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Note that this cartel would have been impossible without patent protection. In fact, this seems to be a purported feature of the patent system, not a bug -- to

Note that this cartel would have been impossible without patent protection. In fact, this seems to be a purported feature of the patent system, not a bug -- to give inventors monopolistic control of a market for several decades.

javert 12y ago
Note that without patent protection, there would be little incentive for these companies' research labs to continue to improve their bulbs, because doing so would not give any competitive advantage, while it would cost money in research and development. e.g. > It was rendered superfluous when in 1906 two European companies introduced a superior lightbulb whose filament was made from tungsten paste. That bulb was itself eclipsed in 1911 by General Electric’s metal-filament bulb, which used pure drawn tungsten wire, and in 1913 by GE’s gas-filled tungsten bulb. It's better to have a technology available and have a choice to pay slightly more or to stay with the prior technology, as opposed to not having a technology available at all. That's why we have patents.
- cromwellian 12y ago
  People invent and invest in the absence of patents. That justification is getting rather tired.
  - seanflyon 12y ago
    > People invent and invest in the absence of patents I don't think that this is established. Patents have existed since the 1400's and areas that have patent systems have general out-innovated areas without them. This could be the result of many other factors, but patents do clearly provide an incentive to innovate. I think a better argument is that the added costs of dealing with patent trolls outweighs the incentive of a temporary monopoly. http://en.wikipedia.org/wiki/Patent http://en.wikipedia.org/wiki/Patent
    - derekp7 12y ago
      Logically, it can also have the opposite effect. If you have all the rights for a product, you have no incentive to improve it, until the patents are about to expire.
      - CamperBob2 12y ago
        My favorite example is the Roomba. Cool new vacuum cleaner invented, ridiculously broad/abstract patents filed... result, near zero progress for 20 years.
      - rhino369 12y ago
        Patents don't give you rights to a product. Only a certain implementation of one. Your competitors will patent improved versions if you don't. They might also invent a product using a new implementation leaving you with no market. And in practice, it doesn't work that way. Companies acquire patents on each minor upgrade to their technology.
        vidarh 12y ago
        Your competitors won't exist if your basic patents are broad enough to deny them access to the market.
        derekp7 12y ago
        I was thinking more along the lines of competitors who are in the same space as you (let's say, light bulb manufactures) -- you patent a new type of bulb, your competitors could patent a bunch of improvements on it to deny you future market on improved versions.
    - nitrogen 12y ago
      Patents have existed since the 1400's and areas that have patent systems have general out-innovated areas without them. Has the direction of causality been established here? Maybe areas with more innovation sprout wannabe monopolists who manage to lobby their governments to create patent protections.
  - javert 12y ago
    "I'm tired of hearing your argument" is not a valid counter to an argument.
jcfrei 12y ago
Such a cartel would still be possible even without patent protection (the article doesn't go into enough detail on whether patents where still only available through GE after WWI). Cartels are always possible when you have massive economies of scale. The (mass) production of light bulbs in this case is sufficiently difficult and expensive, so that any cartel could easily thwart new competitors - even without patent protection. The expertise in the production of light bulbs doesn't lie within the schematics of the light bulbs themselves - it lies within the exact production process, the selection of the suppliers, refinement of materials, etc. Those are enough hurdles to make an entry into this market very difficult and the establishment of a cartel so easy. In my eyes this article is a very good argument against a pure laissez-faire economy.
- dublinben 12y ago
  Corporate cartels are incredibly unstable though, because it is always in a single company's best interests to defect. They tend to last much less time than a patent, and are obviously not legally enforceable.

javert 12y ago

Note that without patent protection, there would be little incentive for these companies' research labs to continue to improve their bulbs, because doing so would not give any competitive advantage, while it would cost money in research and development. e.g. > It was rendered superfluous when in 1906 two European companies introduced a superior lightbulb whose filament was made from tungsten paste. That bulb was itself eclipsed in 1911 by General Electric’s metal-filament bulb, which used pure drawn tungsten wire, and in 1913 by GE’s gas-filled tungsten bulb. It's better to have a technology available and have a choice to pay slightly more or to stay with the prior technology, as opposed to not having a technology available at all. That's why we have patents.

cromwellian 12y ago
People invent and invest in the absence of patents. That justification is getting rather tired.
- seanflyon 12y ago
  > People invent and invest in the absence of patents I don't think that this is established. Patents have existed since the 1400's and areas that have patent systems have general out-innovated areas without them. This could be the result of many other factors, but patents do clearly provide an incentive to innovate. I think a better argument is that the added costs of dealing with patent trolls outweighs the incentive of a temporary monopoly. http://en.wikipedia.org/wiki/Patent http://en.wikipedia.org/wiki/Patent
  - derekp7 12y ago
    Logically, it can also have the opposite effect. If you have all the rights for a product, you have no incentive to improve it, until the patents are about to expire.
    - CamperBob2 12y ago
      My favorite example is the Roomba. Cool new vacuum cleaner invented, ridiculously broad/abstract patents filed... result, near zero progress for 20 years.
    - rhino369 12y ago
      Patents don't give you rights to a product. Only a certain implementation of one. Your competitors will patent improved versions if you don't. They might also invent a product using a new implementation leaving you with no market. And in practice, it doesn't work that way. Companies acquire patents on each minor upgrade to their technology.
      - vidarh 12y ago
        Your competitors won't exist if your basic patents are broad enough to deny them access to the market.
        derekp7 12y ago
        I was thinking more along the lines of competitors who are in the same space as you (let's say, light bulb manufactures) -- you patent a new type of bulb, your competitors could patent a bunch of improvements on it to deny you future market on improved versions.
  - nitrogen 12y ago
    Patents have existed since the 1400's and areas that have patent systems have general out-innovated areas without them. Has the direction of causality been established here? Maybe areas with more innovation sprout wannabe monopolists who manage to lobby their governments to create patent protections.
- javert 12y ago
  "I'm tired of hearing your argument" is not a valid counter to an argument.

jcfrei 12y ago

Such a cartel would still be possible even without patent protection (the article doesn't go into enough detail on whether patents where still only available through GE after WWI). Cartels are always possible when you have massive economies of scale. The (mass) production of light bulbs in this case is sufficiently difficult and expensive, so that any cartel could easily thwart new competitors - even without patent protection. The expertise in the production of light bulbs doesn't lie within the schematics of the light bulbs themselves - it lies within the exact production process, the selection of the suppliers, refinement of materials, etc. Those are enough hurdles to make an entry into this market very difficult and the establishment of a cartel so easy. In my eyes this article is a very good argument against a pure laissez-faire economy.

dublinben 12y ago
Corporate cartels are incredibly unstable though, because it is always in a single company's best interests to defect. They tend to last much less time than a patent, and are obviously not legally enforceable.