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Is it technically correct to say that frivolous patent lawsuits "drag the economy"? Ignoring for a moment the moral issue, if such phenomenon causes a (relativ

Is it technically correct to say that frivolous patent lawsuits "drag the economy"? Ignoring for a moment the moral issue, if such phenomenon causes a (relatively) large amount of money to flow from (software) companies to "patent trolling" ones, isn't it still positive for the economy?

ilyanep 12y ago
One could make the argument that it's taking money from productive entities who would put it into R&D or future production and giving it to non-productive entities who will just use the money to sit on the patents and potentially sue more people.
- deleted 12y ago
  [deleted]
te_platt 12y ago
No. The closest simple example is the broken window fallacy: http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window
- Guvante 12y ago
  Apparently the broken window fallacy has absolutely nothing to do with the broken window theory: http://en.wikipedia.org/wiki/Broken_windows_theory http://en.wikipedia.org/wiki/Broken_windows_theory
- chc 12y ago
  This is a much weaker claim than the broken window fallacy, though. The parent comment addresses something that is left unsaid in the broken window fallacy — that even if it isn't objectively better for the money to go to a window-maker, it might not be worse either. It's possible that the chain of events is ultimately neutral for the system as a whole.
masklinn 12y ago
> isn't it still positive for the economy? NPEs don't grow the economy, and by their activity they hinder or kill companies which do. So no.
fzltrp 12y ago
> isn't it still positive for the economy? Why? Where's the benefit for the economy? If somehow the patent trolls reinject the benefits they make (ie what they obtain from the law suit minus the lawyers/legal fees) in the economy, perhaps we could say it's maybe a positive outcome, but there are no garantee that the infringing company would not have done so. So where is the benefit for the economy?
sp332 12y ago
It depends how you measure. The transfer of license money is good for GDP. But if the money is going to people who just keep it instead of investing in something, then it will "drag the economy".
- icebraining 12y ago
  This shouldn't be downvoted. In fact, it's why the GDP is not a very good measure of what we actually want to know.
toby 12y ago
In economic terms, this is not a transaction (both parties agree to exchange things for their mutual benefit) which is usually considered positive. It's closer to rent-seeking, which is usually considered neutral to negative.

ilyanep 12y ago

One could make the argument that it's taking money from productive entities who would put it into R&D or future production and giving it to non-productive entities who will just use the money to sit on the patents and potentially sue more people.

deleted 12y ago
[deleted]

te_platt 12y ago

No. The closest simple example is the broken window fallacy: http://en.wikipedia.org/wiki/Parable_of_the_broken_window http://en.wikipedia.org/wiki/Parable_of_the_broken_window

Guvante 12y ago
Apparently the broken window fallacy has absolutely nothing to do with the broken window theory: http://en.wikipedia.org/wiki/Broken_windows_theory http://en.wikipedia.org/wiki/Broken_windows_theory
chc 12y ago
This is a much weaker claim than the broken window fallacy, though. The parent comment addresses something that is left unsaid in the broken window fallacy — that even if it isn't objectively better for the money to go to a window-maker, it might not be worse either. It's possible that the chain of events is ultimately neutral for the system as a whole.

masklinn 12y ago

> isn't it still positive for the economy? NPEs don't grow the economy, and by their activity they hinder or kill companies which do. So no.

fzltrp 12y ago

> isn't it still positive for the economy? Why? Where's the benefit for the economy? If somehow the patent trolls reinject the benefits they make (ie what they obtain from the law suit minus the lawyers/legal fees) in the economy, perhaps we could say it's maybe a positive outcome, but there are no garantee that the infringing company would not have done so. So where is the benefit for the economy?

sp332 12y ago

It depends how you measure. The transfer of license money is good for GDP. But if the money is going to people who just keep it instead of investing in something, then it will "drag the economy".

icebraining 12y ago
This shouldn't be downvoted. In fact, it's why the GDP is not a very good measure of what we actually want to know.

toby 12y ago

In economic terms, this is not a transaction (both parties agree to exchange things for their mutual benefit) which is usually considered positive. It's closer to rent-seeking, which is usually considered neutral to negative.