According to Kiwi Blog “A good move from the Gov’t on patents” there is a new Patent Bill that will prohibit patents on software. Logically, this suggests that there is something special about software that is incompatible with patents. In order to determine, we first have to have a clear understanding of what software is and what a patent is. A patent is a property right that a person earns by creating a new invention. But what is an invention? An invention is anything created by man that has an objective result. This definition clearly delineates that inventions are not things in nature or occurring naturally. An invention, also, is not everything created by man. For instance, a painting or a song is a creation of man, but they do not have an objective result. Songs and paintings fall into the category of aesthetic creations. Their goal is to elicit a subjective response and people will react differently. An invention has an objective result. For instance, a controllable heavier than air powered craft, such as the Wright brothers invented has the objective result of controllable powered flight. Software is a set of written instructions that are converted by a compiler (interpreter) into a wiring scheme that opens and closes transistors. Software that is not converted into instructions is just a bunch of bad writing.
Now that we have a clear definition of a patent and software, we can examine whether there is something special about software that would cause it to not be patentable. The written instructions of software do not have an objective result, unless they converting into a wiring scheme. Therefore, software code is not patentable. No country has patent laws that apply to software code. The way this is normally stated is that software per se is not patentable.
If this was all the New Zealand bill was proposing, we could stop here. But all indications are that the proposed law would not allow patents for inventions in which software was used to wire an electronic circuit. As any electrical engineer knows and software developer should know, solutions to problems implemented in software can also be realized in hardware, i.e., electronic circuits. The main reason for choosing a software solution is the ease in implementing changes, the main reason for choosing a hardware solution is speed of processing. Therefore, a time critical solution is more likely to be implemented in hardware. While a solution that requires the ability to add features easily will be implemented in software. Software is just a method of converting a general purpose electronic circuit (computer) into an application specific electronic circuit. If software is not patentable it leads to absurd results. For instance, if I design a pacemaker using logic circuits, it is patentable. However, if I use a microcontroller to do the exact same thing, it is not patentable.
Software per se is not patentable. Executed software is just a way of wiring an electronic circuit. Electronic circuits have objective results, are a creation of man and therefore an invention. There is no logical reason to distinguish between software-implemented inventions and other inventions. This bill is based on emotion or an anti-property rights agenda or both.
David Kelley gave a talk on Ayn Rand vs. Friedrich Hayek On Abstraction. (If you want to read Mr. Kelly’s paper on point click here) This is a very important talk and explains the difference between Austrian economists and free market (objectivists). It also helps explain why Austrian economists who say they are for free markets are against patents, which are property rights in one’s invention.
Ultimately, Hayek is a warmed over Platonist. According to Hayek our perception and reason are limited (Plato). It is this limit to reason that is Hayek’s justification for a free market. Basically, Hayek argues that because our reason is limited it is sheer folly to suggest that central planning can ever work. Rand on the other hand sees no limit to reason and notes that reason is man’s basic tool of survival. But each man must reason for them self. To force (central planning) someone to do something against their reason is immoral and eliminates the creativity and ingeniousness of everyone subject to the central planning decree. This means we have a small group of people attempting to “solve” problems instead of many people and the people making the decision are not the ones that feel it’s effects. As a result, central planning is an open loop process, which as any engineer knows is a very inaccurate process. In addition, central planning does not take all the variables into account, since only each individual can know exactly what their circumstances and needs are.
I believe Austrians gravitate to Hayek’s ideas because it saves religion (Christianity) from reason and the free market. Hayek’s ideas on the limits of reason puts him in the company of Kant, Hume and Plato. Hayek in that sense is both anti-reason and anti-science, which leaves plenty of room for religion.
It also explains why Austrians do not understand patents. Property rights to Austrians are based on social convention or utilitarianism but not based on reason. According to the Austrians we have property rights (privileges, arbitrary grants) because of tradition or because they believe (not know – reason is limited) it results in the best use of resources. As Hakek states:
[M]orals, including, especially, our institutions of property, freedom and justice, are not a creation of man‘s reason but a distinct second endowment conferred on him by cultural evolution.
Patents were once characterized as monopolies (see English history), so Austrians cannot reason out the difference between what were called patents before the Statute of Monopolies and what are patents today. For Rand, creation is the basis of property rights and all human creations start with one man’s mind. Because of this Rand made it clear patents/copyright (Intellectual property) are the basis of all property rights.
For more see Defending Capitalism: Ayn Rand vs. Hayek
More specifically on Hayek’s concept of Abstraction:
If Hayek’s ideas had any validity, then a person whose eyesight was restored after being blind from birth could immediately (visually) identify an apple or red, which we know is not true. If Hayek’s ideas were true then we would have to have some inherent understanding of the double slit experiment in quantum mechanics or the idea that time slows down as we approach the speed of light, but this is clearly nonsense.
This paper is exploratory not definitive. Comments and input is greatly appreciated. My interest in the comparison between Rand and Locke started when I wrote my book The Decline and Fall of the American Entrepreneur. My investigation was spurred on by reading the excellent book The Power and the Glory: The Key Ideas and Crusading Lives of Eight Debaters of Reason vs. Faith, by Burgess Laughlin. In my opinion, John Locke is often misrepresented by both his supporters and detractors. I admit that I do not have the time or energy to review Locke’s original writings in depth at this time. Your input is appreciated.
Charles Murray has suggested that Ayn Rand’s ideas are just a rehash of Locke, Nietzsche, and Adam Smith. I reject this out of hand. Nietzsche’s uberman influenced Rand’s fictional characters, but she rejected Nietzsche as her philosophical ideas matured. Adam Smith’s book Theory of Moral Sentiments is not consistent with Rand’s ideas at all. He wrote this book before he wrote The Wealth of Nations and the two do not appear to be entirely consistent with each other. As a result, it is hard to pin Smith down on his ethics and epistemology. The differences between Rand and Locke are more subtle.
My book mainly discusses patent law in terms of Natural Law or Locke, because that is the historical basis for the founding of the US and US patent law. Readers of my blog State of Innovation may wonder what this has to do with patent law. My answer is everything, since this is about the fundamental basis of property rights.
In my opinion all philosophers fall either into camp of Aristotle or Plato. Aristotle’s metaphysics is that we can trust our senses and there is only one universe or as Rand stated it A is A. Plato’s metaphysics is that there is more than one world and our senses cannot be trusted to understand them or that our senses only give us a vague impression of the real world. Rand and Locke are both Aristotelian in the realm of metaphysics.
Some people may object that Locke advocated there was a deity. Locke did appear to make somewhat contradictory statements on god and faith, but he was writing at a time in which you could have your head cut off for being on the wrong side of a religious debate. Locke appeared to be a deist and believed;
His philosophy on human progress proposed the following: a) human beings can progress by acquiring knowledge, b) reason and action are subject to natural law, and c) the mind (as consciousness) is subject to scientific inquiry (Smith, 1997).
A Deist believes in god or a deity that created the laws of the Universe and has no effect thereafter.
John Locke’s epistemology was Reason. Reason is the means of integrating and conceptualizing perceptions by means of logic. It is distinguished from rationalism which starts with reveled truths and then applies a logical system derived from these assumptions. This is distinguished from empiricism which holds that man’s only source of knowledge is his senses without any recourse to concepts. The logical positivists did us one favor in showing that all logical systems are based on either an assumption, such as Euclidean geometry’s idea that a straight line goes on forever and two parallel lines never intersect, or based on an observation.
Some people argue that Locke was an empiricist. Locke was attempting to use the techniques of science to analyze ethics and political philosophy. (Note that he also defined the metaphysics and epistemology used by science.) People who argue that Locke was an empiricist usually argue that modern science is based on empiricism. This is incorrect based on the definition given above. Science builds on observation, but it is highly conceptual and many discoveries in modern physics derive from following the logical consequences of theory. For instance, the Higgs Boson particle was first predicted by following the math of field theory and now may have been verified by experiment. Locke was not an empiricist either, based on the definition given above. He is widely quoted as having said “logic was the anatomy of thought”, which would be inconsistent with empiricism.
Rand’s epistemology was Reason also. One difference is Rand’s refutation of Kant’s epistemology that emotion is a valid path to knowledge and his attempts to limit reason. However, Locke came before Kant and therefore could not have commented on Kant. Ayn Rand spends a lot of time explaining how concepts are formed and how they relate to the real world or specific instances. An example is reproduced below:
The same principle directs the process of forming concepts of entities—for instance, the concept “table.” The child’s mind isolates two or more tables from other objects, by focusing on their distinctive characteristic: their shape. He observes that their shapes vary, but have one characteristic in common: a flat, level surface and support(s). He forms the concept “table” by retaining that characteristic and omitting all particular measurements, not only the measurements of the shape, but of all the other characteristics of tables (many of which he is not aware of at the time).
