State of Innovation

Patents and Innovation Economics

PATENT=MONOPOLY – A LEGAL FICTION

The authors (Sven Bostyn and Nicolas Petit) of this paper, PATENT=MONOPOLY – A LEGAL FICTION,  argue that patents are not a monopoly based on standard antitrust analysis.  It is very unusual for an academic paper to take such an unpopular position.  They must have not got the memo that the goal of all academics is to vilify inventors, patents, and property rights.  Below are some the lines I thought were interesting and my comments are below.

“No other IPR is so thoroughly examined and evaluated as a patent.”

No other property right is so expensive, time consuming and expensive to obtain title to.

“In 2011, approximately 1,000,000 patents were granted across the globe.  This would mean that 1,000,000 monopolies would have been created worldwide. This clearly, cannot be true.”

“Competition is very valuable, but innovation is probably equally, if not more, valuable.”

 

My main critique is that they did not explain how patents are a property right or the history of property rights and patents.  Under Locke’s theory of property rights, patents and copyrights are property rights – they are granted because of the creative effort (labor) of the inventor/author.  This was picked up by Sir William Blackstone in his Commentaries, where he affirms that patents and copyrights are property and therefore natural rights.  This was enshrined in the constitution as “securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

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January 5, 2014 Posted by | -Economics, -History, -Legal, -Philosophy, Innovation, Patents | , , , , | Leave a comment

Foundations of Patent Law

Below in no particular order are some of the foundational rules of patent law.  No attempt is made to prove these rules, but most should be familiar to patent attorneys.  If you disagree or are looking for an explanation feel free to comment below and I will respond.  In many cases I have already written a post related to the foundational rules.  For my analysis of the Foundation of 35 USC 103 see 5th Anniversary of KSR: Is Section 103 is Unconstitutional?

 

*Patents are a Constitutional Right

*Patents and Copyrights are the only right mention in the Constitution

*Patents are a Natural Right

*Patents are a Property Right – the basis of all property rights is creation/production and the same is true of patents.

*Trade Secrets are a Natural Right

*Patents can be viewed as a Social Contract where the inventor gives up their right to a trade secret in order to obtain a patent.

*All Inventions are a combination of known/existing elements/steps and known connections

*Patents are not monopolies  (A property right cannot be a monopoly)

*All Inventions use natural phenomena – we are not dealing in magic.

*Every element in every claim of a patent behaves in a predictable way – they do not violate the laws of physics – again we are not patenting magic.

*Claims define what the invention is.

*Every element (word) in a claim has to be given meaning – reading a claim is like reading an equation – not like reading prose.

*The definition of an Invention implies that it is Useful or has an Objective Result

*The definition of an inventor requires that they be the first person to create the invention, which results in the novelty requirement.

April 29, 2012 Posted by | -Law, Patents | , , , | 6 Comments

More on the Myth that Patents are Monopolies

David Kline, author of Rembrandts in the Attic, has added the following insight from history on the idea that patents are monopolies.

“The condemnation of monopolies ought not to extend to patents, by which the originator of a new process is permitted to enjoy, for a limited period, the exclusive privilege of using his own improvement. This is not making the commodity dearer for his benefit, but merely postponing a part of the increased cheapness (or excellence) which the public owe to the inventor, in order to compensate and reward him for his service.”

John Stuart Mill, “Principles of Political Economy,” 1848

“The dawn of the right of inventors has been actually [contemporaneous] with the destruction of monopolies odious to the common justice of men; and the common sense of mankind has marked a distinction between such monopolies and the exclusive rights conceded to inventors. Their rights, under patents, are called ‘monopolies’ only from the poverty of language, which has failed to express in words a distinction which no less clearly exists.”

Louis Wolowski, Chair of Industrial Economics, Conservatoire des Arts et Métiers, 1864

“How can the exclusive right of an invention be compared with a monopoly in trade? How can the exclusive privilege to sell salt in Elizabeth’s time, which added not one bushel to the production, but which enriched the monopolist and robbed the community, and the exclusive right of Whitney to his cotton gin, which has added hundreds of millions to the products and exports of the country, be both branded, with equal justice, with the odious name of monopoly?”

George H. Knight, 1891

A patent is a property right, it is not a monopoly.   For more information see The Myth That Patents are Monopoly.

September 30, 2010 Posted by | -Philosophy, Patents | , | 1 Comment