Your use of tabloidism wasn't much cop. The truth is that using qualitative evidence is exceedingly difficult. Whilst it can be used to try and ex post understand outcome, using it to create a coherent policy that doesn't create perverse incentives isn't at all straight forward The impact on competition is unknown. We only have elements of static limitations, but no means to derive a dynamic understanding of firm creation and evolution. Your use of monopoly also has the stench of hypocritical comment given your regular use of creative destruction
Not trying to claim otherwise, only that an alternative exists that, in my opinion, is superior to the current system. Nothing more. It's always a comparison to the alternatives, so you'd have to be making the claim that a system with a flat duration doesn't create perverse incentives. Nonsense, these monopolies aren't created through innovation and didn't derive market power as a result, they were handed it on a silver platter by filling out a form.
You have no means to derive a coherent alternative, nor do you have a means to derive some notion of 'good' monopoly and 'bad' monopoly (as you only have ex post case study of dubious use)
Of course I do, emergent order vs. those granted by fiat. One being demand driven, the other being entirely arbitrary.
here's an interesting 5 minute video covering this topic http://www.youtube.com/watch?v=_Xy1qfNp5yE&feature=colike
How would you feel about a reward system as a replacement for intellectual monopoly? Maybe something like the DARPA Grand Challenge. The government could set aside some funds to encourage development, these funds could then be awarded to inventors who made significant contributions. The benefit of such a system would be that directly after the contribution/reward, others would be free to make immediate improvements on the idea.
An argument based on tabloidism is never going to be powerful. I've seen no use of convincing economic comment on this thread. The use of case studies is always going to be difficult. Chandler was able to use them to understand elements of the competition differences betweem the US and Britain (providing a means to understand the latter's economic decline). Even then it took the likes of Williamson to offer a coherent economic explanation
Or like the Brits did with measuring longitude? I'm not opposed, but in order to do such a thing you have to know ahead of time what goal you want to accomplish and whatever the thing is has to have a massive social impact.
Aside from citation and anecdotal evidence pointing a very ugly finger at the rent seeking aspects of patents. The one thing that's certainly been missing is a counter argument of any variety aside from the impact on VC's on start-ups, which as mentioned is nothing more than investors clamoring after rent seeking opportunities, and taking the sure bet. If I wanted to go tabloid, I'd post something like this: Yup, that's right, Apple is suing because they patented rounded corners on their devices. Clearly they were the first to do so and if they weren't allowed there'd be a significant impact on innovation.... Speaking of threads lacking "economic content" your Georgist call-out thread set a pretty good example of that. People in glass houses and what not...
There cannot be any content in the Georgist thread. That's the whole point. In contrast, you've gone for talboidism in this thread! Put it right
Who decides what is a "significant contribution"? I remember when Mapplethorps "Naked Homosexuals Photos" were decided to be a "significant contribution" by GOVERNMENT PINHEADS....
What has their been to respond to? That the patent system plays a role in the funding of new firms? I've already addressed it; it's good ole fashion rent seeking, one of an anti-competitive variety (yes a static view but we'll address that later). Patents allow start-ups (and existing firms) to monopolize ideas whether their profitable, innovative or unique (such as the rounded edges case). While yes, it may be easy to make a case that fostering these new firms is promoting competition (through a Schumpeterian understanding), is that something that can be supported empirically? Or is it purely speculative and a cop-out for not reforming a system that's very obviously being abused? I realize case study can lead to spurious conclusions but the amount of circumstantial evidence is at the least daunting for proponents of the current system. Perhaps a counter example would be nice! And further, to what extent is competition inhibited by blocking the proliferation of ideas and knowledge and thus firm creation via the recombination of existing ideas, given that (particularly in the tech field) very little initial funding is required (take Google for example, two guys in a garage with your average home PC). If patents were being issued by and large to start-ups, I'd acknowledge your argument about the impact on competition, but what we have instead is example after example of Apple, Microsoft and Amazon using it as a blockade to guard their market share. That monopolies are created isn't the problem, that it prevents new firm creation (the only way to undermine monopoly) is.
The impact on the public and the ability to reap the profits from the idea, like I mentioned with the British competition to figure out how to determine longitude. Very difficult to capture it's value but it had a dramatic impact the shipping industry writ large.
