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Both of us agree that a patent is worth no more than an excuse to take someone to court, and often is just enough rope for a small firm to hang itself if the owners do not understand that patent laws protect firms with bigger and more powerful legal department. IMHO, what IP laws really promote nowadays is not innovation but the growth of legal departments, and misallocation of capital into those legal departments.
There was nothing unique about Intel's approach in liberal cross-licensing with other semi-conductor makers for decades. Practically all of them did that. What was relatively unique was Intel's gradual narrowing of the scope of cross-licensing after Pentium, and that slowed down innovation in the industry and for a time almost brought on anti-trust litigation from the Justice Department. Very ironic in that the government was about to sue the company for having a monopoly while being granted a monopoly by the very same government.
The whole outsourcing phenomenon is only possible under "IP" legal framework (and the sheepish faith in that framework/enforcement among the executive suits). If there were no IP as a legalized concept, corporations would not dare to outsource: as their innovative products would be quickly copied; they'd be much more careful about keeping innovations in-house and conduct business in secure facilities and reliable factories in this country (probably owned by themselves).
I'm not at all convinced of the idea that, without legal protection for patents, companies would win in the market place by cutting R&D cost. Corporations are not created to cut cost. Corporations are legal entities created to make profit. There are two ways to making profit:
(1) Catering to what consumers want, by their free choice;
(2) Having the government force consumers into buying what you have for sale at gun point.
Cutting R&D cost by copycatting does not translate to profitability simply because another copycat can do exactly what every other copycat does, and drive profitability to zero. In order to assert the claim that any copycat can be profitable at all, one has to rely on the economic value of "lead time": when one company has the product that people want, and other companies haven't copied it. The original innovator has far more "lead time" on others than all the copycats can have on each other.
What patent laws and copyright laws result in is not innovation (which is richly rewarded by "lead time") but the growth of legal departments to get the government to force consumers to buy one's products at gun point. While trademark laws can be sustained under legal protection against fraud, patent and copyright laws are IMHO whole-cloth inventions trying to create "property" out of non-economic goods: trying to create artificial scarcity out of what is intrinsically superabundant. All other property rights are born out of intrinsically limited supply (i.e. economic goods): if I own your car, you no longer own it. I do not own the warm air I breath out for example, and can not charge you for inhaling it afterward, despite the intrinsically much higher value of air has to human life than cars do . . . because air is not an economic good due to its superabundance. Likewise, a good idea (or a song) is naturally superabundant, and can be copied infinitely, rendering service to many many people, without causing the original "creator" to lose that idea (or song). A government granted exclusivity is about as unjust and counterproductive as any other government granted monopolies.
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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