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I'd argue you'd get more economic benefit abolishing patents entirely (not just the software ones, I mean the ones on reproducing someone elses car or gas furna
by zanny 13y ago
I'd argue you'd get more economic benefit abolishing patents entirely (not just the software ones, I mean the ones on reproducing someone elses car or gas furnace). You pay a cost in a loss of investment valuation towards invention because it is less economically beneficial if you can't have a monopoly on your patented good, but you benefit economically by letting new inventions reach natural price equilibrium immediately, and the spread of new inventions would propagate more inventions, even without a major profit motive - you still benefit being "first out the door" on a new idea. Which we see all the time in software, and then run into this problem where first out the door has already made a bunch but is now suing me for trying to do something even remotely in the same problem domain because I see demand there, but I won't be able to meet it because I'm artificially locked out of that market.
That applies to all economic domains. Patents worked back when it was extremely hard to sell your goods to its entire market, because you were either distance limited, communication limited, or production rate limited. In the first two situations someone could just take your idea, set up half way across the country, and made all the returns.
Today, I can invent anything I want and have it on ebay overnight and ship it anywhere in the world. I can advertise on most major ad services if I want, with an audience of the entire first world. The only limiting factor for me is demand, but that just means I have to be safe when bringing inventions to market, but it is good for the economy overall because it means if I can't meet demand, someone else will pick up the slack.
It is still, like I said, advantageous to the first to market with an idea, enough so that I wouldn't predict much of a drop in novel ideas. Like I said, I would expect more if technology and designs were more open and people could cheaply iterate and extend past concepts more readily.
- andrewfong 13y agoNot necessarily opposed, but there are a couple areas where this might be a net loss absent other adjustments. Pharmaceuticals would be the obvious one -- they require a large upfront research cost, copying is trivial, and the FDA approval process erodes first-to-market advantages.
- Guvante 13y agoPharmaceuticals would be devastated. While there are externalities that need to be solved around our production of drugs, the patent system is a good thing overall for them. No one spends $1 billion to make a drug if anyone can copy it simply. Additionally there are international problems related to abolishing patents.
- gcb0 13y agoWhy everyone think of drugs only? it required research. Just like a car required crash tests, etc.
- andrewfong 13y agoEase of copying. It takes some effort to reverse engineer a car, and things like manufacturing processes are difficult to ascertain by just looking at the final product. In contrast, many pharmaceuticals are relatively simple to copy and manufacture once you know the chemical composition of a product.
- Guvante 13y agoIf you prefer you can think of software. However software is protected by Copyright quite sufficiently so doesn't come up when talking about patents (well in this way).
- greyfade 13y agoBut even in situations where pharmaceutical companies don't have patent protection, just providing a better product at lower prices to a larger, poorer market has proven to recoup costs just as well as charging $10,000 per dose on a patent drug. (I saw quotes yesterday from the founders or presidents(?) of Merck and Bayer, which espoused both philosophies, and both claimed successes.) I'm not entirely convinced that patents are necessary to ford the research and regulatory approval. Even in a market where generics are relatively trivial, there are ample opportunities for profit.
- 13y ago
- rayiner 13y agoBeing "first to market" only matters when you're building things like Facebook or Windows, where network effects are relevant. If you're making consumable or durable goods, being first to market is irrelevant. India will clone your drug within a few months of its release, but there is no way you'll make up all that capital investment by then. Without patents, the rational thing to do is not invest any more in an invention than you can recoup in the short window before someone clones it and undercuts you on price. Moreover, it diminishes inventors and elevates manufacturers. The smart strategy in a world without patents is to build up massive overseas manufacturing capacity, because you can always quickly copy designs and then undercut the original designer with your manufacturing muscle. 'Andrewfong has a good point about independent invention being a defense. The idea of inventing something on your own only to have someone else claim they patented it is most of what bugs people about patents. In engineering circles where that is much less common, you don't have an anti-patent sentiment. When I was studying aerospace engineering in college, nobody I encountered perceived patents as anything but a good thing.
- pm90 13y agoYes, its only recently with software that patents have really come to hurt. Maybe that's because most engineering disciplines do not patent frivolously, or maybe that not many patents in these areas can generate so many billions in revenue. (PS: Please don't use the term "India" to refer to certain Indian Biotech companies that reverse engineer patented pharmaceuticals developed in the US)
- mmorris 13y agoNot disagreeing with your point, but I chuckled a bit at your examples. I wouldn't qualify either Facebook or Windows as being "first to market". Though I think this mainly just points out the squishiness of the term.
- humanrebar 13y agoMentioning the term "first to market" was unfortunate, but the key phrase in that sentence was "network effects", and Windows, Office, and Facebook all great examples of the advantage of network effects.