Walter said:
Paul Hovnanian P.E. said:
[...]
Some argue that patents are necessary to protect investments in R&D even
when the incorporated idea are not novel. I can accept that.
I have a hard time understanding that argument.
Consider a market with several manufacturers selling a roughly-equivalent
product. The question at hand is whether any one of those manufacturers
will do the work to develop a new feature, knowing that the feature may be
copied (sans development cost) by the others as soon as it is released.
I would argue first that it is clearly the case that they *will* add
features, even without protection. People are creative even when they are
not being rewarded; anyone on this forum should be well aware of that. And
if no one is innovating, someone who does will gain customers for at least a
little while, in the same way that oscillators usually start up sooner or
later. Every feature that's ever been added to a product without being
patented is evidence for this.
I think that this is correct. But that doesn't mean that some limited
protection against a competitor copying your work can't be provided.
Something along the lines of a copyright (which is close to what a
design patent gives you, if I understand them correctly).
Second, I would argue that whether or not patents are necessary to protect
investment in R&D is irrelevant to whether the governments should grant
them. There are plenty of things the government could give me that it
doesn't - for instance, money. If the government gave me money, it would
make my life better, and it would make my business more successful. But it
would do so at a cost to whomever it got the money from; it should only do
that if the net result is positive.
That's a valid point. In fact, patents are intended to encourage people
to divulge the results of their R&D so that others can build upon them.
If all you want to do is to keep technology out of the hands of your
competitors, keep your work secret. The moment you patent (or publish),
everyone else can see your work and is immediately brought up to your
technological level. If you keep it to yourself, you can build upon your
own work and create a larger lead over your competition.
So, the government should only help company A by protecting its R&D from
competitor B if the result is positive, on the net, for both. That
criterion may be met when company A is forced to divulge something of value,
that would not otherwise be divulged, to competitor B in return for the
protection. The criterion is not met, when the information being divulged
would have to be revealed in the course of ordinary business. Company A was
helped, certainly, but only at competitor B's expense; there was no net
benefit.
A positive result for one (or both) companies or for consumers as a
whole? The current problem, not so much with patents, but with the way
that they are being used, is that companies with portfolios of patents
are actively colluding in their cross licensing agreements to exclude
other manufacturers, rather than just using their patent rights for gain
through licensing fees. Both companies involved gain, but consumers
suffer.
If the government wishes to support R&D more than the market itself would
support it (and I don't know why it should, except in the case of basic
science), it has non-restrictive ways to do it: for instance, by funding
grants, or by providing R&D tax exemptions. Trying to encourage R&D by
forcing companies to walk the patent-infringement tightrope seems stupid to
me.
This works, to an extent. But accepting gov't funding can place some
restrictions on a companies ability to restrict subsequent access to the
R&D results by other companies. Unfortunately, given our current
economic environment, many companies place a very high value on
developing monopoly control in their markets. Aside from the (obvious)
Microsoft example, look at how hard Boeing and Lockheed are pushing for
the right to combine their satellite launch businesses. This is a market
in which the 'customer' is (or should be) well informed as to the down
side of having a single source for their needs.
The other side of gov't funding, particularly in the defense industry,
is that the resulting market for that technology can be restricted. If
the R&D is privately funded and conducted by foreign subsidiaries
outside the reach of arms regulations, then it is possible to sell the
resulting products in a much larger market.