[Patents] Patnews on Pierret

[daniel.probst@gmx.ch (Daniel Probst)]

Greg,

I do not quite understand your point of view. (sorry for jumping in, I may
have missed some clarifying mails)

Bias warning: as an economist I believe that the only valid argument for or
against patents is economic (same as your constitution). Issues of elegance
and even absolute consistency  in legal implementation are of secondary
concern.

1) Economic arguments for/against weak/strong protection of IP crucially
depend on the nature of the industry .
>From an economic perspective there is a priori absolutely nothing against,
for example, allowing patents in the cheese industry and banning patents in
the ice cream industry. Whether or not this is a good idea solely depends on
the production/research technologies and the market structure in the
respective industries. The fact  that it might be legally or logically
difficult (or even impossible) to correctly evaluate whether cheese flavored
ice cream, or frozen cheese belongs to one or the other category is of
secondary importance.

2) The balance of theoretical considerations as well as  empiricial
corroboration indicates, that in industries with the market structure and
production/research technology similar to the software industry, patents are
not an efficient means of IP protection. (Contrary to for example in the
pharmaceutical or chemical industry.)
Given the current level of (economic) knowledge in this area, the question
being debated is more "how bad are patents" in an industry like software
and not "are they beneficial or bad" ).

I know of no empirical or theoretical study which indicates that patents in
industries comparable to software  might conceivably be beneficial.

3) I do no see any compelling reason for discussing patent issues "as a
whole". Except of course at a level where the suggested "universal patent
system" allows for the distinction between different industries, takes
issues of complementarities/sequentiality into account, looks at market
structure, looks at cost structure, takes potential entry into account,
takes network externalities into account etc. etc. etc

4) You frequently claim that many problems arise due to the bad
implementation of the current patent system. With a properly working patent
system most problems would go away, i.e. transaction costs would be so low
that a patent system would be beneficial to a broad area of IP. To me you
also seem to suggest that one should go ahead with stronger IP related
property rights and solve the problems of implementation later (furthermore
these problems are solvable).

The short list in 3) of relevant issues a good patent system must address,
suggests to me  that this view is debatable, to say the least. Even given
the assumption that novelty can correctly be assessed (whatever that means,
see below ), there are still a multitude of market specific issues
(competition issues, market entry issues etc.) which you never seem to
address.

Regarding  novelty:

If you extend patentability to research which in many ways is strongly
related to what is traditionally seen as academic research , let me ask
following question:

Why does academia have such great difficulties in assessing novelty (Maybe
its because we are all daft ;-). Why has such an ellaborate system evolved
in academia:

1) Researchers publish their research in "famous" journals and thereby gain
reputation (future monetary income).
2) Journals choose referees who assess novelty. Journals have the incentive
to choose competent referees who choose articles which will be judged novel
by their audience.
3) Journals compete against other journals. The competetive pressure induces
them to pick competent referees (who MUST also be well known researchers in
the field).

Why is this system so complicated? Why don't we have property rights in e.g.
economic theory or mathematics. I pay license fees to people whose research
I am citing/basing my work on. I then bring my research to the a state paid
university bureaucrat who judges the novelty of my research, and stamps
novel on it. I can then require license fees from researchers building on my
work (who might then pay a lawyer to try and bust my patent, claiming it is
not sufficiently novel).

Does the fact that we do NOT choose this institutional arrangement, but
instead the above mentional reputational system, indicate anything to you ?

dan probst

----------
daniel.probst@vwl.uni-mannheim.de
Dr. Daniel Probst
Economic Theory
Mannheim University
Germany
----- Original Message -----
From: "Gregory Aharonian" <srctran@world.std.com>
To: "Gregory Aharonian" <srctran@world.std.com>; "Don Marti"
<dmarti@zgp.org>
Cc: <patents@aful.org>
Sent: Tuesday, July 10, 2001 7:40 PM
Subject: Re: [Patents] Patnews on Pierret


> Don writes:
> >Greg, you don't seem to be willing to draw the line on what is
> >patentable and what is not.  Do you even agree that there should
> >be a line?  If there is a line, software was more in common with the
> >activities on the "no patents" side of the line.
>
> There are lines, there should be lines, and software is on the patentable
> side of the line.
>
> And to be clear, I am making my arguments mostly in the context of US
> intellectual property law.  People in Europe and free to agree or
> disagree from the context of European IP law.
>
> And for US IP law, the line is quite clear:  processes and methods,
> tangible or intangible, are patentable, not copyrightable.  That is
> a very clear line.  And it is back up with 100 years of court decisions
> here in the US.  That is the legal rule.  The mathematics rule is
> also quite clear - software (i.e. source code, user interfaces, system
> designs, protocols, etc.) are processes and methods.  In fact, if I can
> be presumptous and use a language I don't speak:
>
>                         Software ist Verfahren
>
> Don, wonder over to the Stanford mathematics library some afternoon, and
> you will find thousands of articles proving/assuming this to be true.
>
> So combine the two, law and mathematics, and software is on the patentable
> side of the line, especially in light of hardware/software codesign tools
> and systems to map C code directly into FPGAs.
>
> That said, as I have said endlessly, the quality of software patents needs
> to be drastically improved, so that all of the crappy software patents
> that I and others hold up to ridicule the system, don't issue.
>
> This argument, made formal, may not be completely perfect, but it is close
> enough that any argument against software patents is going to be pretty
> much economics-based.  The problem there is that like software, the
> economics of patenting in other areas of technology have their
controversial
> issues (said with drug patents in developing countries, etc.).
>
> These economic issues are worthy of discussion, and are being discussed,
> but they apply to all areas of patentable technology, not just software.
> And if you really concerned about the economics of IP, I would think that
> you would be more interested in addressing the economics of the excessive
> lifetimes of copyright, 100 years or more of protection, especially if
> you want to rely on copyright protection for software (which I will argue
> is illogical under US law, the increasingly de facto viewpoint of US IP
> law, especially after the Apple and Lotus losses).
>
> Greg Aharonian
>
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