Intellectual Property = Monopoly = Inefficiency

[Rambuchan]

Intellectual Property Rights, enshrined in a patent, grant the owner of that property the exclusive right to use it. The patent owner may exclusively market his innovation, and his competition is stifled by IP law. This is the granting of an effective a monopoly.

In the absence of competition, this product doesn't get developed even further in the most efficacious fashion, leading to the best outcome for the consumer. After all, just because something is patented doesn't mean that it is in its most perfect state, a state most beneficial to the consumer. In such a scenario, neither is cost reduced for the consumer via competitive production and marketing. And further, with a lack of competition, what motivation is there to innovate upon a product further? They can just go on peddling the same sub-standard, over priced product at will. Critics of Microsoft will be all too familiar with this line.

There is also the "me too" phenomenon to consider when speaking of the inefficiencies created by IP. Let's take pharmaceuticals for a notable example. If one firm discovers a drug, others are prevented from marketing exactly that drug (unless granted a paid license by the IP owner). But they can produce similar a drug, often called a "me too" drug, that is slightly different, and bring that to market.

This is not quite the pure monopoly described at top, but its outcomes can be even worse for consumers, innovators and the economy. "Me too" drugs are not privilege to the core IP that makes the original drug so great, but they do provide a similar service. Two important results of this situation are that a) inferior drugs crowd the market and subsequently b) the original drug doesn't sell as well. This all means that the innovator doesn't get remunerated for his "original" thought as fully as he would expect and consumers also suffer from an inferior drug. It's a lose-lose. And even when the "me too" phenomenon doesn't take place, consumers, especially in the developing world which can't afford the drug, do not even get to benefit from it or anything like it.

So, why do we still have such an Intellectual Property Rights regime in place? What might be a better regime that strikes a more beneficial balance between the interests of public utility and those of the inventor?

 

[brennan]

Surely the point is to make sure someone who invests money in a invention gets an opportunity to turn a profit. Otherwise the enterprise economy would suffer.

 

[Newbunkle]

Surely the point is to make sure someone who invests money in a invention gets an opportunity to turn a profit. Otherwise the enterprise economy would suffer.

Exactly. If I thought that an invention of mine would just be given away and other people would make money off it, I wouldn't bother.

 

[Rambuchan]

Surely the point is to make sure someone who invests money in a invention gets an opportunity to turn a profit. Otherwise the enterprise economy would suffer.

Exactly. If I thought that an invention of mine would just be given away and other people would make money off it, I wouldn't bother.

Indeed, the current regime provides for and prioritises profits for the investor. A monopoly is a wonderful vehicle for accomplishing this. However, as I hope I've outlined, this is an inefficient system. Whilst profits are protected, people and the wider economy do not benefit in the most efficacious manner. Surely a better balance can be struck?

 

[Erik Mesoy]

There's no such thing as "intellectual property", Ram. If you want to talk about patents, say "patents". Don't go prejudging the whole issue by introducing the loaded and altogether different term "property" into the very name of the field.
Please.

 

[Rambuchan]

There's no such thing as "intellectual property", Ram. If you want to talk about patents, say "patents". Don't go prejudging the whole issue by introducing the loaded and altogether different term "property" into the very name of the field.
Please.

If there's no such thing as intellectual property, what then is a patent?

 

[plarq]

We need more and more free IP core.

 

[JerichoHill]

Ram,

You're awfully confused if you think the mere right to a patent creates a monopoly. That's not how patents work, at least not here in the US. Most patents are for company-specific whatevers that rarely turn profit. And once a company applies for a patent, what its seeking is no publicly available, leading to high quality substitutes.

Apple has a patent for the iwheel or something for its Ipod. How many other substitutes are there for the ipod?

You're a bright guy Ram, even if I disagree with you. But here, you're grasping

 

[Erik Mesoy]

If there's no such thing as intellectual property, what then is a patent?

