State of Innovation

Patents and Innovation Economics

Once Again Tech Dirt proves its ignorance of patents and property rights

TechDirt attacked an article written by Judge Michel, who was the former Chief Judge of the Court of Appeals for the Federal Circuit, the court charged with hearing all patent appeal cases.

Let me list the inaccuracies in the Tech Dirt story:

1) TechDirt Argues that innovation leads patents.  The Industrial Revolution did not occur until there were property rights for inventors – It occurred where there were property rights for inventors, not in countries that allowed unlimited copying.  TechDirt is so biased it can’t see what is obvious on its face.

2) Reforms to the Patent System: While I don’t agree with Judge Michel, TechDirt rolls out its usual non-sense about trolls.  The Patent System was designed so that you could have a division of labor between inventors and manufacturers.  TechDirt shows a surprising ignorance of economics in it is complaint about this division of labor.  It also perpetuates the bad patent argument – which is always repeated by people who do not understand how the patent system works, can’t read claims, make outrageous comments about what patents cover and are inherently opposed to patents under any circumstances.

3) TechDirt set up a straw man argument that companies should only get patents to promote innovation.  People get patents because they want to protect their investment in creating and marketing new technologies.  They do not want thieves to be able to free load off of their hard work.  They are not getting patents to promote innovation any more than TechDirt exists to promote the first amendment or the useful arts (it clearly does the opposite).

4) TechDirt does not understand Property Rights:  The crux of TechDirt’s argument against patents is that they are against property rights – they believe if technology is free to copy (steal) it will promote the development of new technologies.  Patents are property rights.  Whenever property rights are instituted you see an increase output and this includes patents.  When modern patent systems were instituted there was an explosion in innovation called the Industrial Revolution.  Those countries with weak or non-existent patent systems live on the edge of starvation and have no innovation (see North Korea, much of the Middle East and Africa).


TECHDIRT’s position is inconsistent with the facts, history, reason and logic.

January 17, 2013 - Posted by | News | , ,


  1. Dale – Great points. Thank you for continuing to put out the truth.

    Randy Landreneau

    Comment by Randy Landreneau | January 17, 2013 | Reply

  2. The U.S. patent system is apparently NOT the envy of the rest of the world:

    Why do you think the rest of the world would not like the U.S. patent system?

    Comment by Art | January 17, 2013 | Reply

  3. Art,

    The US patent system was the envy of the world thirteen years ago before we started HARMonizing our system with the rest of the world. But useful idiots like TechDirt have pushed our system to be like Europe and the rest of the world and now it has become heavily biased toward large corporations. Large corporations are not interested in creating new technologies and a SBA study has shown that most revolutionary new technologies are developed by startups or individual inventors. Note that the rest of the world did not like our patent system thirteen years ago either – that is irrelevant. We need a patent system based on the understanding that patents are property rights that inventors obtain when they create a new invention.

    Comment by dbhalling | January 17, 2013 | Reply

  4. Check out this article:


    “Politicians take note: Loosening America’s intellectual protection laws could help jumpstart the economy.”

    Comment by Bob Hossenfeffer | January 24, 2013 | Reply

  5. From the above cited article (very, very telling):

    “Several countries with weak intellectual protection laws have the fastest growing emerging economies, meanwhile the United States – which has some of the strictest IP rules – is stuck in a Great Recession.

    Recent empirical evidence and policy analysis have revealed the reason for that is tough intellectual property laws inhibits competition, and economic growth is hindered by their existence.”

    Comment by Bob Hossenfeffer | January 24, 2013 | Reply

  6. Bob,

    The article only selects data that fits its analysis. For instance, it ignore most of Africa that have weak IP laws, North Korea which has no IP laws and most of the middle east – particularly those countries in the Middle East with weak IP laws. It also ignores that China and India and South Korea have strengthen their IP laws over the last several decades. It also ignores that the wealthiest countries have the strongest IP. Japan was able to flourish for a while by stealing other people’s technology, but when that was stopped and they had to invent on their own they fell apart. It also ignores history showing that fastest growing wealthiest countries all had strong patent laws.

    If competition makes you wealthy, then you should eliminate all property rights. But anarchy does not produce wealth.

    Comment by dbhalling | January 24, 2013 | Reply

  7. Your favorite bone to pick on: Patents are “monopolies”.

    Or so the Federal Reserve thinks:

    Comment by step back | February 10, 2013 | Reply

  8. Levine and Boldrin again. Their lack of objectivity and knowledge is staggering.

    Comment by dbhalling | February 10, 2013 | Reply

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