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lakehermit
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Rookie
re: Letter to the editor: Protect the patent system
lakehermit   5/4/2009 3:15:10 PM
NO RATINGS
An interesting comment on the Intel's activity in the patent reform arena: http://www.patenthawk.com/blog/2009/04/lunatic.html

Stephan Kinsella
User Rank
Rookie
re: Letter to the editor: Protect the patent system
Stephan Kinsella   4/29/2009 5:01:29 PM
NO RATINGS
Mr. Cooper writes:
"Your articles in the April 20 edition of EE Times ["Dealing with Mad Patent Disease"] which portray the U.S. patent system as broken and worse seem terribly biased. I wonder where you are getting your information. Surely you don't have any direct experience with patents, e.g. using a patent to protect a money making invention, or you would be able to formulate a more balanced viewpoint."

I'd like to respectfully disagree with some of Mr. Cooper's contentions. As a preliminary matter, I disagree that only those with a lot of experience in patenting are entitled to have an opinion, or ought to be accused of being "biased" if they dissent on the mainstream viewpoint on IP rights. that said, I am a practicing, registered patent attorney, with BSEE and MSEE degrees. I've represented many clients and obtained hundreds of issued patents over the last 15 or so years.
Mr. Cooper writes,
"The patent system could use some tweaking but it is far from the "mad patent disease" you describe. The U.S. needs a stronger patent system, not weaker .... The only way that innovation, and its industry, can be protected is with intellectual property, i.e. patents. To weaken the patent system at the urging and benefit of a few large multinational corporations (most of which have been found guilty in court of stealing the property of others) runs the risk of destroying that one remaining thriving U.S. industry."

There are a few problematic assumptions and chains of reasoning here. I agree that innovation is good, but Mr. Cooper's assumption that "The only way that innovation, and its industry, can be protected is with intellectual property, i.e. patents" is unwarranted. There are of course other ways--exclusion methods; first-to-market; trade secrets, and so on. And there are other methods discussed extensively in Boldrin and Levine's Against Intellectual Monopoly. No one can seriously argue there would be no innovation without patents. At most, you can argue there is more innovation under a patent system.
But the patent system obviously has costs. So the argument that we need a patent system to encourage more innovation assumes that the value of the extra innovation induced by a patent system is greater than the costs of the patent system. But as I note in my article "There's No Such Thing as a Free Patent" (links below to this and others mentioned here), no one has ever been able to show this. In fact, most studies and analyses I'm aware of conclude that if anything, the cost of the patent system is greater than the value of any extra, marginal innovation stimulated. Some analyses even conclude that there is less innovation overall under a patent sytem, than there would be without one--so that added to the undeniable cost of the patent system is the cost of the lost innovation.
If Mr. Cooper is aware of information no one else seems to have--what is the net value of the patent system (i.e., what is the value of the extra innovation induced by the patent system, minus any lost innovation, minus other costs of the patent system), I and others would love to see this data.
Mr. Cooper implies that those opposed to IP rights are biased, or not "balanced," or are mainly "a few large multinational corporations (most of which have been found guilty in court of stealing the property of others)." But surely individuals and even companies are entitled to their viewpoint. It can easily be argued that those who can profit from the patent monopoly granted to them by the state are also biased, and are willing to argue in favor of the patent monopoly system--that they do not really care whether the system is a net benefit to the economy overall--that they are happy to have it exist so long as they benefit from it, even if this is at the expense of overall innovation and growth. Certainly, the deafening silence of advocates of IP to provide any data that supports their contention that patents indeed spur innovation worth more than the cost of the system, casts suspicion on their sincerity. (And is it really that surprising that patent attorneys are almost uniformly pro-IP rights?)
Mr. Cooper's aside that most of the "large multinational corporations" complaining about patents "have been found guilty in court of stealing the property of others" begs the question of whether IP is, or should be, recognized as a legitimate form of property rights, by calling it "stealing" of "property". The question is whether patterns of information are, or ought to be ownable as property. In my view, not only does the patent system cause overall economic damage in the billions of dollars, but patent and copyright are not legitimate forms of property rights--in fact, patent and copyright are contrary to, and undermine, private property rights. As I argue in my book Against Intellectual Property, a free market relies on private property rights being respected, which means scarce resources are owned by the original homesteader of the property, or that person's descendant in title. But to grant a patent to someone who finds a new way to use their own property, is to grant that person some rights in how other people use their own property--this is redistribution from owners, to outsiders. As an example, if the state granted me the right to prevent Mr. Cooper from using his car to transport passengers--if I had this type of veto right--then I could demand he pay me a royalty for my permission to let him carry passengers. I would be a partial owner of his car--where before, he was the full owner, now he is only a part owner. This would be a type of theft of Mr. Cooper's rights in his car, a transfer from him to me. This is what the patent system does, and it is ethically unjustified and contrary to the sanctity of private property rights.
It is understandable that technology companies take advantage of the state's patent system; they have virtually no choice, if only for defensive reasons. And it is understandable they become used to this model, and cannot imagine how their business model would change if the state did not intervene in the market with IP law. But this does not mean IP law is justified.
For those interested in further reading on this (and for links to some of the sources mentioned above), I recommend:
1. The superb new book Against Intellectual Monopoly, by economists Boldrin and Levine.
2. Jeff Tucker's excellent commentaries on Boldrin and Levine.
3. Some of my material, many on Mises.org. Such as: my little book, Against Intellectual Property, my article "There's No Such Thing as a Free Patent," and my presentation, "Rethinking IP Completely," all available here.
4. Mike Masnick's frequent and excellent anti-IP commentary on Techdirt.
There are many other excellent anti-IP pieces, but this is a good starting point.