A patent. *shrug*

Intellectual property is a mirage for the reason that intellectual objects cannot be stolen so much as duplicated. "Intellectual property", meanwhile is a term that not only prejudices thinking, but also obfuscates arguments by being poorly defined. Three dictionaries give the following three definitions:

property that results from original creative thought, as patents, copyright material, and trademarks.

A product of the intellect that has commercial value, including copyrighted property such as literary or artistic works, and ideational property, such as patents, appellations of origin, business methods, and industrial processes.

The ownership of ideas and control over the tangible or virtual representation of those ideas. Use of another person's intellectual property may or may not involve royalty payments or permission, but should always include proper credit to the source.

I don't see your OP mentioning business methods, industrial processes, trademarks, or the like very much compared to patents, so I suggest you use "patents" to refer to patents.

 

[brennan]

And how is pedant corner this morning Erik?

 

[Erik Mesoy]

And how is pedant corner this morning Erik?

Pedant corner is doing just fine this morning. It's preferable to preparing for the linear algebra exam I have in an hour.

 

[brennan]

Need something to keep you awake huh?

 

[Erik Mesoy]

Yeah. Right now I've got the Gram-Schmidt process for orthogonalisation of vectors swimming around in my head, and it's not a pretty sight.

Seriously, though, this is only a matter of degree. If I called someone a murderer for shutting down my computer because he "killed my processes", I think you'd go pedantic too and tell me not to use such an inappropriate term.

 

[brennan]

zzzzZZZ, huh wassat? I fell asleep at Gram-Schmidt...

 

[Enkidu Warrior]

Whatever the semantics, I do agree that there's a difficult balance between promoting innovation and competition. Perhaps the pedants could defend the current system in the situations Ram outlined or else suggest an alternative?

How do you make sure that the original patent holder is sufficiently rewarded without stifling further innovation. If there is another technology that fulfils the same function then the two can compete, but that still wouldn't be as successful as if there were many competitors pushing each technology. But that leaves the original patent holder with little reward.

Of course, the current system allows for licensing that enables competition to exist, whether we're talking about an iPod or a song. But does it work?

And don't expect us laymen to be persuaded by arguments such as 'you used the wrong terminology!'. If you can't lower yourself to discuss your field with an outsider then just don't respond.

 

[Erik Mesoy]

Whatever the semantics, I do agree that there's a difficult balance between promoting innovation and competition. Perhaps the pedants could defend the current system in the situations Ram outlined or else suggest an alternative?

This pedant suggests we abolish the existing patent system for its harmful effects (slowing down innovation, punishing independent inventors), repeated abuse (evergreening, patent trolling), incoherent overseers (the US patent office has allowed patents on pieces of mathematics, physics-violating machines, and lots of obvious non-inventions with prior art), wild double standards (Case in point, the neem tree of India and who gets to assert patents rights on its uses), and general asshattery. (WHAT DO YOU MEAN I CAN'T GIVE MY FRIEND A COPY OF A PROGRAM I WROTE BY MYSELF IN MY BASEMENT?)
Something new is needed.

How do you make sure that the original patent holder is sufficiently rewarded without stifling further innovation[?]. If there is another technology that fulfils the same function then the two can compete, but that still wouldn't be as successful as if there were many competitors pushing each technology. But that leaves the original patent holder with little reward.

This sounds like a difficult question - on one hand, if whatever the law decrees to be given to a patent holder is considered sufficient, one can justify eternal monopolies or effective nonpatents with equal ease, whereas leaving it up to the patent holder is not a good option either. We'll have to define what's considered sufficient in some way. Any suggestions?

Of course, the current system allows for licensing that enables competition to exist, whether we're talking about an iPod or a song. But does it work?

Not necessarily. A patent holder cannot normally be forced to license a patent.

And don't expect us laymen to be persuaded by arguments such as 'you used the wrong terminology!'. If you can't lower yourself to discuss your field with an outsider then just don't respond.

