State of Innovation

Patents and Innovation Economics

Galileo "Invention Theft Worse Than Murder"

According to Stephen Hawkins:

As a cosmologist, you may be interested to know that my illustrious predecessor Galileo Galilei had his design for a compass stolen, by his one time protege Baldassar Capra.  I know that patent theft is one of the big issues that innovative SMEs face today.  Galileo described such theft as ‘worse than murder, the victim feels the loss of fame, honour and merited glory, obtained not by nature, fate or chance… but from studies, hard work and long vigils

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May 10, 2011 - Posted by | Uncategorized | , , ,

2 Comments »

  1. Yes there are all those great things for the inventor or holder of the patent; but inventors also cause all those in the markets that supply the raw material and labor for the invention to earn more money and prestige then they did before.

    With 80% of the value of S&P 500 companies in intangible assets, I’ve been thinking about how patents are the economy of today. If the patent office were to shut down today, the economic disaster that follows would make the housing bubble and derivatives scandal look like a drop in the bucket.

    Today there are more people in Africa who own a cellphone than there are people who have access to clean water. That means there are cellphone towers popping up in the middle of nowhere creating more demand for energy and energy prices go up.

    So no matter what one invests in, including oil, the value is due in large part to inventions. Without inventions there is no increased demand.

    The people who own the oil companies have no incentive to invent cellphones or any other uses because they already receive a nice income from the oil. The property rights of patents not only incentivize the investment in innovation; patents also create profits for the owners of commodities who have no ownership in the patent.

    Thanks to the invention of the cellphone and other inventions, the market price of oil is higher and oil profits are higher. A patent says that the inventor that made it possible for the owners of oil to enjoy higher profits is also entitled to a cut.

    Without patents all the profits would stay with the owners of oil and the rest of us would not have a reason to invest in creating inventions. Without patents nations would still be at war over commodities as the only source of wealth. One might even say that the property rights of patents redistribute wealth; they definitely redistribute power, and thereby help keep the peace.

    Patents: a harbinger of peace and prosperity.

    Comment by Matthew Artero | May 11, 2011 | Reply

    • Matthew, excellent points. Invention is the first step in the creation of all wealth. Logically invention proceeds production which proceeds consumption.

      Comment by dbhalling | May 11, 2011 | Reply


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