3 ms·
Liquidity is a decent point. R&D is very risky. A company invests a lot of money into R&D. A large part of this money produces no return. Some of this money ma
by EugeneG 16y ago
Liquidity is a decent point.
R&D is very risky. A company invests a lot of money into R&D. A large part of this money produces no return. Some of this money may yield patents. A liquid market means that a company can take some of these patents (which may be worth nothing in an illiquid market) and convert them into cash. Liquidity increases return on a firm's investment into R&D and so may have the consequence of incentivizing corporate research spending.
- pyre 16y agoBut what happens with these patents once they are sold is just as important. It's short-sighted to only be concerned with the initial sale of the patent. [i.e. Loosening restrictions on the sale of weapons would increase liquidity for weapons-makers, but it's not necessarily a 'good' thing because you have to consider what will happen with these weapons after they are sold.]
- meric 16y agoIf the patent system works, i.e, it is beneficial to society for technology companies to sue people who infringe their patents, then I think allowing "non-practicing" entities will be beneficial also. By allowing companies to sell their patents and then licensing it back royalty-free, they are able to "out-source" their responsibility to shareholders (and the law?) to sue anyone who infringe on the patents. This means they can concentrate on R&D and making things people want, which is what they are best at, rather than spending time worrying about and looking for patent infringements. This latter task is better reserved for people good at lawsuits and doing them at lower opportunity costs, like the founder of Round Rock Research LLC. That is, if the patent system works.