John McCain’s Prize System: $300 Million for Battery Power

For a long time, monetary prizes have been offered as an alternative to patent rights as a mechanism for driving innovation. In 1714, for instance, the British Parliament offered £20,000 for a solution to the “longitude problem” – to determine the current longitude of a ship at sea. John Harrison solved that problem by creating an accurate mechanical clock set to GMT. Longitude was calculated as the difference between the ship’s local time (as measured by the sun) and GMT. [LINK]

Republican nominee John McCain recently proposed the American version: $300,000,000 “for the development of a battery package that has the size, capacity, cost and power to leap frog the commercially available plug-in hybrids or electric cars” – but that cost 30% less. The prize would be open to any company worldwide – so long as they planned to sell in the US. Although unclear, I suspect that the winner would also be able to protect its innovation through patents. In Harrison’s case, he was required to “surrender the innovation for public use.”

Unlike obtaining a patent, prize systems typically require that the technology be proven through actual monitored testing. That means the winner is more likely to bring the product to market. When thinking about this type of system, I like to compare prizes to patents and also to direct government funding (subsidy/grants). Table 1 below tells most of the story.

  

Patent

Grants

Prize

Success Required for Payout

Yes

No

Yes

Government Chooses Technology

No

Yes

Yes

Government Outlay of Funds

No

Yes

Yes

Provides Seed Money for Venture

No

Yes

No

Payout is driven by Market

Yes

No

No

Table 1

 

Notes:

  • Now Pending S.2210 is the “Medical Innovation Prize Act of 2007.” The act would attempt to “de-couple” the reward for pharmaceutical product research from the market price of the product. Unlike more traditional prizes, this one would not pre-select the goal. [LINK] In the mid 1990’s Economist Michael Kremer proposed that the government should buy-up important pharmaceutical patents and then dedicate them to the public.
  • Attorney/Entrepreneur Michael Martin adds his thoughts: Why the Venetians didn’t invent a Prize system for Inventions

86 thoughts on “John McCain’s Prize System: $300 Million for Battery Power

  1. I note that Mr. Reines represents mostly large parties as defendants in patent cases. Many of his clients are most frequently named as defendants in patent suits rather than plaintiffs and are the principal advocates of the Patent “Deform” bill. They would of course benefit form weaker patent laws which this proposal will produce. That way these large companies could take what they want without having to pay once the public has paid for them.

  2. JAOI,

    BTW, I said the majority of the people THAT h@te us (and by that I really meant our government leaders and policy) not the majority of people h@te us. My pint was that people don’t like the US or US policy for legitimate reasons.

    Also, at this point I would argue that most people from industrialized nations would not move here as it is harder to move up the economic ladder here than in most of the other industrialized nations.

  3. Dear Lionel,

    Re: “However, the majority do not agree with our foreign policy, which tends to be anti-democratic.”

    Nor we theirs.

  4. JAOI,

    “The vast majority of people around the world do not harbor hatred for America.
    The vast majority of people around the world would move to America in a heart beat if they could.”

    Absolutely True. However, the majority do not agree with our foreign policy, which tends to be anti-democratic.

  5. Dear Lionel,

    Re:
    (a) “… you do realize that most of the countries around the world that h@te us, h@te us for sound reasons and not because of abstract notions?

    (b) You cannot claim to have pride in America unless you understand our history, the good and the bad.”

    I disagree with the first part (a) and agree with the second (b).

    (a) Countries per se are inanimate; countries are comprised of people.
    The vast majority of people around the world do not harbor hatred for America.
    The vast majority of people around the world would move to America in a heart beat if they could.

    (b) With all due respect, anyone with half a brain reading my comments would not begin to suggest that I do not understand the good and the bad of our history. And, of course, I am an admitted jingoist, and proud of it.

  6. As far as the link you provided, Doctors are doctors and stores are stores. If a doctor refuse to treat a patient for religous reasons, he needs to have his license revoked.

    Same is true for phramacists, I get PO’ed because we do not do anything in this country about pharmacists refusing to dole out Plan B. That is BS. And the Netherlands is worse. They effectively allow Muslims in their country to subjugate women under their religion.

    The law is the law. Unless a law has no other major purpose than to promote one religion or inhibit another, then you follow the law. Fight to change it through legal channels.

    On the other hand, continually linking Islam and terror is the wrong thing to do, because the majority are terrorists and by linking them, we are just insuring an increase in terrorist recruitment.

  7. JAOI,

    Also, who are the “bad guys” in Iraq? I suppose you believe it could not possibly the foreign occupiers who employ mercenaries that commit atrocities with impunity?

