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To: "=?iso-8859-1?Q? " Andr=E9=20Rebentisch " ?=" <arebenti@web.de>
Cc: bxl@ffii.org, patents@aful.org, us-parl@ffii.org, lac@strakt.com
Subject: Re: Bhagwati on Trips 
In-Reply-To: Message from =?iso-8859-1?Q?"Andr=E9=20Rebentisch"?= <arebenti@web.de> 
   of "Mon, 11 Oct 2004 17:09:30 +0200." <1560462934@web.de> 
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Date: Mon, 11 Oct 2004 17:37:40 +0200
From: Laura Creighton <lac@strakt.com>
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>But in patents it is different, as Bhagwati m
>entions: "we have here the economists tradeoff: more IPP means more knowl
>edge but it also reduces diffusion. The social optimum lies somewhere in 
>the middle, as often."

I think that the assertion 'more IPP means more knowledge' is highly
debatable.  It is trying to measure the knowledge gained by people
who would not embark on such investigations without the promise of
a monopoly, as if they can be measured against a baseline.  What you
cannot really tell is how many of these people actually would embark
on such investigations anyhow, driven by competition, curiosity, or
the belief that they could make a profit even without a monopoly.

What's worse, it cannot measure the people, who considered embarking
on an investigation that is likely to produce knowledge, but stopped.
They believed it was more likely that they would be the third, fourth,
fifth or sixth discoverer, rather than the first.  Thus they feared 
their effort would be wasted -- whatever they discovered would be
owned by patent-holder #1.  So they never bothered to discover it all
all.  Nobody did.  We still don't know it.

Since you cannot measure these things it is hard to conclude that the
knowledge stronger IPP will inspire outnumbers the knowedge stronger
IPP will inhibit.  It is in the realm of the unknowable.

What is easier to mention is how many patented inventions exist out
there which nobody is using for any purpose whatsoever.  The patent
holder isn't spreading his knowledge around -- it's mouldering away
in a patent office somewhere.  Those people who would like to produce
a similar product and market it word-wide, are prevented from doing so.

The world is full of inventors who thought that a monopoly was a great
thing to have by its very nature.  They discovered, to their sorrow,
that it is damn hard to grow a market for a completely new product when
you are the only supplier.  You usually end up the only fish in a very
small pond, in some cases one too small to support you altogether.  But
when you have rival firms all competing you can often find that the net
effect is that you have grown the market so that it can support all of
you -- and that third-sized fish in a lake is ever so much more profitable.

How many markets never happened only because somebody had a monopoly they 
could never properly exploit?   Again there is no way to measure things
that didn't happen, but the number of unused patents out there gives
one reason to believe that this number could be significant.

Laura


