Economists Argue Patent System Should Be Abolished 376
nukem996 writes "Two economists at the St. Louis Federal Reserve have published a paper arguing that the American patent system should be abolished. The paper recognizes the harm the current patent system has caused not only to the technology sector but the health sector as well."
Been saying that... (Score:5, Insightful)
For years, but ain;t gonna happen. The big corps will buy the senators and reps to make sure it NEVER happens.
Watch... (Score:2, Insightful)
They're careers will be systematically destroyed.
Not to mention what they say, even if perfect in its documentation and rationality, will just be ignored.
Economists that don't toe the corporate line of thinking get booted.
Furthering class warfare (Score:5, Insightful)
And when you accelerate the acquisition of power, you encourage oppression in the name of profit. This leads directly to fascism for the people.
Re:Been saying that... (Score:2, Insightful)
There are industries where a severely limited patent system makes sense. Any industry that's too tightly regulated by government, so that barrier to entry is impossible, like pharma or telecom. Of course you could solve the same problem by pealing back the red tape as well. Competition in the free and open market is the only thing that truly breeds innovation. No free market, no competition. It's easy.
Re:Furthering class warfare (Score:5, Insightful)
This might be true in a society where the corporate elite can use the court system as a weapon.
Fix Patents (Score:5, Insightful)
I have my own ideas about patents, I think there should be categories, rather than all patents being valid for the same term.
Patent duration should be related to the amount of R&D needed to develop and turn into a meaningful product, so if we absolutely have to have software patents, then they should have a duration of 1 or maybe 2 years - but a pharmacutical patent with a long development process and high costs can have the full existing term.
This would maintain the purpose of patents to allow the "inventor" to control their product within a reasonable time, but it would not stifle innovation where other new developments are trapped by a massive maze of existing patents in a fast moving field.
-- Pete.
Re:Furthering class warfare (Score:5, Insightful)
At one time it did that, now it does not.
Go pantent something as the little guy, they big boys will then patent every use of your thing they can think of or tie you up in court until you are bankrupt.
Oh Give Me a Break (Score:5, Insightful)
They're careers will be systematically destroyed.
This was published in September of 2012 [stlouisfed.org] by the St. Louis Fed, when can I expect to see their careers systematically destroyed? Does that take longer than five months to walk someone out of such a highly visible position? Even Richard Stallman cited this [slashdot.org] when he responded to one of my questions.
Not to mention what they say, even if perfect in its documentation and rationality, will just be ignored.
After reading much of the report, I don't think it is "perfect in its documentation and rationality." While it brings up great examples of serious problems with the US Patent System (like software patents, the poster child for all that is wrong with patents), it does not examine examples where the patent system has worked. It seems to pretend like patents have never done anyone any good ever. Nor does it discuss how we would have to revert to trade secrets and lying awake at night wondering if one of our employees had just brought a bunch of documents over to our competitor for an undisclosed sum -- which employee would you charge with corporate espionage? All that fun stuff is completely ignored so I would consider the report lacking in thoroughness. They also spend a lot of time discrediting studies that claimed patents are beneficial which is all well and good. It doesn't follow that patents are completely bad, however.
Economists that don't toe the corporate line of thinking get booted.
I don't think that's true. I think it's true that economists who attack corporations for the sake of attacking corporations get booted ... but that's just because they let personal biases get in the way of research. It's odd, Blodrin and Levine actually cite a bunch of cases where the big corporations got bit in the ass (like the Motorola, Samsung, Apple, etc cell phone patent fiascos). So, you know, I think that patent reform (and maybe abolition) is actually starting to look beneficial for many corporations that want to expand even further.
Re:Furthering class warfare (Score:2, Insightful)
The patent system, for as much as it gets bad press, offers the little guy (independent inventor) a chance to get ahead. With no patents, anyone with money can make a clone of an existing product and do whatever they want with it, including selling their clone as the original item.
That's the theory, yes.
The practice is that the wealthy just use the patent system as a weapon against small guys to achieve the exact same thing.
Re:you have that backwards (Score:5, Insightful)
I think a middle ground is the more prudent course of action. I actually wonder if this suggestion was put out there as a starting point to begin negotiations. I'd certainly love to see us do away with software (since that's copyright IMHO), and business practice patents. But, I'm willing to bet that there are still plenty of justifiable reasons to keep patents for new inventions. I'm also sure we can reasonably debate how long these patents should be good for, and also address the processes of attaining one.
I don't think the *only* reason companies are buying up other patents are for protection. I think we all know some cases where they're being bought up for the purpose of going on the offensive. There are also many patents out there that are even serving their original intent too, I'm sure.
Re:Been saying that... (Score:3, Insightful)
There are industries where a severely limited patent system makes sense. Any industry that's too tightly regulated by government, so that barrier to entry is impossible, like pharma or telecom. Of course you could solve the same problem by pealing back the red tape as well. Competition in the free and open market is the only thing that truly breeds innovation. No free market, no competition. It's easy.
