trying to separate facts from discussion from personal opinion here. )

Where in the world do you get that idea from?

From TFA, as in these lines:

So, we’ve constructed the patent system: people have a 17 year exclusive right to such public goods. That is, we’ve made them excludable by law

I am not necessarily of the "school that believes that patent protection is always bad". I am of the school that believes that patent protection is, sometimes, a necessary evil, and bad at all other times.

For the benefit of those who did not read TFA: What he is saying is that patent protection can boost innovation but if that protection is too great the patents get used as a weapon to bash competitors with the result that there is a net drop in innovation. Furthermore he is arguing that we have passed well beyond the point where patent protection is a demotivating influence on innovation so in that sense you actually agree with him. One only has to look at his curve to see this:

http://b-i.forbesimg.com/timworstall/files/2013/06/tabarrokcurve.png

In that graph, if you move too far to the left and you have no patent protection at all which stifles innovation, move too far to the right and have excessive patent protection also stifles innovation, stay somewhere in the middle and patent protection will actually boost innovation above the two extremes. You seem to be mostly arguing for the greatest innovation being achieved at a point that is very close to the left hand extreme. I'm not saying he is right in every detail but the basic idea of applying the Laffer tax revenue curve to innovation seems sound. Too much red tape around patents is just as detrimental to innovation as overtaxation is to state revenue. Likewise too little patent protection is just as likely to stifle innovation as excessive tax cuts are likely to screw up state finances.

As regards the legal system he eventually suggests that it may not be the patent system that is at fault so much as the legal system it self:

Knowledge is a public good and thus in a pure free market we think that too little of it will be produced. Too strong a protection and again too little will be produced.

These are the sorts of thorny questions that we instituted government to deal with for us. Hands up everyone who thinks that our current politicians are going to get this necessary balance right? Quite: it might be that it’s not so much the patent system which is not fit for purpose as the legislative.

Basically he is hypothesising here that we can move ourselves further to the left on his Tabarrok curve mostly (though presumably not exclusively) by legal reform rather than patent reform. I am no lawyer but it seems pretty obvious to me that fixing the legal system such that patent trolling by two bit law firms in East Texas and general patent warfare by major corporations were made significantly harder than it currently is, might be a good idea. In fact the whole issue of anti-competitive and SLAPP lawsuits and the power they give people with lots of money to spend to extort less wealthy people/organisations/companies is something that needs urgent fixing.

Re:Some fundamental, unchecked assumption here ?

[khallow]

And how does that translate into "regulation of innovation"???

How is this not fairly obvious? Innovation is the process of turning ideas into viable economic products. Patents provide monopoly access to certain ideas for a period of time. Hence, they are regulation on access to ideas (a key issue in the innovation process) and thus, regulation of innovation.

Re:Some fundamental, unchecked assumption here ?

[khallow]

Woohoo, there may be a curve

As long as you have two parameters, can vary one parameter with respect to the second, and the second parameter varies continuously with respect to small changes in the first parameter (all else being equal), you have a curve.

Re:Some fundamental, unchecked assumption here ?

[DragonTHC]

When Kennedy said he wanted a man on the moon, were there not laws passed to facilitate the budget required?

That single goal inspired a generation of scientists and the most innovative period in the history of the world.

Re:Some fundamental, unchecked assumption here ?

[ChrisMaple]

There's plenty of historical data. The problem is that it's too hard to interpret. Once something is invented, it can't be invented for the first time again, thus making comparisons of different systems difficult.

I've read that innovation in the telephone field fell when Bell got his patent and increased when the patents expired.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

There's plenty of historical data. The problem is that it's too hard to interpret.

Ah, 20 TB of anecdotal data. The best kind of data.

Until you can put a number to 'innovation', you're just pissing in the wind.

Re:Some fundamental, unchecked assumption here ?

[jalopezp]

Using the curve he presents, we could easily argue that zero strength patents yield the same amount of innovation as we see today (draw a horizontal line from the "we are here" point to the Y axis),

ooh, yeah... no. A drawing like that means he thinks the curve is concave with a local maximum above zero. And 'we are here' means he thinks we're to the right of the maximum. Talking about actual levels of innovation is way beyond his argument.

If we factor in the side industry of patent litigation...

This is precisely what he argues is the cost of patent law. It's already taken into account.

It also assumes that there is only one point on the curve with a global maximum value for innovation, yet is see no argument from him as to why that would be the case.

It is in fact there. Note a couple of things, both said in the article:

1. (1) Knowledge (innovations, invention) is a public good - it is non-exclusive and non-subtractable-, so in an unregulated market it will be under-supplied;
2. (2) patents make knowledge exclusive, at least for a limited amount of time - whoever holds a patent may charge others for the use of his knowledge.

The idea, following the logic of the Laffer curve (people hate the Laffer curve because of its association with supply side economics, but the argument is very old and generally not contested), is that as we introduce a small amount of patenting, innovation will increase drastically as we take from where there is the most surplus: the great innovations with high cost and difficulty of discovery will be patented. There certainly will be some cost, and some litigation to prevent copying, but the existence of these new innovations greatly outweighs it. As we introduce more and more patents (or increase their length), lesser innovations will be patented, those whose research costs are not so high, and those which are a little bit more obvious. The costs of protecting these patents will be proportionally higher, and society will benefit less from the patent system being applied to them. Eventually, the cost will be so high that it is equal to the value of the new innovation. This is the maximum, the tip of the curve; this is the most innovation that we can get before it stops being worthwhile.

Now if we continue patenting more and more liberally, or extending the length of the state monopoly granted by the patent, we get to the point where trivialities are being patented, and parties are arguing over who deserves the credit (and the state monopoly) for a small incremental innovation that should have been obvious to everybody. The cost of litigation in this case will greatly exceed the value of the innovation introduced by the patent. This means that at this point, we would be better off reducing the amount of patents available; the cost of assigning the rights of the patent and .

This is his basic argument about the shape of the curve. He further argues that we're to the right of the maximum. Much like with the Laffer curve, this is not to suggest that the maximum amount of innovation is where we should be either.

Re:Some fundamental, unchecked assumption here ?

[ACE209]

Woohoo, there may be a curve, which we cannot measure and for which we have no data, may exist. And the guy who made it up and named it after himself knows nothing about it. This is going to be so useful.

Sounds good enough for economists.

Re:Some fundamental, unchecked assumption here ?

[hedwards]

Indeed, I'd be surprised if there were much validity to this. Especially seeing as the Laffer Curve is a complete joke. It's never been particularly well supported by evidence, and runs completely counter to actual historical data. At least in the US the times when the economy was doing best, were times when the Laffer curve would predict that the economy would be in the tank due to excessive taxation on the rich.

Re:Some fundamental, unchecked assumption here ?

[Hognoxious]

I think P.J. O'Rourke saw this coming: http://historyofeconomics.files.wordpress.com/2009/05/pj-orourke-1-1.jpg?w=700

Re:Some fundamental, unchecked assumption here ?

[Bill_the_Engineer]

His hypothesis makes sense but it only looks at the time constraints. I assume he did this because it is the easiest thing to legislate and not have to deal with constitutional matters in the US, since the constitution directs the government "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

It would be nice if we could shorten the patent life to 15 years, limit the exclusive use of a patent to no more than 5 years, and mandate reasonable licensing during the remaining 10 years of the patent. Nontechnical patents like design patents should have a term no more than 5 years.

Re:Some fundamental, unchecked assumption here ?

[cpt kangarooski]

His hypothesis makes sense but it only looks at the time constraints. I assume he did this because it is the easiest thing to legislate and not have to deal with constitutional matters in the US, since the constitution directs the government "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

No, the Constitution only empowers the federal government to grant patents and copyrights. Article I, section 8 does not direct it to do so, however, any more than it directs the government to grant letters of marque and reprisal to privateers, which is another power it holds. Making the US a patent free zone mitt be a bad idea, but it would be perfectly constitutional.

Re:Some fundamental, unchecked assumption here ?

[Miamicanes]

> Let's say patents were strong and eternal. This could easily lead to land grabs - there's a rush to discover new areas
> that people aren't even thinking about right now and bring them to market so that they can be patented. The value of a
> patent portfolio is high, and so companies may innovate to create such portfolios. Cross-licensing would be the order
> of the day in that environment, but it would hardly mean innovation would be dead.

No, it means we'd be in eternal stagnant IP feudalism, where only companies the size of Sony, Samsung, Apple, and Microsoft were allowed to innovate anything meaningful commercially. Everyone else would be -- at best -- IP sharecroppers forced to kneel before them and grant their patents for a pittance in return for the right to make commercial use of them at all, because just about any conceivable implementation would otherwise infringe upon two dozen other patents.

Think about it. When's the last time a huge corporation held by risk-averse institutional shareholders concerned with maximizing the next quarter's profits truly innovated *anything* that could be described as "disruptive"? The infant Microsoft would have been thrown into the well and drowned by IBM, DEC, Burroughs, Wang, and all the other companies that used to dominate the American computer industry back in the 1970s/80s. Woz would have gotten served a C&D 3 days after showing off his new prototype to the computer club. Commodore would have never existed, because its whole economic foundation was a semiconductor firm who built what was practically a 6800 clone. Fairchild *and* Shockley would have been eternal vassals of Bell Labs.

Big companies owned by institutional investors are almost genetically incapable of disruptive innovation, because it involves risk, and risk means the next quarter's profits might be disrupted. When alliances of similarly risk-averse companies have de-facto veto power over everyone else by virtue of strong patent protection, disruptive innovation stagnates.

In a way, the former Soviet Union is a perfect indirect example. In the Soviet Union, risk-averse bureaucrats had de-facto (if not de-jure) veto power over everything. The same way a company like Sony can unleash its lawyers to stop disruptive media technologies in their tracks in the holy name of IP law, the Soviet government could unleash its army of law enforcement officers and bureaucrats to prevent a Soviet citizen with a disruptive invention from ever doing anything with it. There was actually quite a bit of underground innovation in the Soviet Union... it's just that it was all basically masturbation, because their efforts were stymied at every level (by buraucratic indifference if they were lucky, by aggressive political backlash if they were perceived as presenting a risk to someone in a position of power, no matter how petty or meaningless).

Going back further to the dark ages, how much real innovation occurred when everyone was forced (by law, if not practical necessity) into being vassals under feudalism that subordinated everyone and everything to landed nobility and the Church? Yes, we had people like Kepler, Newton, and Galileo... and their contemporary influence was almost nonexistent. Their discoveries were talked about privately, behind closed doors, and most of their effort was spent trying to avoid getting crushed by those who cared mainly about preserving the status quo. They're revered today, centuries after their deaths, but in their day, they were basically viewed as godless heretics who deserved to burn for their sins, or at least spend a few decades repenting them in a dark prison cell somewhere.

People forget that the US itself was founded as a reaction to the old world order. Pre-Berne, American IP law was almost at a 90-degree angle to European IP law. European IP law viewed IP as a moral right, like being granted land by a sovereign king acting through the grace of God. American IP law, in stark contrast, was scandalously utilitarian. Up until t

Re:Some fundamental, unchecked assumption here ?

[devent]

It's just his opinion. And his curve is a straw man that he puts out of his ass.
Where is the evidence that some patent protection is good? Ah right there is none. Everybody just assumes that some patent protection is good for innovation. That is just like creationism or like any other theology.

There is evidence that more patent protection is bad. See software patents. But where is the evidence for the other side, i.e. no patent protection as bad?

Don't come to me with some mind experiments like "But without patent protection where is the incentive to innovate". People have innovate for freaking 50,000 years. Our patent system, or our capitalist system is just about 250 years old.

I repeat. There is no evidence that any patent protection increases innovation.

There is plenty of evidence that too strong patent protection hampers innovation. See software patents, patents on DNA, business patents, and so on.

There is also evidence that no patent protection actually increases innovation (I posted already here but I post again)
The only real empirical study that I know of is The patent game.
See http://www.youtube.com/watch?v=q1Pi4w8ddA8
And they come with quite surprising conclusions.

"pure common system" means no patent protection.

1. patents increase innovations?

Average unique innovations is lower in the "pure patent system", and is higher in the "pure common system"
Productivity, aka economic activity, the "pure common system" is almost double the "pure patent system"
Per capita wealth, the total amount of dollars generated in the system: "pure common system" is almost 4 times that of the "pure patent system".

Conclusion: "Despite received wisdom, commons spur innovation better then do patents"

Re:Some fundamental, unchecked assumption here ?

[PhilHibbs]

That's not necessarily a problem. If innovation was boosted because of the potential rewards for being the first to invent a telephone, then the patent system did its job.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

It's just his opinion. And his curve is a straw man that he puts out of his ass.

Where is the evidence that some patent protection is good? Ah right there is none. Everybody just assumes that some patent protection is good for innovation. That is just like creationism or like any other theology.

Surely you mean pulled it out of his ass? And no he didn't pull it out of his ass, he has a PHD in Economics which, based on the rest of your post, is something that it is pretty safe to assume you do not have.

There is evidence that more patent protection is bad. See software patents. But where is the evidence for the other side, i.e. no patent protection as bad?

That's precisely what he is saying, too much protection hurts innovation.

Don't come to me with some mind experiments like "But without patent protection where is the incentive to innovate". People have innovate for freaking 50,000 years. Our patent system, or our capitalist system is just about 250 years old.