    Why not withdraw from Iraq militarily, focus on defending our borders and work diplomatically with the countries of the Middle East. Iran could be a tremendous stabilizing force in Iraq, if we didn’t have the childish “you’re with us or against us” foreign policy.

    Obviously, if we need to protect ourselves militarily we will, bit that need did not exist for Iraq, and it certainly doesn’t exist for Iran at this point. Of course, if enough people listen to the asinine rhetoric of our warmonger in chief and we treat them hostilely then Iran may become a real threat.

    If Iran attacks Israel we will of course defend Israel.

    BTW, were you aware that the CIA helped the overthrow of the democratically elected leader of Iran and then helped install and support the Shah for 25 years?

    While there is no justification for some of the horrific acts committed, you do realize that most of the countries around the world that h@te us, h@te us for sound reasons and not because of abstract notions?

    You cannot claim to have pride in America unless you understand our history, the good and the bad.

  8. Dear Lionel,

    Diplomacy with an Iranian leader who has vowed, for example, to wipe Israel of the map, is not my cup of tea.
    Iranians are aiding and abetting our enemies in Iraq who are killing our soldiers, and we are not retaliating.
    What would you call that? Maybe something worse than appeasement?

    If only our country were led by a true Statesman … If only We the People were United the way we were during WWII … IF WE WERE our beloved US of A would lead many allies and deal with our current circumstances more successfully — IF ONLY …

    Lionel, if diplomacy is your cup of tea, I think your judgment is off.
    However, I don’t think it would make you an ignorant redneck.

    Would you agree that Israel is our most loyal ally?

    What do you think of this link?:
    link to dotsub.com

    Our country accelerated its downward spiral with the 5 to 4 Supreme Court Bush v Gore election decision. Any asshole, no less our Supremes, should have known that, for the sake of our country, that one decision MUST be unanimous; but the political divide was Just too much.

    Today we have another 5 to 4 decision. Most Supreme Court decisions lately have reflected our nation’s political divide – the worst since the Civil War.

    So, whoever chooses to fiddle while our “Rome” is burning may do so, but I’m not going to be that ignorant.

  9. Hi Guys,
    Hi Lionel,

    Us [ignorant – Lionel, that wasn’t nice] Rednecks and Rednecks-at-heart can keep our hand guns! Yippee!

    link to supremecourtus.gov

    Justices STEVENS, SOUTER, GINSBURG, and BREYER dissented.

  10. But to get back to the juicy stuff: Let’s assume I am a jihadist and I die a martyr and I am greeted in heaven by 72 virgins, with whom I will be spending eternity.

    Will they still be virgins 72 days after I get there? 72 years? 72,000 years? Remember eternity is a long time.

    If the answer is yes, they will still be virgins, then what good is that?

    If none of them are still virgins after 72 days, then I get to spend eternity -72 days with used goods?

  11. Back to the question at hand, the whole notion of changing from patenting pharmaceuticals to awarding a prize to the inventor of pharmaceuticals has as its sole purpose reducing the prices of pharmaceuticals while still trying to provide an incentive to invent.

    Problems with this approach are several:
    1. Inventing is not what it is all about; there is also lots of additional development work to do, factories to build, marketing to devise and implement. Why will capitalists make those investment if there is no patent? The return on those investments will be commodity-level returns, which are not enough to sustain that investment that is still very risky.

    2. You don’t really know you have a winner unless the market recognizes it as a winner. How does it get to market if there is no patent?

    3. In the case of pharmaceuticals, many a hot-looking lab development dies in clinical trials. If the prize was awarded for the lab development, would that be a waste? Or does the entrepreneur have to bear the cost of the clinical trials to get the prize?

    4. In the case of the battery, you don’t have clinical trials per se, but you still have issues of safety and environmental compliance. Will we give the prize to a battery that does the electrico-mechanical job, but that can’t be made without adverse environmental side effects?

    There is probably more, but I will leave that to another post..

  12. JAOI,

    Appeasement, really? I know you can be jingoistic sometimes, but I thought you were intelligent enough not to fall for that BS.

    You need to look up a more thorough definition of appeasement. Diplomacy is not appeasement. Neville Chamberlain committed appeasement by allowing Germany to annex territory, not because he was engaged in diplomatic relations.

    That last statement makes you sound like an ignorant redneck.

  13. Dear curious, if you are truly curious, please click my links above.

    * * * * *

    Hello E6k,

    I too love the “300.” I often dream of throwing the spear. “Troy” is another favorite. I often think I must have been a brave warrior in my vivid sleeping memory of previous life.

