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How patents prevent rather than promote adoption of new technologies

Michel Bauwens of the P2P Foundation recently excerpted an article that argues patents might not be the clear-cut technology promotion tool they are hyped up to be. The article itself, by Boldrin, Levine and Nuvolari makes the case that improvements in steam engine technology during the time between 1772 and 1852 show that the protection afforded by patents is not associated with vigorous technological development. Their article is titled

Do Patents Encourage or Hinder Innovation? The Case of the Steam Engine

and it was published in The Freeman.


Image is of "the green steam engine" found on PESWiki

Excerpting from Boldrin's introduction into the patent controversy:

"Today one of the most controversial issues in economic policy is that of patent law. Is a patent just an extension of property rights to the realm of ideas? Or is it an unwarranted interference by the government into the rights of individuals who have purchased goods and services to use them as they see fit? Should the Western system of patents be extended worldwide? Or should we get rid of patents entirely? Is the patent system responsible for modern miracle drugs? Or is it to blame for the millions dying of HIV in Africa? Do patents lead to greater innovation and economic growth? Or do they kill the goose that lays the golden egg?"

"The issue of whether patents are genuine property rights or unwarranted government interference cannot of course easily be answered by a natural experiment. We will leave that discussion to philosophers. The impact of patents on innovation does have an objective answer. In this case history instead of nature has been kind enough to provide us with a wonderful natural experiment. This experiment took place in the county of Cornwall, England, between 1772 and 1852. It was there, in the extreme southwest of England, in the wet depths of the Cornish copper and tin mines, far removed from the supply of coal in Wales, that the steam engine was pioneered."

I recommend reading the full article and, if you're interested, also the comments which give a diversity of views.

Some of you may know that I have written on the subject of patents a good 20 years ago. The article is available on my 'historical' site www.hasslberger.com and is the first one in the Technology and Patents category. In introducing The Inventor and Society, I wrote "Patents are, at times, a block to technological progress, acting to discourage inventors who have found ways to circumvent the dearly held "natural laws" of thermodynamics and of conservation of energy. Why not use a different system that ensures protection of the inventor but does not require him to provide a theory for his invention to register it."

- - -

That view on patents is confirmed by the article of Boldrin, Levine and Nuvolari. They are criticized in some of the comments for being not very accurate in their analysis, so I was prompted to add my two cents, and what I think is more evidence that they are in fact correct. Here is the comment I posted:

"Some commenters criticize the authors of this article for assumptions they say are incorrect. I would like to support them for having the courage to examine and criticize a system that has been established to protect economic interests, but that has never been proven to actually do much more than make a few people fabulously rich at the expense of everyone else and - at times - at the expense of technological progress.

Why is it that the disc break, invented by Italian engineer Giovanni Dotto, although vastly superior to the drum break design in use in all early cars, was not adopted by the major car and truck manufacturers, until Dotto's patent had expired and the innovative design was no longer protected? Did patenting the disc break protect Dotto's interests? No, it didn't. Did patenting the disc break promote early adoption and use of an innovative design that vastly improved driving safety? No, it didn't.

Another, more current example: A man named Theodore Litovitz discovered that by adding low-frequency electronic "white noise" over the top of a cell phone signal, most of the biological effects of the radiation that were known at the time could be reversed.

Litovitz wrote several convincing papers on this subject and patented his work, but it does not seem to have been taken up by the cell phone industry. Instead, that same industry does everything it can to deny and bury any evidence that there ARE biological effects of pulsed microwave radiation and that their products are a ticking time-bomb for the health of users. Tumor incidence has a nasty habit of appearing with a long delay, years or even decades after continuos exposure.

Has patenting the solution to the problem of biological effects of pulsed microwave radiation by Litoviz served his economic interest? No, it hasn't. Has the patent led to the adoption of a life-saving technological hack that would make cell phones and other wireless apparatus safer for users and non users? No, it hasn't. On the contrary, one might argue it has induced the industry to try and avoid the additional cost of licensing, and to bend science in the process, to the detriment of many people's health.

