From phm@a2e.de  Thu Feb  8 00:25:38 2001
Date: Thu, 8 Feb 2001 01:25:38 +0100 (CET)
From: PILCH Hartmut phm@a2e.de
Subject: [Patents] Bessen & Maskin reply on software patent paper

> Jim Bessen writes:
> >  This is what the pro-patent forces do not do because they do not have
> >the evidence on their side.
>
> Come on Jim, neither side has any clear and convincing evidence of the
> impact patents economically (outside the pharmaceutical industry). The
> impact of patents is in general a minor financial concern for companies
> (as compared to other business affairs), so measuring such a subtle
> influence is difficult, either to prove patents are good or bad.

Aren't some companies are paying IBM 40 million USD in patent royalties
per year?  Weren't quite a few software companies attacked already with
patents?

If you just set your measuring accuracy requirements high enough, you can
dispute anything.

> The pro-software patent side has an easy case to make - all they have
> to show is that the impact of software patents in the software industry
> is comparable to the impact of patents in other areas of technology.

No.  They have to show that software patents are beneficial.  If they fail
to show that, then they are even in conflict with the US constitution.

> If so, then there is no reason to discriminate against software
> patents in the law.

Questions of legal systematics are secondary.  The primary question is: do
the rules serve a purpose.  If software patents don't serve a beneficial
purpose, they can be abolished.  The merits or demerits of other patents
are beside the point.

> And they can show this comparability by pointing to all sorts
> of data (new journal articles on software, growing number of software
> companies, the orders greater impact of NASDAQ on the health of software
> companies, the relatively minor number of non-trivial lawsuit damages or
> settlements awarded in software patent lawsuits, etc).  Certainly there
> is more data backing this view, than the biased sampling of data you
> used in your hypothetical model study.

You yourself mentioned pharmaceutics as an area where patents have a
different effect on the economy.  You know that physical objects cannot be
made downloadable from the Internet and that a lot of differentiating
parameters apply, each of which changes the economic calculation.  You
also know that many "discrimation" criteria have been used effectively and
still are.  Otherwise why are we not seeing patents on literary or
rhetorical devices or political ideas?  Since the pro-swpat side's whole
argument is apparently based on "anti-discrimination", how can they
justify such a bias against social engineering or literary engineering?
Can the ideas of film makers or public relations managers really be
considered non-technical?  non-useful?

Greg has been told this many times in this list, but he keeps reiterating
the same "ethical" principles (yes he talks about "ethics" in that
context) about "non-discrimination of software" over and over again.  For
Greg, apparently the question of patentability is not one of what in
practise serves to promote progress but one of principle.  He is the one
who thinks in terms of apriori good and bad and tries to find all kinds of
pretexts to disallow the measuring of merits and demerits of software
patents.

> The anti-software patent side has a harder case to make - to somehow
> show (with real data, not ancedotal stories and poorly researched
> press clippings) that software patents are disrupting both the
> software industry and consumers greater than in other industries.

No, they just have to show that they are more harmful than useful.
The "greater than in other industries" argument does not have to be made.

> And this is a hard argument to make, because the problems of bad
> software patents (and I agree there are way too many) for the most
> part pale in comparison to the problems with biotech patents (both
> for biotech companies that increasingly are blocked out of promising
> research areas because of patents, or consumers [especially in third
> world countries
> ] who find it difficult to be able to afford to buy the new drugs).

This is the third time Greg is playing this shift of focus trick in this
list.  It was pointed out by us before already.

The question Jim is trying to answer is not

	can it be justified to make the poor pay for IP

but

	do specific IP rights actually serve their purpose of making
	the world richer as a whole

> That's why your paper is so disconcerting.  It models a very small
> subset of the dynamics of the software world, and analyzes a very
> small subset of software industry financial data, to make some rather
> strong conclusions about the impact of software patents.  I question
> then the statistical reliability of your conclusions.

Economic models are usually based on less statistical data.
There is always an interest in reducing things to a game

> And with regards to the silly "loss of freedom" arguments, I know of
> only one person ever thrown in jail

It is common sense and a basic theoretical starting point of all economic
investigations that patents are monopolies, which restrict freedom, thus
causing a loss to society, often calculable as misallocation of
ressources.  These losses due to restriction of freedom must be
counterbalanced by some positive effect, such as the promotion of progress
of science and the useful arts.

Persisting in ignoring this is silly.  Continuing to ignore it after
having been told 20 times and then publishing it on an large news
broadcast channel may not be so silly.  It may just be the strategy of a
clever drug salesman who promotes diseases in order to be better able to
sell his (insufficient) curing services.

It is quite natural for silliness and cleverness to join hands in this
way.

-phm