    For your word, “pulsified” I found “No Matching Entries Found” and therefore have no comment.

    Let us Join & throw the spear!

    Please catch up and Join me in my fifth toast for our Beloved Country:

    Salute!, Prost!, Cheers!

  14. Well I agree there, the leaders in our times are pusified to the extreme. Although, this might be because we are pusified and they are merely reflecting that. That said, McCain’s “just occupy them to death” approach is hardly any better. We’re paying more than our kids college funds so that we can spare some of the people of Iraq etc from the sword, that’s an investment I’m sure you love to make.

    What to do about terrorism? I really don’t know for sure, but as a country boy I can make an educated guess. Find out who a terrorist is and bam, his whole village, and the closest villages are leveled. Throw in the closest city to boot. Yes, for one terrorist. You might start to see a decrease in attacks if they know that for every building they blow up everything they’ve ever laid eyes on in their lands will go down as well. Even 72 virgins doesn’t outweigh that.

    People aren’t talking so that you can’t find his village? Just pick one at random, there’s a chance you got it right.

    What do you think these guys would do?

    link to youtube.com

    I’ll tell you what I doubt they’d do, occupy a country.

    We could also probably cut off service to the terrorist hotline:

    link to movies.yahoo.com

  15. Obama’s “appeasement” approach??? I think we are getting a bit off-topic, Mr. Just. (And you also may want to look up the word “appeasement.”)

  16. e6k,

    That narrows it down some, but the £64,000 question was:
    What would Churchill do today about Iraq?, and the War against Terrorism?

    Here’s something else Churchill would not subscribe to – Obama’s “appeasement” approach. Please see:

    link to encyclopedia.farlex.com

  17. “Churchill would not have cried over spilt milk. ”

    Perhaps, but he sure a hel wouldn’t have played around in it for over 5 years and planned to play around for another 5.

  18. Dear Alun,

    Re:
    “Churchill was a great man, … he would not have fallen for the line about the WMD that existed only in fevered imaginations. Whatever else he was, he was nobody’s fool.”

    Okay, I think you are probably right, but we are where we are today,
    and Churchill would not have cried over spilt milk.

    Here is the £64,000 question:
    What would Churchill do today about Iraq?, and the War against Terrorism?

    PS:
    Would Churchill build Europe’s largest Mosque in London to overshadow the 2012 Olympics?
    link to dotsub.com

  19. Churchill was a great man, but he was always after his own political advantage. I say this as an ex-pat Brit. He arguably saved us from the Germans, so we can’t be too critical. He switched political parties mostly because it benefitted his political career, by most accounts. Still, Lincoln is said to have chosen to run as a Republican only based on his analysis that they were most likely to get elected, so he wasn’t a party man either. Maybe that’s a good trait.

    I don’t know what Churchill would have done about Iraq, but I am fairly sure he would not have fallen for the line about the WMD that existed only in fevered imaginations. Whatever else he was, he was nobody’s fool.

  20. Dear Slightly miffed, don’t you know,

    Re: “Enigma: who busted it?”

    Please accept my apology for my mistakes in this statement:
    “If it weren’t for our developing Radar, busting the Enigma coding, Churchill’s balls, Hilter’s mistake attacking Russia … we’d be speaking German as our first language.”

    This corrected statement is what I had in mind by failed to say:
    “If it weren’t for the U.K. and U.S. working together to develop Radar and busting the Enigma coding, Churchill’s balls, Hilter’s mistake attacking Russia … we’d be speaking German as our first language.”

    Which is not to say I don’t have a bone to pick, but not with you.
    I’d bet this bone sticks in your craw as it does mine. Please see:

    link to dotsub.com

    Gasping for air in disbelief, I say … Incredible!
    Is there anything we can do over here to help stop this coming outrage?

  21. The biggest problem in our patent system remains the same as it has for 218 years. Putting the patents in the correct name .Wile we compalin of not enough good new ideas we continue to put the ones that do occur in the name of R+D persons and first filers not the conciever of the original idea.R+D wastes trillions yearly and cant possibly suceed because the individules involved are incapable of producing the breakthrough ideas nessary to create new projects or complete existing ones.There idea often is the inventor is the bottom Man on the project who needs to be riped off then they can keep all the money.

  22. I think Mccaine is on the right track on this old idea? however the prize should be broader based than battery development. The The prize should go to the inventor with the best idea or new ideas to reduce dependance on foreign oil and promotion of green ideas.It should be awarded yearly with different major catagories each year.The parmacutical proposal now in congress should be changed to human wellness contributations as drugs dont always represent the best solution to health problems.

