Wednesday, September 23, 2009

patents, monopolies and innovation

I'm just reading Heroes of Invention: Technology, Liberalism and British Identity, 1750-1914, by Christine McLeod (CUP), and was thinking about
why we have patents and market failures

[aside: this was because I attended an excellent workshiop run by the
Centre for Intellectual Property and Information Lawin Cambridge earlier in the week, where we were discussing the nature of the invetor, the invention and the inventive step. ]

The market is supposed to deliver the best for consumer and producer (Adam Smith etc)
but it requires efficient (information rich) competition, Market failures are usually indicated by monopoly behaviour (price hiking) which can include cartels.
Markets are claimed to be good for social welfare...
Innovation is supposed to be protected by patents, and a large patent count is supposed to indicate innovation is happening.
Innovation is supposed to be good for social welfare..

What is happening these days (and was happening in the 1600-1700 period) was a lot of patents and a lot of monopolies or near monopolies. In the 17th century, this was regarded very badly and parliament put big changes in, what is happening is big companies are smarter - by analogy with high functioning autistics, who can emulate empathy by running a purely cognitive model of how they should feel, rather than actually feeling it, large companies run a "model" of how a competing company in a market should behave (as close to the line as they can get away with, occasionally overstepping it) - the idea is exemplified by Cisco, whose CEO has allegedly said that they always want to own the middle 50% of the market - i.e. neither be an innovator, nor truly work in the purely marginal business (bottom feeding?) of cheap and cheerful devices - similar observations could probably be made of microsoft and intel - they
tolerate the existence of low end and very high end, but only when its a small part of the market -
they use this to price as high as possible without appearing to have market failure.

they engage in generating as many patents as possible, as close to the line of
obviousness or inaaplicability as can be allowed, to give the appearance of being innovative without the reality.

this also puts a chill on innovation.

innovation often happens in computing related areas in government sponsored labs (same is often true in bio-medical in fact) and then is "absorbed" magically into these large organisations....typically by hiring of PhDs -

what universities should do is charge a LARGE finders fee for PhDs placed in companies.
what patent offices should do is have a revocation on patents that are not exploited with a VERY large revocation fee. the revocation interval should be set according to aggressive norms of the sector. revoked patents are put in the public domain.

Where do you want your Go To to go to, today, sir?

maybe, we should ask what happened to the "Come From" idea? is this google?

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