|
SaswatMisraFirstPaper 11 - 06 Mar 2010 - Main.SaswatMisra
|
| |
| META TOPICPARENT | name="FirstPaper" |
|---|
Improving Quality-of-Life through...Patents?
I. Improving Quality-of-Life through Technical Innovation | |
<
< | Government should implement policies that maximize the aggregate quality-of-life of its citizenry subject to its available resources. Among the possibilities for doing so, policies that encourage technical innovation are particularly attractive. A technical innovation, once brought to fruition, has a low recurring cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and may further enable additional technical innovations in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly than the last, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, to maximize aggregate quality-of-life, government should implement policies that disseminate as much technical innovation to as many people as possible, while minimizing the related societal cost of doing so. | >
> | Government should implement policies that maximize the aggregate quality-of-life of its citizenry subject to its available resources. Among the possibilities for doing so, policies that encourage technical innovation are particularly attractive. A technical innovation, once brought to fruition, has a low recurring cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and may further enable additional technical innovations in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly than the last, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, as one part of an overall strategy to maximize aggregate quality-of-life, government should implement policies that disseminate as much technical innovation to as many people as possible, while minimizing the related societal cost of doing so. | | | Technical innovation comes in many forms, including industrial methods and processes, mechanical devices, and increasingly, software. Societal cost includes: (a) the “excess” time for an innovation to emerge relative to some inherent "earliest-possible time," as well as (b) the “excess” cost of the innovation relative to its natural market price during the time period in which access to the invention is artificially restricted (for example, through competition-limiting intellectual property (IP) rights). | | | | |
<
< | First, this clause suggests that the above-described goal should be achieved through private IP-rights, i.e., patents, as is evident from the words "securing," "exclusive," and "their." Second, through the phrase "securing for limited [time]," this clause suggests that the above-described goal is solved simply by turning a “knob” that controls patent-term (i.e., the duration of time during which a patent owner enjoys private and exclusive rights to her innovation) to the point where an inventor receives just enough incentive to invest her resources into creating new innovations. Turning the knob any further than necessary would, of course, award too much patent-term and therefore unduly increase the societal cost associated with the patent. | >
> | First, this clause suggests that the above-described goal should be achieved through private IP-rights, i.e., patents, as is evident from the words "securing," "exclusive," and "their." Second, the phrase "securing for limited [time]" suggests that the above-described goal is solved simply by turning a “knob” that controls patent-term (i.e., the duration of time during which a patent owner enjoys private and exclusive rights to her innovation) to the point where an inventor receives just enough incentive to invest her resources into creating new innovations. Turning the knob any further than necessary would, of course, award too much patent-term and therefore unduly increase the societal cost associated with the patent. | | | | |
<
< | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how far to turn the knob in practice. For starters, the amount of patent-term awarded should depend on the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would have been developed by another inventor. The intended use of the patent also matters (does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" to scare potential competitors from entering her market?). Further, patent-term should be adjusted downward in a scenario where the grant of a patent eliminates an inventor's incentive to develop still-better innovations, especially when she is in the best position to do so. (Consider a hypothetical corporation that corners the market by patenting a drug that can keep a patient alive, albeit with constant physical pain - what is this corporation's financial incentive to develop a better drug that can keep the same patient alive with no pain?) | >
> | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how far to turn the knob in practice. The amount of patent-term awarded should seemingly depend on a large number of factors, including: the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would have been developed by another inventor. The intended use of the patent also matters (does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" to scare potential competitors from entering her market?). Further, patent-term should be adjusted downward in a scenario where the grant of a patent eliminates an inventor's incentive to develop still-better innovations, especially when she is in the best position to do so. (Consider a hypothetical corporation that corners the market by patenting a drug that can keep a patient alive, albeit with constant physical pain - what is this corporation's financial incentive to develop a better drug that can keep the same patient alive with no pain?) | | |
III. The Patent Office - Poorly Implementing Misguided Policy? | |
<
< | Admittedly, it would be difficult to perfectly adjust the knob based on even a small number of the sampling of relevant factors identified above. Still, it is surprising that the United States Patent and Trademark Office (USPTO) does not make even a rough attempt to do so. Instead, the USPTO awards a patent-term of 20 years to every issued patent. The choice of 20 years seems arbitrary. Under this rule, 20 years would be awarded to a small-time inventor, who slaves away at great personal sacrifice to create a new product, and who then “loses” many of these precious years attempting to secure production and marketing for his invention. It seems sub-optimal that the same 20 years of patent-term would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | >
> | Admittedly, it would be difficult or impossible to perfectly adjust the knob based on even a small number of the (mere sampling of) relevant factors identified above. Still, it is surprising that the United States Patent and Trademark Office (USPTO) makes no effort to do so. Instead, the USPTO awards a patent-term of 20 years to every issued patent. The choice of 20 years seems arbitrary. Under this rule, 20 years would be awarded to a small-time inventor, who slaves away at great personal sacrifice to create a new product, and who then “loses” many of these precious years attempting to secure production and marketing for his invention. It seems unsound policy to award the same 20 years of patent-term to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | | | | |
<
< | Under this system, some patent owners gain, at public expense, billions of dollars over what would have been necessary to create an "inventive incentive" ([1]). On the other hand, truly inventive but resource-strapped individuals and small organizations have little incentive to create, given the potentially inadequate patent-term that awaits them (their incentive is further reduced by other artifacts of the patent system, including the expense of dealing with the USPTO and the threat facing a strategically-filed patent-infringement lawsuit if their invention threatens one of the mega-corporations ([2])). | >
> | Under this system, some patent owners gain, at the eventual expense of the public, billions of dollars over what would have been necessary to create an "inventive incentive" ([1]). On the other hand, truly inventive but resource-strapped individuals and small organizations have little incentive to create, given the potentially inadequate patent-term that awaits them (and their incentive is further reduced by other artifacts of the patent system, including the expense of dealing with the USPTO and the threat facing a strategically-filed patent-infringement lawsuit if their invention threatens one of the mega-corporations ([2])). | | | | | | "patchwork" solutions based on the existing patent system. The best solution, whatever it may be, is probably more elegant than that. | |
<
< | -- By SaswatMisra - 3 March 2010 | >
> | -- By SaswatMisra - 6 March 2010 | | |
|
|
|
SaswatMisraFirstPaper 10 - 04 Mar 2010 - Main.SaswatMisra
|
| |
| META TOPICPARENT | name="FirstPaper" |
|---|
Improving Quality-of-Life through...Patents?