  23. I don’t want to open a whole can of worms here, but some things can’t be let go.

    Radar: OK, that one’s a bit complicated but it was the British who first made use of radar in a meaningful way, for air defence in WWII.

    Enigma: who busted it? Have we been learning our history from Hollywood?

    FYI, the UK just finished paying off its WWII debts to the USA a couple of years ago.

    For anyone with a serious interest in the energy crisis: link to withouthotair.com

  24. “‘Broken window’ economics rears its head again …”

    Hardly, two entirely different concepts.

    Innovation can be fostered in a couple of ways. One, innovation is rewarded (i.e., with patent). Second, the easy path is blocked (i.e., by a patent), and thus, one is forced to innovate to get around the blockage in the path.

    This is considerably different than the owner of the broken window paying money to get the window fixed, which then gets used to buy bread, which then gets to buy shoes, etc. This, to me, seems like the predecessor to the trickle down theory (or voodoo economics as GW the 1st called it).

  25. “I’m not really sure how patents stop this from happening, perhaps you can enlighten me?”
    Going back to your poor reading comprehension ways I see. I said nothing about patents preventing this from happening. My comments were directed to the high risk involved in cutting edge research. My point was (and still is) that most companies won’t engage in this type of R&D without either the government paying the bills or an expectation of a high payout from patents down the road.

    “And thus capitalism is a total sham. What people really should be saying when they say capitalism is ‘patentism.'”
    Capitalism isn’t about selling product it is about making money … are you that ignorant?

    “How much more public good might be obtained by allowing people to practice things that they independently invent?”
    How many inventor’s notebooks are we going to have appearing showing “independent conception” of the invention when that idea gets put in place. 6K, you are a fount of ideas but barren when it comes to common sense. You see the world the way you like it to work, not the way it works.

  26. “Road block patents … do not necessarily stifle innovation. Instead, a road block patent could force the competitor to try an entirely different route ….”

    “Broken window” economics rears its head again …

  27. We MUST prevail in Iraq.

    We MUST conquer the energy shortage with a resolve that should have started in the 50s.

    We MUST stop international big businesses’ corrosive influence on our political system and its deconstruction of our Constitution.

    “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

    In the 50s it was our military industrial complex — today the international oil complex is undermining the interests of We the American People.

    ___________________________

    That has got to be the most daming portrayal of the ordinary inventor here in america that I’ve ever personally seen. I hereby revoke anything I’ve ever said about inventors not being totally ignorant. It turns out any empirical evidence that can be gleaned from the above weighs overwhelmingly against me.

    “Go down the wrong path and you are 2 years behind and millions and million and millions of dollars in the hole. ”

    I’m not really sure how patents stop this from happening, perhaps you can enlighten me?

    “People forget that selling product isn’t enough.”

    And thus capitalism is a total sham. What people really should be saying when they say capitalism is “patentism”.

    “Not only to patents reward innovation, patents help subsidize new innovation.”

    I agree but I’m not sure such was ever intended. I’m not necessarily sure if the public good is served by this as well as it would be if it were not so. It seems that it is mainly the personal good served by this occuring, with perhaps a side dish of public good. How much more public good might be obtained by allowing people to practice things that they independently invent?

  28. Dear BHR,

    I think the best ideas come from people trying to save their asses. The next best come from individual inventors trying to make a windfall.

    (Radar was first made operational by the British & U.S. Allies during WWII, and without it are asses would have been grasses.)

  29. “the magnetron was invented at GE in the 1920s in an attempt to work around the Lee De Forest patents”

    Excuse me for borrowing your statement to go off on a tangent. Road block patents (i.e., the type that pose an insurmountable barrier for a competitor to pursue a particular type of patent) do not necessarily stifle innovation. Instead, a road block patent could force the competitor to try an entirely different route that the competitor would have never tried if they could have gone down the easy path. Sometimes the easy path eventually leads to a dead end, but if everybody goes down that path, discoveries that may have been achieved by pursuing the hard path may go unfound.

    I see someone being forced to work around another person’s patent as also a way in which innovation is fostered. Eventually all patents expire, but if the first patent was good enough that additional paths were explored, then 20 years from now, society, as a whole, will have the opportunity have seen (and evaluated) many different ways of acheiving a goal (solving a problem) instead of the single “easy path.”