I sit on several industry standards committees. The USB standard allows patents, but the patents necessary to comply with the USB spec are RAND Z, reasonable and non-discriminatory, zero cost for those that have bought USB membership. RAND Z only applies to USB uses, can't be used in other applications. The JEDEC standard only requires the required patents to be RAND (DDR, PCIe. SATA, etc.). Companies fight to get their patented approach into the standard so they can collect royalties (rents) from their competitors. PCIe is a better technical solution than USB as a high speed I/O. Anyone think cost is why USB has far better market penetration? The problem is, the patent system would have to change on a global level.
No you haven't. You've given tabloidism. Find me an empirical study into the effects on firm creation and therefore a dynamic understanding of competition?
No VC's in UK? The relationship between VC & IP is common knowledge here is the US, and very logical. Small supply, and big demand, caused patent lawyer prices to soar during the tech / dot.com boom, fueled by VC investment. But if you need a report. http://www.wipo.int/export/sites/www/sme/en/documents/pdf/venture_capital_investments.pdf
There is little empirical evidence (that I could find) to support the claim that strong patent laws inhibit new firm creation. There is however evidence contrary to that claim such as Shane, Scott, 1999, "Technological Opportunities and New Firm Creation," and evidence that patent laws encourage investment in R&D and improve the allocation of resources: Daron Acemoglu & Kostas Bimpikis & Asuman Ozdaglar, 2011. "Experimentation, Patents, and Innovation," American Economic Journal: Microeconomics, American Economic Association, vol. 3(1), pages 37-77, February. Little, but not zero however, such as Carl Shapiro "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting" -- Suggesting that the current structure of patent laws leads to hold up in the commercialization of new technologies and that this could be alleviated via the mechanisms in the title. This is especially true for the cases I've presented regarding technology, where it's very difficult to write an application that may involved hundreds of thousands of lines of code and unbeknownst to the developer he may be infringing upon patents he's not even aware of and while yes it's easy to design around them, the problem is it's expensive to discover them. Patent laws raise transaction costs and as a result impact negatively on innovation, this makes possible the argument that new entries simply never come to fruition as a result of these barriers. ===================================================================================================== There is also evidence showing that patent laws don't necessarily encourage innovation: Moser, Petra. "How Do Patent Laws Influence Innovation? Evidence From Nineteenth-Century World's Fair," American Economic Review, 2005, v95(4,Sep), 1214-1236. I find no evidence that patent laws increased levels of innovative activity but strong evidence that patent systems influenced the distribution of innovative activity across industries. Inventors in countries without patent laws concentrated in industries where secrecy was effective relative to patents, e.g., food processing and scientific instruments. These results suggest that introducing strong and effective patent laws in countries without patents may have stronger effects on changing the direction of innovative activity than on raising the number of innovations. [FONT=Tahoma, Calibri, Verdana, Helvetica, Arial, sans-serif]To be honest though the dataset used for this was from 19th century trade shows, and I'm not sure how applicable that is to modern times. It does however make the case the patent laws don't necessarily encourage the right type of innovation, but rather steer it towards industries where idea can be patented. Which does to some extent support my claim that it's a rent seeking activity and not one that encourages the type of innovation that leads to disruptive competitive activity. [/FONT]
From the selection of sources we can conclude that the effects of patents on competition are actually ambiguous.
Maybe the government could sponsor a television show where the inventor could display and explain the functioning of his “significant contribution”. A system could be put in place whereby the audience (including home viewers) could disperse the funds according to how valuable they believed the contribution to be. On this show the available funds to be dispersed would always be shown, maybe there could be a reserve fund (a big pot of gold) for the really exceptional contributions, like a cure for cancer. Heck, some of the funds could come from private donations and allotted to specific causes, such that those who place great value on a specific need, like a cure for cancer, could contribute directly to that cause. As the “pot of gold” dedicated to that specific need grew, more and more investors would be inclined to engage in research, such that they may win the reward. Plus, just imagine the prestige of having your face and your invention on national television. The best part: no monopoly required. Just an idea.
I admitted as much, but went further and suggested that it steers innovation in a particular direction, potentially away from innovation that may lead to comparative advantage.
No need, we have evidence that once they're introduced the number of innovations from industries that have them is increased. The incentives are plain as day.
