02 July 2009

Patents Don't Promote Innovation: Study

It's extraordinary how the myth that patents somehow promote innovation is still propagated and widely accepted; and yet there is practically *no* empirical evidence that it's true. All the studies that have looked at this area rigorously come to quite a different conclusion. Here's yet another nail in that coffin, using a very novel approach:

Patent systems are often justified by an assumption that innovation will be spurred by the prospect of patent protection, leading to the accrual of greater societal benefits than would be possible under non-patent systems. However, little empirical evidence exists to support this assumption. One way to test the hypothesis that a patent system promotes innovation is to simulate the behavior of inventors and competitors experimentally under conditions approximating patent and non-patent systems.

Employing a multi-user interactive simulation of patent and non-patent (commons and open source) systems ("PatentSim"), this study compares rates of innovation, productivity, and societal utility. PatentSim uses an abstracted and cumulative model of the invention process, a database of potential innovations, an interactive interface that allows users to invent, patent, or open source these innovations, and a network over which users may interact with one another to license, assign, buy, infringe, and enforce patents.

Data generated thus far using PatentSim suggest that a system combining patent and open source protection for inventions (that is, similar to modern patent systems) generates significantly lower rates of innovation (p<0.05), productivity (p<0.001), and societal utility (p<0.002) than does a commons system. These data also indicate that there is no statistical difference in innovation, productivity, or societal utility between a pure patent system and a system combining patent and open source protection.

The results of this study are inconsistent with the orthodox justification for patent systems. However, they do accord well with evidence from the increasingly important field of user and open innovation. Simulation games of the patent system could even provide a more effective means of fulfilling the Constitutional mandate ― "to promote the Progress of . . . useful Art" than does the orthodox assumption that technological innovation can be encouraged through the prospect of patent protection.

When will people get the message and start sharing for mutual benefit?

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15 comments:

phayes said...

“It's extraordinary how the myth that patents somehow promote innovation is still propagated and widely accepted”

It's just like quackery etc: it does seem extraordinary at first but when you consider the emotional and economic capital the homeopath (or electrosmog activist or EMdrive engineer or Patent Attorney...) has invested in his or her beliefs; the lack of knowledge and critical thinking skills¹; the Dunning-Kruger effect;..., it all begins to seem very ordinary indeed. I've gotten used to the endarkenment² extremes of delusion and ignorance now but my irony meter still goes *spoing* when I see things like this:

http://www.ipwatchdog.com/2009/07/02/software-new-engine-must-be-patentable/id=4371/

;-)

¹ Sometimes, the apparent selective abandonment of them.

² http://www.dcscience.net/?p=187

glyn moody said...

You're right, of course: it's and emotional - and economic - investment that drives them to cling to this idea, because they daren't face the alternative.

The IPwatch is pretty sad: I particularly like the typical "it's not the patentability of software that matters, but the term..."

guy said...

As a paid programmer developing software for various companies for the last twenty years (both software houses and companies that use software) patents are just one more disincentive for me to create anything novel, non-obvious or in any way imaginative since the likelihood is that I will end up precluded from being able to use it myself even if my employer ceases to use it. Of all the software I've written the *only* work which has any chance of surviving are my own programs or contributions to open source projects because I'll still have some say in what happens to it. Almost everything I've written for commercial companies has been killed off at the end of the life of those companies either through acquisitions (success?) or administration/liquidation (failure?) not because it was technically flawed or not useful (usually there's been a happy user base), but because it didn't fit the commercial preferences of whoever ended up owning the IP. This gets rather depressing after a while, and patents just make that worse since I may not even be able to use the *idea* again, let alone the code.

So, if I have a half decent idea I'll think twice before I offer it to my employer.

I do write software for money, but that's not the only reason --- there's plenty of ways to make money. I take pride in what I create, and I'd hope that in the end I have something more to show for my efforts than my salary, and free software (yes, I think I side with RMS on this) seems like the only way it's going to happen.

glyn moody said...

@guy: thanks for that. I really feel sorry for programmers such as yourself: it seems to be getting harder and harder to code these days.

Dale Halling said...

The empirical evidence does not support this study. The richest countries in the world have the strongest intellectual property laws. The poorest countries have weak or non-existent intellectual property laws. Unless this study can explain this, it is inherently flawed.

Should Patents be Abolished? – Scarcity

There have been a number of suggestions that patent should be scaled back or outright abolished. For instance, Stephen Kinsella has written a book, Against Intellectual Property, and Tom Palmer has written and article, “Are Patents and Copyright Morally Justified? The Philosophy of Property Rights and Ideal Objects.” Many of these critiques suggest that property rights are based on scarcity and intellectual property rights are not subject to scarcity.