Stephan Kinsella
User Rank
Rookie
re: Letter to the editor: Protect the patent system
Stephan Kinsella   4/29/2009 4:59:44 PM
NO RATINGS
Mr. Cooper writes: "Your articles in the April 20 edition of EE Times ["Dealing with Mad Patent Disease"] which portray the U.S. patent system as broken and worse seem terribly biased. I wonder where you are getting your information. Surely you don't have any direct experience with patents, e.g. using a patent to protect a money making invention, or you would be able to formulate a more balanced viewpoint." I'd like to respectfully disagree with some of Mr. Cooper's contentions. As a preliminary matter, I disagree that only those with a lot of experience in patenting are entitled to have an opinion, or ought to be accused of being "biased" if they dissent on the mainstream viewpoint on IP rights. that said, I am a practicing, registered patent attorney, with BSEE and MSEE degrees. I've represented many clients and obtained hundreds of issued patents over the last 15 or so years. Mr. Cooper writes, "The patent system could use some tweaking but it is far from the "mad patent disease" you describe. The U.S. needs a stronger patent system, not weaker .... The only way that innovation, and its industry, can be protected is with intellectual property, i.e. patents. To weaken the patent system at the urging and benefit of a few large multinational corporations (most of which have been found guilty in court of stealing the property of others) runs the risk of destroying that one remaining thriving U.S. industry." There are a few problematic assumptions and chains of reasoning here. I agree that innovation is good, but Mr. Cooper's assumption that "The only way that innovation, and its industry, can be protected is with intellectual property, i.e. patents" is unwarranted. There are of course other ways--exclusion methods; first-to-market; trade secrets, and so on. And there are other methods discussed extensively in Boldrin and Levine's Against Intellectual Monopoly. No one can seriously argue there would be no innovation without patents. At most, you can argue there is more innovation under a patent system. But the patent system obviously has costs. So the argument that we need a patent system to encourage more innovation assumes that the value of the extra innovation induced by a patent system is greater than the costs of the patent system. But as I note in my article "There's No Such Thing as a Free Patent" (links below to this and others mentioned here), no one has ever been able to show this. In fact, most studies and analyses I'm aware of conclude that if anything, the cost of the patent system is greater than the value of any extra, marginal innovation stimulated. Some analyses even conclude that there is less innovation overall under a patent sytem, than there would be without one--so that added to the undeniable cost of the patent system is the cost of the lost innovation. If Mr. Cooper is aware of information no one else seems to have--what is the net value of the patent system (i.e., what is the value of the extra innovation induced by the patent system, minus any lost innovation, minus other costs of the patent system), I and others would love to see this data. Mr. Cooper implies that those opposed to IP rights are biased, or not "balanced," or are mainly "a few large multinational corporations (most of which have been found guilty in court of stealing the property of others)." But surely individuals and even companies are entitled to their viewpoint. It can easily be argued that those who can profit from the patent monopoly granted to them by the state are also biased, and are willing to argue in favor of the patent monopoly system--that they do not really care whether the system is a net benefit to the economy overall--that they are happy to have it exist so long as they benefit from it, even if this is at the expense of overall innovation and growth. Certainly, the deafening silence of advocates of IP to provide any data that supports their contention that patents indeed spur innovation worth more than the cost of the system, casts suspicion on their sincerity. (And is it really that surprising that patent attorneys are almost uniformly pro-IP rights?) Mr. Cooper's aside that most of the "large multinational corporations" complaining about patents "have been found guilty in court of stealing the property of others" begs the question of whether IP is, or should be, recognized as a legitimate form of property rights, by calling it "stealing" of "property". The question is whether patterns of information are, or ought to be ownable as property. In my view, not only does the patent system cause overall economic damage in the billions of dollars, but patent and copyright are not legitimate forms of property rights--in fact, patent and copyright are contrary to, and undermine, private property rights. As I argue in my book Against Intellectual Property, a free market relies on private property rights being respected, which means scarce resources are owned by the original homesteader of the property, or that person's descendant in title. But to grant a patent to someone who finds a new way to use their own property, is to grant that person some rights in how other people use their own property--this is redistribution from owners, to outsiders. As an example, if the state granted me the right to prevent Mr. Cooper from using his car to transport passengers--if I had this type of veto right--then I could demand he pay me a royalty for my permission to let him carry passengers. I would be a partial owner of his car--where before, he was the full owner, now he is only a part owner. This would be a type of theft of Mr. Cooper's rights in his car, a transfer from him to me. This is what the patent system does, and it is ethically unjustified and contrary to the sanctity of private property rights. It is understandable that technology companies take advantage of the state's patent system; they have virtually no choice, if only for defensive reasons. And it is understandable they become used to this model, and cannot imagine how their business model would change if the state did not intervene in the market with IP law. But this does not mean IP law is justified. For those interested in further reading on this (and for links to some of the sources mentioned above), I recommend:
1. The superb new book Against Intellectual Monopoly, by economists Boldrin and Levine.
2. Jeff Tucker's excellent commentaries on Boldrin and Levine.
3. Some of my material, many on Mises.org. Such as: my little book, Against Intellectual Property, my article "There's No Such Thing as a Free Patent," and my presentation, "Rethinking IP Completely," all available here.
4. Mike Masnick's frequent and excellent anti-IP commentary on Techdirt.
There are many other excellent anti-IP pieces, but this is a good starting point.

