State of Innovation

Patents and Innovation Economics

Response to The Economist on Patents

Marshall Phelps wrote an excellent response in Forbes to an anti-patent editorial by The Economist.  The article is entitled Do Patents Really Promote Innovation? A Response To The Economist.  He provides overwhelming evidence that patents are the driver of new technologies.  I and others have shown that the reason the industrial revolution occurred when and where it did was because of the introduction of the first practical patent systems, i.e., property rights for inventions.  The article also points out that the most inventive countries are those with the strongest patent systems and these countries also have the greatest technology dispersion.  The article also points out that the patent system encourages the dissemination of information about technologies, which has been shown empirically and logically.  It is time the anti-patent crowd admit that their position is a matter of faith, not econgrowth.smalllogic an evidence.

I have one beef with the article when it says you cannot prove that patents lead to more inventions and you cannot prove a free market (with patents) leads to economic growth.  Both of these have been shown empirically and the causal connection is clear.  Property rights ensure that the creator benefits from their creation.  People have to work to live and when the product of their work is stolen from them, they cannot be as productive.  For more see my book Source of Economic Growth and my talk at Atlas Summit 2015.


September 18, 2015 Posted by | -Economics, Innovation, News, Patents | , , | Leave a comment

Burning the Ships: Intellectual Property and the Transformation of Microsoft

This book explores the business strategies of patents in the context of Microsoft’s attempt to remake its image this decade. The authors of the book are Marshall Phelps, the architect of IBM’s successful patent licensing program, and David Kline, the author of Rembrandts in the Attic – the standard against which all books on patent business strategy are measured.

The book describes how Microsoft used its patent portfolio to build relationships with its customers, like Toshiba. The vehicle for it to accomplish this goal was patent cross licensing deals. However, before Microsoft could make any progress in these deals they had to drop their non-assertion of patents clause. Microsoft had invented this clause in order to compensate for their weak patent portfolio in the 90s. Continue reading

December 11, 2009 Posted by | Business Models, Uncategorized | , , , , | Leave a comment