The article “Scarcity – Does it Prove Intellectual Property is Unjustified?” (http://hallingblog.com/2009/06/22/scarcity-%e2%80%93-does-it-prove-intellectual-property-is-unjustified/) suggests that property rights are not based on scarcity but on the “labor theory of property” first proposed by John Locke. The labor theory of property explains criminal law, how property is to be allocated and intellectual property law. The “scarcity” theory of private property does not explain criminal law and does not explain how property should be allocated. According to its proponents it does explain why there should not be intellectual property law. Trading scarcity for the labor theory of property is like trading the theory that “what goes up must come down” for Newton’s Law of gravity. The fact of the matter is that the proponents of scarcity have confused cause with effect. A system of private property results in efficient allocation of resource, but it is not the reason for private property – it is the effect of private property.

Is the conception of ideas and inventions subject to scarcity? See http://hallingblog.com/2009/06/25/scarcity-and-intellectual-property-empirical-evidence-for-inventions/

Is the distribution of ideas and invention (technology diffusion) subject to scarcity? See http://hallingblog.com/2009/06/25/scarcity-and-intellectual-property-empirical-evidence-of-adoptiondistribution-of-technology/

glyn moody said...

@Dale: thanks for the interesting links. I don't have time now to answer all their points - I'll try to do this at a later date. For the moment, I'll just make two comments.

You write: "The richest countries in the world have the strongest intellectual property laws. The poorest countries have weak or non-existent intellectual property laws." This seems to me to be kind of Maslow hierarchy.

If most of the population have to worry about where their next meal comes from, or where to find clean water, it's hardly a priority for that nation to worry about whether software or DNA should be patentable, or whether performance should be a separate intellectual monopoly. They are simply irrelevant.

Until a society has enough spare resources for that most superfluous of beings, the lawyer, you're unlikely to find complex intellectual monopoly frameworks, so it's hardly surprising poor countries don't have them, and rich ones do.

One other point. You write: "If you own yourself then you own the fruits of your labor, physical and mental." I don't think that's true in the mental realm.

If I write a book, or a song, I do not own these for the simple reason that they are built on the creations of my predecessors: there is no art created in a vacuum. Even if it reacts *against* something, that something was needed for the reaction, and so what I create is not purely due to me.

So even if the idea of "owning" yourself were true it wouldn't follow that I owned my creations since that would contradict the ownership by others of the ideas and things that I drew on.

Of course, I am their creator, and it may be that I want some incentives to create further (maybe not: many people are happy to create for the sheer pleasure of doing so), then you might want to offer me incentives, maybe even economic ones, to carry on doing so. But that's a separate issue.

Crosbie Fitch said...

There's the natural rights theory of property, where property is created through privacy, or private possession, whether through creation, discovery or exchange.

Thus you do own a derivative work as your private property, irrespective of the fact you built it upon a work you obtained from another.

What you have no natural right to is a monopoly in the marketplace.

It's the seductive allure of that monopoly that people will corrupt their principles to incorporate.

glyn moody said...

@Crosbie: you've lost me on that one. "Property is created through privacy, or private possession": isn't that tautologous? But maybe this is just words, if you agree that that doesn't give you a monopoly. I just don't feel it's correct to claim that you own it, since "it" is made of up many parts, some taken from elsewhere. Maybe its a kind of mini-commons....

Jose_X said...

glyn moody, to add to your remark that wealthy nations have patents because this correlates with other things (stable and successful economic and political systems, etc):

When you have an abundance of creations, patents can leech off this, at least in areas that don't handcuff most people/inventors. For example, most people/inventors have no direct loss to a patent dispute involving heavy industrial processes. So patents are tolerated because the loses to the vast majority of people (and inventors) are of things they aren't able to exercise anyway. Most people don't have access to the resources to manufacture, distribute, etc, the subject of these patents. At some point, a patent is a loss to society. Today, a larger number of patents that were possibly a net gain decades ago might no longer be a gain for society if they were given today. The reason for this is because today the Internet has made wide-scale collaboration possible and sophisticated simulations and models have also been created with software (bringing expensive experimentation laboratories into reach of more people/inventors).

As an extreme case of patents that fulfill hardly any of the context of past patents that were net gains, we have software. Many many people that will never start/own/run a large factory or capital intensive business will participate in the creation, distribution, etc of software, and to very significant extents. I can't take your factory and zap it into my living room, modify it, and redistribute it to others wanting factories; however, I can most definitely do that with software -- and quite effectively. The Internet and computers have really made software experimentation (design) accessible to virtually everyone (at least in wealthy nations) and for just about any subfield of software. Software most definitely should not be patentable, at least in the vast majority of cases where the above items hold, if we intend to promote the progress of science/arts. Even before the Internet was widely used, Bill Gates recognized this much, so one might expect that software patents would do even more damage today (if enforced aggressively) than they would have a decade or more back.