I repeat. There is no evidence that any patent protection increases innovation.

There is plenty of evidence that too strong patent protection hampers innovation. See software patents, patents on DNA, business patents, and so on.

There is also evidence that no patent protection actually increases innovation (I posted already here but I post again)
The only real empirical study that I know of is The patent game.
See http://www.youtube.com/watch?v=q1Pi4w8ddA8
And they come with quite surprising conclusions.

"pure common system" means no patent protection.

1. patents increase innovations?

Average unique innovations is lower in the "pure patent system", and is higher in the "pure common system"
Productivity, aka economic activity, the "pure common system" is almost double the "pure patent system"
Per capita wealth, the total amount of dollars generated in the system: "pure common system" is almost 4 times that of the "pure patent system".

Conclusion: "Despite received wisdom, commons spur innovation better then do patents"

You can make any claims you want but please support them with something better than a dead link and a youtube video, they do not count as empirical evidence, let alone scientifically rigorous studies. Try citing scientific papers or studies done by reputable scientists. Until you do that you are a damn sight closer to pulling things out of your ass than a PHD in Economics.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

Patents issued!

Re:Some fundamental, unchecked assumption here ?

[mitzampt]

Don't come to me with some mind experiments like "But without patent protection where is the incentive to innovate". People have innovate for freaking 50,000 years. Our patent system, or our capitalist system is just about 250 years old.

If you invest something into research and then give away its results for free, would you do more research?
I agree, if you want to scratch your itch you will more likely research anyway, and by making it free, you can use any contribution to your work to your benefit, as anyone researching further on your idea would most likely be useful to you. As an example, look at the wonderful open source communities. The downside is: scratching your itch doesn't give you expert insight in a general problem, but in a particular problem - yours. This is why many open source works tend to get messy, hackish and poorly supported. More than anything research requires quality, and investment in quality requires return of investment, cheap quality requires expertise, which requires dedicated people. So the curve Tabarrok took out his ass is his way of saying that given a chance to make some profit from research we would have dedicated people innovating.

My personal opinion is that exclusive rights are actually beyond the maximum innovation point and where the curve starts descending

Re:Some fundamental, unchecked assumption here ?

[Muros]

Where in the world do you get that idea from?

From TFA, as in these lines:

So, we’ve constructed the patent system: people have a 17 year exclusive right to such public goods. That is, we’ve made them excludable by law

That doesn't tell us anything about what he thinks though. That is merely a comment by him about what we, as a society, have put in place.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

the second parameter varies continuously with respect to small changes in the first parameter

Why would it vary continuously? Even if you posit that 'innovation' is a number, which it is not, people are very much not continuous.

It is a common problem among geeks who learn some math and then think it applies to everything in the world, forgetting that not everything is quantifiable.

The Laffer curve, while having little basis in reality, at least mathematically has defined two points -- 0 revenue for 0% taxation and 0 revenue for 100% taxation (never mind that basically nowhere are tax rates are actually flat). And tax revenue you can put in some currency, like USD. This 'Tabarrok curve' doesn't even have _units_.

Now you could start to quantify the problem by assigning something like number of patents granted in a year, and compare that to number of laws on the books concerning patents, but clearly that is a bit hokey... and I don't think you can really equate patents to innovation directly. You never know what is meaningless today that a few decades from now will turn out to be the breakthrough that saves the world. Or maybe you do want to just generate more patents... which is really what it comes down to.

This is something that relates to business, because the people that are actually interested in such a relationship are trying to make more money. Since it ties in very slightly to government regulation, and then people get their panties in a twist because of their strong opinions about that, never realizing it has nothing to do with them in the first place.

Re:Some fundamental, unchecked assumption here ?

[Weedlekin]

It is not obvious because turning ideas into viable economic products is an aspect of the totality of innovation, not the entirety of it. So stenvar's question was completely correct, because while it is true that patents affect some types of innovation, they do not affect all of them, so they are not a regulation of innovation.

Re:Some fundamental, unchecked assumption here ?

[Myopic]

I don't think the bit you quoted means what you said.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

Of course if you equate innovation to the number of patents granted, you'll have no innovation without patents, by definition.

Re:Some fundamental, unchecked assumption here ?

[tlhIngan]

It's just his opinion. And his curve is a straw man that he puts out of his ass.
Where is the evidence that some patent protection is good? Ah right there is none. Everybody just assumes that some patent protection is good for innovation. That is just like creationism or like any other theology.

There is evidence that more patent protection is bad. See software patents. But where is the evidence for the other side, i.e. no patent protection as bad?

You can apply history to it - patents have been around only a few hundred years - dating back to just before America.

You could also try to frame it in context of say IP protection. Is copyright good? Bad? Too much? Too little?

Will open-source succeed without copyright? Would you write a program to scratch your itch if it wasn't under copyright protection? Realize that the latter means it's effectively modified-BSD licensed.

Software is a tricky thing because until its invention, patents were used for "things" and copyright was used for "creative works" and neither the twain shall meet. After all, writing a book doesn't get patent protection (other than design patents, if the book has certain ornamental features). The work itself doesn't have utility other than being entertaining (hopefully), but that's it. Likewise, the printing press used to make the book isn't copyrightable - there's no "expression" going on other than maybe a few decorative items to give it better form.

Software though, is both. It can be a creative work meant to be enjoyed, or a part of a machine. In effect, it's forcefully combining two areas of IP protection that were never intended to be combined in the first place. And both are being twisted to accommodate this ill-fitting piece.

Perhaps what needs to happen is sitting down and realizing this - that software should not be patented nor copyrighted, but covered under its own IP protection category because of its unique nature. After all, if you get rid of software patents, you're saying if I build a machine out of electromechanical parts, I can patent that, but if I replace some of those electromechanical parts with software to make it more flexible, simpler and more reliable, it's suddenly unpatentable? (And software can be hardware, too, thanks to modern VLSI RTL).

It's probably time to stop forcing software into copyright and patents and realize it's got its own attributes from both, and crafting IP protection appropriate for this reality than bending existing protections about.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

Don't come to me with some mind experiments like "But without patent protection where is the incentive to innovate". People have innovate for freaking 50,000 years. Our patent system, or our capitalist system is just about 250 years old.

If you invest something into research and then give away its results for free, would you do more research?

I agree, if you want to scratch your itch you will more likely research anyway, and by making it free, you can use any contribution to your work to your benefit, as anyone researching further on your idea would most likely be useful to you. As an example, look at the wonderful open source communities. The downside is: scratching your itch doesn't give you expert insight in a general problem, but in a particular problem - yours. This is why many open source works tend to get messy, hackish and poorly supported. More than anything research requires quality, and investment in quality requires return of investment, cheap quality requires expertise, which requires dedicated people. So the curve Tabarrok took out his ass is his way of saying that given a chance to make some profit from research we would have dedicated people innovating.

My personal opinion is that exclusive rights are actually beyond the maximum innovation point and where the curve starts descending

And Tabarrok did not say that complete lack of protection completely kills innovation. His graph kind of makes it clear that even with no protection there is still some innovation going on and he also admits that excessive protection completely kills innovation. What is getting people's goat up here is that Tabarrok is suggesting that moderate protection levels actually boost innovation before excessive protection causes it to nosedive which runs completely contrary to the /. gospel that innovation is either a -G(x+a) or -G(x^2) like affair and that innovation is, furthermore, inversely proportional to the level of patent protection.

Re:Some fundamental, unchecked assumption here ?

[devent]

> If you invest something into research and then give away its results for free, would you do more research?

Have nothing to do with patents.
Patent law does now specify how you monetize or how you are compensated for your research.
For example a university is funded by public money and by tuitions. A private company have capital, whereas a public company sells shares.

> My personal opinion is that exclusive rights are actually beyond the maximum innovation point and where the curve starts descending

What curve? There is no curve. There is no evidence for a curve.
There could be that patents have actually no relationship with innovations.

Re:Some fundamental, unchecked assumption here ?

[stenvar]

The term "regulation of innovation" has a common and pretty sinister meaning: government telling people how to innovate, what areas to innovate in, and what areas not to innovate in. Patents clearly do none of those things, and using the term "regulation of innovation" is misleading and biased.

Patents may disincentivize some innovation or raise the cost of innovation, but that's not regulation. Income tax disincentivizes spending and reduces the amount of money I have available for spending, but it doesn't "regulate" my spending.

Re:Some fundamental, unchecked assumption here ?

[stenvar]

Wow, talk about cutting off your nose to spite your face. With people like you putting up such idiotic straw men, we're never going to get meaningful patent reform.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

In fact, there is nothing in the article that remotely constitutes a "proof" that this is how the curve should look.

There is also no "proof" that patents are overall harmful. There is remarkably little "proof" of anything in economics. So, I suppose you don't want patent reform. The patent trolls are so proud of you and thank you for your support!

Re:Some fundamental, unchecked assumption here ?

[Richy_T]

Yes, let's take something like cancer research... Who on earth would fund cancer research if they couldn't make billions from marketing expensive drugs to people who would have to sell all their worldly goods to buy them? People with cancer (and their families) perhaps?

Re:Some fundamental, unchecked assumption here ?

[Weedlekin]

Going back further to the dark ages, how much real innovation occurred when everyone was forced (by law, if not practical necessity) into being vassals under feudalism that subordinated everyone and everything to landed nobility and the Church? Yes, we had people like Kepler, Newton, and Galileo... and their contemporary influence was almost nonexistent. Their discoveries were talked about privately, behind closed doors, and most of their effort was spent trying to avoid getting crushed by those who cared mainly about preserving the status quo.

The dark ages was a time of significant innovation, e.g. the wheeled, adjustable pough; water mills; the horse collar; draw plates for making wire; the blast furnace; pointed and ribbed arches; the flying buttress; etc., etc., etc.

Kepler, Newton and Galileo did not live during the dark ages. All were well known during their lives, but only Galileo got into trouble over his publications, and it was the way his book was written rather than its scientific content that got him imprisoned (it featured a dialogue between a thinly veiled version of himself as the wise know-it-all, who expounds at length to an idiot who is obviously based on the pope, thereby humiliating and annoying a man who had been his friend since childhood). Kepler's problems in later life were due to his connection with Calvinists, not his scientific work, and Newton, contrary to being crushed, did quite well for himself.

Common people didn't know about their works because they were published in Latin, so the few commoners who were literate were unable to read them.

Re:Some fundamental, unchecked assumption here ?

[Richy_T]

His graph does not "make it clear" because it is made up. I hate when people create charts based on conjecture because the simple minded tend to start treating them as if they were real. This largely applies to the Laffer curve too (which was mostly just a tool to justify decreased taxes without decreasing spending leading to borrowing and totally ignores the issues of misallocation of resources)

Re:Some fundamental, unchecked assumption here ?

[Richy_T]

On a computer!

Re:Some fundamental, unchecked assumption here ?

[Richy_T]

How much do you think Elisha Gray's innovative spirit was boosted?

Re:Some fundamental, unchecked assumption here ?

[king neckbeard]

Yes, but unfortunately, we don't have data on which innovations occurred because of patents, which would have occurred anyway, and which inventions were not invented because of being stifled by patents.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

To its credit, the Forbes article acknowledges that economics research suggests that patents are not the economically most efficient way of increasing innovation.

There are good arguments, for example, that rather than granting patents, the government should instead grant financial awards similar to what is done in the federal research grant system, or the X-prize competitions.

See, for example:
Michele Boldrin and David K. Levine. The economics of ideas and intellectual property PNAS 2005 102 (4) 1252-1256; doi:10.1073/pnas.0407730102

I bring this up simply because although the curve has some intuitive merit, the discussion needs to begin at a more basic level, which is whether any level of patent is better than some alternative that currently does not exist.

There are also serious, basic human rights issues involved in the idea that anyone is entitled to an idea as property.

To put it in the language of the suggested curve: maybe the curve's peak is greatest at the origin of the abscissa, and only declines monotonically as patent strength increases.

Re:Some fundamental, unchecked assumption here ?

[VortexCortex]

What he is saying is that patent protection can boost innovation

Pure, Unadulterated Opinion, borderline outright disproved by the VAST innovation in design in both the Fashion and Automotive industries, which are allowed neither design patents nor copyrights.

Protip: You want to make a comparison? You need something to compare it against. Abolish patents. We have ZERO evidence patents are beneficial, only assumptions that they are good. It's utterly asinine for any scientist to agree we should run the world's technological economy based on completely unfounded assumptions which are most likely wrong, given that what little evidence we do have points to patents being an unnecessary tax on innovation.

What's utterly mind numbingly moronic is that the Scientific Method is good enough to create patentable subject matter, but No One Dares apply such rationality to the patent system itself.

Re:Some fundamental, unchecked assumption here ?

[tragedy]

You seem to be considerably more impressed by a degree in economics than most of us around here are. Also, you're making a pure appeal to authority here. Having an advanced degree doesn't free him from the need to provide some sort of evidence.

Re:Some fundamental, unchecked assumption here ?

[Bengie]

Patents also need to apply only to processes, like as written in law, not to end results like they're being granted. And they need to stay out of software.

Re:Some fundamental, unchecked assumption here ?

