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From: Edward Welbourne <eddy@chaos.org.uk>
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In-reply-to: <Pine.LNX.4.33.0208192340420.7094-100000@mulix.oas.a2e.de>
	(message from PILCH Hartmut on Mon, 19 Aug 2002 23:43:41 +0200 (CEST))
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Subject: Re: [Free-sklyarov-uk] Re: [DMCA_Discuss] Re: [Patents] IT World Feature: Patently ridiculous:
 What's Europe to do?
Reply-To: Edward Welbourne <eddy@chaos.org.uk>
References:  <Pine.LNX.4.33.0208192340420.7094-100000@mulix.oas.a2e.de>
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Date: Wed, 21 Aug 2002 00:52:10 +0000
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>> Now, tell me please, how limiting distribution and use of ideas can
>> improve research...

> By creating revenue streams that help finance research laboratories.

OK, so here's a research project that's now a few centuries overdue:
actually verify that the alleged benefits out-weigh the manifest costs.

Let's be clear about the alleged benefits of patents:

  * the patent gives the holder authority to levy a tax and impose
    substantially arbitrary laws upon those who wish to employ any idea
    which can be presented as depending on the one covered by the
    patent; this authority is subject to no democratic scrutiny; nor is
    it subject to any test of whether it serves the public interest or
    the common weal (for all that it is *alleged* that the system, as a
    whole, i.e. on average, does so serve);

  * the patent is granted to someone who has already done their research
    but may not have yet done their productization; the promise of a
    patent *may* have encouraged them to spend funds they already had on
    research; the grant of the patent *may* enable them to borrow the
    money they need to turn the idea into a marketable product; it is
    theoretically possible that nothing else would have (sufficiently)
    encouraged the former or enabled the latter; and

  * the patent reveals the idea to all, thereby making its direct
    benefits available to all once the patent has expired.

The first only directly benefits the patent-holder and manifestly comes
at the expense of a direct cost to the common weal which is plainly at
least as great as the patent-holder's (direct) benefit; yet the
patent-holder may, in like manner, be so constrained by *other*
patent-holders that this benefit may well fall significantly short of
the cost the public pays to supply it.  Thus the direct cost to the
common weal, which is intended the price of the patent's alleged
benefits, is certain and substantial (as it bears directly upon the
public's liberty), while the direct benefit to the patent holder is
uncertain, cannot hope to over-top this direct cost and may indeed fall
substantially short of it.

The benefits of the second heading are all uncertain - indeed, they are
unavoidably speculative.  We cannot know whether, in the absence of
patents, the research might have been conducted or the loans made
available.  Furthermore, even though the particular organisations which
do the research and productization in a world with patents might not do
those things in a world without patents, this does not assure us that
no-one else would have done those things.  Research would, indeed, be
conducted by private individuals motivated by curiosity and by
universities eager to find innovative topics with which to challenge
their students - so as both to better teach and to attract the brightest
candidates.  The world is not short - some would argue it groans under
the burden of a surfeit - of corporations large enough to endure the
cost of productizing research's results and able to exploit their
resulting head start to amply recoup those costs even as other players
enter their markets, competing with them.  The prospect of gainful
employ with such corporations would be as much of an incentive to the
researcher as it is today.

By the same token, the final benefit may also be challenged: at best, it
applies where no-one public-spirited enough to volunteer the idea would
actually come up with it, either independently or by an analysis of a
miserly discoverer's wares.  Where those wares, themselves, tell the
whole tale, there is no need even of such a volunteer.  Further, since
the inventor can seldom benefit from the invention without financial
assistance - whose providers shall doubtless require disclosure at least
to themselves - it is hard to believe that posterity will long be
deprived of any idea that can be sensibly exploited, even should its
exploitation fail to reveal the idea.

Thus the principal benefit to the patent-holder, though it is uncertain,
comes at - nay, *as* - a cost to the common weal, indeed to liberty;
this cost is certain and certainly at least as great as the benefit it
purchases; while the other benefits are speculative or chimeric at best.
What, then, of the other *costs* ?

Anyone considering productizing some research - or, indeed, launching
any product at all - may be *discouraged* by the possibility that they
will be obliged to pay royalties to someone they have never heard of,
who has given them no aid whatsoever, but whose patent can be
represented as being infringed by the product.  The potential investor
might insist, as `due diligence', on a patent search: but this expensive
process all too often yields nothing better than a partial list of the
patents which can't be ruled out as possible threats, without the
expense of a law-suit; it increases the cost of developing the product,
without usefully diminishing the risk.  Where a product is even remotely
intricate or complex, the scope for there to be many patents threatening
it vastly exceeds the scope for it to deserve a few patents, or even
one.

Likewise, those considering putting funds into research may indeed be
discouraged from doing so - by the knowledge that they shall be denied
any possibility of exploiting the fruits of the research, should it
arise that an other completes, first, enough kindred research to fill a
patent lawyers' needs.  This peril and the foregoing may with little
difficulty be construed as more than a match for the alleged benefits
under the second heading above, which they mirror.  At the same time,
patents encourage precisely that research which serves the patent
lawyers' needs, at the expense of that research which facilitates the
creation of products useful to the general public.

Further, the existence of a network of patents, mutually cross-licenced
by their holders, irrefutably constitutes an barrier to entry in any
industry: this inescapably impedes competition and harms consumers.  By
the same token, those who would gladly contribute their labour to making
inventions accessible to all (this is at its most evident when the
invention is software and the inventor has but to abstain from hoarding
the invention for it to be available to all; but has its parallels
elsewhere, e.g. in offering medicine `at cost' to those in desperate
need) are obstructed not only be the license fees charged by
patent-holders but also by the latter's fear of loss of market, leading
to refusal to grant such licenses.

Patents come, by design, with a major cost - an impediment on the
liberty of all but the patent-holder - and carry a great many further
costs - undeniable, actual, concrete costs, some of them huge.  In
contrast, the alleged benefits are unquantifiable and their very
*existence* cannot be verified without conducting the experiment of
taking a few decades off from having any kind of a patent system in
place.

Meanwhile, the world is drowning in innovation: the patent system's
capacity for assessing novelty, obviousness and usefulness is so
stretched that the assessors have abdicated these responsibilities,
leaving it to those (actually and demonstrably) burdened by a patent to
establish (at great peril, at their own cost, from an adversarial
position prejudiced against them, and with little prospect of seeing
their court costs repaid even if they win) invalidity, in a court of
law.  When millions of patents are are presently `live', can anyone
honestly claim that the world would be worse off if the amount of
invention happening were to drop a bit as a result of a loss of
incentive to inventors ?

	Eddy.