I have brought up the question of patents in 1989 in an article titled "The Inventor and Society"


and have argued that, on balance, patents have done more harm to technological progress than they have helped. Innovation does not depend on the inventor being compensated with huge sums and a long term monopoly. It depends on human creativity and a spirit of competition.

There is no question in my mind that patents (and copyright) should be abolished or at least severely limited.

One change that would make sense could be a "fair compensation" provision that allows the originator of an idea the right to a reward, without hindering others from adopting the idea or allowing them to monopolize it in their turn. An agreed percentage of the income from sales to the inventor/creator, collected without a huge bureaucracy intervening (as is the case today with copyright) would be sufficient incentive, without stifling adoption."

I would really like to see this conversation taking place. The question we should ask ourselves is:

"How can the laws of intellectual property be amended to actually promote the interests of society as a whole, rather than the narrow economic interests of people and - increasingly - corporations who are able to smartly, and with a bit of good luck and cold calculation, use the patent (or copyright) laws to stifle competition?"

Are there ways to protect and reward creativity without putting roadblocks in the way of technological development?

A related article just out in Wired Magazine:

Take Heed, Tech Giants: Edison's Failed Plot To Hijack Hollywood
Edison assembled representatives of the nation's biggest movie companies--Biograph, Vitagraph, American Mutoscope, and seven others--and invited them to sign a monopolistic peace treaty. Since 1891, when the Wizard of Menlo Park filed his first patent on a motion picture camera/film system, his lawyers had launched 23 aggressive infringement suits against other production outfits.

Sometimes Edison won. Sometimes he lost. But the costs of these battles overwhelmed his rivals, and that was the intent.

"The expense of these suits would have financially ruined any inventor who did not have the large resources of Edison," one of his lawyers boasted, "and it could hardly be expected that he would be able to prosecute simultaneously every infringement as it arose."

Had Edison succeeded in litigating all of his competitors out of the business he would have killed the motion picture industry, or at least delayed its flowering by a generation...

And not only patents ... copyright seems to have the same drawback of keeping knowledge from flowing freely:

The constraining role of IP and Patents (2): case study on why Germany overtook England in the 19th century
Until now, copyright was seen as a great achievement and a guarantee for a flourishing book market. Authors are only motivated to write, runs the conventional belief, if they know their rights will be protected.

Yet a historical comparison, at least, reaches a different conclusion. Publishers in England exploited their monopoly shamelessly. New discoveries were generally published in limited editions of at most 750 copies and sold at a price that often exceeded the weekly salary of an educated worker.

London's most prominent publishers made very good money with this system, some driving around the city in gilt carriages. Their customers were the wealthy and the nobility, and their books regarded as pure luxury goods. In the few libraries that did exist, the valuable volumes were chained to the shelves to protect them from potential thieves.

In Germany during the same period, publishers had plagiarizers -- who could reprint each new publication and sell it cheaply without fear of punishment -- breathing down their necks. Successful publishers were the ones who took a sophisticated approach in reaction to these copycats and devised a form of publication still common today, issuing fancy editions for their wealthy customers and low-priced paperbacks for the masses.

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Hello Sepp,

this is an interesting view you have on patents.

Actually I agree with you that patents should be a thing of the past, because as you said, they hinder progress in many ways. Besides, if one individual has a great idea patented, this means by no means this person idea is really protected.

If a large organization or corporation shows interest in this idea, they could take it and let their team of lawyers deal with the inventor until the person is broke and finally gives up.

I owned myself patents in the USA, Canada and Japan. Just last year I gave up the patents for the USA and Japan, because the large industry opposed the idea for the simple reason it would cut into their healthy profit they make on an aged technology.

This was not the only reason I gave it up, besides that it was costing me yearly dearly just to hold on to it. Today I believe that ideas and inventions are given to a person to share it with the community. It would not bother me if somebody would just take my idea and be successful in the market place with it.