[OFnow]

Software patents are bad since software is mathematics (see groklaw.net) so software should be unpatentable.

Copyright is possibly applicable for software, but only really makes sense if the copyright period is adjusted (for everything!) to be the original 1913 length, 7 years. Or less in at the creater's option (ie if I write something I can specify copyright applies for 1 year and then expires).

For all practical purposes copyright currently applies 'for the life of the universe' which is absurd, harmful, and inappropriate.

Re:Some fundamental, unchecked assumption here ?

[Cenan]

I am fully aware that a napkin graph is no way science. I'm challenging the authers premise, that there is a causal link between patent strength and innovation. In fact, slight search engine fu will turn up a veritable zoo of papers on that particular subject, many of which directly contradict what this guy is saying. TechDirt has a bunch of articles on this subject too, and they're sufficiently dumbed down so that anyone should be able to follow it.

COMPETITION & INNOVATION: New Evidence from US Patent and Productivity Data (PDF 29 pages).
From the abstract:

Is there any evidence that innovation and technological progress are constrained by com-
petition and fostered by monopoly power? Our results, based on a newly constructed dataset
of US manufacturing industries observed over more than two decades, suggest that this is
not the case. On the contrary, using both patent statistics and productivity growth as al-
ternative measures of innovation and technological change, we observe faster technological
advances in more competitive markets.

From the conclusion:

Our empirical findings suggest that there is a positive monotonic relationship between
competition and innovation. Patent counts (simple or weighted by citations) are found to in-
crease with more competition. Similarly, TFP* and LP* keep growing as we move from industries
with signicant market power to more competitive industries. These findings seem to contradict
the Schumpeterian hypothesis that ex-ante market power is necessary to foster innovation. They
also cast serious doubts on the existence of an inverted-U relationship between competition and
innovation in markets with well-defined intellectual property rights.

*TFP: total factor productivity
*LP: labor productivity
Both alternative measures of "technological progress" ie innovation.

Re:Some fundamental, unchecked assumption here ?

[kanweg]

Who stopped those people with cancer and their friends&family from doing that if that were the more effective approach? Exactly: Nobody. Nothing stopped them from putting the money together and pay a group to invent their own drug.

Or is it pretty hard, and pretty risky and is a reward (even though it is not monetary) in the form of a temporary monopoly, i.e. a patent really that inappropriate?

Bert

Re:Some fundamental, unchecked assumption here ?

[ewibble]

I don't care what degree he has, but I saw no empirical evidence the article at all, just assumptions no patients being bad, too may/strong being bad, and an graph that he put a random dot on based on his opinion.

Don't get me wrong he may be right, in fact I think he probably is. He might even have evidence that is not mentioned in the article, but without evidence, it is just an unsupported hypothesis that anybody can make.

Also I am also willing believe that all patents harm innovation as well, again that hypothesis needs proof too.

The proof is hard, I haven't even heard of a way to measure innovation that is not something so blatantly biased as number of patients filed.

Re:Some fundamental, unchecked assumption here ?

[midav]

This is the coolest picture I have seen for a while.

If you look where we are, it is about on the same level as if there was no protection at all.

What it means, is that the current system exists solely for the benefits of the patent lawyers. Moreover, if the protection is strengthened it will reduce the innovation further and thus diminish lawyers' area of application. If the protection is relaxed the innovation will boost but it also will leave some money on the table to be converted into actual innovator's revenue.

So the level of protection is stabilized at the level where all the innovation benefits are fully converted into patent lawyer's benefits thus maximizing their revenue from bang for buck perspective without being actually beneficial to a patent holder.

But that conclusion should be pretty obvious, is not it?

Re:Some fundamental, unchecked assumption here ?

[Jane Q. Public]

" Tabarrok seems to tacitly assume that innovation can be regulated via legislation."

"Where in the world do you get that idea from?"

"From TFA, as in these lines: "

The fact that those words exist does not change the essential point: either you have misunderstood what Taborrok meant, or you are deliberately distorting it.

It is obvious that innovation CAN be controlled by legislation. Negatively influenced, at any rate, as we have clearly seen in recent history.

The other side of the curve, the one implying that patents can HELP innovation, is also clear from the historical record.

So while it may be, as you say, that Taborrok believes legislation can "control" innovation (although "control" is probably the wrong word here if you want to be accurate), it is completely beside the point, which was that there is TOO MUCH of it today.

Re:Some fundamental, unchecked assumption here ?

[Jane Q. Public]

And I forgot to add: it is not JUST beside the point. It is also, according to the historical record, true.

Re:Some fundamental, unchecked assumption here ?

[Jane Q. Public]

"No, the Constitution only empowers the federal government to grant patents and copyrights. Article I, section 8 does not direct it to do so..."

Technically true. But realistically, when have you known the Federal government to NOT exercise a power it was given, not to mention usurp powers that it was not given?

With the sole exception, I should add, of declaring war.

Re:Some fundamental, unchecked assumption here ?

[cpt kangarooski]

As I pointed out, Congress doesn't use its power to grant letters of marque and reprisal (since 1815, apparently). But it could if it wanted to. Ron Paul tried to revive them not long ago. And they gave up part of DC to Virginia, though I imagine they could get it back if they wanted.

Re:Some fundamental, unchecked assumption here ?

[Cenan]

I want patents abolished, but that is irrelevant to the merit of this author's case. The author is not arguing for patent reform the way you think he is, he wants patents to stay pretty much the same as now, but slightly tweak the length of each patent to hit his hypothetical sweet spot. Challenging straight up bad science is a good start at a patent reform, at the very least.

Re:Some fundamental, unchecked assumption here ?

[Richy_T]

Nothing stops them. But now there's a race, big pharma looking for big rewards and privately funded groups just looking for the cure and medicine from whoever will produce it safely for a reasonable cost. If big pharma gets there first, the privately funded groups are locked out and their research wasted.

Re:Some fundamental, unchecked assumption here ?

[Jane Q. Public]

I'm not sure I'd count "giving up part of DC to Virginia" as "not exercisng their powers". But your other example is noted.

Re:Some fundamental, unchecked assumption here ?

[real-modo]

Are you planning to patent the process of making laws?? Clever!

Re:Some fundamental, unchecked assumption here ?

[real-modo]

Laffer Curve: somewhat ironically, once people got around to doing some measurements, they found that the optimal top tax rate (for income over the first $1M/year, say) was 73%. Not the result that Laffer wanted, I think.

The modern patent system was introduced in the late 18th century - before telegraphs, before railways, before steam ships. Heck, before paved roads, in most places. The tempo of commerce has increased significantly since then, so it seems likely that reducing the term of patents is appropriate.

I'm sure that some lucky grad students will eventually do the empirical work.

Re:Some fundamental, unchecked assumption here ?

[khallow]

A regulation of a crucial part is a regulation of the whole.

Re:Some fundamental, unchecked assumption here ?

[PhilHibbs]

I don't really know, but I don't see any evidence that Gray was not interested in patenting his inventions. He seems to have been using the patent system as much as anyone else, so I assume that potential for patent protection of his inventions was a factor in spurring on his research.

Re:Some fundamental, unchecked assumption here ?

[Richy_T]

Or maybe it was just an annoying distraction.

Re:Some fundamental, unchecked assumption here ?

[Anonymous Coward]

There is plenty of evidence that too strong patent protection hampers innovation.

There are also good reasons to believe that "too strong" patent protection is not good from a legal or governmental ethics perspective. Most of the patents I see posted here are clearly not valid patents, even by the "official" criteria, which suggests ethical conflict of interest is determining the outcome of the patent application process. Hence there is a governmental ethics problem with respect to the patent system.

The legal ethics issues with the current patent system have been discussed here before, so there's little benefit to re-hashing old points. I'll just add one comment: the recent high profile cases involving very dubious, even absurd, patents are likely to create a high artificial demand for the services of legal professionals specializing in patent law over the next few decades in companies looking to protect themselves from being victims of abuse by a legal system run amok. This means that legal professionals deciding how the patent system will work are in a position of ethical conflict of interest with respect to those decisions.

Ethics, of course, may not matter to many people. After, all, if companies (the root of all evil, in many minds) are having problems, who cares? But I read a lot of complaints people make on this forum regarding actions taken by the US federal, state, and even local governments that infringe fundamental rights OF INDIVIDUALS. These abusive government actions ultimately have a lot to do with the same kinds of problems in legal ethics that have given us a broken patent system and are causing companies problems, which suggests we should be paying a LOT more attention to this issue.

Further, money spent to protect a company from abuses of the legal system is money not available to be spent on innovation, and, of course, the costs of hiring legal professionals to protect a company from legal predators end up being passed on to the consumer.

We all pay for that portion of the legal profession that is made up of socio-paths (and, despite what many people like to think, that isn't all lawyers).

Re:Some fundamental, unchecked assumption here ?

[mitzampt]

But if a "scratching my nose" group of families fund such research and find a cure and then they give it away for free, the result is just like having no patents (because publishing research results without patent is equivalent to prior works). The problem is finding researchers to work for that sum of money (families don't have the money for a fancy laboratory, with cutting edge equipment AND to pay a generous salary), and on the other hand after they find a cure they don't have the incentive to fund research for similar types of the problem. In the medical field there is also the need to validate and certify the drugs, rigorous tests to see if it complies to all regulations and the problem is that "scratching an itch"-type of research often results in a drug applicable to a limited group or it results in complication to a broad group of people.

Also, a person diagnosed with cancer doesn't have a lot of time. Would you, as a researcher, work for a group that pressures you to find a fast cure and might at any time withdraw from funding you, after their relative is beyond recovery? Big pharmaceutical companies are indeed milking a cow dry with those patents but they provide thoroughly tested and generic results, as they have the resources and expertise to do a proper job.
Considering the medical example I keep my opinion that exclusive use of a patent is not helpful. If you paid for a research, there must be a price for anyone to use it at any time.

Re:Some fundamental, unchecked assumption here ?

[mitzampt]

Have nothing to do with patents. Patent law does now specify how you monetize or how you are compensated for your research.

So patents were made just for bragging. I was referring to their purpose, and yes their purpose is mostly to prevent unfair copying, rather than to assure monetizing your research.

For example a university is funded by public money and by tuitions. A private company have capital, whereas a public company sells shares.

Well universities doesn't have to worry about ROI but what about a company? Would they research just to look good? Shouldn't just all companies research brainwashing to make customers buy whatever they produce?

What curve? There is no curve. There is no evidence for a curve. There could be that patents have actually no relationship with innovations.

I don't know, man, it could actually be a polygonal path there, or an apple. It surely doesn't look at all similar to the relation between taxes and government budget as TFA implied. I was just impressed with Tabarrok's ass.

Re:Some fundamental, unchecked assumption here ?

[devent]

> I was referring to their purpose

The purpose of patent law is to foster innovation and encourage discloser of inventions.
There is no evidence that patent law actually is fostering innovation and at least with software patents there is no discloser, because software patents are so broad or they cover mathematics.

> Would they research just to look good?

Companies invest in R&D because of market pressure. If one company fails to innovate it will be out-innovated by a competing company. It's funny how some people want free market but at the same time apologize for patents. But patent law does something good here: it encourage discloser of innovations. In my opinion by no means we should abolish all patents. But you need to base patent law on evidence, like everything else. And you need to articulate the goals of patent law for the market.

There is no 1:1 relationship between taxes and government budget as TFA have implied. There are many factors and in my opinion, taxes are the least significant. For example, taxes spend on military toys and military bases around the world will not increase the GDP. But taxes spend on education, infrastructure and R&D will increase the GDP. So it is much more less how much taxes you get, but much more important is what you spend the taxes on. You could get 99% tax if you spend that tax money fully in your economy it will increase the government budget over time.

Re:Some fundamental, unchecked assumption here ?

[mitzampt]

> I was referring to their purpose

The purpose of patent law is to foster innovation and encourage discloser of inventions. There is no evidence that patent law actually is fostering innovation and at least with software patents there is no discloser, because software patents are so broad or they cover mathematics.

Point valid, but it specifies means of protection, describing the patent as a good, a property, otherwise there wouldn't be a basis for patent lawsuits.

> Would they research just to look good?

Companies invest in R&D because of market pressure. If one company fails to innovate it will be out-innovated by a competing company. It's funny how some people want free market but at the same time apologize for patents.

That is the itch-scratching I was referring to. But big companies invest in R&D to gain assets, not in the market as the consumer see it, but as a means to gain market share by blocking the competitors. Small fries know best, and this is what outrages people against the law.

But patent law does something good here: it encourage disclosure of innovations. In my opinion by no means we should abolish all patents. But you need to base patent law on evidence, like everything else. And you need to articulate the goals of patent law for the market.

And I agree with you, to the point of deciding what is proper evidence.

There is no 1:1 relationship between taxes and government budget as TFA have implied. There are many factors and in my opinion, taxes are the least significant.

There isn't an exclusive relationship, lots of stuff goes in and out of the budget. But there is a correlation for one of its components, and a significant one, in my opinion. That interesting curve (not Tabarrok's) actually means something to some economists, and I will not dare anger them, for they will curse me to hell.
It was interesting to see the guy's theory about patents, without checking his numbers. Just the insight gives something.

Re:Some fundamental, unchecked assumption here ?

[devent]

> It was interesting to see the guy's theory about patents, without checking his numbers.

