
The Case Against Patents (2013) - barry-cotter
https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.1.3
======
jordigh
I never thought that the case for patents was to increase productivity. I
always thought that their purpose was to eliminate trade secrets: people are
going to invent stuff whether you want to or not, but without patents, they'll
take the secrets to the grave.

My favourite patent of all time is Michael Jackson's smooth criminal patent:

[https://mashable.com/2015/03/28/michael-jackson-shoe-
patent/...](https://mashable.com/2015/03/28/michael-jackson-shoe-
patent/#AdzmmRRZPmqY)

This is the patent system working as intended. A magician revealing his
tricks. Tell us how you did it, and in exchange we promise to not compete with
you for a while.

The patent system could work if patent clerks had the time to be a lot more
discerning and reject any patent that is obvious or already known. But it
takes a lot of work to do that and the deluge of patents makes it impossible
to give each application sufficient consideration.

I think the general idea of patents is good, but perhaps it's impossible to
execute it correctly.

 _Edit_ : Should have read the damn article. They address concern further
below and also argue that patents are not revealing any secrets because
pattent attorneys are not qualified to judge the merit of patents and because
the way patents are written makes it almost impossible to reproduce their
results, and sometimes patents are granted for utter nonsense, such as moving
"through the fifth dimension".

~~~
matz1
Trade secret is becoming less and less issue these days. Nowdays information
spread and leak like crazy.

~~~
dnautics
It's actually better in many cases. For processes, in order to enforce the
patent, you have to get a warrant (how can you _prove_ from the product that
the process was used?). A judge will generally refuse to grant a warrant to
search a competitors premises because that would become an open door for
anyone to disrupt their competitor's work.

------
kauffj
This seems like as good a thread as any to mention one of my favorite
unrealized enterprises: Patent Trolling for Good (PTG)

The idea is simple: take the traditional model of a patent troll, but alter
the settlement terms to create a cascade that ultimately ends or significantly
reduces the exclusive ownership of facts (aka IP).

Patent Trolling for Good acts like a traditional Patent Troll in that it takes
any IP it has and aggressively uses it to make claims against other
firms/entities.

However, instead of just seeking cash, PTG offers two options:

\- Pay us a lot of cash

\- Join PTG. By joining: 1) all of your IP can be used by PTG to sue others
and 2) everyone in PTG has automatic rights to any IP held by others in PTG

And of course, anyone is welcome to join PTG at any time. You don't have to
wait to be sued to join :)

I've brought this idea up with VCs and lawyers a few times across the years
but I've never gotten any bites. If anyone was ever seriously and credibly
interested in pursuing it, I would give such an entity any and all IP
owned/claimable by LBRY ([https://lbry.io](https://lbry.io)) and potentially a
small amount of initial funding as well.

~~~
jordigh
> exclusive ownership of facts (aka IP)

This is one of the weirdest definitions of IP I have ever seen.

You think a story is a fact? Stories are usually copyrighted and usually part
of what people mean by "IP".

Facts are generally not copyrightable. You want to go and make a phone book or
a map, you can. Other existing phone books or maps do not mean you can't make
your own.

What about a distinctive trademark? Surely you agree that my company logo is
not a fact. You want to use my company logo to sell your stuff? That would be
deceiving customers if you started to sell your stuff under my name. Is the
logo and distinctive mark a fact?

~~~
kauffj
Rather than have an argument about categorization I'll instead respond to the
core moral question.

I do not think it is moral to claim that you own a story or a logo in the same
way that one owns a shirt or a cell phone.

(But yes, I think a story or a logo is much more like a fact than property.
Though they're certainly less fact-like than other types of facts.)