It is my understanding that Rand is explaining in modern language the concepts of Aristotle or refining them. This seems consistent with John Locke’s epistemology.
This is where we see the major differences between Rand and Locke. In my brief survey of Locke’s ethics, I found two competing concepts for Locke. One is his ideas about Natural Rights and the other is a hedonistic perspective on ethics. Locke’s hedonistic perspective on ethics is in conflict with Rand’s selfishness and I would suggest in conflict with Natural Rights.
Locke’s hedonistic ethical views start with the idea that people naturally want to maximize their pleasure and minimize their pain. Locke’s Natural Rights starts with the idea that moral laws are divine, but he does state these divine laws are discoverable by reason. This second part makes it consistent with his deist metaphysics. He does not seem to reconcile these two competing ethical systems. I will focus on Locke’s Natural Rights ethics.
Locke’s formulation of Natural Rights starts with his concept of man’s rights in a state of nature. In a state of nature a man owns himself. Since he owns himself he has a right to defend himself. Man also has a right to those things he creates, which is where the right to property comes from. From these concepts the moral repugnancy of slavery follows as well as most of traditional criminal law, contracts, and property law. Locke does not explicitly state that man is an end in himself like Rand, however ownership in one’s self certainly implies this. To the extent we focus on Locke’s Natural Rights, Rand and Locke are not in conflict and I would suggest Rand’s ideas are a refinement and provide a deeper insight. Like Relativity and Quantum Mechanics expand our knowledge over Newtonian physics, but are not in conflict with it.
Ayn Rand’s ethics starts with idea that human life has value and ethics is the actions necessary to allow man to live. By live she does not mean mere existence, but thriving. Everything else she derives from an evolutionary point of view. In Galt’s speech she states,
There is only one fundamental alternative in the universe: existence or nonexistence—and it pertains to a single class of entities: to living organisms. The existence of inanimate matter is unconditional, the existence of life is not: it depends on a specific course of action. . . . It is only the concept of ‘Life’ that makes the concept of ‘Value’ possible. It is only to a living entity that things can be good or evil.
From this she defines focuses on man and his unique tool of survival, which is his mind.
In order to sustain its life, every living species has to follow a certain course of action required by its nature. The action required to sustain human life is primarily intellectual: everything man needs has to be discovered by his mind and produced by his effort. Production is the application of reason to the problem of survival. (Emphasis added)
It is reason that requires an ethics of individuality, where each person’s life has value separate from the species. This is not true of other organisms.
Man’s mind is his basic means of survival—and of self-protection. Reason is the most selfish human faculty: it has to be used in and by a man’s own mind, and its product—truth—makes him inflexible, intransigent, impervious to the power of any pack or any ruler. Deprived of the ability to reason, man becomes a docile, pliant, impotent chunk of clay, to be shaped into any subhuman form and used for any purpose by anyone who wants to bother. (Emphasis added)
Thus Rand ends up with an ethics in which each individual person is their own end. The exercise of their mind is the means by which they attain values to live. In order to achieve their values they must not only think but act. In order for this to be true, man must own himself, which is the starting point of Locke. The main difference between Locke and Rand is that Rand starts with a scientific or metaphysical basis of the nature of man to derive her ethics. Locke starts with the assumption that each man owns themselves, but Rand proves why this must be true. Her starting point is that every living organism must value its life or go extinct. Note there are ethical systems that do not value human life, so this cannot be taken as a given. We will explore these more later. The second biggest difference between Rand and Locke is she shows the central place of reason and the mind in man’s existence. Evolution had not been discovered at the time of Locke, so he could not use it to develop his ethics. Another major achievement of Rand was to debunk the supposed is-ought dichotomy.
In answer to those philosophers who claim that no relation can be established between ultimate ends or values and the facts of reality, let me stress that the fact that living entities exist and function necessitates the existence of values and of an ultimate value which for any given living entity is its own life. Thus the validation of value judgments is to be achieved by reference to the facts of reality. The fact that a living entity is, determines what it ought to do. So much for the issue of the relation between “is” and “ought.”
This issue was supposedly first raised by David Hume who lived after John Locke died. As a result, this was not a problem which Locke could address. In fairness to Hume, Rand starts with one assumption or observation in order to solve this problem, mainly that a living entity has to value its own life. As I pointed out earlier it is impossible to have a logical system that is not based on at least one assumption or observation.
I have suggested that a deeper understanding of these issues can be had by understanding that evolution is the application of the second law of thermodynamics (entropy) to living organisms. Note I am not the first person to suggest that evolution and entropy are related. Applying entropy concepts to living organisms is fraught with potential logical errors. I have attempted to avoid them in my writings, but in passing these around I have found that even my most ardent supporters found them a little difficult to get through. My most well received post along this line is Sustainability isn’t Sustainable. My other posts on point can be found below.
Life is a fight against entropy. Entropy as applied to economics is the concept of diminishing returns. It shows that inventions are the only way to overcome entropy – production without invention leads to the Malthusian Trap. As a result, this idea is consistent with Rand’s idea that the mind and reason are the primary means of survival but refines this to the understanding of the critical role of inventions.
Why is this important? Because the intellectual battle today is against those people who have combined an incorrect interpretation of entropy with Kant’s emotion driven epistemology. These people do not believe human life is valuable, in fact they believe humans are evil because they believe we accelerate the entropy of the Universe. Other living species do not harness and use energy (outside their physical body) so they do not accelerate the entropy of the universe and therefore are not evil. These people advocate the death of at least five billion people as a moral good. The basis of their morality is founded on a flawed understanding of entropy and physics. For more information see The Pseudo Scientific Basis of Environmentalism. Defeating this evil philosophy intellectually is vital to anyone who values human happiness.
Locke formulation of property rights is based on the Labor Theory of Property, which is commonly stated as when you mix your labor with natural resources you obtain property rights in your creation. This has been purposely mischaracterized and attacked by Locke opponent. Adam Mossoff has an excellent paper on point entitled Locke’s Labor Lost. Locke’s concept of property is that your productive effort crates a property right in the thing you created. One problem or misinterpretation of Locke’s theory of property rights is that labor means physical labor. This is most likely a mischaracterization, but leaves open the question of whether intellectual property such as patents is property.
Rand’s theory of property rights is that they derive from your right to life.
The right to life is the source of all rights—and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave. (Emphasis Added)
But Rand’s understanding that man’s mind is the most important tool for survival causes her to put intellectual property rights as primary.
Patents and copyrights are the legal implementation of the base of all property rights: a man’s right to the product of his mind. (Emphasis Added)
Ayn Rand’s more detailed understanding of man leads to the primacy of man’s mind and reason as his tool of survival. This leads to a deeper understanding of property rights and the primacy of intellectual property rights. My refinement of Rand’s ideas leads to the primacy of property rights for inventions.
Locke and Rand are not in conflict philosophically, but Rand provides a coherent ethics based on the fundamental nature of man and living organisms, which Locke did not. Rand’s main difference in her epistemology is to dispense with the need for a deity, even one whose only effect was to create the world and her tackling of Kant’s emotion is a path to knowledge. I see the relationship between Rand and Locke as the difference between Newton and Einstein or Algebra and Analytic Geometry; refinement not opposition. I believe that Rand’s ethics can be further refined by understanding how entropy and evolution are related. This leads to a slightly different understanding of property rights, but more importantly provides a direct argument against the religion of environmentalism and the related we are running out of natural resources Malthusian economic argument.
 Ayn Rand’s Critics, Capitalism Magazine, by JAMES VALLIANT, http://capitalismmagazine.com/2011/08/ayn-rands-critics/, accessed 3/20/13.
 The Empiricist John Locke, http://nmalbert.hubpages.com/hub/The-Empiricist-John-Locke, 3/18/13.
 “Concept-Formation,” Introduction to Objectivist Epistemology, 11–12
 The state of nature concept has been much maligned by Marxists and others. They have purposely distorted his argument into an anthropological statement. This clearly was not Locke’s intent and shows an intellectual dishonesty on the part of Marxists.
 For those people who do not know, Relativity and Quantum Mechanics are in complete agreement with Newtonian physics except in the realms of very fast systems, very high gravitational fields, and very small distances. This is part of how we know they are correct.
 It is surprising that Rand was indifferent on the idea of evolution. Her ethics is clearly based on the same concepts. I believe the reason for this is she was worried it would lead to erroneous ideas about Determinism.
 What Is Capitalism?” Capitalism: The Unknown Ideal, 16
 The Comprachicos,” Return of the Primitive: The Anti-Industrial Revolution, 84
 “The Objectivist Ethics,” The Virtue of Selfishness, 17
 This is a favorite argument of Christians. They believe it shows morality is impossible without god. This is inconsistent with both Locke and Rand.
