Re: Do patents really foster innovation?

From: Charles Hixson (charleshixsn@earthlink.net)
Date: Fri Mar 07 2003 - 08:31:19 MST

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    Rafal Smigrodzki wrote:

    >----- Original Message -----
    >From: "Hal Finney" <hal@finney.org>
    >...
    >
    >### This is a very interesting line of thought that I have been recently
    >coming closer to. If the producer of a piece of information (be it music or
    >knowledge embodied in a physical object) was really able to protect his
    >property while allowing wide access to it, but without having a
    >state-enforced monopoly, this might be actually better than the current
    >situation. Persons unwilling to accept the terms set out by the owner would
    >be free to compete by coming up with comparable information on their own,
    >which would provide incentives to produce useful information, identical to
    >the incentives in the production of other commodities. Still, not knowing
    >enough about technology, I wonder if it would be really possible to protect
    >information ownership rights without some significant restrictions on the
    >devices used for the transmission and reading of information. How does
    >Palladium work?
    >
    This is the key question. Palladium won't exist in a vacuum. It's
    ability to work will depend on new and improved laws, e.g., laws making
    it illegal to modify hardware to circumvent it. And it will be largely
    designed by a company that has repeatedly shown a contempt for it's
    customers, ethics, and decency. And that frequently lies about it's
    products, not only before release, but afterwards. So it's going to be
    a new kind of state enforced monopoly, not get away from that concept.
    (Getting away from the concept would be worthy, but no state will give
    up controls on any monopolies that exist. The best you can hope for is
    that it might make it difficult to create new ones. The state is
    practically defined as an organization that claims a monopoly on the use
    of force.)

    >
    >I fully agree with the initial part of your analysis, since an appropriately
    >managed patent and copyright system IMO indeed reduces transaction costs and
    >allows the provision of useful goods which would otherwise not be provided.
    >
    This is correct, but the presumption "...appropriately managed..."
    assumes that those managing it have the same criteria as you do as to
    what this constitutes. For some people the current US patent system is
    "appropriately managed". And those people are the ones in control of
    the operation.

    >The existence of the legal infrastructure of courts (whether private or
    >state run), capable of enforcing impartial decisions regarding private
    >contracts at will, is a prerequisite for a lot of business activity, such as
    >.... copyright law, essentially a perpetuity, is a total
    >mess, which frequently happens with systems amenable to political
    >manipulation against rational market forces.
    >
    >Rafal
    >
    Agreed. It's vile. But even so it isn't as bad as the current patent
    system.



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