I. Improving Quality-of-Life through Technical Innovation | |
<
< | Government should implement policies that maximize the aggregate quality-of-life of its citizenry subject to its available resources. Among the possibilities for doing so, technical advancements are a particularly attractive option. A particular technical advancement, once brought to fruition, has a low recurring cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and further enables additional technical advancements in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly than the last, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, government should implement policies that provide the most quality-of-life improving technical advancements ("innovations") to the most people at the least societal cost, in order to increase the aggregate quality-of-life of its citizenry, | >
> | Government should implement policies that maximize the aggregate quality-of-life of its citizenry subject to its available resources. Among the possibilities for doing so, policies that encourage technical innovation are particularly attractive. A technical innovation, once brought to fruition, has a low recurring cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and may further enable additional technical innovations in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly than the last, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, to maximize aggregate quality-of-life, government should implement policies that disseminate as much technical innovation to as many people as possible, while minimizing the related societal cost of doing so. | | | Technical innovation comes in many forms, including industrial methods and processes, mechanical devices, and increasingly, software. Societal cost includes: (a) the “excess” time for an innovation to emerge relative to some inherent "earliest-possible time," as well as (b) the “excess” cost of the innovation relative to its natural market price during the time period in which access to the invention is artificially restricted (for example, through competition-limiting intellectual property (IP) rights). | | | II. The Constitution's Approach: Patents | |
<
< | Interestingly, the Constitution appears to have a vision of how the otherwise open-ended and aesthetic goal described above (i.e., implementing policy that provides the most quality-of-life improving technical innovation to the most people at the least societal cost) should be achieved. Article 1, Section 8, Clause 8 of the Constitution grants Congress the power to: | >
> | Interestingly, the Constitution appears to have a vision of how the otherwise broad and aesthetic goal described above (i.e., implementing policy to disseminate as much technical innovation to as many people as possible, while minimizing the related societal cost) should be achieved. Article 1, Section 8, Clause 8 of the Constitution grants Congress the power to: | | | | |
<
< | “promote the progress of science. . . by securing for limited times to. . . inventors the exclusive right to their respective. . . discoveries.” | | | | |
<
< | First, this clause strongly endorses private and exclusive IP-rights, i.e., patents, apparently assuming that such rights “promote the progress of science.” Second, this clause recasts the goal described above into a simple one-dimensional optimization problem: maximizing aggregate quality-of-life through technical innovation is apparently done simply by turning a “knob” that controls patent-term (i.e., the duration of time for which a patent owner enjoys private and exclusive rights to her innovation) to a "sweet spot," at which the inventor receives just enough patent-term so that she is sufficiently motivated to invest her time and resources in creating new innovations. (To give her any additional patent-term would, of course, unduly rob the citizenry of rapid and low cost access to her patented innovations.) | >
> | "promote the progress of science. . . by securing for limited times to. . .
inventors the exclusive right to their respective. . . discoveries." | | | | |
<
< | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how to adjust the knob in practice. For starters, the amount of patent-term awarded should depend on the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would likely be developed by another inventor. The intended use of the patent (does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" to scare potential competitors from entering her market?) would matter. Further, patent-term would ideally be adjusted downward in a scenario where the grant of a patent eliminates an inventor's incentive to develop still-better innovations, especially when she is in the best position to do so. (For example, consider a hypothetical corporation that corners the market by patenting a drug that can keep a patient alive, albeit with constant physical pain - what is this corporation's financial incentive to develop a better drug that can keep the same patient alive with no pain?) | >
> |
First, this clause suggests that the above-described goal should be achieved through private IP-rights, i.e., patents, as is evident from the words "securing," "exclusive," and "their." Second, through the phrase "securing for limited [time]," this clause suggests that the above-described goal is solved simply by turning a “knob” that controls patent-term (i.e., the duration of time during which a patent owner enjoys private and exclusive rights to her innovation) to the point where an inventor receives just enough incentive to invest her resources into creating new innovations. Turning the knob any further than necessary would, of course, award too much patent-term and therefore unduly increase the societal cost associated with the patent.
Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how far to turn the knob in practice. For starters, the amount of patent-term awarded should depend on the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would have been developed by another inventor. The intended use of the patent also matters (does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" to scare potential competitors from entering her market?). Further, patent-term should be adjusted downward in a scenario where the grant of a patent eliminates an inventor's incentive to develop still-better innovations, especially when she is in the best position to do so. (Consider a hypothetical corporation that corners the market by patenting a drug that can keep a patient alive, albeit with constant physical pain - what is this corporation's financial incentive to develop a better drug that can keep the same patient alive with no pain?) | | |
III. The Patent Office - Poorly Implementing Misguided Policy? | |
<
< | Admittedly, it would be difficult to perfectly adjust the knob based on even a small number of the factors identified above. Still, it is surprising that the United States Patent and Trademark Office (USPTO) does not make even a rough attempt to do so. Instead, the USPTO awards every issued patent a patent-term of 20 years from the date on which the patented innovation was first disclosed to the public. 20 years seems pretty arbitrary. Under this rule, 20 years are awarded to a brilliant small-time inventor, who slaves away at great personal sacrifice to create a new product, and who then “loses” many of these precious years attempting to secure production and marketing for his invention. It seems illogical that the same patent-term, 20 years, would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | >
> | Admittedly, it would be difficult to perfectly adjust the knob based on even a small number of the sampling of relevant factors identified above. Still, it is surprising that the United States Patent and Trademark Office (USPTO) does not make even a rough attempt to do so. Instead, the USPTO awards a patent-term of 20 years to every issued patent. The choice of 20 years seems arbitrary. Under this rule, 20 years would be awarded to a small-time inventor, who slaves away at great personal sacrifice to create a new product, and who then “loses” many of these precious years attempting to secure production and marketing for his invention. It seems sub-optimal that the same 20 years of patent-term would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | | | | |
<
< | Under this system, some patent owners gain, at public expense, billions of dollars over what would have been necessary to create an "inventive incentive" ([1]). On the other hand, truly inventive but resource-strapped individuals and small organizations have little incentive to create, given the expense and hassle of dealing with the USPTO, and threat being slapped with a possible patent-infringement lawsuit ([2]). | >
> | Under this system, some patent owners gain, at public expense, billions of dollars over what would have been necessary to create an "inventive incentive" ([1]). On the other hand, truly inventive but resource-strapped individuals and small organizations have little incentive to create, given the potentially inadequate patent-term that awaits them (their incentive is further reduced by other artifacts of the patent system, including the expense of dealing with the USPTO and the threat facing a strategically-filed patent-infringement lawsuit if their invention threatens one of the mega-corporations ([2])). | | |
IV. Towards a Solution
Predictably, I do not have a solution to the question posed (i.e., what policy maximally encourages technical innovation so as to improve the aggregate quality-of-life?), but the approach endorsed by the Constitution (and therefore, the patent system) seems misguided. One alternative proposal calls for creating an “efficient market” for buying and selling patent rights ([3] and [4]). Another approach, of my own thinking but certainly not original, would allow the government to force the sale of certain high-value patents from private hands to the public at prices substantially lower than their “fair market value.” However, these approaches are unimpressive. In addition to being susceptible to corruptive influences and findings of unconstitutionality, they are merely | |
<
< | "patchwork" solutions based on the existing patent system. The best solution, whatever it may be, has to be more elegant than that. | >
> | "patchwork" solutions based on the existing patent system. The best solution, whatever it may be, is probably more elegant than that. | | |
-- By SaswatMisra - 3 March 2010 | |
>
> | | | |
| |
<
< | # * Set ALLOWTOPICVIEW = TWikiAdminGroup, SaswatMisra | >
> | # * Set ALLOWTOPICVIEW = TWikiAdminGroup, SaswatMisra
Align right
|
|
|
SaswatMisraFirstPaper 9 - 03 Mar 2010 - Main.SaswatMisra
|
| |
| META TOPICPARENT | name="FirstPaper" |
|---|
| |
<
< | Improving Quality of Life with...Patents? | >
> | Improving Quality-of-Life through...Patents? | | | | |
<
< | I. Improving Quality-of-Life with Technical Innovation | >
> | I. Improving Quality-of-Life through Technical Innovation | | | | |
<
< | Government should implement policies that maximize the aggregate quality of life of its citizenry subject to its available resources. Among the possibilities for doing so, technical advancements are a particularly attractive option. A particular technical advancement, once brought to fruition, has a low recurring cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and further enables additional technical advancements in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly than the last, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, to increase the aggregate quality of life of its citizenry, government should implement policies that provide the most quality-of-life improving technical advancements ("innovations") to the most people at the least societal cost. | >
