Are patents/IP good for innovation?

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Cradarc
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Are patents/IP good for innovation?

Postby Cradarc » Wed Feb 14, 2018 8:21 pm UTC

I'm curious about your opinions regarding patents and intellectual property.

Clearly, they are intended to encourage innovation by allowing people/companies to disclose their ideas without (or with limited) fear of being scooped by some some competing party. However, I get the feeling that people nowadays are too eager to file patents, even when they have little intent of using it themselves. In other words, they are using patents as a way to make money/prestige rather than to protect their future work on the concept. An extreme example of this is a patent troll, but I think many others, even in academia, share the same type of mentality.

In the context of today's society, are patents (or intellectual property, in general) beneficial or detrimental to technological progress?
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cphite
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Re: Are patents/IP good for innovation?

Postby cphite » Wed Feb 14, 2018 10:11 pm UTC

Cradarc wrote:I'm curious about your opinions regarding patents and intellectual property.

Clearly, they are intended to encourage innovation by allowing people/companies to disclose their ideas without (or with limited) fear of being scooped by some some competing party.


Correct. But they also benefit society because they allow other people so see the idea and what it involves, and therefore (in theory) make more informed decisions about whether or not the idea is worth buying, should be legal, etc. The general idea being that you can be open about your ideas without having to worry about them being stolen out from under you.

However, I get the feeling that people nowadays are too eager to file patents, even when they have little intent of using it themselves. In other words, they are using patents as a way to make money/prestige rather than to protect their future work on the concept. An extreme example of this is a patent troll, but I think many others, even in academia, share the same type of mentality.


Patent trolls are a problem, and should be dealt with just like normal trolls - with fire. Kidding. Sort of.

If you have an idea for a new Widget and you haven't quite decided how you're going to make it, or market it, or for whatever other reason aren't quite ready to make use of it yet; you ought to be able to protect that idea for some reasonable amount of time. Other people don't have an automatic right to your Widget, no matter how cool or even useful it might be. There are certainly examples of cases where people take this a little too far, but all in all it tends to work itself out. People don't generally just sit on ideas that are worth acting upon.

That being said, while I don't know exactly how the details would work, I wouldn't be opposed to some kind of appeal process for patents where it can be shown conclusively they are not being utilized.

In the context of today's society, are patents (or intellectual property, in general) beneficial or detrimental to technological progress?


Overall I would say they're a good thing. There are abuses, yes, but the general idea is that people who put the time and resources into innovating ought to have protection against someone taking what they've come up with for free. Innovation is a form of investment; and investment is driven by the expectation of a return.

Leovan
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Re: Are patents/IP good for innovation?

Postby Leovan » Thu Feb 15, 2018 6:13 am UTC

What used to happen is one craftsman would have an innovation but have to protect it by obfuscation etc. They would be so efficient at that nobody ever knew how it was done and when they died, their innovation died with them. Patents share the idea with the world and attempt to preserve knowledge as much as protect it.

Patents also speed up innovation because you can use them to get ideas for your next project. Patents often contain good ideas that you can use without violating the patent, or the patent is expired by the time your own product hits the market.
Companies have a time limit by which time they have to have a new product out if they want to keep their market position. Otherwise the market will be flooded by copycats. Instead of resting on their laurels, the investments in R&D have to keep on coming. Especially in the pharmaceutical market, this is useful.

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LaserGuy
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Re: Are patents/IP good for innovation?

Postby LaserGuy » Thu Feb 15, 2018 7:52 am UTC

Generally, yes, they're necessary to some degree or other, most commonly for the reason that it is much cheaper and easier to copy an existing idea rather than the doing the R&D necessary to come up with something new. The most extreme example is in pharmaceuticals, where developing, testing, and bringing a new drug to market, could run in the billions of dollars, but the final formulation, the active ingredient that actually makes the thing work, might cost a penny per dose. So somebody has to pay a billion dollars in development costs, only to have a competitor recreate and market the generic for negligible cost. And because we're talking about chemistry rather than a widget, the copy can be perfect... there is no difference in terms of effectiveness between Tylenol and generic acetaminophen. So in this particular case, you basically only have two options: You can have the public cover essentially 100% of R&D costs and allow companies to profit off of that for nothing, or you allow them to cover their own R&D, but give them a patent.

There's a related scenario where an innovator develops some novel product, but if they don't have the infrastructure in place to scale it, it's trivial for somebody established in the market to simply copy it and use their existing advantage to get all the credit. If you design a unique improvement on, I don't know, a hammer, then there's a good chance that a company that already makes hammers could, moments after seeing your design, have their own teams recreate it and mass market it before you had the chance to do anything with it.

Patents also, unlike copyright, have a fairly limited term where they can be exploited (typically something like 10-14 years), so even though it gives the original inventor a head start, it doesn't prevent it from becoming more universally adopted in the long term if it really is a good idea. You can certainly argue about how much time is appropriate, but having a patent with a duration of fifty years is probably in the "likely harmful" stage, whereas having it with a duration of one year is in the "likely useless" stage.

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Re: Are patents/IP good for innovation?

Postby slinches » Thu Feb 15, 2018 5:21 pm UTC

My opinion is that with the laws as they currently stand, patents and trademarks are a net positive and copyright is a net negative. And copyright could be a good thing as well, if the term wasn't so long. With today's laws, anyone who would care about saving a work would be dead long before copyright expired. So tons of creative works are rotting away on dead media formats in some basement rather than being shared, archived and preserved to feed the creativity of the next generation. I think the ideal range is likely 15-30 years (similar to patents). Long enough to span the bulk of the economic life of the work, but not so long that it's completely forgotten about and lost before it becomes public domain.

