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I'm afraid the current legal framework around "IP" is more prone to throw the baby out instead of the bath water, not just along with the bath water.
Just look at the biggest IP cases in the past two decades, from music copyright to Windows copyright to Rambus patents to pharmaceutical patents, all we see are "bath water" trying to prevent the natural growth of "babies." That's the natural outcome of government enforced monopoly systems: the original "benign intent" of the system is easily crowded out over time by the skulldugery of nihilistic opportunists taking advantage of the monopolistic system.
In the case that you mentioned, the ex-employee could easily have been stopped by pre-existing non-compete or confidentiality agreement. As for risk to investment, investments are always risky, especially at the VC level; it's the VC investors' own responsibility to ensure that there are non-compete and confidentiality agreements binding the existing employees.
Most innovations involve relatively minor improvements, and the innovator should be incentivized to bring products forward quickly; that is, having a local production facility ready to turn out the products quickly and reap the profits before copycats come along. Many people complain about the shipping of American manufacturing jobs overseas . . . IP laws play a big part in allowing the IP holders taking their sweet time communicating to factories half a world away for production instead of having to keep jobs here in order to have quicker production cycle. When innovations are truly revolutionary and crucial to societal well being, like Volvo's seat belt, Mercedes' crumple zone, and Intel's original microprocessor, the patent holders did not exercise their patent exclusive rights, so it's very hard to argue that those companies would not have put forth the effort if not for the profit expected from patents (as opposed to being able to sell more products just because they are the first-comer, both in terms of reputation and in terms of copycats not being able to keep up yet; market response takes time, and putting a copycat facility into place takes even more time, not to mention finding investors not afraid of further copycats copying copycats and not afraid of original maker expanding capacity on its own). Pharmaceuticals is an industry where investors are investing in the hopes of finding patent choke-holds that can be enforced by government for 17+ years (with extensions); well, see what a disaster that is, as the cost of drug development explodes skyward as greater and greater portions of the cost go to the suits instead of the lab coats, while the companies try to replace decent existing effective patent-expired drugs with unsafe new patent drugs.
posted by 96.233.42...
, Thu, 6 Jan 2011 23:03:23
, Fri, 7 Jan 2011 15:31:58, Fri, 7 Jan 2011 16:23:21, Sun, 9 Jan 2011 03:24:46
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