I am a layman who's complaining that a certain piece of terminology is highly prejudicial and biases the debate precisely for laymen who don't have the time or energy to sort out the definitions of everything involved.
Imagine a newspaper headline saying "[name] Kills 17" on the front page and then the actual article somewhere within the newspaper says that he forcibly turned off a computer like I mentioned to brennan above.
I think whoever it was would sue.

 

[GinandTonic]

IIRC normal patents are twenty years from application date, while drug patents are ten years from the drug being brought to market, so long as the drug was brought to market within ten years of application for patent.

The differential with the drugs patents being to remove an incentive to rush the drug through development and testing, which would be bad m'kay? Drug patents are also subject to certain exemptions on grounds of overwelming necessity. Seems to me the overarching idea is just fine, but the small print could use a bunch of work. Clearly there are instances where people are suffering or dying for want of a drug that cost little to make and where the provision of such a drug would not impact the full price sales. The problem is ensuring that a black-market doesnt exist where the generics are re-sold to markets where the drugs companies could sell at full price.

Twenty years from application for other patents was fair in the context of the agricultural to industrial revoloutions. Things moved a lot slower and were a lot more localised. We do now have an issue with the fast pace of change. A twenty year patent in the computer industry doesnt represent a window of exploitation but the full lifetime of the inventions utility, perhaps several times over. Clearly people get around these issues by creating marginally different product but this duplicates research and is an arbitary work around with unpredictable results.

 

[Fifty]

Does This Mean I Can Plagarize AND ACCUSE ANYONE WHO TRIES TO GET ME OF TROUBLE OF BEING AGAINST THE FREE MARKET!?!

 

[Rambuchan]

Ram,

You're awfully confused if you think the mere right to a patent creates a monopoly.

I'd appreciate it if you were a little more honest about the subject and didn't misrepresent what I'm saying. It's more than just the right to a patent that creates a monopoly. It's all that flows from that right, which I indicated in the OP and expand on with example below.

That's not how patents work, at least not here in the US. Most patents are for company-specific whatevers that rarely turn profit. And once a company applies for a patent, what its seeking is no publicly available, leading to high quality substitutes.

Kindly allow me to provide an example of how patents do work, which your post refrains from admitting:

You must be aware of "The Selden Patent" and The Association of Licensed Automobile Manufacturers (ALAM). In case you're not, and for the benefit of others who may not know: Here was a man, George Baldwin Selden, who patented his design for --- "the road engine" --- a self propelled four wheeled vehicle (in US patent 549160, granted November 5, 1895). In other words - the car.

The idea was far from original and the patent holder was far from being in a position to bring this idea to market. After a few patent rights sales to parties such as The Electric Vehicle Company, enter ALAM, which formed a cartel around Selden's Patent and the manufacture of automobiles in America's infant car industry. ALAM was blatantly fixing prices high and making sure that the automobile was a luxury good, produced by a small clique of manufacturers. They operated upon a protectionist patent infringement campaign, which sued anyone trying to compete.

One person they filed a suit against was Henry Ford, who challenged the suit and won. We all know what happened as a result of this. Competition in the automotive industry happened, for starters. This led to cars becoming far more widespread, far more diverse, and of course far more affordable for consumers.

As Ford said in the case: "We believe that the art [of car manufacture] would have been just as far advanced today if Mr. Selden had never been born."

What purpose did Selden's Patent serve for the consumer? Was it A Good Thing for consumers, for the car industry, and indeed for the wider economy?

Apple has a patent for the iwheel or something for its Ipod. How many other substitutes are there for the ipod?

There are plenty of substitutes for an iPod. But, owing to the lack of access to the core IP, they are all inferior and no one but Apple can truly innovate the core technology. And the iPod remains relatively expensive.

Now, why not apply this same template to life saving drugs - a more telling example of the consequences than a trivial consumer entertainment device - to see how serious the problem can get?

 

[Fifty]

Jericho arguing for soviet pinko protectionism and Rambu arguing that the free market solves everything!

!!!yad sdrawkcab s'tI