Re: Patents
Mon, 22 Feb 1999 12:59:10 EST

In a message dated 2/22/99 7:53:35 AM, wrote:

>You haven't included any information about the capital markets in these
>during this period. The main argument for patents is as security to obtain
>capital, and to establish a capacity to pay back capital without competetive
>pressures diluting the firm's ability to do so. At first glance I would
>say that the reason those countries ended their experiments with no patent
>was because too many of their businesses were either patenting in other
>anyways and were not manufacturing in the patentless countries, or the
>were losing the rights to their own products in countries which kept patent
>as competitors were patenting their products. The third reason would have
>because investors found that the payback on patentless products was not as
>as patented ones...

Both countries in question did at least as well economically without patents as
either before or after. As to why they switched back, my source attributed that to political pressure by large corporations - internal for Switzerland and external for the Netherlands. Restoring patents didn't improve innovation measurably in either country.

>I would also imagine that those countries started seeing a lack of imports of
>technology, as companies were afraid of firms in those countries steal their
>knowledge. If India were a shining light of modernity and industrialization,
>might put some credence to the anti-patent argument. But they have not gone
>anywhere near their potential.

India has many things holding it back, including tarriff, extensive regulations,
and mediocre education. They have improved some of the other things but not changed their patent laws and, for the last couple years, managed a respectable
growth rate.

Ideally your controls for with-patent and without-patent comparisons should be as close as possible. A single country that shifts from patents to no patents
and then back again is a much better (although still flawed) comparison than two very different countries.

>Their GDP has stagnated and unemployment is now 1/3
>of the population. They are an economic basketcase. China is enough better
>they have a useful system, even though to get patent protection it costs a
lot of
>money in bribes...

>From my understanding of the Chinese bribery system, you can't call that a
"patent system". If you have enough money and the right friends, you can buy a monopoly. You needn't have actually developed it.

>The so called 'pirate software' industry is mostly just a
>scheme by which large software producers can avoid taxes....

They don't pay royalties to developers either. When people can buy newly issued games for 3$ in Malaysia when the official price is $60 the royalties count more than the taxes even at a European VAT rate.