 The Science of Economic Growth 1-3, http://hallingblog.com/the-science-of-economic-growth-part-1/, http://hallingblog.com/the-science-of-economic-growth-part-2/, http://hallingblog.com/the-science-of-economic-growth-part-3/; and
The Pseudo Scientific Basis of Environmentalism http://hallingblog.com/the-pseudo-scientific-basis-of-environmentalism/.
 “Man’s Rights,” The Virtue of Selfishness, 93
 Rand, Ayn, Capitalism: The Unknown Ideal, Signet, New York, 1967, p. 130.
In an opinion piece on Fox News entitled “America’s patent system is all wrong for today’s high-tech world”, Mr. Forbes argues that “patent holding entities that do not produce anything in the way of devices or technology are disrupting the free market and stifling innovation for consumers.” Patent pools were first created during the sewing machine patent wars in the 1850s. (For more information see Adam Mossoff’s excellent paper The Rise and Fall of the First American Patent Thicket: The Sewing Machine War of the 1850s. ) During the sewing machine wars it was found that overlapping patent rights made it impossible to produce the best sewing machine for the customer. As a result, a patent pool was created to clear these rights and allow manufactures to produce state of the art sewing machines. A patent pool is nothing more than a clearing house for people’s rights in their inventions, much like ASCAP works for copyrights. Patent pools allow for the efficient division of labor between inventors and manufactures and reduce wasteful litigation. In this sense they are similar to how title insurance works for “real” property. Patent pools were and are a free market device that allows for the efficient clearing of property rights by contract. Patent pools combine people’s right to their property with their right to contract. Both of which are part of a free market. It is disappointing that Mr. Forbes who styles himself a free market proponent has missed these obvious facts.
Mr. Forbes uses the standard rhetoric of the antitrust laws. These laws are not part of the free market, and were championed by people who opposed the free market and property rights, such as Teddy Roosevelt. The FTC’s attack on patent pools and licensing in the 1970s did more damage to the economy than the 911 attackers did. For more information on the FTC’s traitorous attack on US property rights see Jobs, the Economy and Patents.
The article states a number of other fallacies. For instance, Mr. Forbes repeats the idea that there were too many dubious software patents issued. Any objective study of this issue has shown that it is nonsense. For instance, see the paper Of Smart Phone Wars and Software Patent.
The article also asserts that patents that are about to expire necessarily have a lower market value. First of all the market determines the value of patents, not Mr. Forbes arbitrary dictates. Second, patents that are older and cover technology on which numerous other inventions are built are more valuable because they are building blocks. Algebra is not less valuable today than it was when it was discovered, it is more valuable because other areas of math build on that knowledge.
Mr. Forbes suggestion in his conclusion that patents are regulations shows a profound ignorance of property rights and the free market.
 My only complaint with Mr. Mossoff paper is that he suggests that a patent thicket existed. A patent thicket cannot exists in a free market, at least as the term was originally defined. There are a number of papers on point, if you want a link to them let me know.
 Real property in law refers to land and permanent structures. This is similar to the use of real in math to refer to real numbers. Imaginary numbers are real in that they exist as do patents, other intellectual property and personal property (Cars, tools, etc.).
Reason Magazine has released a video, entitled How Patent Trolls Kill Innovation. The magazine banner states that they support “Free Minds and Free Markets” but this video relies on the same irrational, emotion driven logic as the media. I cannot point out all the errors in this video, but below I will highlight some of the major points. Before I do that , let me show some of the sleazy attempts by Reason Magazine to use emotion and hidden assumptions to advance their argument, instead of reason and logic.
Emotion and Faith
*The video starts with the hidden assumption that patents are not property rights – faith not reason.
*The video uses the phrase “patent trolls” to immediately define who is right or wrong without actually proving their case – an emotional appeal.
*The video selects a small entrepreneur to narrate their story – using the typical liberal tactic of pretending this is a fight between a small virtuous entity against a big faceless entity. The reality is that so-called “Trolls” sue large entities much more often than small businesses. Emotional appeal, not reason.
*The video uses an “expert”, Julie Samuels, from a biased source, (Mark Cuban’s lobby group) who has no qualifications in the subject. She has a degree in Journalism and Law, which means she is NOT A PATENT ATTORNEY and does not have the technical skills to understand the underlying technology of patents. Faith not reason.
The video never asks if Austin Meyer did a patent search and clearance opinion before building and selling his software. You would not build a house without doing a title search to make sure you owned the land. Given Mr. Meyer’s surprise that he was being sued for patent infringement, he almost certainly did not undertake this simple due diligence step.
Using Other Peoples’ Property
Mr. Meyer complains that he may have to pay the patent holder for the life of his product. Yes, that is what happens when you use someone else’s property. This is like a steel manufacturer complaining that they have to continue to pay for coal or pay rent for a building they do not own.
Note that the underlying technology is critical to Mr. Meyer getting paid, but he doesn’t want to pay for it.
The anti-patent crowd always complains that these suits are brought in East Texas. If someone refused to pay you rent for staying in your house, would you chose the slowest court in the country or a faster court? Federal Court for the Eastern district of Texas has been one of the fastese to bring invention squatters to justice.
The video makes the implicit assumption that non-practicing entities (NPE) are evil. However, Edison was a NPE, as was Tesla, as was almost every great inventor in the last 200 years, as our most major corporations, as most of our Universities and Government labs. Our Founders looked at the issue of requiring inventors to practice their invention in order to keep their patent and rejected it. They voted for a FREE MARKET system where people could be independent inventors, just like writers do not have to be publishers in order to obtain or keep their copyrights. This is consistent with Adam Smith’s division of labor theory.
The video takes the stand that if you buy the patent rights instead of being the inventor,this is somehow evil. First, all corporations buy their patents – often by paying wages. Corporation don’t invent so they have to buy their patents. Second, we do not argue just because you didn’t build your house you cannot rent it out .
Mr. Meyer states in the video that the technology he wants to use is old, from the 80s. If this were true, Mr. Meyer would be free to use it. But, instead, he wants the updated version of the technology that ensures he gets paid, he just doesn’t want to pay for it.
The Patent Should Not Have Issued
Neither Mr. Meyer nor the so called expert, Julie Samuels, are patent attorneys. They are NOT QUALIFIED to evaluate the scope of the claims of a patent. It is interesting how lay people (I include attorneys who are not patent attorneys in this definition) believe they can just read a patent and evaluate it, but they would never try to do the same thing with a Warranty Clause in a contract or an Indemnity Clause. No one would believe a Journalism major or an attorney (non-technical) is qualified to comment on software technology; but somehow they are qualified to comment on patents on software? This is like asking a plumber to comment on the design of a Nuclear Power Plant.
Patents and the Free Market
Patents are property rights, just like a property right in a farm. The basis for all property rights is creation. Inventions are clearly creations. Property rights are part of the free market. Those countries that are the freest economically have the strongest patents laws, are the most innovative, and have the highest standards of living. REASON MAGAZINE is pushing a point of view that is much more consistent with a Marxist’s labor theory of value than Capitalism.
REASON MAGAZINE is neither promoting REASON or FREE MARKETS in posting this video.
People who believe that software should not be patentable often argue that there are only so many combinations of instructions that can be made. Since the universe of instructions is limited all possible combinations are conceivable and therefore obvious and of course each instruction acts in a predictable manner. If we used this line of reasoning for music, which only has thirteen unique notes (all of which act in a predictable manner), you would assume that over the course of history every song has been written. And yet we find that people keeping coming up with new songs. It is very rare for two songs to be the same or even similar unless the second composer had access to the first composer’s song. With so few basic building blocks, much fewer than any high level computer language, how is this possible. We hear the Free Software Priests tell us it happens on the time in the world of software. Perhaps a little math can help us unravel this conundrum. The number of possible combinations for combining thirteen notes at one time is 6.2 billion. Now it would be fair to say that some of the combinations would never be found in any musical score, but this is just for one note in time. If we assume the average song is three minutes longs at 100 BPM (Beats Per Minute), which at the lower middle range of a metronome, and a unique combination of notes is played every beat, then we end up with 1.8 trillion possible songs. It is not too surprising, given this that artists do not simultaneously create the same song and that we have not run out of songs.
