Re: Intellectual property

Michael Lorrey (
Tue, 25 Mar 1997 11:20:32 -0500

Lee Daniel Crocker wrote:
> Mr. Lorrey properly pointed out that I had ignored one of his earlier
> arguments, and I misinterpreted his later reference to it. I will
> attempt to remedy this. First, his point:
> > For example: There have been approximately 5.5 million inventions
> > patented in the US in it entire history (mostly during periods when
> > patent rights are vigorously enforced, hint hint) while laborers have
> > worked approximately 25 x 10^13 hours in US history. This means that
> > in fair market value, the average invention is equal to 4.55 million
> > man hours of physical labor in relative scarcity. If we value the
> > average man hour at as little as $1.00 per hour (which was typical
> > for the turn of the century, never mind that 2/3 of all workers have
> > lived since that time) we see that the fair market value for an average
> > invention is $4.55 million dollars.
> > Any responses to this quoting communist rhetoric and I will puke.
> Ignoring the parenthetical hint which is clearly circular (defining
> inventions as patented things, then claiming most inventions happened
> under patent laws)

Only that having vigorously enforced patents creates a greater incentive
on the part of inventors to pursue the patent process. By patenting, the
invention specs are publicly available for study, so companies or
indviduals needing a solution to a particular problem can find it if it
is already invented. By paying royalties on use of the patent, they save
money versus re-inventing the wheel, thus R&D costs are saved. If the
invention were not patented, and kept secret, such exchanges would not
be possible, and R&D would comprise a much larger percentage of
production costs. Also, by having exisitng patents publicly available
for study, the competetive frog-jumping effects I spoke of can take
place, where companies can see how brand X does it, so they say, how can
we do it better to be more competetive than they? THus R&D moeny is
spent on NEW research, rather than rehashing things already developed
but kept secret.

, Mr. Lorrey then calculates that the "relative
> scarcity" of an invention is 4.55 million man-hours of labor. By this
> I believe he means to imply that this is an appropriate measure of the
> value of an inventor's work, and further that he means to imply that
> this income would not be obtained without patents.

No, it is only to debunk your arguments that inventors get overpaid in a
patent system due to the monopoly they can command for their device,
that the work of inventors/creators needs to be more in line with that
of other labor functions, which I am trying, by illustration of relative
scarcity to show that since one patented invention is worth so many man
hours of labor in terms of relative scarcity, not even to mention that
man hours of labor are generic commodities, while every invention is
unique, that even being stingy, an average invention is worth so many
man hours. While we can say that not all inventions are worth anything,
or are marketable, by filtering out "useless" inventions (while keeping
all the useless work that occurs every day) this merely makes each
useful invention MORE VALUABLE relativly speaking.
> That is at least three independent claims. The first (the value he
> calculates) incorrectly assumes that patent=invention, thereby ignoring
> the thousands of inventions that are never patented either because
> their creators had no use for patents (high-tech and trendy things
> often become obsolete so fast that waiting for and paying for a patent
> is a waste of time and resources better spent on getting the thing to
> market quickly), or because they couldn't find a sufficient market or
> sufficient startup capital, or because they were invented by foreigners
> for whom there was no US patent protection until the Paris convention
> of 1884. As a guess, I'd put the number of "inventions", not including
> all the little things people build for themselves with no intention of
> marketing, at least an order of magnitude higher.
> The second claim, that the relative scarcity of a commodity is in
> direct corrolation to its value, just ignores the demand side of the
> equation. It doesn't matter how rare your talents are if nobody has
> any use for them. An inventor, then, must use judgment and take some
> risk in deciding how to invest his time so that his creations will
> have a better chance at being valuable. The best way to do that is
> probably for him to do research under a capitalist patron, because
> capitalists live on their ability to judge investments. An alternative
> "strategy" (in a loose sense) is blind luck. To happen upon a
> discovery by accident--like the vulcanization of rubber--eliminates
> the risk, and is a time-honored tradition, primarily because some
> things were just to farfetched to have been discovered otherwise.
> However, many chance discoveries resulted from basic research aimed
> at other goals, so there was still speculation involved. Because
> that speculation takes capital, and its success is a major factor in
> the success of the enterprise, it is the /speculation/, not the
> invention, whose scarcity we most prize, and that should benefit the
> most from the product. When the inventor himself does it, he does
> indeed reap the benefits, but usually it's a capitalist, and quite
> rightly so. He is, after all, paying the inventor's bills. So the
> relative scarcity of inventions to labor is no measure of value.
> Lastly, it is (presumably, but not explicitly) claimed that without
> patents, the inventor would have insufficient incentive to create,
> because he would be less likely to be rewarded commensurately with
> his "value". That invention happened before patents is still there
> to challenge that idea,

I never denied that people invented things prior to the USPTO, and am
even acknowledging that prior to the USPTO and the American Revolution,
patents and other intellectual property were handled by the Royal Office
of Patents in Britain, though I am not particularly familiar with that
system. What i am saying is that in an system where individual patent
rights are rigorously enforced by government, irrespective of the
relative wealth of the patent holder, that the quantity of patents
pursued by individuals and companies goes up, which, due to the openly
available patent information, helps accelerate technological advancement
as described above. R&D money is not wasted on replicated research.

but so too are all the other arguments I have
> made before about other ways for an inventor (or patron) to profit
> from his creations. Mr. Lorrey elsewhere claims that his experience
> of individual contracts being imperfectly honored in courts hampers
> most of those methods. But two wrongs don't make a right: if contract
> law is broken, using the patent laws here in question to avoid that
> problem rather than tackling the problem directly makes little sense.
> And even if individual contracts are hard to enforce, most inventions
> are made under the employ of large corporations who /do/ have the
> resources to enforce their contracts with each other, which is
> sufficient for several of the methods proposed. This is also moot
> in the cases where an lone inventor, without contracts, can manage
> to demonstrate an invention without giving away its secret, and
> can then sell it to the highest bidder, and in the case where he
> can choose never to release specs to the public at all, by making
> money with the technology privately.

And what is the possibility of making money with either method? I would
say that the indvidual inventor can make much more money under a public
patent system like ours than in private secrecy system, and is much less
likely to be taken advantage of (with the exception of one, which I
shall describe below.)
> Because there are many patentless methods to profit from technology,
> and because a patentless system cuts research and developments costs
> drastically, I simply don't see that a patentless world automatically
> resigns inventors to poverty. This is not a socialist argument that
> inventors must sacrifice profits for the common good, or even a
> left-libertarian argument that an inventor only "deserves" what he
> can get without resort to force; it is a purely uncompromising
> capitalist profit-driven argument that the inventor himself, his
> investors, and everyone else benefits more from a system that does
> not restrict the unfettered exchange of ideas to whomever can most
> efficiently exploit them.

In this case I would like to hear details of these sort of systems.
Personally, I have had one invention seized by a defense agency and
classified, so I cannot get a patent on it till it is declassified
(meanwhile they and their contractors are using it to their glee). THis
is my one caveat with the present system, and have been seeking methods
to be able to keep the central secrets of my drive system secure without
risking having the drive technology seized by Agent John Q.
Stormtrooper, and still being able to produce products using the