From: Samantha Atkins (samantha@objectent.com)
Date: Sat Mar 08 2003 - 22:14:39 MST
Hal Finney wrote:
> Another justification for patents can be expressed in terms of transaction
> costs. If there were no patents, people might try to protect their
> innovations in other ways that could be quite expensive. They could
> wrap their devices in elaborate self-destruct mechanisms, for example.
> Or they might reveal the workings to customers, but only in exchange
> for a promise by the customer not to use the information or reveal it
> to anyone else.
>
> Needless to say, such contracts would be very difficult and expensive to
> enforce. The transaction costs would be extremely high. So the patent
> system can be seen as a substitute for privately-negotiated contracts
> like this, a sort of default contract which inventors can choose to make
> use of. Or they can always try to protect their secrets in one of these
> other ways.
>
> The justification is then that if we did not have patents, inventors
> would waste everyone's time, energy and money coming up with other ways
> to protect their ideas. Patents would therefore reduce transaction
> costs and make society run more efficiently.
>
This is a lot of assumption. As an innovator myself I could
care less about protecting my ideas. What I most want is to get
my innovations in common use and see my ideas be the springboard
for still other ideas. Money is not my primary motivation as
long as I have enough to continue doing the things I am
interested in. I do not think I am alone in this. So I find
this argument for patents to be empty.
> It is interesting to observe how we are starting to see the results
> of transaction costs falling for other private methods of protecting
> intellectual property. The much-maligned Palladium technology from
> Microsoft can be seen as a way of enforcing the kinds of agreements
> discussed above, with regard to copyright. You will only be able to
> download a movie, say, if you in effect agree to observe certain rules
> in terms of handling the data. Palladium technology is designed to
> lower transaction costs to the point where these kinds of contracts
> can be efficient on a wide scale. It can be seen as an alternative to
> copyright that is non-coercive and relies solely on private agreements.
>
On the contrary, Palladium is ultimately coercive as the code
becomes law that is inescapable and cannot be argued with or
even necessarilly examined.
I also do not agree that "intellectual property" without
considerable subdivision and explanation, is a meaningful
phrase. At the very least there is a need for distinguishing
between what is best handled as a commons versus what is best
handled as some form of private property. Not everything, and
especially not all things resulting from use of the intellect,
fall cleanly into the property side. Such distinctions are
crucial to these discussions.
- samantha
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