This whole line of reasoning also degrades what the creator of a song does. It suggests that they just string together random notes and then decide which random group sounds is pleasing. To listen to each of these possible combinations would take 10.8 million years. Even if one in a thousand of these combinations was a useful song that would require fifty hours of listening and then having the discernment, intelligence, and diligence to pick it out of that random group. Something I bet only a skilled musician could do with any meaningful success rate. So it is clearly absurd to suggest that just because the number of unique notes in music is very limited that it takes no or even ordinary skill to create a quality song. It is even more absurd in the case of software. The number of instructions in high level software is in the hundreds or more. While each instruction may not be unique changing the variables on which it operates makes it different. So clearly software has many more building blocks. But the Free Software Priests might complain that most software is executed one instruction at a time. This is true, but even a slow processor, such as the 80386 could execute three Million Instructions Per Second (MIPS) so in comparison to the thirteen unique notes at 100 BPM we are talking about more than 1.6 million unique combination per beat. Clearly the numbers get astronomical. The Free Software Priests (FSPs) are pedaling their own Kool Aid in order to steal other people’s work or cover up their inadequacies as programmers.
PS. Chemistry is made up of only 102 elements. How long do you think it would take you to discover a simple element like methane by randomly combining elements? There are at least 108 million possible combinations and this hardly covers the problems of how to create these combinations. The FSP are not dealing in logic and reason, they are dealing in propaganda that hides their anti-property, anti-individual, anti-reason thesis.
 In one octave there are only 13 notes including sharps and flats. Other octaves are just harmonics of these notes.
It is common for people and economists to state that patents are a monopoly. Because patents are a monopoly, it is argued that they negatively affect the pace of innovation and slow down the diffusion of inventions. The only redeeming feature of patents they concede is that if provides a profit incentive to invent, but then it inhibits follow on inventions and the dissemination of knowledge. If this thesis is correct, it should be testable. Let’s test this hypothesis.
1) Countries with strong patent systems should innovate less than countries with weak patent systems.
2) Countries with strong patent systems should have slower dissemination of new technologies than those countries with weak patent system.
If PROPERTY RIGHTS
1) Countries with the strongest patent systems should innovate more than countries with weak patent systems.
2) Countries with strong patent systems should have faster dissemination of new technologies than those countries with weak patent system.
Let’s take a look at the facts, according to the World Intellectual Property Organization (WIPO), the top ten most innovation countries and the bottom 10 countries for 2012 are:
5. United Kingdom
8. Hong Kong (China)
10. United States of America
132. Syrian Arab Republic
134. Cote d’Ivoire
138. Lao PDR
In a report from National University of Singapore they show a chart of the Fraser index vs. Ginarte-Park index. The Fraser Index is a ranking of economic freedom and the Ginart-Park index is a ranking of patent strength. The chart shows an almost perfect correlation between the two. For those of you who are not familiar with economic freedom indices, there are several and they all show that economic freedom correlates positively with economic growth, wealth, education access, health, longevity, the environment, civil rights, etc.
They also had a couple of charts for the countries with the strongest patent systems for four different years and those with the weakest patent systems. I do not know all the countries that were included in this survey.
|U.S.A. 39.30||U.S.A. 39.06||U.S.A. 39.06||U.S.A. 42.75|
|Netherlands 28.20||Belgium 32.23||Belgium 36.22||Netherlands 41.36|
|Switzerland 28.12||Netherlands 31.47||Netherlands 35.22||Denmark 41.26|
|Germany 28.01||Switzerland 30.55||U.K. 33.57||Finland 41.01|
|Japan 27.14||Germany 28.73||Germany 33.14||U.K. 40.15|
|Nicaragua 2.38||Nicaragua 2.38||Guyana 3.17||Niger 5.38|
|Peru 2.22||Bolivia 2.30||Pakistan 3.17||Guatemala 5.10|
|Guatemala 1.90||Guyana 1.69||Jordan 2.95||Nicaragua 5.00|
|Guyana 1.78||Guatemala 1.50||Guatemala 2.15||Rwanda 4.64|
|Jordan 1.72||Peru 1.31||Peru 1.73||Zaire 3.51|
If we examine the first postulate, does it appear the most innovative countries have the strongest patent systems or the weakest patent system? Which countries do you think have the strongest patent systems – the USA, Singapore, Switzerland or Niger, Pakistan, Sudan? It is clear that the most innovative countries according to the WIPO survey have the strongest patent systems. If we look at the charts from the National University of Singapore (NUS) we see those countries with the strongest patent systems are clearly the most innovative. Although the WIPO data and the NUS data are from different time frames we see some overlap between those countries with the strongest patent systems (NUS) and the most innovative (WIPO) and the same is true for the weakest and least innovative.
If we examining the second postulate, does it appear that the countries with the most technology diffusion have the strongest patent systems or the weakest patent system? Which countries do you think have the most technology diffusion – the USA, Singapore, Switzerland or Niger, Pakistan, Sudan? It is clear that those countries with the strongest patents have the most technology diffusion.
The macroeconomic evidence does not support the thesis that patents are a monopoly. The data shows the exact opposite of what this theory predicts.
The empirical evidence is overwhelming that patents are a PROPERTY RIGHT not a MONOPOLY.
I have written extensively on whether the defining characteristics of a patent are consistent with the definition of a monopoly or the definition of property rights. For instance see:
This post explains the characteristics of a monopoly and a property right and poses three questions to show the difference. Patents fit all the characteristics of a property right and none of a monopoly. Note that professional license, such as a law license has some of the characteristics of a monopoly.
This post contains a number of quotes from philosophers explaining that patents are not monopolies.
This post explains the difference in the concepts of property rights, possession, and objects. Most economists and patent detractors confuse these concepts. The origin, definition, and legal basis of property right are explained.
This post compares the definition of a monopoly to the rights obtained with a patent. It shows that the rights obtained with a patent do not confer a monopoly.
The only way to suggest that patents are a monopoly is define “market power” so broadly that any property rights confer market power. I admit that I reject this argument. A property right is not a monopoly and this is an attempt by people with a political agenda to attack the concept of property rights.
PATENTS are PROPERTY RIGHTS under the law, by definition, and according to all statistically significant macro-economic evidence. People who suggest otherwise are pushing a political agenda or do not understand the definition of the words monopoly and property rights.
According to the New York Times Article Inventor Challenges a Sweeping Revision in Patent Law, a lawsuit has been filed to challenge the Constitutionality of the “first to file” provisions of the America Invents Act (AIA). The lawsuit was filed by Mr. Stadnyk who holds several patents related to motorcycles. He compares his fight against the AIA to the battle against Obama Care, which I believe is very appropriate. Both were large complicated pieces of legislation laden with special interest goddies. Both ignored the clear meaning of the Constitution. Given this it is surprising that Mr. Stadnyk selected an attorney who is not committed to the Constitution. Mr. Stadnyk attorney is Jonathan S. Massey, who is a protégé of Laurence H. Tribe. Mr. Tribe has been a leading advocate of the ‘living Constitution’ concept and believes the Commerce Clause is an open ended excuse for the expansion of government power. Hopefully Mr. Massey will be able to argue effectively despite these leanings. I also hope that they hire a patent attorney. As the Supreme Court has proven over a century of confused decisions, most attorneys do not understand patent law and cannot pick it up by just reading the confused decisions of the Supremes.
I and others have argued that the First-to-File (FTF) provision of the America Invents Act (AIA) is unconstitutional. For instance see First to File is it Constitutional, which is a open letter by a number of law professors. The essence of the argument is that Article 1, Section 8, Clause 8, grants Congress the power to protect inventors’ rights in their creations, not the first person to file at the Patent Office. I suspect the opponents will argue the following points:
*Standing: Mr. Stadnyk holds a number of patents, but these are not going to be effected by the AIA. Mr. Stadnyk may have filed a number of patent applications, but these are not going to be effected. If I were the opponents, I would argue that only a patent application that was denied under the first-to-file rule, but would have been issued under a first-to-invent (FTI) system would be well enough developed issue to provide standing. If they succeed with this argument it could be years before a plaintiff had standing to sue.
I think the counter argument is that any inventor whose actions have been effected (changed) because of the change in the rule should have standing. I think this may be the most difficult argument for Mr. Stadnyk to win because it will allow the courts to avoid the difficult questions presented by this suit.
*First Inventor-to-File: The proponents of the FTF system have argued that the AIA is really a first inventor to file. What does that mean? How can you be the first inventor to file? What does the word inventor mean? INVENTOR means the first person to create an invention. There is no such thing as the first inventor to file. There can only be one (one group of) inventor. All others are just re-creators. For example, if I, with no knowledge of Calculus, were to recreate it today that does not make me the discover of Calculus and the equivalent of Newton or Leibnitz. Even if my discovery is close in time to the inventor’s, I am still just a re-creator. This is no different than science or the winner of a race, or the winner of a football game. There is only one winner and there is only one inventor.