_Claiming_ to be another company that you are not is something different
entirely (fraud) and does not require IP.

~~~
jordigh
The categorisation is important. Copyright is very different from trademarks
is very different from patents. It is important to understand these different
laws rather than saying that they're all about owning facts or owning whatever
it is you consider "owning" to be.

The very term "intellectual property" is troublesome because it indicates the
very ownership that you're objecting to. There is no ownership. And there is
no property.

A patent is about disclosing inventions. Copyright is about giving the author
economic and moral rights. A trademark is about making sure consumers are not
deceived. It is a separate law than fraud. You can deceive by abusing
trademarks without outright lying.

Patents can be infringed accidentally. You can infringe a patent without ever
being aware of it. You cannot accidentally infringe copyright. The plaintiff
of a copyright infringement complaint has to prove that you deliberately
copied. Independent retelling of a story is fine. Independent rediscovery of a
patented invention is not.

It is important to understand these laws, their origin, their purpose, and
their nuance, whether you agree with them or not, in terms of the rights they
grant and what constitutes infringement. Making the analogy to property and
ownership is misleading and leads to the wrong conclusions about how these
laws work.

Know thy enemy.

~~~
pnw_hazor
Trademarks: Who Copyrights: What Patents: How

Many do not realize that utility patents generally protect how something is
done, not what was done. Inventors will often say, we can't patent that
because someone else does that thing already. But it is the "how" that matters
not the "what."

For example, even though the paper mention Amazon's one-click patent, there
are probably 100's of other shopping cart patents that claim different methods
of making an ecommerce shopping cart work.

------
js8
I am against (all) patents on the following grounds:

The article talks about first-mover advantage.. it seems to me that the case
for or against patents depends on how you model it.

If you model it as a single-shot prisoner's dilemma, then without patents,
there is no incentive to make result of research public. This is a classical
argument in favor of patents.

On the other hand, if you model it as a many-rounds prisoner's dilemma, then
even without patents, it makes sense for companies to have a strategy which
makes some results of research public, then hopefully piggyback on the
research that was done by others and also published (that is, mutually
cooperate).

It seems to me that the second strategy can only be viable if the results of
the research are "infinitely divisible", that is, companies can make
arbitrarily small steps in opening up their research.

However, I don't see any evidence that the research is NOT infinitely
divisible, thus it seems to me that patents are not really needed for the
latter to happen.

In addition, interestingly, economists generally approve patents as needed for
someone to make the first move, but they don't feel the same about similar
issues that happen in the market. For example, somebody needs to explore new
market first or make a capital investment in a new field - economists do not
call for government support in that. This convinces me that the rationale for
patents is somewhat hypocritical defense of status quo (caused by rather
arbitrary choice in the game theoretical model).

~~~
pitaj
IP is fundamentally different from property as me know it.

Something is your property if you have exclusive control over it. Since IP is
not exclusive (two people can have the same thought), it is not property.

Patents are the worse form of IP, since it is possible to accidentally
infringe on them.

Copyright is almost as bad, _especially at current timespans_ , and because it
has such a chilling effect on the internet and other media.

Trademarks are essentially just defenses from fraud, so they aren't really IP.

~~~
js8
As gowld already pointed out, the distinction between traditional property and
"intellectual property" is not as strong as it is often painted.

I would say for the larger part, the exclusivity in both is artificial. As
gowld points out, for many physical things there exist fair sharing schemes.
And historically, when public lands were enclosured to become private
property, it was an artificial process which explicitly created the exclusion.
This exclusion wasn't needed from economic point of view.

------
kajumix
The case against patents has a moral dimension as well as a utilitarian one.
This article is about the latter. Stephan Kinsella makes a good argument for
both [1]. Ideas are free and can't owned.

In a way, enforcement of intellectual property rights infringes on physical
property rights. If you come up with a process P to assemble certain kinds of
physical widgets together, your claim on the patent for P prevents others to
use those kinds of widgets in a certain way, even when they own those widgets
fully.

[1]: [https://mises.org/library/against-intellectual-
property-0](https://mises.org/library/against-intellectual-property-0)

------
enriquto
link to the abstract (not a pdf):

[https://www.aeaweb.org/articles?id=10.1257/jep.27.1.3](https://www.aeaweb.org/articles?id=10.1257/jep.27.1.3)

------
zyxzevn
Restrictions hinder innovation, development and technology. And patents are
such restrictions.

The worst cases are the ones that grant monopolies on common or important
technologies. They can completely block the progress in certain areas. Even
companies with patents stop with innovation until the patent has run dry, if
they do any innovation at all.

