What investors want is to be “protected” from competition. But the same set of people are the ones loudly proclaiming that competition is what provides the best deal for the common man.

And isn’t US government “by the people, for the people”? Shouldn’t the same apply to research done in its’ name?

One can reasonably deny the legitimacy of the whole question. If patents
are wrong, or if the redistribution involved in patents for
government-funded research is wrong, then it doesn’t
matter if you’ll get more commercialization or not.

Assuming that it is in fact moral to use monopolies and redistribution
to get commercialization, and further assuming that you want
rapid commercialization, it’s still not so obvious that patents are
practically needed. People do invest in technology
without “protection”. The usual example is the software industry,
which grew from almost nothing to huge with no meaningful patent
protection… obviously there was enough investment there to get
the job done.

Admittedly, investors are going to feel more comfortable if they feel
they have monopolies than if they don’t, and given a choice between two
otherwise equally attractive investments, they’ll choose the more comfortable
one. However, that doesn’t mean that they’ll be stopped completely.
Things are never entirely equal… and it could be arranged that
there not be so many safe-seeming investments around to
choose from.

The existing system may actually prevent the commercialization
of good technology that, for whatever reason, doesn’t happen to
be patented. Would the stigma associated with not being patented tend to
go away if a larger fraction of the obviously good, cutting-edge stuff
was unpatented? How damaging is it that good, unpatented stuff doesn’t
get commercialized, especially since truly revolutionary, ahead-of-their-time
ideas may be out of patent before they’re feasible in practice?

People still invest, and make lots of money, in industries where patents
aren’t available. What are the basic patents underlying Wal-Mart? You
can knock the software examply by saying that software has low startup
costs and low barriers to entry, but retail doesn’t, really. How many
really old industries are still dominated by the firms that started
them? It would seem that running your business well is more important
than having a patent.

One can also argue that investors don’t value patents rationally, and
that that could be fixed with better research (to establish the rational
value) and education (to make it widely known). Most
people who aren’t patent lawyers don’t realize how hard it can be to
actually enforce a patent, and most people who aren’t business managers
don’t realize how many things, beyond just having the basic description
of the technology, it takes to turn an idea into a viable
business… how important it is to run the business well… how
valuable it is to have the top experts on a technology, even if you
don’t have a patent on it… how much the prestige of being the
inventor and the best is worth. They therefore overvalue patent
protection… especially when patent lawyers and random fluctuations in
fashion tell them patents are Very Important.

That brings up the question of whether the investors you get with
patents are the ones you want. The people you want to encourage
are those who plan to build real businesses with real good will,
real know-how, and real reputations in the market… none of which
come from patents. Are investors who are primarily concerned
about patent protection as high-quality as investors who know
that they’re building businesses with intrinsic value? Do they
have the same long-term attitude?

There’s also the issue of friction at the startup stage. To the extent
that entrepreneurs are worried about infringing patents, they may be
chilled from starting anything. I’ve seen people chilled from
starting businesses by patents. I’ve seen this in cases where the patent
holders proceeded, through their own extremely poor business management,
to utterly fail to commercialize the technology… perhaps unjustly
damaging the technology’s reputation in the process. If you give
somebody a monopoly over a technology, that person’s errors are
going to affect the whole technology.

Another factor is that the costs of starting
businesses may go way up if founders have to worry about possibly
licensing patents. In some industries, you can start a company on almost
no capital… fees for lawyers to worry about IP encumbrances may be
your biggest startup cost, if you really do worry about it.
That’s important, because a cost that might be trivial for an
established business can completely prevent the creation of a new one,
and that effect is worst in “scruffy” new industries.
Even within an established business, having to deal with management
questions about IP can make it hard to start up a new initiative.

I’ve had actual legal advice not to worry about patents, and to
avoid finding out if things were covered by any patents,
because of the treble damages for knowing violation. How good can a
system be if its own practitioners have to advise people to ignore it?

None of this is certain evidence for my side… but it is
enough to pretty much destroy the automatic assumption that granting
monopolies on inventions always increases investment, and that
assumption is what underlies the Bayh-Dole patent giveaway.

The argument for patents on government funded research is that investors will not invest without protection. What is the answer to this point? —Christine

Oh, and Bayh-Dole seemed like a good idea at the time, and may have even been a good idea given the structure of industry at the time… but I don’t think you can show me any real data that say that “most observers” agree that it’s better than the alternative now, or that counting the noses of “observers” is the right way to figure out what works anyway, given that most of the observers have vested interests in the system. Bayh himself seems to think Bayh-Dole is a loser.

I do agree that there ought to be some real research in this area, and not only that but that somebody ought to make a credible and intellectually defensible attempt to make that research accessible and understandable to non-specialists. I’d also like a pony. In the meantime, until proven otherwise, I want to follow the most obviously moral path and arguably the practical path: no patents on government-funded research, anywhere, ever… and private foundations ought to do the same with research they fund.