  30. Sean: I for one took the success ==> payout to actually mean that MARKET success would lead to payout for a patentable invention. I think that is the better view. As we all know, an “invention” needn’t be better than the prior art, only different. (Furthermore, the mere issuance of a patent is not a “payout” in any meaningful sense.)

    Even under the patent system, lack of success correlates to lack of payout. On the other hand, in order to realize a payout, success (in the marketplace) must come first.

    I useta think this was true. Arguably, it should be true – and the fact that it isn’t raises serious public policy questions.

    However, Prof. Crouch really has a better grasp of this issue. Even an unmarketable, technically infeasible patent can give a payoff in settlements – so long as the patentee / assignee seeks an economically reasonable settlement from a large number of accused infringers (i.e., less than it would cost to reach Fed. Rule 56 on an infringement suit).

    A key question in the whole “troll” issue is, how many business models are built on the above concepts – and does the net societal gain from patenting currently outweigh the detriments of those business models? My gut feeling is “yes, but not as much as in the days before ‘zealous advocacy’ supplanted ‘candor’ in professional ethics.”

  31. “Are you saying Boeing would have invented all those advances without the government contracts and money?”

    No … but then again, I didn’t think you worded the question the way you wanted to word it.

    “Do you think the desire to sell products has no motivational value?”
    The desire to sell product has motivation value, but how much? As a business, you don’t invest $$$$$ unless you have some reasonable expectation of a payoff. Pushing the outer limits of technology is always a very risky proposition. Go down the wrong path and you are 2 years behind and millions and million and millions of dollars in the hole. Much of the (commercial) aviation industry was subsidized by government contracts. After doing the research on the airframes, the materials, the processes, the avionics, etc., for military aircraft, much of these advances were applied (by the same companies) to the commercial industry.

    Would these companies had done the same R&D had the government not ponied up much of the costs? I very much doubt it.

    The plans for a hypersonic aircraft using scramjets has been on the drawing boards for at least 20 years now …. New York to Tokyo in 2 hours. What’s stopping it from happening? Well, there is a lot of work that needs to be done on the materials side. You need strong, lightweight materials that have long life-times, the ability to resist high-temperatures and high-stresses. Despite being on the drawing board of the commercial aviation industry for some time, the progress has been slow. No doubt, the desire to sell products has some motivation, but for the amount of R&D needed to make this happen, the motivation isn’t too strong.

    Now … if the USSR was still around and we were still saber rattling, that plane would have been in the air by now.

    People forget that selling product isn’t enough. Many companies have gone belly up because they sold too much product. The reason why is that they didn’t have the margins to be profitable. Margins are a direct result of competition, the more competition, the lower the margins. As we all know, patents stifle competition. However, patents allow for profitability. A highly profitable company is able to invest in R&D, so as to be more profitable. A marginably profitable company, however, is cutting as many corners as possible just to survive. Not only to patents reward innovation, patents help subsidize new innovation.

  32. Mr. Rat:

    “that $300 Million might be usefully dedicated to a university based research program into the properties of materials.”

    I agree

  33. JAOI – You refer to radar. We should remember that: (1) radar was invented independently in several places and I think it was always by people looking for something else; (2) the magnetron was invented at GE in the 1920s in an attempt to work around the Lee De Forest patents; and (3) what made Allied radar special was the cavity magnetron which was developed in England and then in the USA (using public money) based on a German idea. The best ideas do not always come from the private sector seeking patents.

    To achieve a real breakthrough in batteries we probably need a better understanding of fundamental solid state physics and that $300 Million might be usefully dedicated to a university based research program into the properties of materials.

  34. PDS,

    Are you saying Boeing would have invented all those advances without the government contracts and money? Do you think the desire to sell products has no motivational value?

    Now who is naive regarding business.

  35. “However, XYZ and his past, and his present political pandering and judgment, scares the livin’ sh*t out of me.”

    Wherein XYZ is any politician in recent memory ……

  36. “You guys need to jump off the bandwagon occasionally and take a look around. Great things can be done without patents, believe it or not.”

    Like most engineers/attorneys, business/economics is not your strong suit.

    There are certain industries in which patents are that big of a deal. I very much doubt we’ll see a serious competitor to Boeing/Airbus anytime in the near future without a company having substantial governmental support. Then again Boeing/Airbus would be the companies they are without government support. In Boeing’s case (and a few other major airframe makers), it was through R&D based upon military contracts that led to the advances in aviation we see today.

    Would any private enterprise made these types of investments without patents to protect their inventions? I highly doubt it.