> | Government should implement policies that maximize the aggregate quality-of-life of its citizenry subject to its available resources. Among the possibilities for doing so, technical advancements are a particularly attractive option. A particular technical advancement, once brought to fruition, has a low recurring cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and further enables additional technical advancements in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly than the last, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, government should implement policies that provide the most quality-of-life improving technical advancements ("innovations") to the most people at the least societal cost, in order to increase the aggregate quality-of-life of its citizenry, | | | Technical innovation comes in many forms, including industrial methods and processes, mechanical devices, and increasingly, software. Societal cost includes: (a) the “excess” time for an innovation to emerge relative to some inherent "earliest-possible time," as well as (b) the “excess” cost of the innovation relative to its natural market price during the time period in which access to the invention is artificially restricted (for example, through competition-limiting intellectual property (IP) rights). | | | II. The Constitution's Approach: Patents | |
<
< | Interestingly, the Constitution transforms the open ended and aesthetic goal described above, i.e., implementing policy that provides the most quality-of-life improving technical innovation to the most people at the least societal cost, by imposing certain limitations on how such a goal "should" be achieved. In particular, Article 1, Section 8, Clause 8 of the Constitution, in which the patent system is rooted, grants Congress the power to: | >
> | Interestingly, the Constitution appears to have a vision of how the otherwise open-ended and aesthetic goal described above (i.e., implementing policy that provides the most quality-of-life improving technical innovation to the most people at the least societal cost) should be achieved. Article 1, Section 8, Clause 8 of the Constitution grants Congress the power to: | | | “promote the progress of science. . . by securing for limited times to. . . inventors the exclusive right to their respective. . . discoveries.” | |
<
< | First, this clause strongly endorses private and exclusive IP-rights, i.e., patents, apparently assuming that such rights “promote the progress of science.” Second, this clause reduces the goal described above into a simple one-dimensional optimization problem: maximizing aggregate quality of life through technical innovation is apparently done simply by dialing a “knob” that controls patent-term (i.e., the duration of time for which a patent owner enjoys private and exclusive rights to her innovation) to a "sweet spot" at which the inventor receives just enough patent-term so that she is sufficiently motivated to invest her time and resources in creating new innovations. (To give her any additional patent-term would, of course, unduly rob the citizenry of rapid and low cost access to her patented innovations.) | >
> | First, this clause strongly endorses private and exclusive IP-rights, i.e., patents, apparently assuming that such rights “promote the progress of science.” Second, this clause recasts the goal described above into a simple one-dimensional optimization problem: maximizing aggregate quality-of-life through technical innovation is apparently done simply by turning a “knob” that controls patent-term (i.e., the duration of time for which a patent owner enjoys private and exclusive rights to her innovation) to a "sweet spot," at which the inventor receives just enough patent-term so that she is sufficiently motivated to invest her time and resources in creating new innovations. (To give her any additional patent-term would, of course, unduly rob the citizenry of rapid and low cost access to her patented innovations.) | | | | |
<
< | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how to adjust the patent-term knob in practice. The amount of patent-term awarded should certainly depend on straightforward factors such as the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would be developed by another inventor. A more intricate calculation of patent-term could possibly take into account additional factors such as the intended use of the patent - does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" so as to scare potential competitors from entering her market? Further, patent-term would ideally be adjusted to account for the troubling scenario in which an inventor is awarded a patent that eliminates her incentive to develop still-better innovations, even though she is often in the best position to do so. (For example, consider a hypothetical publicly-owned corporation that patents a drug to keep a cancer patient alive at the cost of constant physical pain - what is this corporation's financial incentive to develop a better drug that can keep the same patient alive while allowing him to feel no pain?) | >
> | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how to adjust the knob in practice. For starters, the amount of patent-term awarded should depend on the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would likely be developed by another inventor. The intended use of the patent (does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" to scare potential competitors from entering her market?) would matter. Further, patent-term would ideally be adjusted downward in a scenario where the grant of a patent eliminates an inventor's incentive to develop still-better innovations, especially when she is in the best position to do so. (For example, consider a hypothetical corporation that corners the market by patenting a drug that can keep a patient alive, albeit with constant physical pain - what is this corporation's financial incentive to develop a better drug that can keep the same patient alive with no pain?) | | |
III. The Patent Office - Poorly Implementing Misguided Policy? | |
<
