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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."
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Economists Argue Patent System Should Be Abolished

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  • by fascismforthepeople ( 2805977 ) <> on Wednesday February 06, 2013 @10:40AM (#42808091) Homepage Journal

    The big corps will buy the senators and reps to make sure it NEVER happens.

    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. A patent prevents a large company from making a cheap clone of an existing product and selling it to unsuspecting consumers at a profit. The reason why companies are buying up each others' patents is only to protect themselves; they would just as soon see the patent system go away entirely. It has brought about an arms race between companies, where none of the participants actually want to partake in the race - however they can't afford to abandon it either unless they know everyone else will do the same. And the only way to know that is to have everyone forced to do it.

  • Ch-ch-changes (Score:4, Interesting)

    by Dachannien ( 617929 ) on Wednesday February 06, 2013 @11:39AM (#42808781)

    Incremental changes might be a better idea. Two such changes, for starters:

    Loser Pays. In Europe, when a patentee files an infringement lawsuit and loses, they are liable for the defendant's court costs and attorney's fees. In the US, unless the suit was frivolous (and this is a high bar to meet), each party pays its own costs.

    Compulsory Licensing. Consumers lose when a patentee uses patents to exclude other innovation from the marketplace. Rather than allowing a patentee to exclude others from producing an infringing product, allow infringers to continue paying a reasonable licensing fee. Essentially FRAND, but covering all patents.

  • by Maximum Prophet ( 716608 ) on Wednesday February 06, 2013 @11:46AM (#42808903)

    Examples, please.

    Philo T. Farnsworth. []

    Basically invented television, then RCA under Sarnoff stole it. I don't think he ever went bankrupt, but his laboratory equipment was repossessed. All and all, he spent much more time in the courtroom than any inventor should.

  • Re:Sheer rubbish. (Score:5, Interesting)

    by itsdapead ( 734413 ) on Wednesday February 06, 2013 @12:05PM (#42809145)

    The patent system promotes innovation. Who is going to invest years of money and time to develope new technologies if they are going to be copied by everyone else without remuneration?

    Who is going to invest years of money and time to develop new technologies when, as soon as they try and sell them, they're hit with a dozen crippling expensive lawsuits from patent trolls and large monopolies who have gamed the system to secure shedloads of vague, over-broad patents?

    The patent system is a nice idea that just plain doesn't work - see debacles like the Apple/Samsung war (...and lets not take sides - that is a debacle from every direction with stupid over-broad patents on both sides and a floundering jury asked to make an impossible decision). It relies on a distinction between "obvious" and "non-obvious" that can't be satisfactorily defined and is such a specialised area of law that only megacorps can afford decent representation. Anybody with the necessary polymath genius credentials to be a patent officer is going to be so bored by the job that they just end up sitting and daydreaming about riding beams of light...

    If patents are taken away then maybe something is needed to replace them. As far as software is concerned that already exists - it's called 'copyright'. In the case of medicine, all civilised countries have a system of regulation and approval for new treatments, which could easily incorporate a limited period of exclusivity.

    As for patents and innovation - do you like using the Internet? That was built on open source and open protocols. Do you think that would exist in anything like its current form if all the protocols had been patented by big monopolies back in the 1980s? Enjoy using your AT&T(r) Compuserve(r) Email(tm) 2013(tm) system. Not Microsoft or Apple, note, they wouldn't have existed if Bill and the Steves had been nuked by IBM patent lawyers as soon as they tried to distribute computer software.

    Funny that, all those big software companies that didn't need patents when they were exploding out of their parents garages but, now they're huge multinationals with skyscrapers and dominant market positions, suddenly see them as essential to 'innovation'.

  • by Tokolosh ( 1256448 ) on Wednesday February 06, 2013 @12:20PM (#42809341)

    Article I, Section 8, Clause 8 of the United States Constitution, known as the Copyright Clause, empowers the United States Congress:

    "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."