    This is just one form of a “barrier to entry.” With a high barrier to entry (hmmmm … what’s a good example … hey, Patent Attorneys!!!), one can charge high prices (and be profitable) without resorting to quasi-monopolies (i.e., patents). As such, one might be willing to invest a lot in both time and capital (e.g., 7 years of schooling and oodles of student loans) while having a reasonable expectation of a good return on the investment.

    However, when the barrier to entry is lowered, patents become that much more important. Making batteries doesn’t necessarily require a lot of capital investment. Also, I’m guessing that the hard part will be more in finding the solution (i.e., the magical mix of components that would have been obvious to most examiners upon examination) than implementing the solution (I could be wrong, but I’m just guessing here). As such, once the solution has been found, the person making the discovery may easily get pushed out of the way without having some patent protection. If so, then innovation is not being fostered, IMHO.

  37. Dear Lionel,

    I don’t disagree with you about the military industrial complex.

    However, Obama and his past, and his present political pandering and judgment, scares the livin’ sh*t out of me.

  38. JAOI,

    One other side comment – The MIC is much stringer and exercises more influence than it ever did before. Clinton found that out when he challenged the military budgets being pushed through which contained tons of money for unnecessary traditional military projects and not enough for readying the military to combat terrorism, which his administration recognized as the future of warfare.

  39. Oh, and I hear that the Soviet patent system was pretty robust and that’s how they launched Sputnik. Who’d have thunk it. Uh huh!

  40. So we flew to the moon on patents? The X-15 project, the basis of modern aviation, was paid for by patents? Spaceship 1 was funded by patents?

    You guys need to jump off the bandwagon occasionally and take a look around. Great things can be done without patents, believe it or not.

  41. JAOI,

    Are you kidding with the McCain we can survive stuff? He will just be Bush’s third term.

    Obama has begun to show he has feet of clay and is not above politics, but he is still better much better and more correct on policy than McSame is.

    Also, Obama distanced himself from Reverend Wright when he went on TV and started saying some really wacky things. I don’t see anything wrong with any of the original Youtube clips. And it’s not like his sermon’s consisted of weekly rants. All his complaints were righteous expressions of anger (I am a white boy from the suburbs in the interest of full disclosure) over this country’s acts of racism, hypocrisy, and brutality. It is indisputable that while the US may be fighting a “War on Terror” the US has supported and will continue to support terrorists and dictators when it suits US business interests.

  42. I must be one of the few attorneys here that believes a prize system is probably as much or more incentive than the patent system for big pioneering ideas like this. The R&D costs and market creation costs are daunting to almost any established business.

  43. Dennis: “Succes required for patenting: The rule is that you only get a patent if you have an invention. This is different than typical government grants where money is distributed prior to the R&D and successful innovation is not required.”

    I for one took the success ==> payout to actually mean that MARKET success would lead to payout for a patentable invention. I think that is the better view. As we all know, an “invention” needn’t be better than the prior art, only different. (Furthermore, the mere issuance of a patent is not a “payout” in any meaningful sense.)

    Even under the patent system, lack of success correlates to lack of payout. On the other hand, in order to realize a payout, success (in the marketplace) must come first.

  44. Dear left coast,

    Okay, I’ll stop with the Obama v McCain campaigning.

    But, may I say with your permission before start happy hour early, that a strong American patent system is good for our beloved country?

  45. Obama’s preacher says G-D America. His wife says for the first time in her life she is proud of America. Is Barack the only patriotic one of the three? Or does he agree with them?

  46. I hear you guys about Obama. The alcohol fuel stance is disheartening, but because he’s such a smart guy, I have faith he may be steered straight on that.

    I have been pushing hard for his election too. I am willing to put my money on black and spin the wheel, but if it does not pan out, I am out of here to a beach waaay down south.

    They have siestas too! As I get older, I am becoming a firm believer in siestas.

  47. Just an ordinary inventor(TM)

    While I would love to debate on you on Obama v McCain, let’s not turn this blog into a political blog. There are plenty of patent issues to discuss.

  48. Dear stepback,

    McCain we can survive. My point is that it is more of a gamble with Obama.

  49. left coast,
    I ditto that re Obama.
    He is misinformed and pandering, as do all politicians including McCain. Same difference. (I’m supporting Obama on the theory that his younger brain might be more amenable to change & to understanding why business as usual got us to where we are and why we can’t keep drilling more and more. It is after all a small & finite planet.)

  50. We MUST prevail in Iraq.

    We MUST conquer the energy shortage with a resolve that should have started in the 50s.

    We MUST stop international big businesses’ corrosive influence on our political system and its deconstruction of our Constitution.