< | Admittedly, it would be challenging to perfectly adjust the patent-term knob based on even a small number of the factors identified above. Still, it is surprising that the United States Patent and Trademark Office (USPTO) does not make even a rough attempt to do so. Instead, the USPTO awards every issued patent a patent-term of 20 years from the date on which the patented innovation was first disclosed to the public. 20 years seems pretty arbitrary. Under this rule, 20 years are awarded to a brilliant small-time garage inventor, who slaves away at great personal sacrifice to create a new product, and who may then “burn” many of these precious years attempting to secure production and marketing for his invention. It seems illogical that the same patent-term, 20 years, would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | >
> | Admittedly, it would be difficult to perfectly adjust the knob based on even a small number of the factors identified above. Still, it is surprising that the United States Patent and Trademark Office (USPTO) does not make even a rough attempt to do so. Instead, the USPTO awards every issued patent a patent-term of 20 years from the date on which the patented innovation was first disclosed to the public. 20 years seems pretty arbitrary. Under this rule, 20 years are awarded to a brilliant small-time inventor, who slaves away at great personal sacrifice to create a new product, and who then “loses” many of these precious years attempting to secure production and marketing for his invention. It seems illogical that the same patent-term, 20 years, would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | | | | |
<
< | Under this system, some patent owners make billions in excess of what would have been necessary to foster in them an "inventive incentive" ([1]). On the other hand, naturally inventive but resource-strapped individuals and small organizations are subject to strategically filed and frivolous patent infringement lawsuits, which divert their scarce resources away from creating new and innovative products ([2]). | >
> | Under this system, some patent owners gain, at public expense, billions of dollars over what would have been necessary to create an "inventive incentive" ([1]). On the other hand, truly inventive but resource-strapped individuals and small organizations have little incentive to create, given the expense and hassle of dealing with the USPTO, and threat being slapped with a possible patent-infringement lawsuit ([2]). | | |
IV. Towards a Solution | |
<
< | Predictably, I do not have a solution to the question posed (i.e., what policy maximally encourages technical innovation so as to improve the aggregate quality of life?), but the approach endorsed by the Constitution (and therefore, the patent system) certainly seems misguided. One alternative proposal calls for creating an “efficient market” for buying and selling patent rights ([3] and [4]). Another approach, of my own thinking but certainly not original, would allow the government to force the sale of certain high-value patents from private hands to the public at prices substantially lower than their “fair market value.” However, these approaches are unimpressive to me. In addition to being susceptible to corruptive influences and findings of unconstitutionality, they are simply
"patchwork" solutions based on the existing patent system. The real solution, whatever it may be, is probably more elegant than that. | >
> | Predictably, I do not have a solution to the question posed (i.e., what policy maximally encourages technical innovation so as to improve the aggregate quality-of-life?), but the approach endorsed by the Constitution (and therefore, the patent system) seems misguided. One alternative proposal calls for creating an “efficient market” for buying and selling patent rights ([3] and [4]). Another approach, of my own thinking but certainly not original, would allow the government to force the sale of certain high-value patents from private hands to the public at prices substantially lower than their “fair market value.” However, these approaches are unimpressive. In addition to being susceptible to corruptive influences and findings of unconstitutionality, they are merely
"patchwork" solutions based on the existing patent system. The best solution, whatever it may be, has to be more elegant than that. | | | | |
<
< | -- By SaswatMisra - 2 March 2010 | >
> | -- By SaswatMisra - 3 March 2010 | | |
|
|
|
SaswatMisraFirstPaper 8 - 02 Mar 2010 - Main.SaswatMisra
|
| |
| META TOPICPARENT | name="FirstPaper" |
|---|
| |
<
< | Technical Innovation and the Patent System | >
> | Improving Quality of Life with...Patents? | | | | |
<
< | I. Increasing Quality-of-Life using Technical Innovation | >
> | I. Improving Quality-of-Life with Technical Innovation | | | | |
<
< | Government should implement policies that maximize the aggregate quality of life of its citizenry subject to its available resources. Among the possibilities for doing so, technical advancements are a particularly attractive way to realize quality of life increases. A particular technical advancement, once brought to fruition, has a low on-going cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and further enables additional technical advancements in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, to increase the aggregate quality of life of its citizenry, government should implement policies that provide the most quality-of-life improving technical advancements ("innovations") to the most people at the least societal cost. | >
> | Government should implement policies that maximize the aggregate quality of life of its citizenry subject to its available resources. Among the possibilities for doing so, technical advancements are a particularly attractive option. A particular technical advancement, once brought to fruition, has a low recurring cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and further enables additional technical advancements in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly than the last, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, to increase the aggregate quality of life of its citizenry, government should implement policies that provide the most quality-of-life improving technical advancements ("innovations") to the most people at the least societal cost. | | | | |
