Re: Alternative to Invention Patents

From: Grinch (oldnasty_at_mindspring.com)
Date: 06/17/04 

Date: Thu, 17 Jun 2004 15:30:58 GMT

On Wed, 16 Jun 2004 08:47:15 -0400, "Mark Monson" <m_monson@ztech.com>
wrote:

>As things are now, inventors are encouraged to develop new technologies by the lure
>of a twenty year patent monopoly. This system is defended by the argument that
>without patents, new ideas would not be brought forth. As a public service, the
>government awards patents.
>
>The downsides of the patent system are that the patent process takes about two years
>and a good bit of money for the patent preparation. The public pays high prices for
>the patent protected product in the market. The huge fortunes that are collected
>due to patent protection are a lure that prevents research into "unpatentable"
>ideas.

Hmmm.. I would be very interested in data on exactly the proportion of
all patents that produce "huge fortunes" as opposed to those that have
no market value at all.

For example, you mentioned earlier that your attorney "wrote a patent
that was granted for packaging a drill bit in a zip lock bag."

Did this patent create a fortune for its owner -- even a small fortune
-- due to the monopoly it created in the packaging of drill bits?

It's always best to pursue our reforms guided by actual real-world
data, lest we make mistakes due to ignorance.

>The public ultimately pays for patent fortunes, yet the supposed reason for patents
>is to benefit the public. Accepting for the moment the argument that some type of
>compensation should be offered to inventors beyond that of the free market in order
>for the public at large to benefit, and remembering that this compensation must be
>paid by the public, we should ask what is the most cost-beneficial way for the
>public to support inventions.
>
>During the first world war, governments awarded inventors cash prizes for weapon
>ideas. The same system could compete with the patent process today. An inventor
>would agree to forego patent protection and submit his idea to the office of
>invention awards. An examiner would check to see if the idea was new and useful
>and the government would award a cash prize to the inventor if his invention is
>found to be novel and useful.

I assume that, as during the war, the size of awards would vary
correspondingly to the usefulness of the invention. (Otherwise we are
setting up some very dubious incentives)

This would presume that ...

1) We have a cadre of government bureaucrats who can accurately gauge
from looking at something the usefullness and value of *all*
innovations in *all* businesses and industries across the entire
economy -- whether the cost involved in $5 and a moment's thought or
$500 million and years of research; and

2) These bureaucrats can see this *into the future*, which is of
course the relevant issue. Those making big-money investments in new
tech, new drugs, etc,. often do so hoping they may pay off ten years
or so from now, very often in connection with other innovations not
invented yet and possible industrial and economic changes that haven't
occured yet. In our world they get their reward *only* if this
happens. But your "award givers" will know this in advance, and give
the corresponding award now for the usefulness that will be realized a
decade hence.

I suggest that if we have a cadre of bureaucrats capable of such
performance they would be woefully underemployed examining
applications for new designs of trash bags, diaper seals, drill bit
packaging .. and even drug formuals and semi-conductor designs.

These guys should be put in charge of a new USA Gosplan that will show
how the Soviets should have done it right.

As a minor nit pick relative to that, I will add that under the awards
proposal taxpayers pay for the awards, and of couse in >99% of cases
>99% of taxpayers will never use whatever the award is granted for.
Which is economically inefficient. The "public"actually does pay,
literally.

In the patent system the price of the patented item is paid for by the
user of it -- and of course the user would not pay that price unless
the item was worth at least that much or more to him.

This is more economically efficient. It avoids the situation where
taxpayers take a loss by paying for something they don't use, to
enable users to pay less than they are willing to pay for that thing

> The invention would then pass immediately to the
>public domain where anybody could use it.
>
>The downside to inventors is less chance for huge fortunes but the upside is less
>upfront costs, less risk, less of the business side so inventors can concentrate on
>inventing. The public ultimately pays less for the invention and it gets to market
>sooner.
>
>
>MM
>
>
>

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