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Patents Vs Innovation - the Tabarrok Curve 210

Posted by Unknown Lamer
from the wrong-side dept.
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."
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Patents Vs Innovation - the Tabarrok Curve

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  • by ciaran_o_riordan (662132) on Tuesday June 25, 2013 @05:24AM (#44098863) Homepage

    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 [swpat.org]
    * http://en.swpat.org/wiki/More_than_innovation [swpat.org]

    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 [swpat.org]

  • by ikaruga (2725453) on Tuesday June 25, 2013 @05:58AM (#44098941)
    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:The Laffer Curve? (Score:5, Interesting)

    by dkleinsc (563838) on Tuesday June 25, 2013 @07:06AM (#44099085) Homepage

    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 [cynicalnation.com]
    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 [gapersblock.com]

    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.

  • by khallow (566160) on Tuesday June 25, 2013 @08:01AM (#44099265)

    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.

  • by Miamicanes (730264) on Tuesday June 25, 2013 @09:24AM (#44099795)

    > 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

  • by devent (1627873) on Tuesday June 25, 2013 @09:24AM (#44099805) Homepage

    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 [slashdot.org].
    See http://www.youtube.com/watch?v=q1Pi4w8ddA8 [youtube.com]
    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"

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