    “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

    In the 50s it was our military industrial complex — today the international oil complex is undermining the interests of We the American People.

  51. “Can anyone tell me why we aren’t committing hundreds of Billions, not paltry millions, to a Manhattan like Project to deal with the big picture and prepare for the inevitable?”

    Because we’ve already committed those hundreds of Billions to our current activities in Iraq?

  52. Energy Crisis

    This is an area I have been following for many years and by no means claim to be an expert.

    However, just as is true with “specialists” in many other areas of our economy, most patent practitioners here are clueless as to the enormity of the problem and the inability of our business-as-usual systems to cope with it.

    McCain, Obama, and numerous other politicians (except for Congressman Roscoe Bartlett & his small coalition) don’t get it and probably never will.

    This X-Prize-like solution (for innovative battery) is merely a variation of the “Technology will save us” meme and “The Market will save us” meme. Both are nice stories, but also narrative fallacies as Nassim Taleb of Black Swan fame would call them.

    Battery technology is mostly chemistry. Scientists have been searching for a better battery for hundreds of years. This flash in the pan prize will not change the pace of progress. Sudden realization by a larger number in our population that we are in deep doo doo won’t change the situation. Humans are unfortunately not much smarter than yeast. Our petri dish is in the one minute to midnight stage and 90% of the populace doesn’t understand what that means because they don’t understand the exponential function. They think 3% per annum “growth” is good news.

  53. Hey ordinary, there is always South America. I’m taking Spanish lessons now. Just look for a place with beach front property, a half decent hospital nearby, and a good enough economy (that won’t soon become a banana republic). These days, all you need is a satellite drop to stay in business, and maybe a few armed guards. The labor is cheap down there!

  54. I’m beginning to fear it may be America’s turn to suck hind tit.
    Doesn’t anybody else see past this quarter’s profit?
    Isn’t anybody else concerned about our children’s future enough to see past tomorrow?
    Am I the only jingoist to speak out?
    Am I the only alarmist with a Churchill vision?

    Anybody?, anybody?, Bueller?

  55. I have a better idea. Give Jon Dudas and Margaret Peterlin the money and tell them to get lost. Innovation will flourish thereafter. Better yet, give it to McCain and tell him and his patent office ruining party goons to get lost.

  56. Where is another Statesman like Churchill when we need him?

    Our great country, and the best we can offer up for the Presidency is Obama and McCain? Perhaps we’d have better choices if international big business interests hadn’t corrupted our two party political system so thoroughly, who knows?

    McCain ain’t no Churchill, but he beats the pants off of Obama.

    Don’t get me wrong, I think of McCain as one of America’s greatest Heroes, but too tainted by the omnipresent corruption.

  57. Dear left coast,

    How about the bigger Obama picture?

    “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” (Lord Acton, 1887)

    Who can deny that Obama is great?

    Moreover, I still don’t know what to think about Obama being so tightly in the clutches of the Reverend Jeremiah Wright for so long, and why Obama was reluctant to distance himself for so long.

  58. Even though I will be campaigning and voting for Obama, I am very disappointed that he favors corn ethanol. He is either misinformed or is pandering.

  59. Big Hairy Rat: Yes, McCain wants to impose a huge dead weight loss on society. This is the same as the sunken treasure example from Econ 101. $1M sunken treasure, costs $100k to bring it up. Many seekers spend up to $999k to get it first. Most are losers, so society spends many times $1M to recover $1M — a dead weight loss.

    The common law solution was to give an exclusive right to the first active searcher, thus limiting the duplicative efforts to the early, cheap stage.

    A better solution is usually presented as auctioning off rights to salvage the treasure. The highest bidder then bids $1M minus the cost to get the treasure (adjusted for risk) plus a reasonable profit just a hair above the cost of capital.

    McCain’s proposal throws all that away, once again demonstrating that populism trumps economic reasoning. He’s not ignorant of the econ, he’s trying to get elected. (Yes, I’ll probably vote for McCain, B.O. is no better).

    SF: No, the Iraq was supposed to make Big Oil rich by driving up the price of oil. Keep your conspiracies straight.

    Question: because they’ll spend the money and not have a battery to show for it.

    TMP: It doesn’t matter. Ethanol wasn’t a great idea, either, but that didn’t stop us. The government is making the world a greener place, so sit down, shut up, and like it. :-) You’ve got a great point, theoretically, the market will best reward the solutions that turn out the best over time.