Now to give one example of how correlation is not causation.

The governments of wealthy nations make many billions (or trillions) in taxes annually. The governments of poor nations do not make many billions (or trillions) in taxes annually.

So does this mean that if we try to tax poor nations significantly more, so that the taxes approach these values of wealthier nations, then these poor nations will become wealthy?

No. That's a ridiculous notion.

Similarly, patents are a tax, and their existence is owned to a healthy economy (not vice-versa). There are very bad taxes that can destroy an economy (eg, a 95% tax used to pay people to dig holes that have little benefit to the rest of society).

"Software" patents are an example of a very bad tax.

Jose_X said...

[Dale Halling] >> http://hallingblog.com/2009/06/25/scarcity-and-intellectual-property-empirical-evidence-of-adoptiondistribution-of-technology/

I skimmed that essay. It appears that the author wants to recognize and reward that value of inventions (intellectual realm).

I think that is great, but patents are a horrible way of doing that. They stagnate the rest of the world. Lack of scarcity helps explain why this is so.

[Labor theory of property @ http://en.wikipedia.org/wiki/Labor_theory_of_property ] >> When a person works, that labor enters into the object. Thus, the object becomes the property of that person.

Problem is that many work towards inventions, yet patent law gives it all to a single entity. For example, patent law takes away from the labor I did to create item X that ended up inspiring a conversation between you and someone, from which you got inspiration towards your invention. I contributed because without my item X, you would not have made that invention as/when you did.

Further, according to this logic, why should others be prevented in the future from adding their own labor to further improve the property?

Giving a person exclusive use of something until they dispose of it is not the most efficient use of that property, but it might be a very practical compromise for (eg) houses, chairs, etc, in many cases. Note further that we can all own a house or chair that are very similar and hence live out our life in society without missing too much. A patent given to you, on the other hand, prevents me from enjoying an invention that would be very similar to yours. [Copyright monopolies are more lax this way, btw.]

Anyway you slice it or dice it scarcity is an important element, but even if we look towards Locke, patent law has problems.

Crosbie Fitch said...

If I paid you £500 to write me a program to XOR a file with the corresponding digits of Pi, then the source code you e-mail me in exchange for my money is my private intellectual property. It matters not whether it is a combination/derivative of 5 other authors' work (that you purchased previously), or whether it has a GPL license.

It is my IP because it is in my private possession (through exchange). I am naturally able to control access and any other use of that IP.

You may well have kept a copy of the source code. Fine. That's your IP.

Apart from the unnatural monopoly of copyright or patent neither of us has any right or ability to control what the other does with their IP, moreover we have no right of access to each other's IP - irrespective of provenance or similarity. Thus if you accidentally delete your copy, you have no right to force me to supply you with a copy of mine (nor to steal a copy from me). Similarly you have no right to prevent me producing and distributing copies or derivatives at any price I fancy, nor do you have any entitlement to royalty.

For provenance (copyright) or similarity (patent) to give a prior author or inventor some controlling interest or power over other people's material or intellectual property is an attractive privilege (historically sought and granted many times), but it is not a natural right.

All an author or inventor can naturally insist upon concerning what others do with their own possessions is that the truth of their authorship or invention is not impaired. Thus the buyer of a painting has no right to present it as their own work, but then the ability to impair the truth cannot be purchased in any case (ethically - irrespective of laws permitting this).

glyn moody said...

@Jose_X: thanks for the analysis.

glyn moody said...

@Crosbie: OK, I see what you mean better. How does that square with the GNU GPL?

Crosbie Fitch said...

The GPL is a neutralisation of copyright (and patent as far as possible) in those jurisdictions in which such privileges are granted.

The GPL does not give you a right to control what I can or cannot do with my intellectual property (even if you wrote it). Instead it neutralises any privilege I may be granted to control what any recipient does with the copies or derivatives I make from it.

Given that copyright/patent is fundamentally a suspension of the natural right (liberty) to produce copies/replicas, then the neutralisation of such privilege is effectively a restoration of the individual's natural right.

That restoration is to be free to do those things prevented by copyright and patent.

Without copyright and patent, there is no longer any need for the GPL. Indeed, it would be strange for those who would have their liberty restored to insist on the retention of a privilege that suspended their liberty to make copies/replicas precisely so they could neutralise it.

The fact is, today anyone can make and distribute infringing copies. All that copyleft licenses do is to assure the people engaged in this cultural activity that the risk of suffering litigation for doing so is much reduced.

What some such as I would see sooner rather than later is the abolition of copyright and patent so that no-one should suffer litigation for sharing and building upon published art and technology, mankind's cultural heritage.

Such cultural liberty belongs to all, not just the audiences of those who have ethically relinquished their privilege through copyleft or other neutralising license.

glyn moody said...

Thanks.