Now advocates of the AIA will argue that the first person to create an invention is not always considered the inventor under the present system. Under the rules of interferences the second person to create the invention can be considered the inventor, if they did it without any knowledge of the first creator’s work and if the first creator abandoned their efforts to perfect the invention or concealed the invention. If someone abandons an invention, then it was not created or at the least it provided no benefit to world or even the inventor. You cannot award a patent or inventorship to someone who does not tell you about their invention. In the case of abandonment, I do not see how that person can be considered an inventor. The other case is concealment. In that case, the proponents of the FTF system should argue that no patent should issue not that we should change our whole system to accommodate this very rare circumstance.
*Alice in Wonderland Argument: Proponents of the FTF system will argue that the word INVENTOR can mean anything that Congress decides it means. If that were true, why write a Constitution. IF Congress can define every word as it wishes, then it is pointless to write down a founding document. This is a nonsensical argument, but one the statists on the Supreme Court are likely to find appealing.
*Promote the Progress of Science and Useful Arts: Proponents of the AIA are likely to argue that the Constitutional purpose of a patent system is to ‘promote the progress of science and the useful arts’ and Congress can do anything to further that purpose. First of all this theory confuses the purpose of the preamble with the actual right involved. The purpose of a preamble is explanatory, but not mandatory. This is exactly the way preambles work in patent law. Second, the Constitution says the EXCLUSIVE RIGHTS of inventors. It is the only RIGHT mentioned in the original Constitution and when the founders used the word right they meant natural rights. The purpose of government is to secure these rights – see the Declaration of Independence. The purpose of government is not to promote the progress of science and the useful arts that is the result of securing the exclusive rights of inventors (and authors).
The proponents of the AIA will not admit it, but all empirical evidence shows that a FTI system is more effective at promoting science and the useful arts than a FTF system. This is not surprising since a FTI system rewards the creator not just the person who can game the system the best.
*Treaty Obligation: The advocates of the AIA will argue that our treaty obligations require the US to award patents to foreigners under the FTF system. This is true. However, treaty obligations do not trump the Constitution. We should renegotiate these treaties not trash the Constitution.
It would be nice to believe that patent law is not influenced by politics, but a century of activist Supreme Court Judges shows this is not the case. The most egregious example was the 1949 case Jungersen v. Ostby & Barton Co., 335 U.S. 560, 572 (1949) where Justice Jackson ignored the Constitution and stated that “The only valid patent is one which this Court has not been able to get its hands on.” None of the present Supreme Court Justices understands patent law as well as a first year patent law associate and so this case will probably turn more on politics than the law or logic.
The paper Illuminating Innovation: From Patent Racing to Patent War, by Lea Shaver, is a draft of an article to be published in the Washington and Lee Review, is another example of the deteriorating state of academic research. First, I will examine the primary hypothesis of the paper and second I will examine the factual errors and inherent biases of the paper.
The underlying assumption of the paper is:
For more than two centuries, U.S. patent law has assumed that patents promote innovation. Yet for all the profound impact that patent law has on industry and society, we have little empirical evidence to test this “innovation assumption.” In fact, there are good reasons to believe that patents may also impede innovation, by creating barriers to competition.
Really? How about the clear differences between countries that have patent systems versus those that did or do not. In the early 1800s the strongest patent systems in the world were in the US and England, which were the leaders of the Industrial Revolution. The Industrial Revolution was really an invention revolution as the book The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention, by William Rosen documents. Why didn’t this innovation occur in Africa, or the Middle East? They did not have an anticompetitive patent system? Or even why didn’t it occur in France or Germany or Japan?
There is also strong empirical evidence that human beings did not escape the Malthusian Trap until the advent of a patent system, which are property rights in inventions. The only way to increase real per capita income is by increasing our level of technology. This has been shown by such diverse economists as Robert Solow, Paul Romer, Jacob Schmookler, and Gregory Clark. The first large group of people to escape the Malthusian Trap were the English and the Americans. Japan did not escape the Malthusian Trap until they copied the US’s patent system. For more information see The Source of Economic Growth.
Ms. Shaver completely ignores the work of economist B. Zorina Khan, who has undertaken an extensive survey of the effects of patents on innovation. But she does cite her work while ignoring its conclusions. For those interested in a true academic study of the history of patent law in the US see the book The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790-1920 (NBER Series on Long-Term Factors in Economic Development) by B. Zorina Khan. Note I do not agree with all of Professor Khan’s conclusions, but it is an extremely well researched book.
Both the development and dissemination of technology occurs at a more rapid rate in those countries that have the strongest patent laws. The empirical evidence is overwhelming that stronger patent system results in increase innovation and wealth creation. Professor Lea Shaver’s statement that there is a lack of empirically evidence is outrageous and shows that the professor’s paper is really a propaganda piece.
The Paper: Flaws, Errors, and Distortions
This paper is so full of factual errors, distortions, and propaganda that it is impossible to point them all out or correct them. But it is necessary to point out at least some of them, so that they do not go unchallenged. These errors and distortions are pointed out in roughly the order they were brought up in Professor Shaver’s paper.
The abstract to the article starts with the provably incorrect hypothesis (see above),
Patent law assumes that stronger protection boosts innovation, yet empirical evidence to test this “innovation hypothesis” is lacking.
The article purports to use the example of the invention of the incandescent light bulb to determine if stronger patent protection boosts innovation. It explains that this is not the story of brilliant inventors and bright inventors. No its,
It is a story of corporate maneuvering and high-stakes litigation, as Thomas Edison and his competitors employed patents as weapons in their battle to dominate the electrical industry.
What does the author believe patents are for? Does she believe people collect patents like blue ribbons without any business goals? Does the author believe it is wrong for the owner of a factory use it to dominate a market? Does she understand the purpose of property rights is to enhance the owner’s ability to increase production and lower costs? In other words, does this so-called professor of law understand the purpose of property rights?
Since this statement is in the author’s introduction, it is clear that she has a bias before she has even examined the facts.
She goes on to state,
The smartphone is today’s light bulb. A complex machine, developed through the collaborative and competitive efforts of many engineers, rather than a single mythological inventor.
This shows the author’s bias against the light bulb, which she calls a “humble device.” I doubt the author could build this “humble device” with the materials that Edison had at the time. I am sure her law and sociology degrees have prepared her for building and understanding technology – not.
She also exposes her collectivist ideology when she elevates “collaborative” efforts and suggests that a single inventor is mythological.
The author proves that she does not understand property rights when she states
Patent law is a tremendously influential aspect of modern economic regulation.
Patent law is not economic regulation it is the property law of inventions. It recognizes the simple fact that but for the creator, the invention would not exist.
It is hard to believe how incredibly corrupt our academic institutions have become, but Ms. Shaver sums it up in one sentence.
Within the substantial social scientific literature employing and commenting on case study methodology, some researchers prefer case studies because of normative commitments that achieving objective, accurate explanation of complex social phenomena is unattainable or undesirable. From these researchers’ point of view, there is no “truth” in social science, only “interpretation.”
Let me translate this academic BS. Ms. Shaver is suggesting that objective and accurate explanations are UNDESIRABLE. Well we can start with your paper Ms. Shaver, it is clear that you have no interest in being accurate or objective, your conclusions are based on your feelings not on the facts. The paper and bandwidth to print your drivel is an extravagant waste of the individual human greatness that created the Internet, computers, electronics, incandescent light bulbs, and the printing press.
Ms. Shaver’s dishonesty knows no bounds. She cites Adam Mossoff’s paper on the sewing machine as support for her anti-patent tirade. Adam Mossoff discusses how the markets were able to clear the patent rights of sewing machine inventors, but Ms. Shaver pretends his article supports limiting patent rights.
Next, Ms. Shaver complains
In the case of the light bulb, these long-term dynamics included massive litigation, the consolidation of a previously competitive industry, and a half-century lull between when incandescent light technology was first patented and when it finally became widely accessible to the American public.
Ms. Shaver complains how long it took to disseminate this technology in the US. Did the electrical light technology disseminate faster in China or India or Saudi Arabia, which had did not patent rights at the time. No. In fact, this technology was disseminated faster in the USA than anywhere else in the world, which had the strongest patent protection in the world. But this does not fit Ms. Shaver’s narrative and so she ignores these clear facts.
Ms. Shaver proves her complete ignorance of both the technology underlying the incandescent light bulb and her lack of understand of the function of claims in a patent when she states,
Even today, British schoolchildren are taught that Joseph Swan, not Thomas Edison, won the race to invent the light bulb.