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Re: Are patents/IP good for innovation?

Postby jewish_scientist » Thu Feb 15, 2018 6:32 pm UTC

I think that the core of most problems in the current patent system is how long patents last. If the length of a patent was shortened enough, patent trolls would not exist. Also, the fanfiction is a perfectly valid form of literature that is outlawed under the current system. This video traces the development of the King Arther canon and makes a joke every now and then about how later writers were just writing fanfiction, but I think that they are actually onto something.

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slinches
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Re: Are patents/IP good for innovation?

Postby slinches » Thu Feb 15, 2018 7:15 pm UTC

Patents can't really be shortened without losing their usefulness, though. At least for mechanical devices, the time from patent application to market can be measured in decades in some industries. Unless you want all large industrial companies to stop disclosing any inventions, I wouldn't shorten the terms.

However, the problem with trolls would be more directly addressed by limiting transfer rights of IP. Just require that the original author/assignee cannot sell their ownership and any license sold is transparent and non-exclusive (anyone can purchase for the same price), then acting as a middle-man would no longer be profitable.

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Re: Are patents/IP good for innovation?

Postby elasto » Thu Feb 15, 2018 8:43 pm UTC

slinches wrote:However, the problem with trolls would be more directly addressed by limiting transfer rights of IP. Just require that the original author/assignee cannot sell their ownership and any license sold is transparent and non-exclusive (anyone can purchase for the same price), then acting as a middle-man would no longer be profitable.

Seems like it'd be tricky to lock that down.

If IP's are not transferable you simply have a company register the IP (by 'employing' the creator if necessary) then simply sell the company rather than selling the IP.

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Re: Are patents/IP good for innovation?

Postby Sizik » Thu Feb 15, 2018 9:37 pm UTC

slinches wrote:Patents can't really be shortened without losing their usefulness, though. At least for mechanical devices, the time from patent application to market can be measured in decades in some industries. Unless you want all large industrial companies to stop disclosing any inventions, I wouldn't shorten the terms.


20 years is waaaaay too long for software patents though. 5 years or less would be much more reasonable.
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slinches
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Re: Are patents/IP good for innovation?

Postby slinches » Thu Feb 15, 2018 10:58 pm UTC

elasto wrote:Seems like it'd be tricky to lock that down.

If IP's are not transferable you simply have a company register the IP (by 'employing' the creator if necessary) then simply sell the company rather than selling the IP.

If they register that IP with a separate company, they'd need to buy a license to use the IP. Then there's a price set for it that any competitor can pay and selling the company really doesn't do any good.


Sizik wrote:20 years is waaaaay too long for software patents though. 5 years or less would be much more reasonable.

True, the ideal term for different forms of IP is likely not the same. Not sure how to resolve that without it getting really complicated, though.

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Re: Are patents/IP good for innovation?

Postby jewish_scientist » Fri Feb 16, 2018 7:51 pm UTC

slinches wrote:Patents can't really be shortened without losing their usefulness, though.

Think about this. If patents were arbitrarily short, it would not be profitable for someone to become an inventor and start a business based on their inventions. If patents were arbitrarily long, an inventor would only need to make one invention in their whole lives, assuming the total income from that invention equals or exceeds what they believe is an acceptable level of income. At both extremes, inventors will be making practically no inventions. That means that if there is a point in between these two where inventors must make 2 inventions, then there must be a point in between these extremes where the amount of inventions / inventor is at a maximum. THAT point, that is how long we should make patents last.

P.S. Patents in different industries have different lengths.

elasto
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Re: Are patents/IP good for innovation?

Postby elasto » Fri Feb 16, 2018 9:19 pm UTC

slinches wrote:If they register that IP with a separate company, they'd need to buy a license to use the IP. Then there's a price set for it that any competitor can pay


Why does selling a licence to one company mean other companies can buy the same licence? Why couldn't they sell an exclusive licence? Why couldn't they add conditions that the preferred company meets but others wouldn't, just like not just anyone can open a McDonalds franchise?

If none of that works, why couldn't company A set up company B, pay a billion dollars for the licence, which company B pays straight back to company A as share dividends (or some tax-efficient equivalent)? Then, in your terms, there is a price set for the IP but it's not anything any competitor would pay.

(Finally, if that doesn't work, they could just set up company B overseas. As with most rules of this kind, unless they are enforced globally there are always loopholes.)

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Re: Are patents/IP good for innovation?

Postby slinches » Fri Feb 16, 2018 10:51 pm UTC

elasto wrote:Why does selling a licence to one company mean other companies can buy the same licence? Why couldn't they sell an exclusive licence? Why couldn't they add conditions that the preferred company meets but others wouldn't, just like not just anyone can open a McDonalds franchise?

Because that post was in the context of this:
slinches wrote:However, the problem with trolls would be more directly addressed by limiting transfer rights of IP. Just require that the original author/assignee cannot sell their ownership and any license sold is transparent and non-exclusive (anyone can purchase for the same price), then acting as a middle-man would no longer be profitable.


elasto wrote:If none of that works, why couldn't company A set up company B, pay a billion dollars for the licence, which company B pays straight back to company A as share dividends (or some tax-efficient equivalent)? Then, in your terms, there is a price set for the IP but it's not anything any competitor would pay.

They could, but who would buy that company if it doesn't produce anything on its own and the price to license its IP is so high that no one else would pay for it?

elasto wrote:(Finally, if that doesn't work, they could just set up company B overseas. As with most rules of this kind, unless they are enforced globally there are always loopholes.)

That problem exists no matter what we do with IP laws.


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