I don't know what should be interesting about someone's theories. Anyone can have theories. What is interesting is the numbers, the evidence. The same as the Geocentric theory. It's a nice theory but it is totally wrong. That is why I'm so negative about him. If he would have some numbers to back up his theory I would praise him.

That is also why I'm so negative about almost all economists. Hard evidence in a complex world economy is very hard to get but it don't stop economists from postulating theories. It wouldn't be so bad if not for the politicians that then pick one theory that serves their agenda and then with the help of the economists push that agenda.

There was a recent example with Reinhart and Rogoff.
Here is their paper: Growth in a Time of Debt
From the National Bureau of Economic Growth.

When external debt reaches 60 percent of GDP, annual growth declines by about two percent; for higher levels, growth rates are roughly cut in half.

Nice claims no? Problem is, the data is completely bonkus. See Reinhart And Rogoff's Pro-Austerity Research Now Even More Thoroughly Debunked By Studies

Any real scientists would lose any creditability, but not so economists. I guess Reinhart and Rogoff are still call them self economists and they are still used by politicians to push policy.

Re:Some fundamental, unchecked assumption here ?

[mitzampt]

Yeah I hate their voodoo, too.
It supposedly makes the world go round, though.

On another note, starting from the hypothesis that there is a correlation between innovation(research output), patent regulation effectiveness(as a coefficient) and research accessibility after patented, and the correlation happens to have a maximum somewhere. This hypothesis is really vague, but plausible. Where would you put us today in relation to that maximum?
I actually never thought of putting stuff like that into numbers until this guy came out. Going from this people should give him the middle finger, start crunching some data and follow to the optimum. After that, as a naive and unthinkably optimist person that I am, I think someone will come with a better proposal to define and regulate patents.

Re:Some fundamental, unchecked assumption here ?

[devent]

The only real data I ever saw is the Patent Game experiment. I already mentioned that but I post here again:

http://www.patentgame.net/
http://www.youtube.com/watch?v=q1Pi4w8ddA8

As far as I know that is the only real data on the issue. The conclusion of the "game" is quite surprising: no patents actually performs better then patents. Both in amount of innovation and the whole wealth.

The other data I have is on copyright. Germany had in fact for 100 years no copyright laws, the first laws were introduced in 1837, well after the laws in England in 1710. In that period of time Germany had a booming book industry, with many more books and much more cheaper then in England. If you know history, then that was also the "Golden Age" of Germany, with many discoveries, political, literature, etc. innovations. After the copyright laws were introduced the total amount of books goes down, prices goes up.

You can read it up (in German):
http://www.heise.de/tp/artikel/33/33092/1.html

My opinion is: patents yes, but only for real innovations and limited.
Copyrights: yes, but extreme limited and only after registration.
Basically, my opinion is in agreement with the founding fathers of the USA.

Re:Some fundamental, unchecked assumption here ?

[mitzampt]

I like your answer... and I agree.
I would also add my opinion: patents, yes, basically for breakthroughs, without exclusivity. Anyone should be able to use the research behind the patent, base further innovation on it, and in exchange, for a limited period of time, it pays to the innovator a small slice from profit. By this criteria, non-gov organizations and universities would be able to freely use this kind of research in any community or endeavor.
Copyrights: yes, free registration and free fair usage. Also a work can be freely used for any purpose it wasn't designed for. Any distributor should be allowed to sell and provide a work as long as during a limited interval after registration they pay the creator a small slice from profit, non-gov organizations and universities are only required to specify the creators.

And it goes like this: you invest money in research or creation, you deserve a reward. Anyone who makes a profit from your work must thank you, literally. And once registered an innovation or copyrighted work, you can't decide it's application, so that anyone further contributing can apply ideas you never thought of.

curves

[l3v1]

Well, the first thing that came to mind when seeing it was this: http://xkcd.com/323/ :D

Assurance contracts

[IamTheRealMike]

Tabarrok is also known for his work on how to fund public goods via non-patent means, in particular his dominant assurance contract form which is a variant of what Kickstarter does.

don't help and there's more than innovation

[ciaran_o_riordan]

For software, they don't help innovation, and promoting innovation can't be the only goal. Lots of non-innovative software development is really useful.

* http://en.swpat.org/wiki/Studies_on_economics_and_innovation
* http://en.swpat.org/wiki/More_than_innovation

And it's really crucial that patents be analysed per-domain. The don't affect pharma and the auto industry the same, and they don't affect software the same either. The distribution models are different, as is the profile of who mass produces each thing, as is the complexity (number of ideas) that get added to a product within one lifecycle, and the length of product lifecycles...

* http://en.swpat.org/wiki/Why_software_is_different

Re:don't help and there's more than innovation

[ikaruga]

Another nice feature would be protecting only patents actually used in products made by the inventor or its partners, in order to take out those so called patent trolls that don't produce anything. If in the future the inventor actually decides to use the patent in an actual product and there is someone already using it there could be some sort of predetermined fee. Obviously I'm oversimplifying the huge problem, but something must be done about those parasites.

Re:don't help and there's more than innovation

[Anonymous Coward]

When you find yourself saying "something must be done", like some 70-year-old woman in a 1950s comedy about whiskey, you need to look at your knee and see if it's moving of its own accord in a rapid irregular motion.

Re:don't help and there's more than innovation

[jythie]

The tricky part there is what counts as a 'partner' and how you cover the trolls but not, say, universities who do not produce products but do depend on patents to fund their research.

Re:don't help and there's more than innovation

[KiloByte]

The reason their analysis excludes pharma is purely political: the big pharma lobby has such an immense power that anything they perceive as risk will be torpedoed. Having powerful enemies doesn't stop you from being right, though, merely might make holding your cards prudent.

Re:don't help and there's more than innovation

[Anonymous Coward]

The patents need to go in the public domain. That's what National Institute of Health insists on, but they also grant funding based on patents. It's awkward. Patents are now so expensive to apply for with any chance of winning the patent that it's a serious tax on a productive lab's operational budget. I've been flat out told, my work was patentable, but to pursue the 3 patents was $5000 that would not be available for my salary. I wish I'd agreed to it, the patents would have helped my career a lot in later work.

And this was 15 years ago, it's much more expensive now.

Re:don't help and there's more than innovation

[itsdapead]

The reason their analysis excludes pharma is purely political: the big pharma lobby has such an immense power that anything they perceive as risk will be torpedoed.

Probably true.

The silly thing is, Pharma is the easiest one to fix. If a country doesn't require new drugs to be licensed/approved based on (expensively gathered) evidence of their efficacy and safety then, well, they should. A fixed term exclusive right to manufacture could easily be built into the licensing process.

Re:don't help and there's more than innovation

[ceoyoyo]

I disagree. It's crucial that patents NOT be analysed per domain. It's crucial that that basic requirements for a patent be applied consistently and as objectively as possible.

The problem in the software domain is that most "innovation" is trivially easy and stupid things get patented. If you applied the non-obvious requirement consistently you'd find that only a few software patents, the ones that are actually deserving, would be allowed. You don't have an idea for a new drug in the shower and run out and patent it. New drugs are the result of a considerable investment in time and research by skilled practitioners. One-click and "on the Internet" are in-the-shower inventions. Things like marching cubes, SIFT and the FFT are not, and probably deserve patents.

The problem is, how do you do it? The likely answer is, patent peer review.

Re:don't help and there's more than innovation

[Hognoxious]

So if I invent a new type of car engine I have to set up my own factory to make it, even though I know nothing about running a factory, don't have an established network of suppliers[1], don't have the finances to build one, and don't have anywhere to put it?

Wouldn't it just be better all round if I sell or license the design to Ford or Mercedes? That way they can build it their existing plants with their existing expertise, and I can go back to my shed and invent a wi-fi sewing machine[2] or something.

[1] I know even less about mining & refining than I do about running a factory, so I was planning to buy in the raw materials. Are you OK with that, Mr Architects-should-pour-their-own-concrete?
[2] I'm not even going to bother googling for it. I know.

Re:don't help and there's more than innovation

[pr0fessor]

I have had plenty of what I thought were great ideas usually relating to applying a new advance in a different way. I have never pursued any of them, lack of time, resources, money, but someone else put all of them on the market shortly after I had the idea. It's not that they are reading my mind it's that they were great ideas that were obvious enough for it to be a race to production for multiple companies. As for software I have had those ideas as well researched them and most of the time found small companies trying to take off with the idea or open source projects implementing the idea already. I imagine that most of us have done this at some point, but these are the ideas getting patents.

Applying the non-obvious requirement would cut out a lot of the patent trolling.

Re:don't help and there's more than innovation

[Rockoon]

Another nice feature would be protecting only patents actually used in products made by the inventor or its partners

How about going back to only allowing patents on manufacturing processes, rather than fucking products?

This is real simple folks. The government providers the service of patent protection in exchange for the publication of knowledge. The extremely simple idea being that trade secrets are bad for innovation, that the public benefits when there are fewer trade secrets.

Products are not and can not be trade secrets so there is, in fact, absolutely zero benefit to the public for patents on products. Why should the government provide a service that affords zero benefit to the public? It of course should not.

Re:don't help and there's more than innovation

[Anonymous Coward]

> Another nice feature would be protecting only patents actually used in products made by the inventor or its partners

Congrats. You've just guaranteed that no small inventors can compete.

Got a novel method for an oil refining system? I hope you've got the 1 billion $$$ to build a refinery... otherwise you're a patent troll.

Why would any group in their right mind partner with you if they can just call you a troll and rip you off.

The Laffer Curve?

[Anonymous Coward]

I don't think I want to have the Laffer Curve as an ally here.

Re:The Laffer Curve?

[fuzzyfuzzyfungus]

I don't think I want to have the Laffer Curve as an ally here.

Oh, that's where your wrong; for a powerful ally it is. Just think for a moment: Do you have a problem that you can pretend to boil down to two variables that are inversely proportional in their hypothetical extreme cases? If so, just draw a curve of pretty much any shape between those points on the graph and *boom* Instant policy justification!

Re:The Laffer Curve?

[dkleinsc]

Oh, come on! These two curves are perfectly related: They're both attempting to vaguely connect 2 variables that intuitively seem like they ought to have something to do with each other without actually being a remotely accurate description of reality.

For reference, Arthur Laffer said the theoretical relationship between tax rates and government revenue per capita looks like this:
Laffer Curve
A suspicious Martin Gardner then plotted the actual relationship between tax rates and government revenue per capita, and got something that looks like this:
Neo-Laffer Curve

My basic view on the subject:
1. There's absolutely no way to measure real innovation. Some of the problems:
- Discoveries that seem unimportant can turn out to be incredibly important 15 years later, and vice versa.
- Organizations sometimes protect their discoveries by keeping them secret.
- Academics often give away the knowledge they have without patenting it to build their career. However, they can also build their career by giving away nonsense and getting away with it.
- A lot of "innovations" are just tiny variations on things that we already have and don't make much real difference (e.g. the rounded rectangle).
2. There are lots of motivations for innovation, some of which can't be bottled, organized, or turned into policies. For example, the more idealistic scientists are motivated more by the joy of discovery than by the cash they'll get.
3. That means that trying to take a theoretical approach to creating more innovation is just plain unworkable. The one thing that seems to have worked, historically speaking, is (1) put really smart people in contact with each other, (2) make sure they have plenty of cash and whatever they need to do their work, and (3) tell them they can focus on pretty much whatever they feel like working on, just make something awesome happen. That worked in Alexandria 2300 years ago, it worked in Baghdad around 1000 years ago, it worked in London around 200 years ago, it worked in Bell Labs in the last century.

Re:The Laffer Curve?

[Cenan]

This!
Spot on. And why is the Tabarrok curve not curving downwards? No justification for the shape in the article, other than "of course that is how it looks, d'uh".

Re:The Laffer Curve?

[drinkypoo]

- Organizations sometimes protect their discoveries by keeping them secret.

Yes, this is the issue that patent protection was supposed to solve, and it's a reason why SOME legislation is beneficial.

That worked in Alexandria 2300 years ago, it worked in Baghdad around 1000 years ago, it worked in London around 200 years ago, it worked in Bell Labs in the last century.

Except that's really not how it went in any of those cases. In each case the thinkers were directed by patrons.

Re:The Laffer Curve?

[dkleinsc]

In each case the thinkers were directed by patrons.

Who told Erastothenes to measure the size of the earth? Who told Jabir ibn Hayyan to perform a ridiculous number of chemistry experiments? Who told Isaac Newton to write about physics and mathematics? Who told Charles Darwin to come up with evolution? Who told Ken Thompson to write an operating system?

I'm not saying you can't give smart people some kind of direction, like they did in the Manhatten Project, but you certainly get a lot when you do what something along the lines of "Welcome! Here's your lab and office. Here are your colleagues. Here's where you can find supplies, and here's how to request supplies if we don't have what you need on hand. Now, do something."

Re:The Laffer Curve?

[ObsessiveMathsFreak]

The Laffer curve is on record as having been dreamed up on the back of a napkin by Donald Rumsfeld during lunch hour. I am not making this up.

Re:The Laffer Curve?

[dkleinsc]

No, it was dreamed up on the back of a napkin by Arthur Laffer during lunch hour, which is why it's called the "Laffer Curve".