If an "idea" is just created for the sake of money, then the idea looses its purpose. The idea was created to fulfill its own purpose, not to create cash flow for the inventor. I personally would feel much more fulfilled if the idea would spread to the benefit of everybody. Money alone would never give me the same satisfaction.

So I let it go on its own, flow with its own speed, and when it is of benefit to the society, it will grow to what it should be.

We have to change the way we think, and have to recognize that even our "ideas" belong not only to us, they are given to us to share.


The original idea of a patent according to the patent attorney that I once used was to get ideas out in the open so that they could be improved. If he was correct, this basis works because all patents are available to be read. However, your concerns are warranted if the idea of a patent is to improve the technology of society. Most people who go after patents are looking at ways to protect their ideas, which patents normally do for a limited time s you suggest.

Sepp (and any other's interested),

I tried to use all links and directions associated with your 'blog', ((this time on the right and important topic of "our rather ineffective, even counter productive Patent System")).

Below is what I tried to type under 'comments' in your blog, but it said I made an entry error and rejected it. (So, I think you have too complexed of site to easily 'navigate' to the end, and which does not give examples of how to enter comments and finish up with codes, etc).:

" Previewing your Comment
By Carl Littmann on September 7, 2010 1:24 AM
Thanks Sepp (Hasslberger) for making your correct points, regarding our patent system. Buckminter Fuller once said he patented his inventions just to register his dates and corresponding ideas - because generally our patent system is NON-productive or even Counter-productive. I think pro-innovation charities like Nobel-Prize do a better job! Regarding rewards, we must ask, "by how many years did the invention or just new Idea really speed-up progress?"

Sepp comments:

Carl, thank you for your comment and for sending it by email as well. I have put it up in your name, asking you to excuse the complexity of the system.

I could open up comments without accompanying controls, but there are so many who use comments to promote their or someone else's commercial products that the site would soon become unusable. So I have to keep it (somewhat) complicated to keep out the automatons that would swamp the site...

I have been on this trip for a while now myself.

In my analysis of the market forces, distribution is where the real power is. One could patent an idea have a working model and even go into production but unless one establishes distribution they will have spent a lot of money and time.

Becasue distribution is the main stake i feel more small innovators are attempting to go to market as fast as possible before the copy cats have the chance to establish themselves.

Another thing is that a bigger company will just go to market with your idea and wait for the court challenge and then squeeze you in the process and legal costs.

I think the 50 year ownership rights to an established idea is far too long and keeps monopolies in power. I think in consideration of the reality of distribution 7 years is sufficient to garner an advantage in the marketplace

Sam Rose said, elsewhere, but in reference to the article by Boldrin et al:

"I think that patents driving progress and innovation may have been a myth. The patent is the device that allows secure wealth independently of progress and innovation. A system where patents dominate will likely require more and more resources for participants to compete with each other. Over time, as information is treated like a finite resource, the non-renewable resources needed to procure enclosed information will be depleted. The system will cascade into collapse."

Mike R in the Philippines says (in response to an email forwarded to me):

"There is strong support for a position such as this in current literature: see Stephan Kinsella, et al at http://www.mises.org and archives at http://www.LewRockwell.com

when the Patent is described in similarity to a Royal Charter from the King, to promote sales, and stifle competition, Patent weakness is exposed.


I'm a self-employed inventor that learned NOT to patent 20 years ago. Here's my No Patent Page

When I started my fuel saving business I found that, since 1900, over 10,000 fuel saving patents were suppressed; many of the inventors were bought out or killed. Those innovations are STILL not used on OEM vehicles.

Practical, proven 200 mpg+ technology existed in the 1930's. There is NO technical reason why vehicles manufactured with technology that exists now (but has been suppressed) couldn't be getting 400+ mpg.

I realized that, for technologies that threatened the Vested Interest, patents were seriously counter-productive... literally a waste of time, money and maybe my life.

True, I'm not rich, but my fuel saving technologies are being implemented worldwide and I do make a decent living.

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