<
< | Technical innovation may come in many forms, including industrial methods and processes, mechanical devices, and increasingly, software. Societal costs are hard to quantify, but should account for opportunity cost, i.e., the cost incurred due to: (a) the “excess” time for an innovation to emerge relative to some inherent baseline, as well as (b) the “excess” above-market price of the innovation after it has emerged but during which the citizenry’s access to it is artificially restricted (for example, through competition-limiting intellectual property (IP) rights). | >
> | Technical innovation comes in many forms, including industrial methods and processes, mechanical devices, and increasingly, software. Societal cost includes: (a) the “excess” time for an innovation to emerge relative to some inherent "earliest-possible time," as well as (b) the “excess” cost of the innovation relative to its natural market price during the time period in which access to the invention is artificially restricted (for example, through competition-limiting intellectual property (IP) rights). | | | | | | “promote the progress of science. . . by securing for limited times to. . . inventors the exclusive right to their respective. . . discoveries.” | |
<
< | First, this clause strongly endorses private and exclusive IP-rights, i.e., patents, apparently assuming that such rights are necessary to “promote the progress of science.” Second, this clause reduces the multi-faceted goal described above into a simple one-dimensional optimization problem: maximizing aggregate quality of life through technical innovation is apparently solved simply by adjusting a “knob” that controls patent-term (i.e., the duration of time for which a patent owner enjoys private and exclusive rights to her innovation) to a "sweet spot" at which the inventor receives just enough patent-term so that she is sufficiently motivated to invest her time and resources in creating new innovations. (To give her any additional patent-term would, of course, unduly rob the citizenry of rapid and low cost access to her patented innovations.) | >
> | First, this clause strongly endorses private and exclusive IP-rights, i.e., patents, apparently assuming that such rights “promote the progress of science.” Second, this clause reduces the goal described above into a simple one-dimensional optimization problem: maximizing aggregate quality of life through technical innovation is apparently done simply by dialing a “knob” that controls patent-term (i.e., the duration of time for which a patent owner enjoys private and exclusive rights to her innovation) to a "sweet spot" at which the inventor receives just enough patent-term so that she is sufficiently motivated to invest her time and resources in creating new innovations. (To give her any additional patent-term would, of course, unduly rob the citizenry of rapid and low cost access to her patented innovations.) | | | | |
<
< | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how to adjust the patent-term knob in practice. The amount of patent-term awarded should certainly depend on straightforward factors such as the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would be developed by another inventor. A more intricate calculation of patent-term could possibly take into account additional factors such as the intended use of the patent - does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" so as to scare potential competitors from even entering her market? Further, patent-term would ideally be adjusted to account for the (troubling) scenario in which an inventor is awarded a patent that eliminates her incentive to develop still-better innovations, at least, while her patent is covered by patent-term. (For example, consider a hypothetical publicly-owned corporation that patents a drug to keep cancer patients alive but with moderate discomfort - what is this corporation's financial incentive to develop a new drug to keep the same patients alive, but with no discomfort?) | >
> | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how to adjust the patent-term knob in practice. The amount of patent-term awarded should certainly depend on straightforward factors such as the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would be developed by another inventor. A more intricate calculation of patent-term could possibly take into account additional factors such as the intended use of the patent - does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" so as to scare potential competitors from entering her market? Further, patent-term would ideally be adjusted to account for the troubling scenario in which an inventor is awarded a patent that eliminates her incentive to develop still-better innovations, even though she is often in the best position to do so. (For example, consider a hypothetical publicly-owned corporation that patents a drug to keep a cancer patient alive at the cost of constant physical pain - what is this corporation's financial incentive to develop a better drug that can keep the same patient alive while allowing him to feel no pain?) | | | | |
<
< | III. The Patent Office - A Poor Implementation of a Bad Policy?
It would without a doubt be laborious to adjust the patent-term knob based on even a small number of the factors identified above. What is surprising, however, is that the United States Patent and Trademark Office (USPTO) makes absolutely no effort to do so. Rather, the USPTO arbitrarily awards every issued patent a patent-term of 20 years from the date on which the patented innovation was first disclosed to the public. Under this rule, a patent-term of 20 years is awarded to a brilliant small-time garage inventor, who slaves away at great personal sacrifice to create a new product, and who may then “burn” many years of his patent-term as he attempts to secure production and marketing for his invention. It seems illogical that the same patent-term, 20 years, would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | >
> | III. The Patent Office - Poorly Implementing Misguided Policy?
