In a recent post on the Ludwig von Mises Institute website, Stephan Kinsella analyzes the US patent system and whether its supposed benefits outweigh its costs. Patent advocates have long held that the patent system encourages innovation by restricting the reuse of ideas, thereby forcing inventors an entrepeneurs to innovate.
I have a few questions about this...
1. Does innovation really need to be encouraged by artificial means? If there were no restrictions on using someone else's ideas to make a buck would we be stuck in the dark ages because no one ever invented anything new?
2. Is it valid for a company or individual to file suit against someone else on the basis of the possible but unquantifiable loss of potential sales that may occur due to patent infringement? Does that mean that outselling a competitor in a given market merely by providing a superior product is somehow unfair?
3. Would Microsoft Windows be more stable and secure if other companies could create a similar product without fear of litigation?
The topic of intellectual property in particular is hotly debated these days, and I'm interested in hearing what others have to say about it.
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3 comments:
interesting article, and i happen to agree with many of the cost/benefit comparison points that are made. what i find most interesting in the article, however, is the equality given both "the innovator" and "the company" under IP law in light of the vast disparity which exists in fact between these two very different entities. the scale on which "the company" can bring to bear resources with which to perform research and generate IP is much greater than any individual can practically compete, yet corporate law affords "the company" the same practical rights as the individual.
before responding directly to any of your questions, i'll as a few of my own after a read through the article and your comments. these aren't really thought out and i'm sure it shows. :p
1) if a patent is "a grant of property rights by the U.S. Government" (from the USPTO website), is not its sole purpose one of economic advantage for the grantee? if so, why bother couching the purpose of a patent system in terms of benefit to society?
2) are there perhaps other ways to encourage innovation other than via economic advantage or gain? do we as a society only value innovation in terms of economic gain?
3) i'm unfamiliar with the history of the USPTO and its original goals, but assuming it primarily exists to protect the individual innovator's right to capitalize on a novel concept, why bother allowing entities other than individual persons the right to patents? (this could degenerate into a general argument over the concept of corporate law, which would be interesting but unfortunately for me i'm woefully unread on the subject and would be ill-equipped for such a discussion.)
4) and speaking of microsoft... :) if all of the innovations which comprise a software product as large as the windows operating system were only patentable by their individual originators and not by the company or companies for which they may happen to work, how would this change the IP landscape?
and now that i've spewed forth that mess, here are your answers:
1) no, or there would be no wheel.
2) i can't think of a good way to respond to this with out first wanting to discuss the complete lack of understanding our current social, political, and economic environments have when talking about "the information age". ask me about that later.
3) nope, 'cause they suck. :) and i'd have lots to say about open source software here and i find that i'm ready for bed. so good night....
this really isn't a comment about the entry under which it's posted, but it's as good a place as any....
i know squat about economic theory and its ties into politics, but i'm curious as to whether or not you've read anything about how the economic beliefs of current libertarian thinkers is influenced by the fact that we in the U.S. have a powerful economic advantage in the world today. i say this after having read a few blurbs today which brought that fact to mind. first, the retiring CEO of intel wrote an essay on global competition, warning that the U.S. semiconductor industry shouldn't be complacent regarding its top position in the global market today given the increased activity of china (among other countries) in IT industries. and second, a top analyst at goldman sachs believes that by 2050 the countries of brazil, russia, india and china (BRIC) will outstrip the top six countries of the G7 in terms of gross domestic product, and china will replace the U.S. as the world's leading economy by 2040.
again, i don't really have a firm grasp on the economic beliefs encapsulated in libertarian philosophy, but i wonder if they're influenced by the U.S. position in the global economy. thoughts?
Wow...lots of questions. Good stuff!
So, in answer to your first post...
1) Yes, that is pretty much its sole purpose, but "economic advantage" is just plain crass, so it must be couched in more acceptable terms in order to make it socially acceptable.
2) Each person values innovation for his or her own reasons. Economic advantage is the highest reason for some. For others, serving humanity may hold the greatest value. The bottom line, however, is that innovation typically costs money. The question is where should that money come from? Should a tax be levied against productive individuals so that money can be given to innovators as a resource? Or should the innovator be allowed to reap the desired rewards (economic or otherwise) of his or her efforts without imposition of what others believe that reward should be?
3) I'm afraid I can't add much to this one, either. One can assume that it probably began with an individual or company approaching government because someone else "stole their idea, and they're making money from it that I could be making, so there ought to be a law...", so laws were drafted and a bureaucracy was formed to enforce those laws. From this perspective, it amounts to a form of protectionism, thereby shifting the cost of continuous innovation to the competitor (through litigation) or to the taxpayer.
4) Honestly, I think it's irrelevant. The Right to Contract allows employers and employees to enter such binding arrangements as non-disclosure, non-compete, and intellectual property agreements. If the employee signs on the dotted line, they're bound by that agreement, and any breech thereof constitutes fraud.
Now...to answer your second post...
In general, Libertarian economic belief has its basis in what is typically known as the Austrian school of economics. (Check out the link to the Ludwig von Mises Institute website for more info.) Essentially, it's grounded in the belief that a free market, absent of government intervention, is the only economic system that can truly flourish. Libertarians feel that the US government's involvement in the market, however well-intentioned, is not only hurting our position in the world economy, but wrecking things for the domestic economy as well. That isn't to say that government should play no role in the market whatsoever, but it does mean that the only legitimate role of government in the market is to settle cases of fraud, theft, and breech of contract.
There is some belief that the economies of other countries are on their way to becoming "freer" than that of the US. Indeed, government involvement in the US economy grows daily, while the governments of some other countries (China in particular) are becoming more and more "hands-off". Time will tell whether or not they surpass the US in terms of GDP, but it wouldn't surprise me if it happened.
So...if Libertarian economic beliefs are influenced at all by America's current economic status, it is to say that a return to a free market is the only way the US will maintain or increase its economic advantage. In other words, we don't tout America's current economic system as the "right way" to do things.
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