  60. I haven’t great interest in this thread because it reminds me of what Justice Meyer wrote in his dissent in Phillips: The concern about batteries
    “… is akin to rearranging the deck chairs on the Titanic—the orchestra is playing as if nothing is amiss, but the ship is still heading for Davey Jones’ locker.”

    BHR is closest to making any sense out of the silliness. Batteries are but a small fraction of one aspect of the historical proportioned problem we face – comparable to losing the big one, WWII.

    And, of course, “patentboy” is dead on. In fact, I’ll add emphasis: We need to strengthen in every way possible and at every turn our American patent system.

    But my comment here today speaks to the most immediate and devastating threat We the People face.

    (i)
    As we speak, We the People could be attacked!

    (ii)
    As we speak:
    Untold numbers of terrorists worldwide are praying for, and willing to die for, our genocide, and they are rearing their progeny to follow suit.

    (iii)
    As we speak:
    We are paying them and those who sympathize with them many many times the price for a barrel of oil than we were paying only a few years ago, money that will be used to buy various WMD to be used by terrorists for our genocide during this generation or another.

    Money is power. …
    Churchill knew it. …
    WE ALMOST LOST!

    If it weren’t for our developing Radar, busting the Enigma coding, Churchill’s balls, Hilter’s mistake attacking Russia … we’d be speaking German as our first language.

    Can anyone tell me why we aren’t committing hundreds of Billions, not paltry millions, to a Manhattan like Project to deal with the big picture and prepare for the inevitable?

    Do we need to lose New York, London or Israel before we take our looming doom serious?

    If we don’t pull our heads out of their sands, our progeny will be speaking Arabic as their first language – that is if they don’t annihilate us completely – that’s exactly what they have in mind.

  61. Sadly, this plan – combined with Obama’s recent boosting of ethanol – suffices merely to make clear that neither major presidential candidate possesses even de minimis

  62. Is the battery idea best for the country? – I (and I suspect just about everyone else) don’t know. I think about all the resources to produce those batteries, disposal of heavy metals, etc. It seems like a nightmare to me. Perhaps increasing efficiency of internal combustion engines might be a better idea, with power recapture (fly wheels, etc.).

  63. why not take that money and give it to a consortium of universities to develop this better battery?

  64. I say go ahead and offer the bounty. $300 million is a drop in the bucket: it wouldn’t pay for a week’s worth of occupying Iraq, which (ironically) was also supposed to help bring oil/gas prices down.

  65. Let’s all remember that it is just a battery technology – the electricity would still have to be generated by some means (hydro, solar, wind, nuclear, coal, oil or natural gas). The hype about the “hydrogen” economy had the same problem – the electricity had to come from somewhere.

    There are probably different types of problems that are best addressed by different incentive systems. Prizes may be appropriate as a last resort as a method of drawing in researchers from unrelated fields to work on the problem. The offering of a prize becomes a marketing tool for the problem. Economically, the pursuit of these prizes for their own sake makes no sense for the people working on them. Consider the Netflix prize where the level of effort by the various teams represents total opportunity costs far in excess of the million dollars being offered.

  66. If someone comes up with the battery McCain is talking about the patent for it will be worth WAAAAY more than $300 million. Those of ordinary skill in the art know that and would see the government prize as paling in insignificance.

  67. Also, either this approach works or it does not. If it does not, then the taxpayer is not out any money save what it costs to administer this prize (statistical noise relative to the size of the federal budget). But if it does work, no one will care that it cost a few hundred million dollars to provide America with a technology that points the way to weaning us off the House of Saud’s hydrocarbon-coated tit and (possibly) a much cleaner environment as well.

    I sincerely hope that if this program is implemented, the patent bar is not in any way involved with it.

  68. patentboy — It is naive to think that the patent system alone is the optimal approach to driving all types of innovation.

    The patent system is the government’s indirect hands-off approach to encouraging innovation. The system is thought to generally encourage innovation, but it is not directly focused on any particular problem. Most of the time this general approach is good because the government is likely not skilled in understanding all the specific types of innovations need encouragement.

    However, when we have a major known problem, it makes sense to take direct action to solve the problem either by offering specific incentives or hiring someone to do the job.

  69. When I heard about the McCain proposal I was very disappointed. Why not rely on the patent system which has been used for centuries to provide the incentive to innovate. If there is a profitable patent-protected technology to develop, no other incentive is needed. If it won’t develop under the patent system, no other incentive will do better.

  70. Succes required for patenting: The rule is that you only get a patent if you have an invention. This is different than typical government grants where money is distributed prior to the R&D and successful innovation is not required.

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