Admittedly, it would be challenging to perfectly adjust the patent-term knob based on even a small number of the factors identified above. Still, it is surprising that the United States Patent and Trademark Office (USPTO) does not make even a rough attempt to do so. Instead, the USPTO awards every issued patent a patent-term of 20 years from the date on which the patented innovation was first disclosed to the public. 20 years seems pretty arbitrary. Under this rule, 20 years are awarded to a brilliant small-time garage inventor, who slaves away at great personal sacrifice to create a new product, and who may then “burn” many of these precious years attempting to secure production and marketing for his invention. It seems illogical that the same patent-term, 20 years, would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | | | Under this system, some patent owners make billions in excess of what would have been necessary to foster in them an "inventive incentive" ([1]). On the other hand, naturally inventive but resource-strapped individuals and small organizations are subject to strategically filed and frivolous patent infringement lawsuits, which divert their scarce resources away from creating new and innovative products ([2]). | | | "patchwork" solutions based on the existing patent system. The real solution, whatever it may be, is probably more elegant than that. | |
<
< | -- By SaswatMisra - 1 March 2010 | >
> | -- By SaswatMisra - 2 March 2010 | | |
|
|
|
SaswatMisraFirstPaper 7 - 01 Mar 2010 - Main.SaswatMisra
|
| |
| META TOPICPARENT | name="FirstPaper" |
|---|
Technical Innovation and the Patent System | |
<
< | I. Quality-of-Life and Technical Innovation | >
> | I. Increasing Quality-of-Life using Technical Innovation | | | | |
<
< | Government should implement policy that maximizes the aggregate quality of life of its citizenry, subject to its available resources. Technical advancements are an attractive way for government to realize such quality of life increases. A particular technical advancement, once brought to fruition, has a low on-going cost (compared to alternatives such as, say, welfare programs, which need to be continually funded in order to realize a corresponding continual increase in quality of life) and further builds a foundation for future technical advancements (for example, each epoch in computer microprocessor evolution has built on the generation of microprocessors that came before it). Therefore, to increase the aggregate quality of life of its citizenry, government should implement policies that provide the most quality-of-life improving technical advancements ("innovations") to the most people at the least societal cost. | >
> | Government should implement policies that maximize the aggregate quality of life of its citizenry subject to its available resources. Among the possibilities for doing so, technical advancements are a particularly attractive way to realize quality of life increases. A particular technical advancement, once brought to fruition, has a low on-going cost (compared to alternatives such as, say, welfare programs, which need to be continually funded) and further enables additional technical advancements in the future (for example, each epoch in computer microprocessor evolution has arrived more quickly, in part because of the knowledge gained in building the previous generation of microprocessors). Therefore, to increase the aggregate quality of life of its citizenry, government should implement policies that provide the most quality-of-life improving technical advancements ("innovations") to the most people at the least societal cost. | | | | |
<
< | Technical innovation may come in many forms, including industrial methods and processes, mechanical devices, and increasingly, software. Societal costs are hard to quantify, but should account for opportunity cost, i.e., the cost incurred when an innovation is not created or is not disseminated, as rapidly and cheaply as possible, to the citizenry. Components of opportunity cost should include both the “excess” time for an innovation to emerge, as well as “excess” cost of the innovation after it has emerged, but during which the citizenry’s access to the innovation is artificially restricted (for example, through competition-limiting intellectual property (IP)-rights). | >
> | Technical innovation may come in many forms, including industrial methods and processes, mechanical devices, and increasingly, software. Societal costs are hard to quantify, but should account for opportunity cost, i.e., the cost incurred due to: (a) the “excess” time for an innovation to emerge relative to some inherent baseline, as well as (b) the “excess” above-market price of the innovation after it has emerged but during which the citizenry’s access to it is artificially restricted (for example, through competition-limiting intellectual property (IP) rights). | | |
II. The Constitution's Approach: Patents | |
<
< | Interestingly, the Constitution transforms the open ended and aesthetic goal described above, i.e., implementing policy that provides the most quality-of-life improving technical innovation to the most people at the least societal cost, by imposing certain limitations on how such a goal may be achieved. Article 1, Section 8, Clause 8 of the Constitution, in which the patent system is rooted, grants Congress the power to
“promote the progress of science. . . by securing for limited times to. . . inventors the exclusive right to their respective. . . discoveries.”
First, this clause strongly endorses private and exclusive IP rights (i.e., patents) apparently assuming that such rights are necessary to “promote the progress of science.” Second, the clause takes the multi-faceted goal described above and reduces it into a simple, one-dimensional optimization problem: maximizing aggregate quality of life through technical innovation is apparently solved simply by adjusting a “knob” that controls patent-term (i.e., the duration of time over which an inventor enjoys “exclusive right[s]” to her innovation) to a sweet spot, the point at which the inventor receives just enough patent-term so that she is sufficiently motivated to invest her time and resources in creating new innovations. To give her any additional patent-term beyond this would be to unduly rob the citizenry of rapid and low cost access to her patented innovations. | >
> | Interestingly, the Constitution transforms the open ended and aesthetic goal described above, i.e., implementing policy that provides the most quality-of-life improving technical innovation to the most people at the least societal cost, by imposing certain limitations on how such a goal "should" be achieved. In particular, Article 1, Section 8, Clause 8 of the Constitution, in which the patent system is rooted, grants Congress the power to: | | | | |
<
< | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how to adjust the patent-term knob in practice. The amount of patent-term awarded should certainly depend on straightforward factors such as the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would be developed by another inventor. A more intricate calculation of patent-term would possibly take into account the intended use of the patent - does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her “stockpile,” useful only for scaring potential competitors from entering her market? Further, patent-term would ideally be adjusted to account for the (troubling) scenario in which an inventor is awarded a patent (say, on a drug on that keeps a cancer patient alive for his entire natural life, but with moderate discomfort) that eliminates her incentive to develop still-better innovations (say, a drug that keeps the same patient alive, but with no discomfort) during the time that her patent is in-force. | >