What children are taught is not relevant to understanding of how patent law works. There is a difference between the historian and the patent attorney. If Ms. Shaver had consulted a patent attorney, which she is not, she would have learned that Swan invented a low resistance, short lived light bulb that had no commercial application and Edison had invented a high resistance, long lived light bulb, with immense commercial potential. But I doubt Ms. Shaver, whose prelaw education was in Sociology could even understand why a high resistance incandescent light bulb was so important. For those of you who do not have a technical background a low resistance filament meant that you needed copper cables with very large diameters to even light a city block. The cost of these large copper cables meant Swan’s incandescent light bulb was limited to being a laboratory curiosity.
Ms. Shaver then makes this bewildering statement.
Once electric light was ready for commercialization, many companies competed with Edison’s in the marketplace. Compared to his rivals, however, Edison was particularly successful in litigating his patents.
Perhaps this was because Edison was the inventor of the light bulb and many other things that made it practical invention, including inventing an improved dynamo, fusing systems, electrical connectors including the standard light bulb socket still used today. Why does Ms. Shaver believe Edison invented these? So his competitors could steal his inventions? To help out his competitors? Of course, Edison litigated when his competitors stole his technology. Ms. Shaver clearly does not understand the role of property rights in free society. She also does not understand merit or cause and effect. According to Ms. Shaver, failing to share your property with people who did not produce it is anti-competitive. A phrase she uses several times in the paper.
Ms. Shaver then goes on to discuss the concept of “Patent Racing” by Mark Lemley. Professor Lemley is neither a patent attorney nor does he have a technical background. According to Mr. Shaver, Lemley shows
In case after case, Lemley’s article illustrates, multiple inventors, working on the same technological problem, have arrived at the same solution at nearly the same time.
Mr. Lemley’s lack of understanding of both the underlying technologies and the law shows he has no idea of what an invention is. His conclusions about simultaneous inventions is not supported by the facts or the literature. For more information, see the economist’s Jacab Schmookler’s book, Inventions and Economic Growth, where he examined this nonsense of simultaneous inventions.
Professor Lemley’s lack of technical knowledge leads to his lack of understanding of the difference between inventions. For instance, he does not understand the difference between a patent for a low resistance incandescent light bulb and a high resistance light bulb. He does not understand the difference between a patent on high resistance light bulb and a socket for connecting a light bulb to an electrical distributions system. According to Mr. Lemley these are all simultaneous inventions. Mr. Lemley is another complete charlatan, who pretends to undertake academic research, but is actually is a propagandist who would make Joseph Goebbels proud.
Then Ms. Shaver suggests that the invention of the light bulb was inevitable.
From the perspective of market incentives and of technological groundwork already laid, therefore, a commercially practical light bulb may have been a near inevitability.
If it was inevitable why did the invention of the light bulb occur in the US and not in France or Russian or Ecuador? Why did it occur in the nation that had the strongest patent laws protecting the rights of inventors? Ms. Shaver ignores the obvious.
Ms. Shaver’s ignorance and arrogance knows no bounds, she states:
Despite all this support in the historical record, Lemley’s theory of patent racing has been vehemently disputed by business professor John Howells and his co-author, Ron D. Katznelson. These critics specifically take issue with Lemley’s use of the light bulb as an example of incremental invention. They argue that Edison’s contribution in fact “unlocked the field,” cannot be placed on a par with contributions by any other inventor, and was deserving of a “pioneer” patent. My own closer examination of the light bulb case puts me on the side of Lemley rather than his critics.
Ron Katznelson has a PhD in electrical engineering and has been the founder of numerous, successful technology startups. Ms. Shaver has a degree in Sociology and Law and Professor Lemley also does not have a technical background. Basically Ms. Shaver and Mr. Lemley are completely unqualified to make this determination. Her opinion is without any basis. She knows this so she does not actually support her conclusion, she just asserts it.
Ms. Shaver admits that “lamp patents were not respected” but she complains about the subsequent litigation. She seems to believe that the legal system should support theft in the name of “competition.”
Ms. Shaver goes on to apply her conclusions to the smart phone industry. On the one hand she praise cooperation between competitors and on the other hand she suggests a dominate player is anticompetitive. Isn’t cooperation anticompetitive also Ms. Shaver? Once again Ms. Shaver has shown she is not interested in logic, reason, or a well functioning patent system. She is interested in using any propaganda that will stick to suggest patents are evil monopolies. Ms. Shaver complains that patents lead to monopolies, but ignores the overwhelming evidence that startups rely on patents to protect themselves from larger competitors. For instance, see Tesla whose patent on alternating current allowed Westinghouse to challenge Edison. Countries that have the strongest patent system have the most dynamic markets with new competitors challenging incumbent firms. Weak patent systems not only entrenches the large dominant companies she rails against, but destroys innovation.
This paper is a farce and Ms. Shaver is propagandist pretending to be a scholar. If Yale Law School had one shred of integrity it would fire Ms. Shaver immediately.
Illuminating Innovation: From Patent Racing to Patent War, by Lea B. Shaver, Yale Law School, Washington and Lee Review http://ssrn.com/abstract=1658643
Lea Bishop Shaver
The generally agreed beginning of section 103 is the Supreme Court case of Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248 (1851). This case first articulated the idea that an improvement that was the subject of a patent had to be more than “the work of the skilful mechanic.” The case involved making door and other knobs of all kinds of clay used in pottery, and of porcelain. The Supreme Court decision made the common error of pointing out that each of the elements in the invention were individually known.
But in the case before us, the knob is not new, nor the metallic shank and spindle, nor the dovetail form of the cavity in the knob, nor the means by which the metallic shank is securely fastened therein. All these were well known, and in common use, and the only thing new is the substitution of a knob of a different material from that heretofore used in connection with this arrangement.
Every invention in the history of the world is a combination of known elements/steps. The reason for this is Conservation of Matter and Energy – you cannot create something from nothing. This idea is implicit in 35 USC 112, which requires the inventor explain their invention so that one skilled in the art can practice the invention.
Back to Hotchkiss, the ruling states the well known idea that for an invention to be patentable, it must be more than just the work of a skillful mechanic. Today this is stated as the invention must have taken more than just the work of “one skilled in the art.” For a very interesting discussion of the history of the nonobviousness requirement see Novelty and the Hotchkiss Standard.
Note that Justice Woodberry ‘s dissent in the Hotchkiss case argued that the statute only required the invention be new and did not say anything about the work of a skillful mechanic. Was there any justification in the statute for the Supreme Court’s ruling in Hotchkiss? The 1790 Patent Act stated that the Patent Board was only to grant a patent if the invention was “sufficiently useful and important.” The patent statute of 1836 also contained a clause that said the Patent Office could deny a patent to an invention the Commissioner deemed to be “insufficiently useful and important.” However, it appears that this part of the statute was almost never invoked. Either way, the statute did not give this power to the Supreme Court or any other Court. As a result, Hotchkiss was a clear case of judicial activism. The Court just made up a requirement that was not in the statute and could not be considered just an interpretation of the law.
Why the Non-obviousness Standard is Unworkable
Words have meaning. Let’s examine the meaning of the words NOVEL and OBVIOUS in the context of statute. The key portion of the non-obviousness statute states:
A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. (underlining added)
Based on the wording and the fact that section 103 was added later than the novelty requirement, logically 103 is intended to be an additional requirement above the novelty requirement. According to Dictionary.com, novelty means “of a new kind; different from anything seen or known before: a novel idea.” The non-obviousness requirement logically requires something more than an invention be novel. According to Dictionary.com, obvious means, “easily seen, recognized, or understood; open to view or knowledge; evident.” It is axiomatic to patent law that whether an invention is non-obvious, has to be determined at the time the invention was made or in other words before the invention was known. How can an invention that has not been created, be easily seen, recognized, or understood; open to view or knowledge or evident (obvious)? Clearly, an invention that has not been made cannot be open to view and how can you have knowledge of something that does not yet exist? Evident means, according to Dictionary.com, “plain or clear to the sight or understanding.” Is it any wonder that non-patent attorney judges cannot make sense of Patent Law? The law is contradictory on its face.
Is Section 103 Constitutional?
The Constitution states at Article I, Section 8, Clause 8:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.
The drafters of the Constitution only defined ONE RIGHT in the Constitution and that was the Right of inventors and authors. When the founders talked about ‘the right’ they meant a Natural Right. A natural right is a right that exists, whether government exists or not – of course enforcing that right is another story, which is why governments are instituted among men, see Declaration of Independence.
If the Constitution says that inventors have a right in their discoveries, the first question should be: what is an invention? Some people have suggested that an ‘invention’ can be anything that Congress decides it is. But this is clearly nonsense. If that were the case, then the Constitution would be meaningless. This is not ‘Alice in Wonderland,’ words have meaning. So what is an invention? Inventions belong to the genus or class of human creations. However, not all human creations are inventions. For instance, a painting or a musical score is a human creation, but it is not an invention. Reproduction or making another copy of something is not invention and not a creation in the sense used herein.