------
ajb
FYI, there was an article about a new patent bill on the front page yesterday,
but it dropped off rather fast: "US Software Patents are back with HR 6264
section 7"
[https://news.ycombinator.com/item?id=17492196](https://news.ycombinator.com/item?id=17492196)

------
andrewla
The authors summarize as:

> ... there is no empirical evidence that [patents] serve to increase
> innovation and productivity ...

This seems to be a fundamental misunderstanding as to what purpose patents
serve. The public benefit of a patent is that the information is public --
inventions which might previously have been kept secret are instead put into
the light where others may use them. The cost to the public of patents are
that such use must be deferred out of respect for the temporary monopoly
granted to the patent holder.

That is, patents don't increase innovation or productivity -- that is by
design. They are just a means of harnessing the innovation and productivity of
individuals and encouraging them to make their work public instead of keeping
it a secret. So it seems to me that the paper is arguing a strawman rather
than making a useful point.

~~~
rbultje
> The public benefit of a patent is that the information is public [..] > The
> cost to the public of patents are that such use must be deferred

But who does this benefit? The author points out that it benefits big/old
("stagnant") corporations rather than innovators. And that still holds, no?

Here's a thought experiment: if you're a small innovator and you invent
something new (let's be evil: a software algorithm), what benefit does
disclosure bring you? It's better to keep it secret, because big/old
("stagnant") companies will find legal loopholes in your patent application to
work around it. Or, they will run it in the cloud and not tell you at all that
they're running your exact algorithm. The innovator would never know.

Big/old ("stagnant") companies, on the other hand, have enough legal manpower
to sue you out of existence regardless of whether their patent is valid or
not. It's not the patent, it's the legal process that will bankrupt the small
innovator.

Can patents be molded to protect the small innovator? Because isn't that the
intent? Regardless of whether that protection results in monopoly, disclosure
or both.

~~~
ChrisLomont
>Can patents be molded to protect the small innovator?

There's plenty of cases of a small or lone inventor making big companies pay
for infringing a patent. I think patents are about the only protection for a
small innovator to get enough leverage to enter a market.

As a small innovator myself, at probably every pitch I've ever made to
investors, I've been asked immediately if I have patents. When I've looked at
Chinese manufacturing for products, the first thing they ask is about patents
(un-patented means they can copy and sell in a lot of markets, patented makes
it harder for them to sell in markets where I have a patent).

There's also plenty of people that are skilled at invention, that don't work
for a big mega-corp, and they make their living by being able to stop big
corporations from simply stealing their product ideas and crushing them via
bigger and better distribution networks.

Patenting a key aspect of a new item gets small players a seat at the
negotiating table where a big player has to buy the product. Without patents
this would rarely happen.

------
jernfrost
I think patents should be replaced with prizes. People can propose problems
which needs solving and then private individuals and/or government can pledge
money to donate to whoever finds a solution to the problem first. However the
winner doesn't own the idea. It must be made public.

~~~
anticensor
Does the proposer also get compensation after a solution is found, or only the
solver?

------
neilwilson
Interesting that many commenters use the 'make an idea public' argument for
patents. However if reinvention and rediscovery of an idea doesn't happen that
often then you why would you need patents anyway? Penn and Teller's Fool Us
shows demonstrate that very few magic tricks are undiscoverable to other
magicians. So just hire one to work it out. That increases the value of
magicians and decreases the value of patent lawyers, patent reviewers, patent
writers and the patent trade. Surely that is a good thing?

------
hammock
Drug patents are ten years. It's common to say without patents no drug company
would spend the billions it takes to bring one drug to market. But I remember
doing the back of the envelope math in college on the socially optimal length
of a drug patent based on the cost, profit motive and public benefit, and it
worked out to only about three years.