You live in a deluded fantasy that free market and zero regulation means honest brokers and business ventures. Grow up and get passed Friedman's fallacy along with Ayn Rand.
Re:you have that backwards (Score:2, Insightful)
I'll take some of whatever you're smoking. Patent law is overwhelmingly used for offensive strategies, as opposed to defensive strategies (as you claim). And the vast majority of invocations of patent law are performed by mega-corporations, rather than the little guy (as you claim).
It is almost too ironic that you told the guy above you that he "has it backwards".
Re:Been saying that...Wrong, Simply Wrong. (Score:5, Insightful)
Wrong, wrong, wrong. You are obviously not in the medical business.
No CAT Scan, MRI or Cancer drugs would have been invented without patents to give the inventors time to make their years of investment back by a period of exclusivity. Regulation by the government (mostly for safety & efficacy) is just another business expense, like fuel, that all players pay. The price to enter the game.
I have spent over $1m with my partner over 5 years to develop a product and get it FDA cleared for sale with 3 patents. We simply would not have started this project without knowing we could patent what we do, because otherwise J&J and P&G would both copy our product starting the day we released it publicly.
There would then be almost no way to make our investment back at that point, without patents.
P&G and J&J can compete with us, but they can't do it by just copying. They will have to invent something even better that gets the results a different way. That is progress. Mankind has progressed this way at the fastest rate in the history of man, and virtually all of it in the last 200 years. Patents drive innovation. Ordinary citizens benefit from the release from drudgery as a result. It only took about a century to relieve about 80% of the population involved in hard physical farm work down to 5% of the population in farm work, supported mostly by farm machinery inventions.
I am sick of the lack of knowledge (lack in the education system) of how mankind has advanced and how the business process aids new products when people can spend years of hard work and spending of large sums of money with no guarantee at all of success, but knowing that if they can get limited time protection for their work they can then have a chance to profit.
Re:Been saying that... (Score:3, Insightful)
Please explain how free market is a fallacy.
In a completely free market, the big fish will eat the small, and the player with the deepest pockets can own it and become a monopoly.
With a monopoly, the market forces cease to have meaning.
And this is indeed what we see - the biggest become bigger, and the small have no chance of competing, only of being bought and closed down so the monopolies and oligopolies can be maintained.
Re:Been saying that... (Score:5, Insightful)
Re:Been saying that...Wrong, Simply Wrong. (Score:3, Insightful)
> No CAT Scan, MRI or Cancer drugs would have been invented without patents
IMHO research should be done on tax payers money, using global co-operation. Once the research is done, private companies can manufacture products. This would have several advantages.
Re:Been saying that...Wrong, Simply Wrong. (Score:5, Insightful)
Re:you have that backwards (Score:4, Insightful)
You have that exactly backwards. Large corporations would prefer to have no patent system at all. To a large corporation a patent is a barrier to profit.
In the software world - maybe. My world is pharmaceuticals and patents are needed, and should maybe even be extended in some cases. It isn't like the software world where companies buy patents for the purposes of some weird legal warfare. For pharma, patents represent a way for them to recoup the R&D costs made on a drug. Patents need to exist for pharma since there is such strict testing before it can be used on the general public. All this information has to be handed over to the government, where it doesn't remain a secret. No patents would kill new drug development in a heartbeat.
Re:Been saying that... (Score:5, Insightful)
In an unregulated market, being honest means that your product/service will appear "crappy" when it is compared to something that it represented dishonestly. The biggest scam artist rises to the top.
Re:Been saying that...Wrong, Simply Wrong. (Score:5, Insightful)
Interesting, I do hope you realize that what you are reading, and what you using as a medium to communicate did come from the government. Please check your facts... Thank-you and don't let the door hit you on the way out.
Re:Been saying that... (Score:3, Insightful)
Although it is difficult to distinguish a free market from a free society, some try to make that distinction. For instance, the mere existence of government could be labeled as the removal or granting of freedom to some. It is all perspective. However, there is a attempt to separate free market from freedom. For instance, a sales or income tax, although it has an effect on the market, should not be viewed as infringement on the term free market. As long as the taxes are uniform and show no bias to certain markets.
You are wrong in that it never existed, but it sure hasn't in quite some time. I'm pretty sure people 10,000 years ago were pretty "free market".
You have an issue with today's system with respect to corporations. The concept of having millions of outstanding shares in a single corporation is a rather new idea. It as similar to communism (except everyone owns an EQUAL share in the corporation) as free market capitalism. Instead it is government managed "public" company bullcrap. The exchanges are mandated by a government agency that has no ownership or incentive to help the business to do what they can to drive up their stock price. And if dismantling a company and selling it of in chunks is more valuable, why would you not want it to happen? Those chunks will apparently be more productive and employ just as many or more people.
Meanwhile, large private companies (rare) are much more capable at looking long term. But as usual, the more hands in the pot, the more screwed up and corrupt the corporation becomes. We need to stop vilifying large and public companies and start attacking the reason why the formed in the first place. And it wasn't the "free market".