We need to differentiate inventions from other human creations. Inventions belong to the species of human creations that have an objective result. What do I mean by an objective result? Examples will probably be the best way to examine this. A painting is a human creation, but it is not an invention. A painting has a subjective result – namely the viewer’s reaction. Logically, all human creations either have an objective or a subjective result or goal, there is no other choice. This point can appear confusing with respect to mathematics. Does a Fourier Transform have an objective result? For patent attorneys, the requirement is commonly referred to as the invention must be ‘useful’ under 101. The synthesis of a new chemical is not patentable if the inventor cannot describe a practical use (industrial applicability) for the chemical. The same is true of mathematical formulas. The definition of an invention requires that it be useful or have, what I call, an objective result, which explains the basis of 101. A mathematical formula by itself is not useful or does not have an objective result.
An invention is a human creation, which means that a human was the creator of the invention. That person is called the inventor. Because we are discussing creation, not reproduction, to be the inventor you have to be first. That is where the Novelty (102) requirement comes from. There is nothing in the definition of Invention that implies any sort of non-obviousness requirement or ‘more than a skilled mechanic.’ Neither the Supreme Court nor Congress have the power to ignore the Constitution, which requires that The Exclusive Rights of inventors be secured. Therefore, 35 USC 103 is unconstitutional.
The origin of Section 103 was a Supreme Court case that failed to follow the law. The more than a skilled mechanic grew into the nonsense of requiring a flash of genius. The codification of this bit of judicial activism results in the non-obviousness requirement for patents. This terminology was double speak: requiring something that was unknown to be apparent. The definition of invention does not include any sort of non-obviousness requirement and the Constitution requires Congress and the Courts to uphold the exclusive rights of inventors. As a result, section 103 is unconstitutional.
Words have meanings and judicial activism has consequences. The non-obviousness standard has inhibited the creation and introduction of new technologies and therefore made us all poorer. As just one example of this see Robert Kerns, inventor of the intermittent windshield wiper. Because of the non-obviousness standard, automobile manufacturers were able to steal his invention and drag out court cases for years. Robert Kerns had a PhD. in electrical engineering and was an intelligence officer in the armed forces as a teenager. Instead of inventing or teaching, Dr. Kearns spent his life litigating against an auto industry that felt no shame in stealing his invention. Another tragic example is that of Edwin Armstrong, inventor of the superheterodyne receiver and FM. RCA’s theft of FM radio destroyed this genius to the determent of all mankind.
Twitter posted their Innovators Patent Agreement (IPA) https://github.com/twitter/innovators-patent-agreement/blob/master/innovators-patent-agreement.md with much ballyhoo yesterday. Despite the claim that Twitter will only assert patents defensively, part 2(b) of the IPA allows Twitter to assert patents against anyone who has asserted their patents. This will only exclude a very few companies, mainly startups. Twitter’s stated goal is to promote innovation, but the real result if Twitter is successful will be that companies will rely on Trade Secrets. Trade secrets decrease innovation, because the information is not shared. Inventors cannot build on the work of previous inventors and they are more likely to waste resources rediscovering other people’s work (reinventing the wheel). History clearly shows that when a country relies on trade secrets instead of patents, innovation is impeded. Those countries with weak or nonexistent patent systems are not innovators and their people live on the edge of starvation.
In an article entitled “Could Morse Have Patented the Web? Under today’s loose standards, the telegraph inventor might own the Internet” , dated March 26, 2012, the Wall Street Journal demonstrates their incredible ignorance of patent law. The article states, “The standards for patents are so low that simply having an idea often justifies a patent.” Obtaining a patent takes at least several years to obtain and tens of thousands of dollars. It is the most expensive, time consuming, and most examined property right before you obtain title of all property rights. In addition, when Morse obtained his patent the requirement that a patent cover a non-obvious invention did not exist. This by itself makes it more difficult to obtain a patent today than in Morse’s day. The author’s ignorance of patent law embodied in the above statement is monumental.
But the ignorance does not stop with this statement, the article goes on to state that:
“The patent explosion began in the mid-1990s, when the U.S. Court of Appeals for the Federal Circuit ended the requirement that patents specifically define inventions.”
First of all the U.S. Court of Appeals for the Federal Circuit never did any such thing. The requirement for specifically defining one’s invention in a patent has not changed since at least the 1952 patent act. Second there has been no explosion in the number of issued patents in the US to US based inventors. The numbers of patent issue to US based inventors has been flat for at least a decade, see chart below
and by every objective measure (GDP/patent, R&D/Patent, Population/patent) the quality of patents is increasing – see Patent Quality Nonsense.
The article then quotes a forthcoming article from the CATO Institute that it is impossible for a software company to determine if they are infringing an existing patent.
They estimate that there are 600,000 firms producing patent-eligible software and 40,000 software patents granted each year. They say this comes to “24 billion new patent-firm pairs each year that could produce accidental infringement.
Since the total number of issued patents since 1836 is just over eight million this is complete nonsense and academic fraud. The exaggeration of the authors from the CATO Institute and Yale Law School is criminal. Both of the authors of this study should be fired and never given another academic job. But so low is the state of our academic research no one will question their outrageous assertions.
Companies do market research on competitors in the software space and clearly do not feel overwhelmed by the “24 billion” new pairs of potential products. Most software companies I know are very good at narrowing down their market research and the same applies to patents. Companies spend huge sums on market research, but complain about spending a little money to determine if they are violating someone’s property rights. In fact, most companies never do check to see if their products are likely to infringe a patent. This is like starting construction on a building without checking that you have clear title to the land. We would not tolerate or glorify the stupidity in the case of real property, so why should we do so in the case of patents?
Finally, to the point that Morse could have patented the Internet this again shows the author’s ignorance of patent law. Patents cover an invention. Anything that incorporates that invention infringes the patent. For instance, if I have a patent on a microprocessor and you incorporate a microprocessor into your cell phone you infringe my patent. I am not asserting that I invented the cell phone, I am asserting that I invented the microprocessor and you are infringing my patent by incorporating it into your cell phone. According the Supreme Court’s decision Morse did invent a system for repeating electromagnetic signals so they could be sent over long distances. Repeaters are still used to amplify electronic signals, including signals sent over the Internet. So if Morse’s patent were still valid (they expired around 150 years ago), then yes the Internet would likely have infringed his patent – according to the Supreme Court’s characterization. This would not mean that Morse was asserting he invented the Internet. Note that the inventor of the transistor, the inventors of error correction codes, the inventor of microprocessors, the inventor of electronic amplifier circuits, and many, many more would be in the same hypothetical situation – but of course this is meaningless since their patents expired years ago. All this proves is that all inventions build on earlier inventions and the author of this article’s ignorance of how patents work, knows no bounds.
Could Morse Have Patented the Web? Under today’s loose standards, the telegraph inventor might own the Internet” , dated March 26, 2012, the Wall Street Journal
The Supreme Court ruling in Mayo Collaborative Services v. Prometheus Labs., Inc. (Supreme Court 2012) was released on March 20, 2012 and they held unanimously against Prometheus and invalidated two patents under 35 USC 101. My title may be a bit salacious, since the holding in the case does not limit patents to just black magic, it limits them to magic. The holding on p. 4 states:
The steps in the claimed processes (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field. P. 4
The three steps (of the claim) as an ordered combination adds nothing to the laws of nature that is not already present when the steps are considered separately. P. 10
Logically, the Supreme Court is saying that known steps or elements in combination with a law of nature is not patent eligible. First every invention ever made involves steps (elements) that were known individually before the invention, and laws of nature. You cannot create something out of nothing. Section 112 means that you have to be able to describe your invention in terms known to those skilled in the art. Thus the Supreme Court’s holding means that any invention that satisfies 112 is unpatentable under 101. The only inventions that will satisfy 101 are those that violate laws of nature or involve creating something out of nothing – or magic.
Get out your cauldrons-
For the lawyers in the audience this case reintroduces the point of novelty test nonsense.
I have written extensively about this case in the following posts and will not reiterate my earlier points.
But for those not familiar with the case here is a little background
The patents (6,355,623 and 6,680,302) claim methods for determining the optimal dosage of thiopurine drugs used to treat gastrointestinal and non-gastrointestinal autoimmune diseases. Thus, the questions in this case are whether determining optimal dosages of thiopurine drugs to treat autoimmune diseases exists in nature separate from man and whether this solves an objective problem? Clearly, determining optimal dosages does not exist in nature for any drug and the patent solves the objective problem of determining the optimal dosages of thiopurine drugs for autoimmune diseases.