Re:The Laffer Curve?

[khallow]

Oh, come on! These two curves are perfectly related: They're both attempting to vaguely connect 2 variables that intuitively seem like they ought to have something to do with each other without actually being a remotely accurate description of reality.

So you think there's a "vague connection" between tax rate and tax revenue? Or between innovation and regulation of that innovation? Do tell.

There's absolutely no way to measure real innovation.

You have a reason for this statement? Your supporting statements just mean that such measurement is a bit harder and less accurate than it could be. Not that innovation is somehow impossible to measure.

There are lots of motivations for innovation, some of which can't be bottled, organized, or turned into policies.

Irrelevant especially since there are substantial motivations (such as the profit motive) which can be so "bottled".

That means that trying to take a theoretical approach to creating more innovation is just plain unworkable.

Non sequitur. Nothing of your post aside from the unfounded claim that innovation can't be measured has any relevance to this statement.

Re:The Laffer Curve?

[ChrisMaple]

How do you expect to be taken seriously when you cite the notorious Martin Gardner, who provides a graph that is clearly a joke?

Re:The Laffer Curve?

[ceoyoyo]

You're talking about scientists or their pre-science equivalent - crazy people driven by the joy of discovery who can't wait to tell everyone when they figure something out. I'm one of those. Patents are essentially irrelevant to those people anyway.

Patents work when there are people who are driven by commercial motivations. Blacksmiths, iron mongers, stone masons, Microsoft.

Of course, most of the people you mention did have patrons anyway. You don't think Darwin sailed around the world looking at pretty birds on his own dime, do you? One of Isaac Newton's principle patrons was Charles Montagu, the founder of the Bank of England. Patrons didn't necessarily direct people's inquiries (although they certainly did sometimes), but they did pay for them.

Re:The Laffer Curve?

[Hognoxious]

You don't think Darwin sailed around the world looking at pretty birds on his own dime, do you?

His grandfather was Josiah Wedgwood[1], so I doubt he was short of a bob.

[1} A fact I only recently learned, along with there being only one "e" in the name.

Re:The Laffer Curve?

[Hognoxious]

You have a reason for this statement? Your supporting statements just mean that such measurement is a bit harder and less accurate than it could be. Not that innovation is somehow impossible to measure.

What do you measure it with? A ruler? Scales? Some mysterious doohicky with flashing lights and dials?

What's the unit called?

Re:The Laffer Curve?

[Hognoxious]

Nope. Rumsfeld finished his dessert and decided nobody would possibly fall for it. "You want it, you can have it!" he said.

And left Laffer with the check to boot. Known known bastard.

Re:The Laffer Curve?

[Alomex]

A suspicious Martin Gardner then plotted the actual relationship between tax rates and government revenue per capita, and got something that looks like this:
Neo-Laffer Curve

First off, that graph is a joke, not actual data. Second even if it were actual data it would prove the point of the Laffer curve as it still traces its general shape. Keep in mind that when you have so many variables you do not expect, say, the clean parabola of a body falling in the vacuum, but a squiggly line that shows the general pattern of the correlation between the two variables and that joke curve does exactly that.

There is wide agreement that something like the Laffer curve exists. There is also wide agreement among serious economists (i.e. people who look at data rather than their ideology manual to reach conclusions) that currently America seems to be sitting well to the left of the peak on the curve. Yes Virginia, the Laffer curve (as well as our gianormous deficit) both indicate that taxes in America are too low at least as far as Mr. Laffer and his curve are concerned.

Re:The Laffer Curve?

[I'm New Around Here]

Yes Virginia, the Laffer curve (as well as our gianormous deficit) both indicate that taxes in America are too low at least as far as Mr. Laffer and his curve are concerned.

Only if you think the purpose of government is to take as much real money as possible from its citizens.

I, for one, don't agree with that basis of reasoning.

Re:The Laffer Curve?

[Alomex]

Only if you think the purpose of government is to take as much real money as possible from its citizens.

Not at all. The above reasoning also holds if you don't believe on leaving your chidren and your children's children laden with a federal debt load that will be impossible to pay.

So long as we are spending more than we are collecting taxes are not high enough. For the last 16 years we spent more than we collected which means that taxes were too low. This is a fact that is beyond ideology: we did not collect enough taxes for the level of expenditures we had. Period, no two ways about it.

Sure enough for next year we do have a choice, which is ideological: can cut services and thus reduce the deficit or we can increase our tax levels up from third world levels to those of developed countries just like we did in the Clinton years and get rid of the deficit. We do have that choice, for next year. This year taxes were too low.

Re:The Laffer Curve?

[khallow]

Someone already mentioned number of patents, jokingly, though that is a measure. Or revenue or profit from new products that didn't exist X years ago.

seriously?

[mapkinase]

Since when an arbitrary curve with extremum gets a name each time it applies to a phenomenon.

Re: seriously?

[Anonymous Coward]

Just wait for him to patent & trademark it. That will show you the "point" of his curve is really a sharp stick in the eye.

Re:seriously?

[SirGarlon]

Tarrabok has provided no evidence that the curve applies to this (or any) phenomenon. He might as well have done a parabola or freaking circle for that matter.

Re:seriously?

[Anonymous Coward]

This is how economics works, didn't you know?

Re:seriously?

[ceoyoyo]

Beware things that people name after themselves.

Re:seriously?

[Hognoxious]

There's prior art concerning porridge temperature and sizes of beds.

Re:seriously?

[Hognoxious]

ceoyoyo's law: Beware things that people name after themselves.

FTFY.

Re:seriously?

[timeOday]

Too Much is too much, and Too Little is too little, whereas somewhere in between (although I can't say where) is Just Right. I've discovered this amazing formula applies not only to taxes, but one or two other things in life. Don't you see the brilliance?

While we're on names: fallacy by moderation

[Anonymous Coward]

This is low quality rhetoric.

Even more fundamental assumption

[Camael]

An even more fundamental assumption he makes is that intellectual property legislation is desirable because it encourages innovation. Why should that be a given?

Take for example, the very same example cited in TFA, Sir Issac Newton and his mathematical principles. Isaac Newton composed Principia Mathematica during 1685 and 1686, and it was published in a first edition on July 5, 1687. Copyright did not exist at that time; the very first copyright law, the Statute of Anne was enacted only 23 years later in 1710.

The point I am trying to make is that people will innovate and create, even without the protection of intellectual property laws.

On a separate point, if the whole rationale for intellectual property legislation is to promote innovation, shouldn't the focus be on protecting the rights of the actual person doing the creating, as opposed to whichever faceless entity who may own the contractual right to make use of the invention? Start by making intellectual property rights vest only in the creator, and make it non transferrable. This will force commercial entities to grant a fair share of the profits to the real innovators instead of the giving an unearned bonus to the patent troll who own a large number of the patents today. The way it is structured today, it is very clear that intellectual property legislation only benefits those with the capital to buy over the rights and not the creators themselves.

Re:Even more fundamental assumption

[mwvdlee]

The point I am trying to make is that people will innovate and create, even without the protection of intellectual property laws.

Which is why has graph, on the left edge where no intellectual property laws exists, still has a level of innovation.
The graph only states some amount of legislation facilitates the financial incentives and the assumption that financial incentives encourage innovation in general.
It also states that too much legislation actually has a negative net effect on innovation.
His graph seems to make no attempt at actually pinpointing any problems, it merely tries to explain that there is some undefined amount of legislation after which there are no further gains to be had.

Re:Even more fundamental assumption

[KiloByte]

Except that "protection", while it rewards the person in question, greatly harms dissemination of the idea. Thus, the first question to answer is whether that curve isn't strictly monotonic, which I think it is.

Re:Even more fundamental assumption

[khallow]

On a separate point, if the whole rationale for intellectual property legislation is to promote innovation, shouldn't the focus be on protecting the rights of the actual person doing the creating, as opposed to whichever faceless entity who may own the contractual right to make use of the invention?

No. because by contract the faceless entity is the one actually doing the creating. All this talk of "real innovators" ignores that they need various things such as support staff, infrastructure, and capital which are provided by the "faceless entity" in exchange for that contractual right. Without such a transferable right, then one also ends up with unresolvable issues of ownership in cases where there is no one person who is responsible for all of the creating.

Second, it should be painfully obvious to you that being able to sell one's IP rights to another strengthens the right in question. Let's consider a more general example, labor. The ability to sell our labor greatly strengthens our rights as workers and simultaneously makes us much more valuable to would-be employers. If some law was passed to make that not so (say, enforcing the Marxist opinion on labor, that it should have a non-transferable ownership to all products made by that labor), then that would greatly reduce the value of our labor (and perhaps even cause a collapse of society).

The way it is structured today, it is very clear that intellectual property legislation only benefits those with the capital to buy over the rights and not the creators themselves.

"Very clear"? Keep in mind that they have to buy over those rights. Who's selling? The creators themselves who benefit from the selling. In other words, this is a way for creators of IP to benefit by providing another means for doing so.

Re:Even more fundamental assumption

[greg1104]

Start by making intellectual property rights vest only in the creator, and make it non transferrable. This will force commercial entities to grant a fair share of the profits to the real innovators instead of the giving an unearned bonus to the patent troll who own a large number of the patents today.

Dream on. What would actually happen is a combination of two things. One, employees doing research for large companies will get paid less, on the theory that now they get directly rewarded for the things they invent. It will work just like tipping does for food service people: their base income will drop because this expected (but not guaranteed) revenue would get lumped in as part of their compensation. Of course researchers will actually make nothing that way in the average case, due to the large cost of prosecuting a patent infringement, and the result will be they are paid less overall.

Second, really vital patents will end up assigned to the company management instead of the researchers, and then those people will license them out. Don't like it? You're fired, and we'll take your name off the patent application too the minute your ass is out the door. (This has happened to me) Instead of buying the patent, in this new arrangement you'll buy a share in the guy who owns it, and that won't be the real people at the bottom doing the work anymore. Currently patent rights when you work at a large company turns into a resume builder, while the company takes the profits from that work. Restructure the profits, and you'll find the credit moves away from the real inventor too. "That's just business" says the sort of executive who will happily execute the new style of employee agreements.

Don Lancaster wrote an interesting book twenty-ish years ago called "The Incredible Secret Money Machine", and there's a chapter in there about patent protection. He makes the point that if you really are the sort of genius who can invent something brand new as a researcher, the odds you are also a savvy business man who knows how to make a buck from that idea are almost zero. The only thing I would add to that is that you can't even just make the buck--you have to keep it away from assholes with money who'd prefer to litigate it out of you too.

Re:Even more fundamental assumption

[ChrisMaple]

Your claim is refuted in TFA, citing Stradivarius. The idea is that low or lacking patent protection encourages "secret science", wherein the inventor estimates a better financial return if he never publicizes his advance. Patents, except the few that are secret for military purposes, are public record and easily available.

Re:Even more fundamental assumption

[ceoyoyo]

It doesn't. Protection encourages dissemination. With no intellectual property protection, many innovations and creations are kept as trade secrets. For every Newton you can cite, there were thousands of minstrels who didn't share their songs and blacksmiths, bakers, cobblers, stone masons, swordsmiths, etc. who didn't share their secrets. You used to have to be initiated into a guild to learn any of those things. Some of those guilds became extremely powerful because of it.

Overbearing protection discourages application, not dissemination. Since you can't use an idea you don't know about, there's a balance between the two.

Re:Even more fundamental assumption

[gtall]

Using Newton in this day and age is a bit disingenuous. His output was merely some well-thought out thoughts. Try coming up with the next drug to cure some current disease this way. You won't get past, gee, wouldn't it be neat if the disease worked like this, then I'd have a cure. It takes 100s of millions of dollars to come up with a single drug that hits the market. What's never shown are all the false starts and compounds that failed. And even then the FDA can send you back to the drawing board. And if your drug does make it to market, and you wind up killing or maiming a few people, expect to get your ass sued off.

Admittedly, the patent system is broken. In my own opinion, we need different rules for different sectors of the economy. That's going to be hard work and they cannot be fixed for 20 years because the economy evolves.

Re:Even more fundamental assumption

[ebno-10db]

Using Newton in this day and age is a bit disingenuous. His output was merely some well-thought out thoughts.

Yeah, I don't know what the big deal was about Sir Isaac. All that fame over a few intelligent musings. Big deal, we probably get 100 of those per day on Slashdot.

Re:Even more fundamental assumption

[devent]

His graph he gets out of his ass. There is no evidence that backs up the graph. I can draw a nice graph and then conclude anything.
Even the Laffer Curve is a non-model.

From Wikipedia:
"[...] the curve need not be single peaked nor symmetrical at 50%". And in fact the peak range from 32% to 70%.
So first, it can have multiple maxima, and second, studies shows that the peak range from 32% to 70%.

Re:Even more fundamental assumption

[bzipitidoo]

So some way to encourage disclosure could be beneficial. That way does NOT have to be exclusivity, monopoly. Certainly, no one should have the "right" to tell others that they can't use some idea at all. But not only do we hand out monopolies, we let monopoly holders refuse to deal, denying everyone else. They don't have to license at any price at all. One thing this does is allow obsolete and inefficient industries to continue. They acquire the patents to better methods and bury them, so that everyone has to continue using the old way.