    The fact that the Constitution explicitly carves out this Congressional power, implies that there is no inherent right to intellectual "property", equivalent to ownership of tangible property. The aim is to "promote progress..." for the nation as a whole. Any legislation should be calibrated to maximize this benefit to society. This is not the same as maximizing the benefits to the authors and inventors. So the definition of "limited times" should be optimized to this objective of maximum benefit to the nation. Too short, and there is insufficient incentive. Too long, and the benefit to society is lost. I believe current patent and copyright durations are much too long and some objective rigor is needed to find the optimum times. Note that one-size-fits-all is not appropriate, and that different durations may be appropriate for different technologies and industries.

    Also, the definition of "writings and discoveries" should be much more narrowly defined. Round or square corners on a phone is no benefit to anyone. Reprinting Shakespeare does not entitle you to copyright.

  • by hairyfeet ( 841228 ) <bassbeast1968@gm[ ].com ['ail' in gap]> on Wednesday February 06, 2013 @02:05PM (#42810815) Journal

    You simply have to look at history between 1867-1920, also known as "the age of the robber barons". You see during that period the government REALLY didn't give a shit, no regulations on food or water quality, no regulations on what you dumped and where, no regulations on anything. Hell you could throw 6 year olds to work in mines while you snorted heroin off the ass of an underage hooker, nobody gave a shit. It was Ayn rand's version of paradise.

    So what happened? Simple a handful of the richest men met at places like "hunting clubs" and worked out a nice little plan to split the country among themselves. One owned the railroads, one owned shipping, one owned the cattle industry, one owned the oil industry...get the picture? They gave each other sweetheart deals while using their respective monopolies to insure they stayed the sole games in town. Somebody hit an oil field and not want to sell to Standard oil for a pittance? Well I hope you can move that oil on horseback, as you ain't using the railroads or ships to move it! And so on and so on.

    This is why I have to laugh at libertarians, because just like communism and fascism it had a chance and was shown to be wanting. If you don't believe me, please, read up about the trusts and the age of the robber barons, it was the most open market in the entire history of the USA and it showed quite clearly that when you give those at the top an unfettered market to play in they WILL run riot. But in the end that is the problem with most "isms" like libertarianism, fascism, communism, in that for the concept to work those at the top can't be douchebags but if its one thing thousands of years of history has taught us is those at the top will ALWAYS BE douchebags, that's just how that works.

  • by nblender ( 741424 ) on Wednesday February 06, 2013 @02:11PM (#42810891)

    You are wrong. Anyone can copy your patented work and market it if they have a larger legal budget than you do.

    I (and my business partner at the time) came up with a unique way to solve a problem. We patented it, and began selling product. We sold several thousand instances of said product and a big US company (we were a Canadian company) came along and duplicated our product, and began selling their copy for less than our parts cost. We had our lawyer send a nastygram, including our patent for reference. We received a reply from their legal department that said "We acknowledge receipt of your letter dated "... Our lawyer said that was lawyer speak for "come and get us, if you dare.". The best we could do was prevent them from exporting their product into Canada but since 95% of our customers were US based, we were screwed and eventually went out of business. It was estimated that it would take 5-10 years to fight and probably on the order of $1M.

  • by TFAFalcon ( 1839122 ) on Wednesday February 06, 2013 @02:51PM (#42811487)

    But a market isn't the same as an ecosystem. In an ecosystem, the predator doesn't want to exterminate all other species, he just wants to eat them. And the equilibrium arises due to the fact that anything that causes it to break down goes extinct - a predator that reproduced too fast and hunted too well would soon find itself without prey and die out.

    In a completely free market a company doesn't seek to destroy every other company. Just those that compete with it. So you'd end up with an equilibrium where a number of big companies divided up the market, destroying any new company that tried to compete. They might also decide to go after each other, from time to time, but that would just lead to even bigger companies.

    Patents started out as a way to encourage the sharing of knowledge. Instead of each company hoarding the results of their research, patents enabled them to share knowledge without having to give it away - sure the person they share it with can share it further, but the original company will still be compensated whenever someone uses the knowledge to make something,
    But now patents are a way of stopping others from thinking things up. They no longer protect solutions, but problems.

Mathemeticians stand on each other's shoulders while computer scientists stand on each other's toes. -- Richard Hamming