Ayn Rand discussed this exact issue in Atlas Shrugged. James Taggart is discussing Rearden Metal with his wife:
”…’he didn’t invent smelting and chemistry and air compression. He couldn’t have invented HIS metal but for thousands and thousands of other people. HIS Metal! Why does he think it’s his? Why does he think it’s his invention? Everybody uses the work of everybody else. Nobody ever invents anything.’ (Jim Taggart) She(Jim Taggart’s Wife) said, puzzled, ‘But the iron ore and all those other things were there all the time. Why didn’t anybody else make that Metal, but Mr. Rearden did?’” Kindle Location 5796-5802
These exact questions could be asked of the Supreme Court. All these other steps were available to other people, but no one else discovered how to use thiopurine to safely treat Crohn’s disease. In fact, the Supreme Court admits as much.
. . . and it has been difficult for doctors to determine whether for a particular patient a given dose is too high, risking harmful side effects, or too low, and so likely ineffective. p. 4
The reality is that this Supreme Court is anti-patent and anti-property rights. The opinion states patents are monopolies in three spots and mentions rent seeking in one spot, but it does not mention that the Constitution clearly states that inventors have a RIGHT to their invention and it does not state that patents are property rights. This case is just another example that the anti-property rights and anti-Natural Rights crowd is in control of our government. This case will have long term negative ramifications for the US economy. The US is losing its technological advantage because it believes that inventors should work for free. Note that Singapore is taking another path and trying to figure out how to strengthen their patent laws (see Singapore and the US Divergent Patent Policies)
The CATO Institute are reiterating the findings of the flawed paper The Private and Social Costs of Patent Trolls , Boston University School of Law Working Paper No. 11-45, by James E. Bessen, Michael J. Meurer, and Jennifer Laurissa Ford. This paper looks at lawsuits filed by NPE (Non-Practicing Entities) and the subsequent drop in the stock price of the company being sued. The paper suggests that this loss of wealth is all “deadweight” loss, since little of the money ends up with the original inventors of the technology. This last part is an intellectually dishonest slight of hand. The authors make no attempt to determine if the cases are meritorious. If the firms are infringing a valid patent, then the filing of the lawsuit represent the cost to society of deterring the theft of inventions. This cost discourages further theft by companies. If half the patent lawsuits (by cost) are meritorious then the net cost of these lawsuits is zero. Unless you assume that the cost of protecting property rights has no value, which I am afraid is the ultimate problem with anti-reason people at Reason Magazine and CATO. Neither of these organizations seems to understand property rights.
This lack of understanding of property rights causes multiple errors in both the paper and CATO’s and Reason’s analysis of this issue. For instance, once you understand that patents are property rights you understand the purchase of patents by investors is not different that the purchase of a building from the builder. The profits by the subsequent purchaser of the building are not “DEAD WEIGHT” costs and neither would a lawsuit by the purchaser to demand rent for someone squatting in their building. When the (paying) occupancy rate for buildings is high this encourages the building of new structures. The same is true for patents – when owners of patents receive good returns on their assets then inventors create more of these assets.
Unfortunately, the CATO Institute has become hopelessly lost on the issue of property rights. They have adopted the Utilitarian point of view that property rights are just an efficient way of allocating scarce resources. Professor Adam Mossoff has commented on this nonsense. Mossoff states that Jeremy Bentham’s ideas are at the root of Libertarian’s attack on IP. Bentham basic philosophy was Utilitarianism – the greatest good for the greatest number. Bentham stated that the reason for property rights was because of scarcity and conflict resolution not natural rights. Mossoff then points out that the followers of Bentham argue that there is no conflict between people using the same ideas like there is with land. Ideas can be copied and used endlessly. This argument fails for because there is a conflict when a physical embodiment of the idea (invention) is created. The copier has clearly limited the return for the inventor and patent law only prohibits the physical embodiment. I discuss the fallacies behind the scarcity theory of property at my post Scarcity: Does it Prove Intellectual Property is Unjustified and Scarcity -2 and Scarcity -3. Mossoff points out that this is the philosophical point of view used by the Cato Institute and the Von Mises Institute to attack patents (IP).
Utilitarianism’s “greatest good for the greatest number” always leads to totalitarianism. It also never leads to the purported goal. The reason for this is that utilitarianism is merely a justification for short term actions. Once something has been produced, it always looks like the greatest good is to redistribute the creation. However, this is clearly only true in the short term. In the long term it is clear that this always destroys the economy. This is the theory behind the USSR, North Korea, and all socialist states. As Ayn Rand pointed out you only need open your eyes to see that these countries do not produce the greatest good for the greatest number. This is because stealing the product of one’s mind (mental labor is labor) is no different than banning free speech. It stifles the mind, which source of all economic progress (values).
The CATO Institute’s article is under the header “Regulation.” This again demonstrates that the CATO Institute does not know the difference between property rights and regulations. Here are three easy questions for Libertarians, Socialists, and Economists to determine if a right is a monopoly (rent seeking) or a property right.
1) Does the right arise because the person created something?
2) If someone else was the creator would they have received the right in the creation?
3) Is the right freely alienable?
Patents meet all the tests of property rights. They are not a regulation. Enforcing property rights does not result in dead weight costs.
Another great article on this issue can be found at Gametimeip entitled Myopic Patent Cynicism.
The phrase “I am my brother’s keeper” is used to explain a moral goal or imperative. The word ‘brother’ does not mean your biological brother, but those people in your community, or country, or really every other human being in the world. The word ‘keeper’ is used to mean that you have a moral responsibility to help every other human being in the world. This responsibility means that you are to put their needs before your interests and your moral goal is that people exist to serve others. In other words, the phrase ‘I am my brother’s keeper’ enshrines SLAVERY as a moral goal. Slavery is the condition in which you have no right to exist for yourself, your only right to exist is to serve others. Note that all slaves need a master and as a result it is no surprise that President Obama has used this phrase to explain his policies as he is an avowed socialist and wants to be our master.
Wherever this moral goal has been tried it has resulted in human suffering, misery, disease, famine, death, and torture. North Korea is the country that most encapsulates this moral goal today and it is a living hell. The Soviet Union and Communist China also tried to implement this moral imperative and it resulted in the largest genocides in the 20th century, resulting in the death of over 100 million people. Attempting to following this moral code also resulted in the Dark Ages under the direction of the Catholic Church. It is also why the Christian right is often ineffective at countering socialists arguments, since they accept the same moral goal. These bad outcomes do not occur because the wrong people are in charge, they occur because slavery is immoral and this is the logical result of following an immoral goal.
The opposite moral imperative to ‘I am my brother’s keeper’ can be found in our Declaration of Independence – namely the RIGHT to Pursue One’s Own Happiness.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
This right to pursue your own happiness is the exact opposite of slavery. It states that no one has the right to enslave you (or anyone) morally or legally. Wherever this moral ideal has been tried it has always resulted in human happiness, abundance, technological innovation, increasing life spans, increase health care, and yes fewer environmental problems. There is no contradiction between what is moral and economic abundance and human happiness. This has not occurred because the right people have been in charge, it is the result of pursuing that which moral, namely FREEDOM.
Why should a blog directed to patents and inventions care about such a subject? Because this idea of ‘I am my brother’s keeper’ has been raised in the cases Association of Molecular Pathology v. USPTO (which was original called ACLU v. Myriad) and in Mayo v. Prometheus and it is used by opponents of patents. They all argue that the inventor has no right to his invention and the only reason we allow them to invent is to serve their fellow man. In the ACLU case this argument was re-crafted as property rights should not stand in the way of science.
Slavery is immoral and a moral goal of slavery, even if it is suppose to be voluntary, is immoral. Those who push the moral goal of slavery are advocating human misery, death, famine, and genocide.
- step back on Is 35 USC 101 Judged by the Claims?: CLS Bank v. Alice Corp CAFC en banc decision: Nation of Men
- step back on New Zealand to Outlaw Patent on Software
- step back on New Zealand to Outlaw Patent on Software
- dbhalling on New Zealand to Outlaw Patent on Software
- dbhalling on New Zealand to Outlaw Patent on Software
- Is 35 USC 101 Judged by the Claims?: CLS Bank v. Alice Corp CAFC en banc decision: Nation of Men
- CAFC Makeup: May 16, 2013
- New Zealand to Outlaw Patent on Software
- Hayek vs. Rand: Patents and Capitalism
- WHY THERE IS NO GLOBAL WARMING CONSENSUS: Guest Post
- Earth Day: Environmentalists are Evil
- Myriad Oral Argument: Supreme Court Analogies show Supreme Ignorance
- Supreme Court Hears Myriad Case: The Myth You Can Patent Human Genes
- CLS Bank v. Alice: 35 USC 101 Presumption of Validity
- Margaret Thatcher Patent Attorney: You Did Build That