Maybe we should set some standard pricing. We could set up a patent tax, and use the money to encourage more innovation. When someone uses a patented idea, they pay a modest, standard fee. This leads to other problems. What if you can't find the owner? Fees would be paid to one of the organizations set up for purposes of handling collection and distribution, not to patent holders. The patent holders can surface later and demand their share, which would be much less than 100% and would come from these "Patent Collections and Holdings" organizations, not from the users. What if you didn't know some trivial idea was patented? Could pay some kind of general product development tax to cover that contingency. In all cases, keep the very, very, very expensive courts and the lawyers out of this business. It is absolutely idiotic the way we use court cases to try to figure out how much an idea is worth when no one can really know, and the threat of a court case and all the extremely burdensome expenses of it to extort and blackmail those engaged in productive endeavor. We don't do this just once, we do it over and over, because we've bought so thoroughly into this notion that each idea is unique and precious, and therefore should be handled in about the most expensive way possible, case by case. Patent lawyers are laughing at us all the way to the bank. Patents are definitely not easily available.

Re:Even more fundamental assumption

[phantomfive]

An even more fundamental assumption he makes is that intellectual property legislation is desirable because it encourages innovation. Why should that be a given?

There's a book about it. If you're going to be contrarian, you should at least familiarize yourself with the standard ideas, and the evidence that supports them. The evidence that copyright encourages writers is so huge that if you don't think so, you probably haven't looked. Patents encourage inventors as well; the only question is whether they deter other inventors more (which is the topic of this story).

Re:Even more fundamental assumption

[Myopic]

Transferability is essential to the value of a patent. Yeah, nobody likes it when Intellectual Vultures buys up all the ideas in an entire industry then latches to/leaches from that industry, but to take away transferability from patents would be a cure worse than the problem. There are other ways to address the problem and my favorites are:

* Make the "obviousness" standard match the colloquial definition of "obvious" and not the legal definition. Congress can do this with legislation.
* Take away the ability to amend a patent.
* Take away the ability to extend a patent's term.
* Stipulate that patent protection only applies for patents in active use, meaning products in the marketplace.

Re:Even more fundamental assumption

[Anonymous Coward]

...actual human being doing the creating,... FTFY

Re:Even more fundamental assumption

[Weedlekin]

For every Newton you can cite, there were thousands of minstrels who didn't share their songs and blacksmiths, bakers, cobblers, stone masons, swordsmiths, etc. who didn't share their secrets. You used to have to be initiated into a guild to learn any of those things.

Most craft knowledge was lost through illiteracy, not guild protectionism. Few European countries in the Middle Ages had literacy rates in excess of 3%, so the chances of craft practices being written about were remote, because those who were literate had no notable interest in them. And while it is true that some guilds became powerful, they only existed on a local level, and their power came from letters of marque or letters patent from rulers that gave them a monopoly on the practice of a trade in a particular town or city. Not being a member of the correct guild within a jurisdiction meant that it was against the law to do whatever it was that the guild controlled, so the members of the guild grew rich because there was no competition for their services.

Re:Even more fundamental assumption

[KiloByte]

their power came from letters of marque or letters patent from rulers that gave them a monopoly on the practice of a trade

Emphasis mine. And new enterprises were routinely stopped by guilds, as any innovation threatened their profits.

Re:Even more fundamental assumption

[Anonymous Coward]

...Start by making intellectual property rights vest only in the creator, and make it non transferrable. This will force commercial entities to grant a fair share of the profits to the real innovators instead of the giving an unearned bonus to the patent troll who own a large number of the patents today. The way it is structured today, it is very clear that intellectual property legislation only benefits those with the capital to buy over the rights and not the creators themselves.

This. This should apply to both copyrights and patents, maybe with a limited period the creator(s) can license distribution and/or use to another entity, after which all rights return to the creator. And by limited I mean maybe seven years for copyrights, with the creator then able to license it out to whomever for another seven, after which it becomes public domain. I don't believe there should be software patents at all, but I could accept maybe a three year, one time patent.

Re:Even more fundamental assumption

[mwvdlee]

The graph is not intended to be an exact representation of reality, it is meant as a device to clarify the effects overbearing patent legislation has on innovation.
It is used to visualize a concept, somewhat like the well-known hype-cycle or uncanny valley graphs.

Re:Even more fundamental assumption

[Richy_T]

Minstrels who didn't share their songs? How did that work out for them?

Kicking in an open door

[golodh]

The idea of an optimum patent strength is like kicking in an open door. It's pretty obvious that somewhere between no patents at all and long-lasting patents there is an optimum in terms of societal benefits.

What's lacking unfortunately is the hard work of quantifying the societal benefits as a function on e.g. patent duration. Which incidentally is the 99% perspiration to accompany the 1% inspiration (which all of us probably has anyway).

So Tabarrok's curve is a typical no-brainer (in both senses) as far as it has been worked out.

What's needed is an analysis along the lines of the one by e.g. Rufus Pollock (see http://rufuspollock.org/papers/optimal_copyright_term.pdf ) or the one described here: http://www.ipdigit.eu/2010/09/what-is-the-optimal-copyright-length/ Of course this is where political viewpoints enter the debate, as evidenced by the views of the Von Mises institute (see http://archive.mises.org/17319/optimal-patent-and-copyright-term-length/ ) who cite people that argue that patents don't contribute at all to spurring innovation (something that anyone who has ever pitched his idea to a VC with the objective of funding a startup will reject out of hand).

It's hardly a new point of view. Perhaps mr. Tarrock ought to do a better literature search before coming up with an existing idea and grandly naming a curve after himself.

Re:Kicking in an open door

[jkflying]

people that argue that patents don't contribute at all to spurring innovation (something that anyone who has ever pitched his idea to a VC with the objective of funding a startup will reject out of hand)

I think that's exactly the point those people miss. Sure, you can come up with as much innovation as you want without any patent protections. But, if you ever want anybody to pay for your innovation to become more than just figments of your imagination, they need to know that they will be getting their money back.

Re:Kicking in an open door

[Anonymous Coward]

grandly naming a curve after himself

This wouldn't be possible if we had effective patent protection on curves.

Re:Kicking in an open door

[Anonymous Coward]

There's a refinement of your argument, which goes as follows:

Yes, it may be that less patent protection leads to greater innovation, globally. But less patent protection means smaller VCs are less likely to invest. So the increase in innovation is mostly going to come from larger established players. We can argue degrees, but it seems clear that where we are on the curve not only affects innovation in "quantity", but also how much the innovation is consolidated to a few large players.

This may or may not be a bad thing. Large companies may then need to replace those VCs and fund external inventors as VCs do now, otherwise (to put it crudely) they'd have no small innovative companies to absorb. The terms of that funding may well change for the better (or for the worse) and it may be easier (or harder) to get than it is now, especially in smaller amounts ($100k vs $10m) and for projects that may have a higher chance of failure (but a higher return if they succeed).

Re:Kicking in an open door

[trout007]

There is nothing to stop a private non-disclosure agreement between you and the VC's before you pitch your idea.

Re:Kicking in an open door

[Qzukk]

So how did computing get as big as it did prior to the 1998 State Street Bank decision?

Re:Kicking in an open door

[Kookus]

I think he was poking fun at innovation through naming the curve after himself even though it's just an application of the Laffer curve. See the parallels?

Re:Kicking in an open door

[ThosLives]

What about getting your potential customers to pay for the innovation itself, rather than some third-party VC group that generally only wants to pay for the right to earn profits off the innovation?

I think Kickstarter and the publicly-commissioned model could make the old funding models of VCs and banks and the like obsolete (for a large swath of products, at least). This reduces the middle-man effect, and ensures that the primary beneficiaries of innovation are the innovators and the consumers of the innovative products and services themselves, rather than the providers of liquidity.

Re:Kicking in an open door

[jkflying]

Absolutely, this is an option that the Internet (and high-speed communication in general) has given us which wasn't available before. But even still, these kickstarted companies will have to charge much more to their initial customers if another company can swoop in and steal all their R&D the moment they have a successful product. The moment that happens the competitor will only have to pay incremental manufacturing costs, not the R&D which accumulated during the design process, and to be competitive the original company will have to lower their prices once competition starts up. So in order to break even the original customers will need to pay high enough costs that the original run will cover all R&D. This higher costs will stifle innovation.

Re:Kicking in an open door

[ceoyoyo]

WWII.

Not that the success of early computing has much to do with the patentability of business ideas. Computers consist of nice, concrete, physical components, which were patented up the ying yang.

Re:Kicking in an open door

[ceoyoyo]

That's not the issue. The VCs don't want to put money into something that isn't patentable, because they're not as likely to get their money back out again. If you don't have a patent and can't get one, that's bad. If you don't have a patent and might not be able to get one, that's almost as bad. If you've got a patent, clearly it's patentable, and that's good.

Haven't you ever watched Dragon's Den / Shark Tank / Soul Sucking VC Rage II?

Re:Kicking in an open door

[Hognoxious]

There is nothing to stop a private non-disclosure agreement between you and the VC's before you pitch your idea.

And that would stop a third party coming along, making a knock-off of your invention, and pinching your customers (which are also the VCs') how, exactly?

Re:Kicking in an open door

[trout007]

I thought he meant that the VC's would steal the idea before it got to market.

By being the first to market you have a lead on competition.

Re:Kicking in an open door

[ThosLives]

Why would the initial customers need to be charged? Presumably the folks would get enough funding from the Kickstarter (for example) that would include enough profit for them to be happy. This way, some other company "swooping in" won't have any impact on the ability to recoup R&D.

It's a very different model, yes - but it's one where instead of risking a small amount of your own (or VCs) money for a massive payout by winning the IP lottery, you have a (probably lower) guaranteed return with zero risk, assuming you actually met the initial funding threshold.

The way I see it - if you want the IP lottery, you can't complain about patent law

Re:Kicking in an open door

[jkflying]

The most successful kickstarter campaigns have been ones where you get a 'reward' - basically, you pre-order your widget before it is designed. Those people who contribute to the kickstarter will have to bear the costs of R&D on their own, because once it is released other companies will be able to clone it. Thus, people will be less likely to contribute to kickstarters, because it will be more expensive. Thus, impeding innovation.

No answer

[fastest fascist]

But the curve doesn't provide any answers! There's no method for deciding where on the curve we are at the moment, although the author seems to have arbitrarily decided on a point.

Re:No answer

[M. Baranczak]

Worse than that: we're talking about things that can't be boiled down to two variables. At least the Laffer curve dealt with things that could easily be measured.

This Tabarrok guy is a puffed-up idiot who likes making charts, because he thinks that's what smart people do. He has a long and prosperous career ahead of him.

Re:No answer

[PhilHibbs]

And, where's the data? At least with laffer, there are some dots that you can kind of see could justify a curve if you close one eye and tilt your head. With this, it's just an arbitrary line and a cross. It is pure prejudice in the original definition of the term. I wish it were true, though, I really do, because it makes sense and would probably lead to better laws. But until I see some data, this is pure nonsense. And even with data, working out the direction of causality isn't easy.

Re:No answer

[Bill Dimm]

Not even wrong

Re:No answer

[devent]

Not only that. The curve implies relationship where there could be none.
There is no evidence at all that patent laws increase innovation. There is some evidence that too strong patent protection hamper innovation, and there is empirical evidence that no patent protection actually is better for innovation. But there is no evidence that patent protection fosters innovation.

Heh

[benjfowler]

The power of wishful thinking in action. The same thought of defective cargo-cult thinking behind the Laffer Curve, actually.

Libertarians will believe any old bunkum that'll reinforce their beliefs, and justify greed and selfishness. This Tabarrok Curve bollocks is just an extrapolation of that.

The Laffer Curve?

[Anonymous Coward]

So, what you're saying, is that Republicans will use this as theoretical justification for cutting patent protection as a response to ANY patent protection/innovation environment they encounter in the real world?

Actually, I could get behind that...

Natural monopolies for innovations

[trout007]

There are natural patent monopolies that are rewarded to innovators in the market. If you are the first on the scene with a desirable product or service the consumers may reward you with monopoly prices. But as time goes on and other producers notice those outrageous profits it will lead others to enter that market and competition will reduce those profits to around the natural interest rate of the economy.

The nice part about natural monopolies is that they adjust well to how great an innovation is. The more the consumers like it the higher the profit and the more advanced it is over the state of the art the longer it will take competitors to catch up.

There is no reason why an artificial patent monopoly should increase innovation. It just breaks what would be small continuous innovations into step increases. With all of the bloat and overhead of the patent system it should be obvious it is a net negative on production.

Re:Natural monopolies for innovations

[Anonymous Coward]

Ever tried to manufacture really clever hardware? And had some jerk not only duplicate it after manufacture, but build it in sweat shops, use cheap parts, and get it *WRONG* and thus help poison the market? Been there, done that. The patents did help get cease and desist orders to prevent people manufacturing actually dangerous hardware, based on our work. And it helped keep the income in *our* pocket, who built the machine shops and the designs and spent solid research money and engineering time trying out new ideas. In this case, I felt it helped: the rewards of the patent helped fund our next round of R&D, and that is not cheap work.