> | “promote the progress of science. . . by securing for limited times to. . . inventors the exclusive right to their respective. . . discoveries.” | | | | |
>
> | First, this clause strongly endorses private and exclusive IP-rights, i.e., patents, apparently assuming that such rights are necessary to “promote the progress of science.” Second, this clause reduces the multi-faceted goal described above into a simple one-dimensional optimization problem: maximizing aggregate quality of life through technical innovation is apparently solved simply by adjusting a “knob” that controls patent-term (i.e., the duration of time for which a patent owner enjoys private and exclusive rights to her innovation) to a "sweet spot" at which the inventor receives just enough patent-term so that she is sufficiently motivated to invest her time and resources in creating new innovations. (To give her any additional patent-term would, of course, unduly rob the citizenry of rapid and low cost access to her patented innovations.) | | | | |
>
> | Even accepting this Constitutionally-endorsed formulation as a sensible one, it seems difficult or impossible to determine how to adjust the patent-term knob in practice. The amount of patent-term awarded should certainly depend on straightforward factors such as the likelihood of commercialization, the time needed to recoup investment costs, and the expected time until a substantially similar innovation would be developed by another inventor. A more intricate calculation of patent-term could possibly take into account additional factors such as the intended use of the patent - does the inventor actually seek to bring the patented innovation to bear, or is she simply going to add it to her "stockpile" so as to scare potential competitors from even entering her market? Further, patent-term would ideally be adjusted to account for the (troubling) scenario in which an inventor is awarded a patent that eliminates her incentive to develop still-better innovations, at least, while her patent is covered by patent-term. (For example, consider a hypothetical publicly-owned corporation that patents a drug to keep cancer patients alive but with moderate discomfort - what is this corporation's financial incentive to develop a new drug to keep the same patients alive, but with no discomfort?) | | | | |
<
< | III. The Patent Office - A Poor Implementation of Bad Policy? | >
> | III. The Patent Office - A Poor Implementation of a Bad Policy? | | | | |
<
< | It would no doubt be expensive and laborious to adjust the patent-term knob based on even a small number of the factors identified above. What is surprising, however, is that the United States Patent and Trademark Office (USPTO) makes absolutely no attempt to do so, even in a coarse or approximate way. Rather, the USPTO arbitrarily awards every issued patent a patent-term of 20 years from the date on which the patented innovation was first disclosed to the public. Under this rule, the patent-term awarded to a brilliant, small-time garage inventor, who slaves away at great personal sacrifice to create a new product, and who “burns” many years of patent-term as he secures production and marketing for his invention, is 20 years. It seems illogical that the exact same patent-term would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | >
> | It would without a doubt be laborious to adjust the patent-term knob based on even a small number of the factors identified above. What is surprising, however, is that the United States Patent and Trademark Office (USPTO) makes absolutely no effort to do so. Rather, the USPTO arbitrarily awards every issued patent a patent-term of 20 years from the date on which the patented innovation was first disclosed to the public. Under this rule, a patent-term of 20 years is awarded to a brilliant small-time garage inventor, who slaves away at great personal sacrifice to create a new product, and who may then “burn” many years of his patent-term as he attempts to secure production and marketing for his invention. It seems illogical that the same patent-term, 20 years, would be awarded to a mega-corporation, for a product created using the minimal efforts of a corporate assembly-line “invention” process, for a patent that will predictably and immediately generate millions of dollars in daily profits. | | | | |
<
< | Under this system, some patent owners make billions in excess of what is necessary to create an inventive incentive ([1]). On the other hand, inventive but resource-strapped small companies are subject to frivolously-filed patent infringement lawsuits which divert their scarce resources from creating new and innovative products ([2]). | >
> | Under this system, some patent owners make billions in excess of what would have been necessary to foster in them an "inventive incentive" ([1]). On the other hand, naturally inventive but resource-strapped individuals and small organizations are subject to strategically filed and frivolous patent infringement lawsuits, which divert their scarce resources away from creating new and innovative products ([2]). | | |
IV. Towards a Solution | |
<
< | Predictably, I do not have a solution to the question posed (i.e., what policy maximally improves quality of life through technical innovation?). To me, it seems that the approach endorsed by the Constitution (and therefore, the patent system) is wrong. A different approach calls for creating an “efficient market” for buying and selling patent rights ([3] and [4]). Yet another approach, of my own thinking but likely not original, would allow the government to force the sale of certain high-value patents from private hands to the public at prices substantially lower than their “fair market value.” However, these “patchwork” solutions are not appealing. At a minimum, they are susceptible to special interests or are Constitutionally problematic. The solution, whatever it may be, is probably a simple and elegant one. | >
> | Predictably, I do not have a solution to the question posed (i.e., what policy maximally encourages technical innovation so as to improve the aggregate quality of life?), but the approach endorsed by the Constitution (and therefore, the patent system) certainly seems misguided. One alternative proposal calls for creating an “efficient market” for buying and selling patent rights ([3] and [4]). Another approach, of my own thinking but certainly not original, would allow the government to force the sale of certain high-value patents from private hands to the public at prices substantially lower than their “fair market value.” However, these approaches are unimpressive to me. In addition to being susceptible to corruptive influences and findings of unconstitutionality, they are simply
"patchwork" solutions based on the existing patent system. The real solution, whatever it may be, is probably more elegant than that. | | | | |
<
< | -- By SaswatMisra - 28 Feb 2010 | >
> | -- By SaswatMisra - 1 March 2010 | | |
|
|
|