~~~
notlob
Post-AIA, US utility patents (including APIs, biologics, methods of
manufacture/use, etc.) are 20 years with possible adjustments to term length.

~~~
hammock
I was in college a while ago :) Appreciate the correction

------
kotharia
The pharmaceutical industry is usually given as the prime example of an
industry where patent protection is necessary; however, this is far from
obvious. See Robin Feldman's book Drug Wars (there is an interview with her
about it here: http//www.econtalk.org/robin-feldman-on-drug-patents-generics-
and-drug-wars/)

~~~
jernfrost
I would solve it with a combination of public funded research and prizes
awarded to those solving important medical needs.

------
ibeckermayer
[https://reasonandliberty.com/articles/patents](https://reasonandliberty.com/articles/patents)

------
jimmydddd
Question for anti-patent folks. Do you like a system where Chinese companies
just copy products listed on Amazon and sell them for less?

~~~
throwaway37585
Yes?

~~~
jimmydddd
Fair enough. I think it would promote copying instead of inventing. Not sure
how that ends.

~~~
anticensor
That would prevent unnecessary "innovations" to refresh IP. You cannot keep
everything secret.

------
djhaskin987
Nice name drop

> We are grateful to the editors, the referees, and to Richard Stallman for a
> careful reading and comments.

------
pnw_hazor
Dragging out the old one-click patent I see. I guess I missed where the
development of ecommerce was stymied by this patent.

A patent can promote innovation in at least two ways: (1) rewarding the
inventors for their toil and risk taking; and (2) by forcing competitors to
try to solve the same problem with a different solution.

People seem to forget about the second one.

~~~
throwaway37585
(1) is addressed by the article. As for (2), well... do you have _any_
evidence this outweighs all the downsides of the patent system?

~~~
pnw_hazor
Most of the so-called downsides of IP are subjective or viewpoint based. Or,
they are imaginary/hypothetical.

But there is this, countries with the strongest IP protection are the most
innovative and successful. So there must be something beneficial going on.

------
_bxg1
Needs a [PDF] tag

------
ninjakeyboard
Sleep deprived from go live, I misread this as "The Case Against Patents."

~~~
choward
What?

------
monochromatic
[2013]

------
kevin_b_er
Meanwhile the Intellectual "Property" wants patents treated as real estate and
the party of corporate interests is in power.

~~~
theltrj
wants? this is the way it has been done for a long long time in the US (the
first US patent grant was from George Washington in 1790), there is Property
category where there is at least Real Property & Intellectual Property,
patents which are in the Intellectual Property 'bucket' so to speak

There are multiple of forms of intellectual property beyond patents:
copyright, trademarks, etc

This is the way the legal system has always worked, not an invention of a
modern corporate interests, the ancient Greeks recognizes some forms of
patent, the modern version is based around the implementations of Italy's
patent system in the 1400s:
[https://en.wikipedia.org/wiki/History_of_patent_law](https://en.wikipedia.org/wiki/History_of_patent_law)

no conspiracy here....but yes corporations do like to see a return on their
significant research and development investments

~~~
kevin_b_er
There is no intellectual "property", merely a temporary exclusive grant made
by the public to encourage the arts and sciences. To call it "property" is, as
I warned, the goal of the "IP" industry in equating a patent as no different
from a house and land. Then it magically becomes some sort of right, but one
is fundamental a restriction of your own fundamental human rights because a
patent can be accidentally infringed.

A patent can be accidentally issued, but it can be hell to accidentally UN-
issue it. Meanwhile the patent constraints your actions and speech through its
power. And we want to treat it like a house? The house limits what you may do
upon that land, a patent limits what you may do anywhere any everywhere. And
you don't even need to know the patent "property" upon your actions even
exists.

~~~
pnw_hazor
Intellectual property is real. Try stealing some IP from Apple and see what
happens -- something real will happen.

IP is as real as any other legal construct, such as, contract rights. The term
intellectual property is a term of art that just happens to model some of the
analogues that exist between intellectual property, real property, and
personal property.

------
drewlander
wow at first I thought it said "Against Parents." I think I need glasses....

~~~
_bxg1
I saw "Against Patients", for some reason

------
aj7
A patent is, first and foremost, a fence. It creates property rights. Do
fences increase productivity? Should they? It probably is more productive if
your neighbor's dog shits on your lawn, or your clever invention is taken
apart and immediately copied by a larger competitor. But is it right?

