State of Innovation

Patents and Innovation Economics

Yale Law Professor’s Attack on Patents: A Comedy, Farce and Tragedy All Rolled into One

An article on Cato Unbound entitled, “What’s the Best Way to Fix the Patent System’s Problems?” by law professor Christina Mulligan, argues for two different solutions of what she perceives are problems with software patents.  One solution advocated by Eli Dourado is to eliminate all software patents (See CATO and Mercatus Center: Another Flawed Study on Patents).  The other solution, advocated by John F. Duffy, is a more rigorous application of the obviousness standard.  Ms. Mulligan comes down on the side of Eli Dourado’s solution of eliminating patents on software.

What is amazing is that Ms Mulligan never even addresses the inherent contradiction that if you are going to eliminate patents of software you have to eliminate all patents on electronics.  Of course this may be because Ms. Mulligan does not have a technological background, she is not a patent attorney nor is she legally or factually competent to be a patent attorney.  Software is a way of wiring an electronic circuit.  Any invention implemented in software executed on a computer can be implemented in hardware (i.e., an electronic circuit) as any competent electrical engineer knows.  In fact, this is exactly what happens when software is executed, it is converted into a series of voltage levels that open and close switches in a general purpose electronic circuit called a computer to create a specific electronic circuit.

Ms. Mulligan quotes the clearly incorrect statement that:

Many software patents are merely mathematical formulas or abstract ideas and should not be considered patentable subject matter because they remove too much “raw” material from the public domain.

This statement confuses two separate points.  One point is that many software patents are merely mathematical formulas or abstract ideas.  The second point is that software patents remove too much raw material from the public domain.  The idea that any software patent is a mathematical formula is complete and obvious nonsense to anyone who has worked with computers.  While it is true that software often uses mathematical formulas, so do electronic circuits, radar, rockets,  mechanical systems, chemical processes, in fact almost every area of technology.

Ms. Mulligan does not define what she means by an abstract idea.  In one sense every invention in the history of the world is an abstraction.  Inventions define a class of things.  For instance the invention of the incandescent light bulb is not a specific incandescent light bulb, but the class of these objects.  The only logical definition of an abstract idea is “a thought or conception that is separate from concrete existence or not applied to the practical”.  Every invention that meets the requirements of 35 USC 112 first paragraph is not an Abstract Idea, since this section requires that the invention be described in a manner so one skilled in the art can practice the invention.  Something that can be built and used (practiced) is concrete and applied, therefore it is not an abstract idea.  Clearly software patents are not abstract ideas because they are concrete and applied to a problem of life.  If they did not solve a problem of life, then no one would care, because no one would want to practice their invention.

The second point is that they remove too much raw material from the public domain.  This is a bald statement without any support.  In fact, patents do not remove any material from the public domain.  They secure the property rights of an inventor to their invention that did not exist before they created the invention.  To suggest that this removes anything from the public domain would make even the most strident Marxist blush.

Ms. Mulligan attempts to use Ayn Rand in support of her position.

Even Ayn Rand sidestepped suggesting a length for intellectual property terms, stating that if intellectual property “were held in perpetuity . . . it would lead, not to the earned reward of achievement, but to the unearned support of parasitism.

Of course she forgets to mention that Rand stated “Patents and copyrights are the legal implementation of the base of all property rights: a man’s right to the product of his mind.”[1]  You can see from this statement that it is very unlikely that Ayn Rand would have supported Ms. Mulligan’s position.

More importantly, all property rights are term limited.  A dead person cannot own property.  Property is a legal (moral) relationship between a person and something.  Once the person is dead they cannot have a legal relationship to something on this Earth that would be a contradiction.  There is only a question of what happens to property relationship when someone dies.  But no property rights go on forever.

Ms. Mulligan also ignores the obvious Constitutional problems with a law prohibiting patents on software or any other group of inventions.  Article 1, section 8, clause 8 requires that the right of inventors to their inventions be secured.  There is no basis under the Constitution to discriminate between securing the rights of inventors for chemical inventions, but not to software inventions for instance.  Ms. Mulligan may argue that the preamble to article 1, section 8, clause.8[2] is a limit on patents, but this is a clear misinterpretation of a preamble under legal construction.  Preambles are never considered limiting in law.  In addition, if the founders intended such a limitation then they would have said Congress can take whatever steps they believe will promote the sciences and useful arts.

Ms. Mulligan’s arguments do not stand up to scrutiny.  Part of the problem may be that Ms. Mulligan is not a patent attorney.  But some of the problems are so outrageous, especially for someone who is a Yale Law professor that the only conclusion is that she has a political agenda.

The United States of America created the strongest patent system in the world.  Most of the greatest inventors in the history of the world, Edison, Tesla, Bell, etc. lived and worked in the United States.  In less than 100 years, they created the most technologically sophisticated country ever.  Almost every modern product you use today was subject to a patent or a patented processes at some point.  Your cell phone is the subject of hundreds of patents.  The same is true of your computer, the Internet, the power system, the medicines your take, the car your drive, even your glass windows (Venice patent system), even cement.  For Ms. Mulligan to suggest that patents on software or anything else inhibit the progress of technological is an extraordinary claim and requires extraordinary evidence.[3]  Ms. Mulligan has failed to provide even a scintilla of evidence and logic for her position.


[1] Rand, Ayn, Capitalism: The Unknown Ideal, Signet, New York, 1967, p. 130.

[2] “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”

[3] Thomas Paine.

November 20, 2014 Posted by | -Philosophy, News, Patents | , , , , | 6 Comments

Competition is for Losers

This statement is from a Peter Thiel interview.  Peter Thiel is a founder of Paypal, investor in Facebook and many other technology startups.  Mr. Thiel is talking about entrepreneurs and businesses and that you want to create a unique company and dominate your market space.  I have just finished a manuscript for a non-fiction book that makes this point from an economy wide point of view.  Wealth is not created by manufacturing undifferentiated, me-too products, it is created by new technologies.  There is no contradiction between what is good for the economy and what is good for an entrepreneur, despite the statement of economists on perfect competition.

One of Peter Thiel’s interview questions is tell me something you know to be true that no one else knows is true?  How would you answer that question?

My answer is that the source of real per capita growth is inventions and patents, property rights in inventions, are the key to stimulating people to invent, resulting in the Industrial Revolution and our present standard of living.

November 6, 2014 Posted by | -Economics, Innovation, News, Videos | , | Leave a comment

   

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