betajet
User Rank
CEO
re: Letter to the editor: Protect the patent system
betajet   4/29/2009 3:37:48 PM
NO RATINGS
Mr. Cooper: Obviously you and I had different history teachers. The Japanese had to rebuild their industry from scratch after WWII, with lots of help from the US government. Japanese steel-makers used this as an opportunity to install modern, efficient steel-making processes in the which gave them an advantage over the US steel industry which was still using 19th Century processes. I don't know why the US industry refused to upgrade their processes until much later. The Japanese car industry benefited from the 1973 Oil Crisis since they had small, reliable, fuel-efficient cars that the US auto industry refused to produce for the domestic market (and still do). After the Oil Crisis, the Japanese car industry kept their customers through superior reliability using techniques taught them by W. Edwards Deming, the American father of Total Quality Management. According to my history teachers, Deming tried to convince US auto makers that higher quality saves money in the long run, but they refused to listen until the Japanese irrevocably gained market share. Yes, the USA is adept at coming up with innovations, but most large companies are still more interested in this quarter's profits than the long-term gains resulting from true innovation. Innovation is regarded as too expensive and risky. I have heard it said that when the US Congress increases fuel economy standards, the Japanese hire engineers to solve the problem and US companies hire lawyers and lobbyists to fight the new rules. As Sean Connery said in "Rising Sun": "Their way is better." References: http://www.answers.com/topic/nippon-steel-corporation, http://en.wikipedia.org/wiki/W._Edwards_Deming.



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