I've also worked in medical research, and come up with perhaps half a dozen patentable electronic ideas as part of the work. The NIH funded laboratory refused to pursue patents, or allow me to pursue them, because they'd be public domain and it thus "wasn't worth pursuing". Lo and behold, one of them turned up in a commercial patent portfolio. The barrier to entry is too *high* for many genuine innovators, and that's an enormous problem with the system. At roughly $10,000/patent to get competent lawyers review it and walk it through the system, I agree that in general it's a mess now. And the software patents are a *complete* abuse of the process that stifles innovation because you they're like patenting sandpaper and hammers: 3/4" threaded holes: they're randomly patenting too many *components* of manufacture.

Missing the point

[Kirth]

Well, patents might behave like that. Or they might not. Because there is actually NO data on why patents should foster innovation. People (and even scientists) just think they do, but any investigations so far turned up no positive correlation. So the verdict from 1851 still stands:

Besides the caveats,
by which one man attempts wrongly to appropriate to himself the bounty
which the State gives for invention and which properly belongs to another,
the granting patents “inflames cupidity,” excites fraud, stimulates men
to run after schemes that may enable them to levy a tax on the public,
begets disputes and quarrels betwixt inventors, provokes endless lawsuits,
bestows rewards on the wrong persons, makes men ruin themselves for the
sake of getting the privileges of a patent. Patents are like lotteries,
in which there are a few prizes and a great many blanks. Comprehensive
patents are taken out by some parties, for the purpose of stopping
inventions, or appropriating the fruits of the inventions of others,
&c. Such Consequences, more resembling the smuggling and fraud caused
by an ill-advised tax than anything else, cause a strong suspicion. that
the principle of the law from which such consequences flow cannot be just.
(The Economist, 1851)

Re:Missing the point

[phantomfive]

Because there is actually NO data on why patents should foster innovation.

Well, actually there is. There's even a whole book on it. There is absolutely no doubt that patents encourage inventors. The only question is whether they deter other inventors enough to reduce the overall level of invention.

Re:Missing the point

[Anonymous Coward]

Because there is actually NO data on why patents should foster innovation.

Well, actually there is. There's even a whole book on it. There is absolutely no doubt that patents encourage inventors. The only question is whether they deter other inventors enough to reduce the overall level of invention.

Oh, there's a book on it! Well, that settles it. I'll read all about that, just as soon as I'm done reading this book about Bigfoot's latest discoveries on water memory in the Reptiloid Institute at Zeta Reticuli.

Re:Missing the point

[Anonymous Coward]

There is absolutely no doubt that patents encourage inventors. The only question is whether they deter other inventors enough to reduce the overall level of invention.

When "other inventors" can number in the billions and patents completely block those other inventors re-inventing the same thing it is not at all clear that "patents encourage inventors." Just the first one.

Metric for 'strength'?

[Anonymous Coward]

The article plots the benefit from patents versus their strength.

What attribute of the patent system can we legislate to control it's strength.
      Perhaps the length of time a patent gives one exclusive use of the technology.
      Perhaps a limit on the license terms.
      Perhaps the scope of the patent to apply past a specific implementation.

It does seem that the optimal 'streangth' is different for different industries.
        Pharma has long and costly development cycles, maybe needs stronger patents.
            (Although the current economic incentives for pharma don't seen to result in the right drugs being developed.)
        S/W more the reverse. (Although I wonder what the cycle time was for the iphone?)

Economics is not a physical science

[devent]

Please stop assuming that economics is a physical science like physics. About the Laffer curve from Wikipedia:

This is the curve as drawn by Arthur Laffer,[3] however, the curve need not be single peaked nor symmetrical at 50%.

and further:

The New Palgrave Dictionary of Economics reports that a comparison of academic studies yields a range of revenue maximizing rates that centers around 70%.[2] Economist Paul Pecorino presented a model in 1995 that predicted the peak of the Laffer curve occurred at tax rates around 65%.[12] A 1996 study by Y. Hsing of the United States economy between 1959 and 1991 placed the revenue-maximizing average federal tax rate between 32.67% and 35.21%.[13] A 1981 paper published in the Journal of Political Economy presented a model integrating empirical data that indicated that the point of maximum tax revenue in Sweden in the 1970s would have been 70%.[14] A recent paper by Trabandt and Uhlig of the NBER presented a model that predicted that the US and most European economies are on the left of the Laffer curve (in other words, that raising taxes would raise further revenue).[11]

So what curve is the Laffer curve? It can have multiple maxima, it can be asymmetric, the peak can range between 32% and 70%. If physical science were based on such curves the Moon landing would miss the Moon and fly to the Sun, and probably miss the Sun and fly to Jupiter.

Economics is a social science with a lot of psychology mixed in. The assumption that every individual in the economy works with maximum efficiency and have only his greed in mind is a nice hypothesis but is based on nothing. So is the Laffer curve based on nothing which explains the random properties of the curve.

The problem is then that the politicians are using this social and psychology based science and try to apply some magic formula and try to make public politics based on it. The results are mismanagement and at the worse case suffering of real people. Like the austerity politics introduced by the USA and which leads to economic meltdown of whole Europe.

Coming back to patents. There are no empirical studies at all in the field of patents, copyright and other "I.P." The politics just assume that more protection = more innovation, but that is not based on anything but lobby work from the parties that have personal gains in increasing monopoly rights. See Mickey Mouse Extension Act and all other copyright extension acts.

Why don't we have such lobbing for ever increasing extension of patents? Because patents are a two-way street whereas copyright is only a one-way street. Companies use patents that have expired as well as do new innovations, and the new innovations are often rooted in older patents. So there is as much interest in lower the patent protection as there is interests in increase protection. But with copyright there is only one big lobby, the copyright lobby. There are no lobby for the public good, for the common people. So you can see copyright and patent protection have nothing to do whether or not it increase innovation, but with the lobbing effort of the stakeholders.

The only real empirical study that I know of is "The patent game. See http://www.youtube.com/watch?v=q1Pi4w8ddA8

And they come with quite surprising conclusions.

"pure common system" means no patent protection.

1. patents increase innovations?

Average unique innovations is lower in the "pure patent system", and is higher in the "pure common system"
Productivity, aka economic activity, the "pure common system" is almost double the "pure patent system"
Per capita wealth, the total amount of dollars generated in the system: "pure common system" is almost 4 times that of the "pure patent system".

Conclusion: "Despite received wisdom, commons spur innovation better then do patents"

Re:Economics is not a physical science

[trout007]

Economics should be classified similar to Logic and Math. They are constructs of the human mind that are great tools to model the way the world works. But like any model you have to know the limitations.

Re:Economics is not a physical science

[dargaud]

Economics should be classified similar to Logic and Math. They are constructs of the human mind that are great tools to model the way the world works. But like any model you have to know the limitations.

Not really, because the knowledge of the 'rules' of economics changes their effect ('beating the system'). It should be more akin to quantum mechanics, with wavefunctions observing other wavefunctions.

Re:Economics is not a physical science

[ebno-10db]

Economics should be classified similar to Logic and Math.

No. Economics is supposed to be a science, and hence valid only to the extent that it jibes w/ empirical data. Math is a whole different animal, since everything flows from pure reason applied to a set of self-consistent axioms (logic is a branch of math, the watered down rhetorical version of logic notwithstanding). There are no axioms in science. What are called first principles are basic and well demonstrated theories, but always subject to empirical invalidation.

One of the biggest criticisms aimed at many economists is that they try to treat economics as though it were math, using their pet assumptions in lieu of axioms. It's garbage. Aside from not being how science works, many of their "axioms" have even been demonstrated to be false, yet they continue with them anyway. It's a circle jerk, with a set of "first principles" that can be chosen to come to any ideologically based conclusion you want.

Re:Economics is not a physical science

[the eric conspiracy]

> So what curve is the Laffer curve? It can have multiple maxima, it can be asymmetric, the peak can range between 32% and 70%

Just recognition there there is a curve is a good starting point. The shape depends on a lot of factors in yet unknown ways which makes policy debates interesting.

However the endpoints are known. One point is at zero taxes, which of course means no revenues. The other point is 100% taxes, which is what Genghis Khan experimented with when he razed conquered cities and exterminated their populations. Again no revenues.

Eventually Genghis Khan got an economic adviser who explained the concept of taxation to him, so stopping this practice.

That there should be a similar curve for patents seems reasonable. After all the Industrial Revolution didn't really take off until after the Brits adopted a patent system. And I think most people feel things have gone too far now.

So lets have the policy debates.

Re:Economics is not a physical science

[ChrisMaple]

Most people who look at the Laffer curve don't think about it very deeply.

For instance, it relates tax rate to government income, but many people act as if it relates tax rate to societal benefit.

For another thing, it's clear that the curve will be different for different time spans and for how long in advance the rate is known. Consider Clinton's unconstitutional ex post facto income tax rate increase: by increasing taxes on money already earned, there was negligible possibility for people for people to change their actions to reduce their taxes, so there was little Laffer effect possible. On the other hand, changes in capital gains taxes have resulted in well-known changes in tax revenue. For taxes in general which are in effect for decades, the peak can be expected to move to the left as time increases due to positive feedback.

Re:Economics is not a physical science

[Rockoon]

For instance, it relates tax rate to government income, but many people act as if it relates tax rate to societal benefit.

Don't forget the moral dilemma inherent in it.

Now to start off with, I believe that the Laffer curve does apply in the best way that it can within the noisy system we call the economy.

But suppose they could in fact figure out the Laffer curve to a great deal of confidence. Now then, is it moral for the government to use this knowledge to maximizing its revenue? Remember that the government does it via its monopoly on prison cells and men with guns.

I believe that the only moral choice within tax policy is a tax policy that maximizes the growth rate of GDP. Think about how quickly our budget problems would be solved if we were to lock spending at current levels (adjusted for inflation) and found a tax policy that brought the growth rate of our GDP back up to an annual 7%. It wouldnt take but a decade or so to balance the national budget and then spending could be allowed to rise in step with GDP, and 50 years down that road paying off the debt that did accumulate before the balance would be trivial.

Some would argue that an annual GDP growth rate of 7% is not sustainable, however some countries have sustained higher average rates for many decades. Hell, at one time even we did it, or we wouldnt be the king of the hill that we are today.

The obstacle in front of this line of reasoning are the people that want to increase spending now, the people that simply cannot wait until we can trivially afford it.

Re:Economics is not a physical science

[Richy_T]

Yes. Economics should be classified similar to astrology. Except astrology tends to have less of an agenda.

Re:Economics is not a physical science

[devent]

Oh super we have two points. From two point you can imagine infinite forms of graphs. Which is what Wikipedia basically says.

> That there should be a similar curve for patents seems reasonable.

That is an opinion. I tent to disagree.

> After all the Industrial Revolution didn't really take off until after the Brits adopted a patent system.

Where did you get your history from?
The Statute of Monopolies was passed on 25 May 1624 in the UK. The Industrial Revolution happen between 1760 to some time between 1820 and 1840. Patents were recognized in the UK for 100 years before the Industrial Revolution.

Re:Economics is not a physical science

[Solandri]

So what curve is the Laffer curve? It can have multiple maxima, it can be asymmetric, the peak can range between 32% and 70%. If physical science were based on such curves the Moon landing would miss the Moon and fly to the Sun, and probably miss the Sun and fly to Jupiter.

Hate to break it to you, but that's how physical sciences work two. The multiple minima and maxima in gravitational potential curves are called Lagrange points. L1, L2, and L3 are unstable (maxima), L4 and L5 are stable (minima) for certain ratios of masses. Asymmetry in the curves (in the reference frame you're moving in) are what allow gravitational slingshots. In fact, there's a new field of orbital mechanics called weak stability boundary trajectories based on this, which can be used to get from point A to point B in space using less energy than if you went straight from A to B. And no it's not just theory - it's already been used on several spacecraft.

Simple fixes that would go a long way:

[Qzukk]

1. Eliminate the Doctrine of Equivalents
2. Especially with regards to "after-invented technology"

What 1 means is that if you come up with a way to do the same thing, even if you do it a completely different way, they can still sue you in court and you get to spend a million dollars proving that not only did you not infringe on their patent, you came nowhere near infringing on their patent.

What 2 means is that if someone invents something, and later someone else comes along and invents a better way to do something in the patent, it's still infringement because of fucked up court rulings that basically amount to "boo hoo the poor widdle inventors couldn't foresee this invention and shouldn't be penalized because they didn't think of it." Fuck that, if they wanted patent protection for it, they should have invented it themselves.

Inoovation ?

[Anonymous Coward]

Since when can we talk about innovation ? Real innovation ?

Oh, erm, groundbreaking?

[Ihlosi]

Let's see:

No patent protection: Everyone tries to keep their innovations secret. Innovations get lost because they're kept secret and are forgotten at some point. Inventors are kept from inventing things because it's hard to profit from their inventions, either because they're immediately copied or because of all the effort to keep them secret.

Tons of patent protection: Great, invent something once and you and your descendants are set for life (just like copyright works today). Invention is stifled because inventors have no motivation to keep inventing after their first breakthrough - they're too busy throwing money out the window.

So the sensible level of patent protection needs to be between those two extremes. Allow inventors to profit from the publication of their inventions, but keep the protection short enough to motivate an ongoing process of new inventions.

Re:Oh, erm, groundbreaking?

