Clvr.Tv
Rss Feed
Linkedin button

The Myth that Patents are a Monopoly


The Myth that Patents are a Monopoly
This+article+explains+why+patents+are+not+monopolies.++

A patent gives the holder the right to exclude others from making, using or selling the invention.  35 USC 154.  It does not give the holder the right to make, use or sell their invention.  A monopoly is an exclusive right to a market, such as an electric utility company.  An electric utility company has the exclusive right to sell electricity in a certain territory.  Since a patent does not even give the holder the right to sell their invention, let alone an exclusive right to a market, it is clearly not a monopoly.

When a person describes a patent as a monopoly to be consistent they should also state that they have a monopoly over their car or over their house.  In fact, they have more rights in their car and house than a patent gives the inventor over their invention, since you have a right to use and sell your car or house.  A patent does not give these rights to an inventor over his invention.  All invention are built upon existing elements (conservation of matter) and if the elements that the invention uses are patented, then the inventor will not have the right to sell their invention without a license.

Some economists argue that a patent is designed to give the holder monopoly power.  Those economists who are consistent also state that all property rights give some monopoly power.  The property rights are monopolies thesis shows how confused economic thought is on this subject.  The only logically consistent definition of a monopoly is an exclusive right to a market.

According to Wikipedia “In economics, a government-granted monopoly (also called a “de jure monopoly”) is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement.”  Since patents are clearly “government granted”, then this is the appropriate definition.  Since a patent does not even provide the holder the right to sell their invention, it clearly does not grant an exclusive privilege to a firm to be the sole provider of a good or service.

There is a lot of nonsense in the economic profession about monopolies.  Even the definition above can lead to nonsense.  For instance, according to Locke’s Natural Rights theory you own yourself so you own the product of your labor, both mental and physical.  This means anything you produce you have the exclusive right to make and sell, does this make you a monopolist?

The historical basis for monopolies is the Statute of Monopolies of 1623 in England.  The Statute of Monopolies prohibited the Crown from issuing monopolies for items that were already known or being produced.  The idea was to protect the Natural Rights of Englishmen to practice their craft, in today’s language the government in issuing a monopoly was interfering with private citizens rights to their property.  However, the Statute did not prevent an exclusive grant for inventions.  The reason for this in the words of the day was an invention did not interfere or take away anything from private citizens.  The invention did not exist before it was invented, so it does not take away anything from private citizens to provide a limited term property right to the inventor.

Modern antitrust law has turned the concept of monopolies on their head.  Instead of being a limitation on government power, like the Statute of Monopolies, it is a limitation on private action.  Instead of protecting people’s rights to their property, like the Statute of Monopolies, it limits or takes away private property.  The only logically consistent definition of a monopoly is an exclusive right to a market.  No property right, gives you an exclusive right to a market.  Market success is not an exclusive right to a market.  Only the government can create a monopoly.

People who suggest a patent is a monopoly are not being intellectually honest and perpetuating a myth to advance a political agenda.




59 Comments

  1. You are still ignoring the incident I mentioned. By what moral authority does the government have to deny the right to use one’s work?

    If I am the first to discover an algorithm, somebody else re-discovering it on their own and using it does not constitute theft of my property. I still have knowledge of the idea and can use it however I want.

  2. (I don’t see the post I made a minute ago, so I’m reposting it just in case. Feel free to delete if it’s a duplicate).

    Dale,

    You are still ignoring the incident I mentioned. By what moral authority does the government have to deny someone the use of their own work?

    If I am the first to discover an algorithm, somebody else re-discovering it independently and using it does not constitute theft of my property. I still retain the knowledge of the algorithm and can use it however I like.

  3. Yes the great myth of simultaneous invention. First of all it is very rare. Second of all there is only one person who adds to the store of human knowledge, the first person is the inventor and yes you are a thief. If I discover calculus today without any knowledge of calculus that does not make me the discoverer of calculus.

  4. If it is very rare, it is not a myth. Now, logically, how does an individual own something independent of themselves simply because they discovered it first?

    (the key being that they did not create it, but rather discovered it)

  5. Of course it does. You used my invention. You are using the creative efforts of someone else. If I discover gold and they you rediscover it you have stolen my mineral rights, unless I have abandoned them.

  6. Eric,

    Your farm is independent of you, your car is independent of you. Your argument is totally illogical. You clearly own those things you create. Your possession theory of property is nonsense as I have already shown, it is not historically accurate, it is unworkable. You are just searching for a way to steal other peoples property and not feel guilty about it.

  7. I guess we just disagree on a fundamental level there. Perhaps about whether an algorithm is created or discovered? That’s a difficult question, and while I lean towards discovery, I can’t say that I’m completely decided on it.

    Your arguments (have been any, other than invoking the status quo?) still do not convince me on the case of simultaneous discovery/invention though. Is the decision on that not arbitrary?

    Anyway, I can respect that you disagree with me, and am glad that your beliefs are consistent with what seems to be your profession.

  8. Dale,

    But you have not addressed Erik’s lament head on.

    It DOES happen from time to time that a second-in-time engineer independently solves a problem without knowing that an earlier in time engineer had done the same and had filed a patent application for it.

    Then, when sued for patent infringement, the second-in-time engineer feels that he has done nothing wrong and indeed ha done almost everything right. So why is he being punished?

    You say the second-in-time engineer is “stealing” the 1st engineer’s invention. But how could that be when the 2nd one knew nothing of the first’s invention?

    I answered that the patent system is a winner-takes-all race even if some players do not know they are running in that race. It is a government enforced (by force) race. It is enforced because the government feels the gains achieved by the patent system outweigh its deficits.

    What is your direct answer to Erik’s lament?

  9. Actually, we do not have a winner takes all system. That is why we have negative rights. Only one person (group) can be the inventor, just as only one person can be the winner of a race or the discover of calculus. We had a system for determining who the inventor was. Almost no interferences had exactly one count and almost never do two engineers invent exactly the same thing. Nor is the second person precluded from inventing improvements. For instances, the Bell telephone interference had multiple inventors and multiple counts and different people won different counts.

    It is both morally right that there is one inventor and important from a property rights point of view. Clear ownership is critical to developing technologies.

Leave a Reply

Subscriber Count

    18

Advertise Here

Your Ad

could be right

HERE

find out how

Donations

Coming Soon