State of Innovation

Patents and Innovation Economics

A Modest Proposal for Academic Economists

In one of my earlier posts, Patent Quality Non-Sense , I pointed out that the R&D (Research and Development) per patent ratio, GDP per patent ratio, and number of citations per patent have all increased over the last fifty years.  These were all statistically significant changes.  Based on this evidence I concluded that the quality of patents (or threshold for obtaining a patent) has increased over the last fifty years.

I was fortunate enough to have an academic economist send me a message pointing out that there were several papers by academic economists that have been debating why the R&D per patent and GDP per patent ratio have been increasing.  One of these papers suggested the reason for this phenomena was that as technologies are explored they become mined out – the cost of obtaining a new invention keep increasing.  Of course this issue had been explored in the 1950s by the famous economist, Jacob Schmookler, in his book “Inventions and Economic Growth.”  Professor Schmookler showed that across multiple industries the amount of R&D per patent was essentially the same.  See figure 2, page 46, figure 22, page 138, figure 23, page 139. 

 

Since these industries included both new industries and mature Continue reading

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January 13, 2010 Posted by | Innovation, Patents, Uncategorized | , , , , , , | Leave a comment

Foreigners Receive More Patents than U.S.!

For the first time in U.S. history more patents were issued to foreigners than U.S. residents, by the U.S. Patent and Trademark Office (USPTO).  According to the USPTO, foreigners received 80,271 patents while U.S. inventors received 77,501 in 2008.[1] Six of the top ten patenting companies in 2008 were foreign. Continue reading

October 26, 2009 Posted by | Patents | , , , , , , | 5 Comments

The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation

 This post is the Introduction to my book, which should be available on Amazon.com in December of 2009.

This book started as a project based on my observations.  I deal with technology start-up entrepreneurs everyday as a patent attorney.  I noticed a difference between the sort of projects my clients were undertaking since the technology downturn of 2000-2001 and the 90s.  Clients, in the 90s, would come into my office with plans to build businesses that were disruptive or revolutionary.  The technologies underlying these companies held the potential to completely redefine a market.  Some of these of these ideas would increase the available bandwidth by 10x for minimal costs or allow data searches that were 10-100x faster than existing technologies.  It was extremely exciting talking with these entrepreneurs.  Their energy was infectious and the potential implications of their work was mesmerizing.  The technology downturn of 2000-2001 forced a reevaluation of these aggressive business plans.  I expected that after a couple years of the technology market taking a breath, I would again be working with companies trying to change the world.  Continue reading

September 24, 2009 Posted by | -Economics, Innovation, Patents, Uncategorized | , , , , , , , , , , , , , , , , , | Leave a comment

Innovation and the Obama Administration

The Obama administration has released a white paper outlining a strategy to encourage innovation and thereby stimulate the economy, entitled “A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs. ”  According to President Obama, “The United States led the world’s economies in the 20th century because we led the world in innovation.”  The first step in solving a problem is identifying the cause and the Obama administration has nailed it on the head. Continue reading

September 23, 2009 Posted by | -Economics, Innovation, Patents, Uncategorized | , , , , , | Leave a comment

Innovation – Wake-Up Call

There are number of indications that the U.S. is losing its technological edge.  In the second quarter of 2008, there were no public offerings of Silicon Valley venture capital-backed companies, a phenomenon not seen since 1978.  U.S. venture capital firms are investing more of their funds overseas.  Many U.S. trained, foreign national, scientists and engineers are leaving the U.S. and returning to their home countries.  In 2001 (the most recent year for which data are available), US industry spent more on tort litigation than on research.[1] Continue reading

August 19, 2009 Posted by | Uncategorized | , , , , , , , , , , | 2 Comments

Scarcity – Does it Prove Intellectual Property is Unjustified?

A number of scholars[1] have suggested that the logical basis for tangible property rights is scarcity.  Property rights efficiently allocate these resources and avoid conflicts between competing rights of individuals.  These scholars argue that ideas and invention are not subject to scarcity and therefore intellectual property rights should not exist.  These arguments seem to be particularly prevalent among Libertarians, including the Cato Institute and Von Mises Institute, and the open source community.  Continue reading

June 22, 2009 Posted by | -Law, -Philosophy, Innovation, Patents | , , , , , , , , , | 4 Comments

Sarbanes Oxley – The Medicine is worse than the Disease: Part 2

None of these securities laws were able to prevent the stock market decline of 2000.  Sarbanes Oxley was passed in 2002 in reaction to several corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, and WorldCom.  The legislation set new or enhanced standards for all U.S. public company boards, management, and public accounting firms.  The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law. Continue reading

June 18, 2009 Posted by | -Economics, -History, -Legal, Innovation | , , , , , , | 1 Comment

Phoenix: Mythical Fed Chairman Muses on the Economic Growth of the 90s

Phoenix: Mythical Fed Chairman Muses on the Economic Growth of the 90s

The Federal Reserve Chairman was sitting in his office contemplating the fantastic problem that he and the other fed governors were trying to solve.  The Federal Reserve, since its inception in 1913, had never faced such a dilemma.  Huge federal budget surpluses were likely to wipe out the federal debt in the next couple of years and the fed chairman was concerned how the Federal Reserve was going to control the money supply.  Buying and selling treasury notes was one of the major methods the Federal Reserve used to control the money supply.  Controlling the money supply was necessary to control inflation, ease recessions and deal with banking crises, such as 1930’s style runs on banks.  The Federal Reserve buys treasury bills when they want to increase the money supply and sells treasury bills when they want to decrease the money supply.  If the federal deficit was paid off, then the Federal Reserve would have difficulty using open market operations to control the money supply.  The Federal Reserve could still alter the discount rate or the required reserve ratio of banks to alter the money supply, but open market operations have a more immediate. Continue reading

June 15, 2009 Posted by | -Economics, -History, Innovation, Uncategorized | , , , , , , , , , , | Leave a comment