[Compuser]

Or the right way: fund invention process publicly (like e.g. the university research system) and then require that all publicly funded work be fully disclosed to the public. Also require that every good made available for sale (no matter who and how invented it) be fully described (including schematics, source code, and operating principle) in freely publicly available document.

This way you have a stream of inventions on-going and no issues with losing the ideas to secrecy. Further, every good on the market is a commodity from the moment of availability and the consumer gets the benefit of price competition right away.

Re:Oh, erm, groundbreaking?

[Ihlosi]

This way you have a stream of inventions on-going and no issues with losing the ideas to secrecy.

How does this system prevent abuse, e.g. by people receiving funds without ever planning to invent anything?

Or, if inventions are funded retroactively, how does this system determine the financial worth of an invention?

How does this system reward alternative approaches that might lead to even more inventions? If you can use any patent, you'll never have to strain your brain to devise a way to get around existing patents or come up with something that's better than existing patents.

what about an public defender system for patents t

[Joe_Dragon]

what about an public defender system for patents that can be used by innovations and company's who can't pay the costs of attorneys. that can help from people being bulled by BIG company's who can / have staff attorneys that can use the court system to shut people down.

Both Extremes Are Undesirable?

[Digital Vomit]

Slashdot likes to argue about intellectual property and patents, and it's clear that both extremes are undesirable

It is? I'm pretty sure the world would be a better place if people were not allowed to own ideas or expressions of ideas.

Re:Both Extremes Are Undesirable?

[the eric conspiracy]

If you have spent time working in industrial research and development you would realize that the lack of patent protection for real innovations would be detrimental to investment in technology.

Companies don't like investing large sums of money in anything and getting nothing out of it.

Re:Both Extremes Are Undesirable?

[king neckbeard]

You are ignoring that there are other ways to get a return on investment than patents. You can break the research down into small pieces where a first mover advantage is more than enough. In cases where this isn't possible, you can build an industry consortium or seek government grants. This has the added benefit of greater standardization within an industry

Forget patents

[Anonymous Coward]

How about the incredibly painful to the eye "Vs" in the title? "vs", or "vs.", please.

Re:Forget patents

[OptimalCynic]

My original submission had either "vs." or "versus". Damn editors...

Laffer curve is fiction

[gr8_phk]

The end points of the laffer curve are supposed to be "obvious". At zero taxes there is no revenue, and at 100 % taxes there is also no revenue due to destruction of the economy. However, there is another argument (mine) that at 100 % taxes you simply have 100 % government control over the economy. This would mean a complete welfare state - every penny comes from the government and as soon as you spend it every penny goes back to them. Of course this means they control who gets money and presumably for what purpose. Yes, it's a shit system but it shows that there is NOT a drop to zero on the laffer curve. I suspect this guys curve for patent protection is ignoring a highly undesirable option at the far right end as well.

Re:Laffer curve is fiction

[Anonymous Coward]

Except NEXT YEAR, no one will want to work (much), since the government takes everything. It's not a welfare state, It's communism. Communist states exist by: deferring maintenance, not replacing worn out assets, and stealing from others nations. Eventually everything breaks and the economy collapses. And if I work for the government, I would have to pay 100% withholding each pay period to pay the next period's wages. This leaves me nothing to spend with. I need "productives" to work so I can leach off their money.

Re:Laffer curve is fiction

[Solandri]

The endpoints don't have to be zero in the Laffer curve. As long as there's at least one point between the two endpoints which is higher than the endpoints, the Laffer curve holds. You concede that when you say:

Yes, it's a shit system

about 100% taxation. So you agree there's a maximum (or maxima) between the two endpoints, and the Laffer curve holds. The Laffer curve is just a specific case of the Mean Value Theorem from calculus.

Re:Laffer curve is fiction

[gr8_phk]

So you agree there's a maximum (or maxima) between the two endpoints, and the Laffer curve holds.

Nope. Once you take the 100% taxation revenue away from zero you lose the ability to argue that it's not the highest point on the curve. Honestly I think it's not the highest point on the curve, but that is no longer obvious which is what Laffer relied on to make his point that raising taxes too far will actually reduce revenue. Certainly if you change the measure to "revenue as a share of GDP" there is no doubt that higher taxes will increase the measure all the way to 100 percent.

How about this?

[RogueWarrior65]

I have a problem with companies that create no concrete products and exist solely as patent trolls. So why not ban that practice? Why can't you make a patent contingent upon the applicant actually producing a product that uses that IP?

Re:How about this?

[SecurityTheatre]

To be fair, this does completely eliminate the concept of "inventor".

Researchers, for example, may have some important invention, but who don't have the capital or experience to build a complex system that uses this feature they invented.

Is it wrong for them to try to license their invention?

While i agree with you about trolls, I just thought I would bring up a counter to your question.

Re:How about this?

[RogueWarrior65]

Point taken. But the premise of requiring the patent to be used is still valid. Maybe you say "The patent must be employed in non-legal activity within 2 years from date of issue in order to remain valid." IMHO, the point of a patent is to protect the inventor trying to create a viable product against someone copying your thing and making money off it. But if you do nothing but sit on it for a few years, that flies in the face of the spirit of a patent. Time was that you had to submit a physical model to the patent office along with your patent. But who would go to that much trouble if they didn't intend on making a product out of it. From my own experience, if you can't turn an idea into a salable product within 2 years, it isn't ever going to work.

You have to do something because we already went down the road of First to File which IMHO opens up a number 10 can of legal worms if someone happens to see what you're working on and files a patent on it the next day before you're close to being ready to file.

Avoiding bad outcomes

[packrat0x]

One one end of the spectrum is no patents or copyrights. All innovation is either public domain or trade secrets. With trade secrets, people still innovate, but they keep as much knowledge as possible away from the minds of others. This deprives citizens of shared knowledge. The other end of the spectrum is longer terms for patents and copyrights. As the terms lengthen (beyond a generation, beyond life expectancy) this too deprives citizens of shared knowledge.

Re:Avoiding bad outcomes

[Richy_T]

It may "deprive citizens of shared knowledge" but it also allows independent paths to that knowledge, something which is precluded by the current system and may, in some circumstances prematurely preclude superior approaches to a problem.

handwaving .vs. bloviating, yawn.

[Medievalist]

Wake me up when there's empirical data used to plot actual numbers instead of wavy lines drawn on napkins.

Try this, for example: take the US population data and patent office data from 1640 to the present, and plot the per-capita curves for the numbers of patents granted, patents applied for, patents in force. Make the horizontal axis of your graph measure time in years, with dated marks for all changes in patent law. Scale your vertical axis, which will be used for the per capita patent values, so that you can also plot US population on the same graph, giving you four lines total.

Plotting real data may let you see interesting correlations between patent law and innovation, but unscaled curves drawn on a whim just show if there's any ink in your pen or not.

Unfounded assertion

[Richy_T]

and it's clear that both extremes are undesirable

Not at all. There are arguments from both sides that do not agree with this. At the very least, extreme lack of so-called "intellectual property" control might hamper advancement by some factor but music, literature, inventions occurred before we had these government granter monopolies. In the other direction, complete control is not so much undesirable but rather impossible and is, in fact, nonsense.

Re:Unfounded assertion

[OptimalCynic]

As someone up-thread pointed out, one reason that no protection isn't desirable is because we can lose the innovation. The bargain for patents is public disclosure of the innovation in return for protection. Without any patent protection at all, people keep things secret and if they die with enciphered diaries, we lose what they discovered. We also lose the pyramid effect where other people build on their work, which directly affects the pace of innovation.

Re:Unfounded assertion

[Richy_T]

Typically, if somethings important, people will come to it via parallel paths. Just look at the telephone and television for example. Marconi wasn't the only one playing with radio waves. There's dispute as to which was the first computer. Patents may indeed lock out several minor differences that could produce quite superior results.

Re:Unfounded assertion

[Richy_T]

Point being, it's not "clear" at all. There are arguments to be made and using the word "clear" is obvious bullshit.

Re:Unfounded assertion

[king neckbeard]

If someone can keep something secret for the rest of their life, they sure as hell wouldn't get a patent. It makes zero sense to argue that patents get rid of secrets, because patents are not mandatory, outside of a few provisions in which there are public funds spent. However, we could just as easily require the same disclosure with no patent in those situations.http://yro.slashdot.org/story/13/06/25/0036225/patents-vs-innovation---the-tabarrok-curve#

To the people who are saying "all patents are bad"

[harvestsun]

You are incredibly naive. First of all, the use of the word "bad" needs a context, so I'll assume we're referring to "bad" with respect to the overall prosperity of a society. In the case of software, it's arguable whether patents are doing any good. But it should be obvious that in many cases outside the realm of software, innovative products need funding to become realized for the good of society. And that funding will be proportional to the profitability of the product (at least as long as we have a capitalist economy!). Some level of patents are necessary to ensure that profitability; companies will not invest in something if their competition can simply copy it and steal their profit.

Do you disagree with that statement? Do you believe that, in the absence of patent law, a company would invest in something simply out of goodwill? Then you are naive! Individuals are willing to do this (with platforms such as Kickstarter), but companies exist for the sole purpose of pleasing their shareholders, and most of the time, those shareholders want to make money.

But too MUCH patent law, and the overhead costs start to outweigh the benefits. That's the curve in the article. When we start patenting crap like "phone with curved corners", it's not protecting anyone, it's just draining money into legal expenses.

I feel like, in this area, Slashdot exists in a bubble devoid of basic business logic. It reminds me of the communities where people argue that anarchy is the best form of government (please don't tell me that happens here too). Anyway, it's getting kind of old.

The problem with his point of view...

[blahplusplus]

... is that history contradicts that human beings are capable of "just the right amount".

http://en.wikipedia.org/wiki/Copyright_extension

http://en.wikipedia.org/wiki/File:Copyright_term.svg

Given the above chart what kind of credibility do moderates have, seriously? They have been saying the same bullshit for over 100 years already and as we can see from the chart 'moderation' never occured. The power of the law was just abused and endlessly expanded. What we consider normal today is already too much abused. Consider videogames for instance, why can't customers repair software and get access to old PC game source code for instance after a decade? Why should a bunch of private dickheads be able to confiscate historical and cultural works in the name of profit through abuse of the law?

FS2 Open / SCP
http://www.youtube.com/watch?v=xhAR8rWPluQ

Things like the above Freespace 2 SCP (open source) are totally dependent no the 'good will' and luck of developer/publishers combination, it's total bullshit to just allow these works to lay fallow when there are legions of amateurs/fans/pro's that would pick up the slack to learn form and innovate, build on these past works, which is currently impossible for most works in the current climate.

What has come to be seen as "normal" is already deeply corrupt and anyone who says otherwise is not intelligent enough, ethical enough and historically well read enough to even begin to take part in the discussion.

Copyright law has only continually expanded since it's implementation. He's historically illiterate, the people who want to abolish it are correct. The idea that innovation would stop without enforced monopoly is bullshit, we'd just be forced to find other ways to solve the problem which is a good thing. History has proven that human beings will just expand their desire for power indefinitely and can wait out 'moderates' like himself. He doesn't understand that people with money will just outlast you until you are weak/exhausted with all the $ they have. Corporations can outlast your for an eternity, moderate people just refuse to understand this because they are stupid.

The argument for 'moderation' was how copyright was endlessly expanded. Human beings are too stupid and ever expanding the definition of what is considered 'moderate' there is no fixed definition of what is moderate or not moderate. Which is why we have the giant clusterfuck we have today, i.e. once you allow dumb humans in the door to get their way, the endless greedy fucks come in and ruin what could be sane and just laws. The best law is no law at all at this point from point of view, the fact that we have works that some curious person would love to enhance/work with/build upon and is just sitting collecting dust under some corporate bullshit law is the insanity.

Human beings were inventors and innovators long before monopoly laws were a gleam in anyone's eyes.

Some extremes are desirable

[Anonymous Coward]

Slashdot likes to argue about intellectual property and patents, and it's clear that both extremes are undesirable

No it's not.

Software patents are simply nonsense. It's math, and it's human expression -- both of which make no sense to patent.

That fact that software patents even exist is purely the result of ignorance plus greed.

The extreme view on software patents is absolutely desirable.

I can draw random graphs too.

[Anonymous Coward]

What is the point of this.
I can draw the same graph, put the dot of 'you are here' at the other side and say "hey, we need more patent protections."
This would have actually been useful if he had found a way to measure the impact of patents on innovation.
Or even just a way to measure innovation.

Red flag

[cundare]

"So, we’ve constructed the patent system: people have a 17 year exclusive right to such public goods. . . ."

OK, false alarm. For a second there, I thought we were going to hear something intelligent from an expert on U.S. patent law. But this guy is apparently just another self-important Internet Wiley E. Coyote with an opinion, who can't be bothered to learn basic facts about his subject matter. It's the old "Rush Limbaugh" Rule: You don't have to have any idea what you're talking about; you just have to sound like you know more than your audience. And this is Slashdot, after all!

It would have been interesting, too, had this guy actually had some credibility, (and, further useful if else somebody figures out how to build a real graph that does what this one purports to), to provide a scaling reference. For example, the AIA certainly weakened patent protection in significant ways. For comparison, where would the pre-AIA patent system fall on this graph relative to the current system? Such a before-and-after would certainly help readers put the curve's seemingly arbitrary scales into perspective.