Re:Been saying that... (Score:5, Insightful)
We *think* we know what happens when there is a free market, but just like in the oceans, a natural equilibrium actually occurs where smaller species can coexist with larger ones, even predatory larger species. What we think is a free market has never been a free market. Big fish do eat small fish, but big fish can be brought down by smaller predators or parasites using the gigantic blind spots that big fish tend to develop as they evolve.
The problem with our current situation is that we have the government intervening to provide what is in effect, corporate welfare, as well as a safe, zoo-like environment. The big companies may naturally chafe at the confinement, but it also has the effect of the government keeping them from having to compete with other businesses.
Even the regulation itself breeds larger enterprises, as the regulations increase the need for economies of scale due to the need for each entity to have compliance and reporting units. Since each entity needs to report and comply, whether it is large or small, it is a greater cost for small companies to comply. And in the lucrative and incredibly regulated government sector, you can see this effect with huge companies growing up to service (and influence) the government.
The patents are also important because without patents, small companies can actually compete by taking the ideas of the larger companies and improving on them, or altering some aspect of service or marketing to differentiate. Since the company is small, it can only have strong effects locally, but due to their local focus, they could out-compete the larger enterprise in a more specific niche if the smaller entity can focus on some aspect that the larger entity cannot or will not deal with.
Patents, of course, allow the larger companies to use their corps of lawyers to enforce their business, instead of having to innovate and compete in their market segment against more agile smaller enterprises. And, of course, the ultimate result of patents like we have is the creation of companies that *only* enforce patents, and do nothing else, becoming full-fledged parasites.
Obviously, even without patents and regulation there are benefits to large businesses, but large businesses become calcified and unwieldy and their lower ability to compete on all fronts opens niches that small companies can grow in. As long as regulation, compliance and patent portfolios are there, large businesses can close those niches without actually having to compete in those niches.
Re:Been saying that...Wrong, Simply Wrong. (Score:5, Insightful)
It's a different operating space ; pharma patents the molecule. Medicines only have a few components. Patents are narrow - a molecule is a molecule and can't be interpreted as anything else.
Software has a multiplicity of components, it's virtually impossible to write any new software without infringing existing patents, since the ones we have are ridiculously broad. The scenario you describe is easy to encounter in the software world.
The best way to avoid this issue, as far as I can tell, is base your company value on brand and service rather than patented technology. As you say - a big patent holder can almost certainly torpedo any new software project if they want to. But they can't torpedo your brand or reputation in the same way. Which is probably one of the reasons for the whole Software As A Service fad - if you hide it behind a firewall and don't show the innards off, you're less likely to get sued for patented tech in those innards.
Better still, stop granting software patents. What constitutes "obvious to an ordinary practitioner" changes with such rapidity that the 20 year lifespan is just mental.
Re:Been saying that... (Score:4, Insightful)
Monopolies are rarely good things, but I have to wonder just how stable and bulletproof they are in reality. I think there is this Orwellian idea that the monopolies will take over and then history will end with their boot on our face forever.
However, as long as the government is not acting as the muscle for them, monopolies seem like they have a great deal of potential instabilities and vulnerabilities. Their pricing power and control of verticals and horizontal chains is daunting, but that sort of size tends to breed inefficiencies and creates blind spots. As long as there was no artificial legal barrier to entry, I think enterprising small companies could outmaneuver a monopoly. They would have to be smart and capable, of course, but it could be done.
Microsoft was actually declared a monopoly, but due to the extended battle, even that had little practical effect on their business or market share. So you have a bona-fide monopoly which easily survived anti-trust proceedings, which is now stumbling all over the place, even though the government didn't even touch them in any sort of effective manner. Even with its considerable market share and size, it is being outmaneuvered or left behind in every market that is not the console or the PC, which is to say, most new markets. That mechanic is why dominance is not something that you can ever take for granted.
Re:Been saying that...Wrong, Simply Wrong. (Score:5, Insightful)
Wrong, wrong, wrong. You are obviously not in the medical business.
No CAT Scan, MRI or Cancer drugs would have been invented without patents to give the inventors time to make their years of investment back by a period of exclusivity.
Dont forget aqueduct, sanitation, roads, irrigation, medicine, education, health! Would never happen without patents.
Oh, did I mention Shakespeare would not write anything without Strong Copyrights?
Re:Been saying that... (Score:5, Insightful)
Re:Been saying that...Wrong, Simply Wrong. (Score:4, Insightful)
p>No CAT Scan, MRI or Cancer drugs would have been invented without patents to give the inventors time to make their years of investment back by a period of exclusivity.
Really? Most fundamental medical advances are created in academia, mostly with public money. Many companies just take the relatively small step to a commercial product. William H. Oldendorf would have done his pioneering work on the CAT scan, whether there was a patent system or not. Indeed, looking at his wikipedia biography, he worked in public institutions for most of his life.
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