Patently-O Bits and Bytes by Juvan Bonni

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29 thoughts on “Patently-O Bits and Bytes by Juvan Bonni

  1. 3

    The Moretti work rather gives the lie to the suggestion that innovator companies are all going to move overseas after Alice & the AIA. There is a coordination problem with such a move—companies need their brightest minds to be in the physical vicinity of other top minds in order to maximize productivity (and given what they are paying to buy the time of such minds, they need that productivity to be maximized). No one want to be the first outfit to move their researchers, because if the tech hub is in Silicon Valley, then you need your inventors also to be in Silicon Valley. In other words, the U.S. is presently caught up in a virtuous circle that is going to keep R&D physically located in the U.S. for the foreseeable future.

    There is a good reason to be concerned about a deterioration of the U.S. patent system, but that R&D will leave the U.S. because of patent considerations is misnomer. Patents constitute only a tiny part of the reason why a company decides where to site their R&D facilities.

    1. 3.1

      In other words, the U.S. is presently caught up in a virtuous circle that is going to keep R&D physically located in the U.S. for the foreseeable future.

      While there may be some truth in what you say, Greg, the innovation literature shows that your overall thrust is just not so.

      The US has already seen a hollowing out due to the loss of manufacturing (and the fact that there is a strong secondary effect in innovation from the implementation phase).

      While your “virtuous circle” may impede an egress, it by no means is the only force acting on WHERE innovation takes place (and the fact that there ARE local effects TO innovation is a STRONG blow against your usual “it does not matter where” platitudes.

    2. 3.2

      Where inventors are located or do R&D does not affect where and what patent protection they or their assignees can get, under the Paris Convention, etc., as others have pointed out before.
      Some countries with a strong legal inventor compensation system for national inventors may be slightly less desirable sites, and some countries with strong R&D government subsidy programs may be slightly better sites.
      Countries that attract top graduate students from around the world provide a distinct site advantage, as more and more R&D is done in universities. This is being damaged in the U.S. by current administration visa and other restrictions and public attacks on “immigrants.”

      1. 3.2.1

        Where inventors are located or do R&D does not affect where and what patent protection they or their assignees can get, under the Paris Convention, etc., as others have pointed out before

        This is NOT true, Paul, ,as has also been pointed out before.

        The bottom line is that there IS a localization effect, and this effect is MORE pronounced for the types of innovations that patent protection provides greater leverage: those innovations to entities that do NOT have a global (or even merely multi-national) presence.

        Such Multi-nationals COULD (and do) compete on terms of innovation, but all else being equal would rather NOT, and would rather compete on non-innovation terms that distinguish those that may have disruptive innovation (but lack multi-national status and capability) from those that can compete on terms of money, established market share and other NON-innovation factors.

        Put bluntly, Efficient Infringement is a REAL thing — a REAL problem, and the “oh, it does not matter globally” view that both you and Greg espouse is both wrong and is used to mask the issue that the US patent system has faced forces seeking to denigrate having a strong patent system.

        1. 3.2.1.1

          Let me clarify: the opportunity and scope of patent protection IS provided with the comity of treaties (such as under the Paris Convention, with due regard to each Sovereign’s implementation into its own laws of such treaties).

          But that is NOT the “localization effect” driver.

          Just because there IS the possibility of comity and obtainment of patent protection in a sovereign of choice pretty much anywhere in the world does NOT reduce or eliminate the reality that localization effects are abundant — and have many different drivers.

          Trying to gloss over localization effects and woodenly state that because of treaties it simply does not matter the locality of invention (or even worse, that a Sovereign should NOT be trying to use its sovereign power to gain an innovation advantage) is an enemy of strong patent systems.

          Harmonization has long been pushed for — not for the benefit of any particular sovereign, nor for the benefit even of innovation in and of itself. Harmonization has long been pushed for by the Transnationals (NOT having any allegiance to ANY sovereign) as a benefit purely unto the Transnational itself. By making patent protection “transferable,” the Transnational cements its ability to NOT be holding to any particular sovereign, and can use traditional non-innovation factors in “playing” the innovation game.

          Critically thinking of the players in the game — and having a solid understanding of innovation in and of itself — quickly raises red flags when such comments from Greg (Pharma) and yourself (non-patent holder advocate) seem to want to “legitimize” an absence of localization effects. Each of you may well be serving the interests of clients — but those interests are NOT in line with THIS country having a distinctly strong patent system (and using that system as a national lever.

          1. 3.2.1.1.1

            Thanks for you above first paragraph correction of your preceding post, but there is also no validity in asserting that recent changes in U.S. patent enforcement affecting R&D location, since all those changes are also equally applicable to the approximately 50% of U.S. patents that are of foreign origin.
            One basic valid reason [besides those mentioned at 3.2] is simply that R&D in some other countries is cheaper, due to cheaper salaries.

            1. 3.2.1.1.1.1

              The “applicability” that you mention is inapposite to the point for the reasons already given. The reality of the situation is that any globalization factors that MAY make it easier for entities to obtain protection anywhere in the world are factors that FAVOR those entities with the non-innovation factors of size and established market presence that would be more capable of taking advantage of those global factors. That this capability “works both ways” does NOT impact that non-innovation based capability, and does NOT diminish localization effects (notably a driver for those with disruptive innovation).

              Your continued attempts to dismiss localization effects are noted.

      2. 3.2.2

        Where inventors are located or do R&D does not affect where and what patent protection they or their assignees can get, under the Paris Convention, etc.

        Exactly correct.

        Countries that attract top graduate students from around the world provide a distinct site advantage, as more and more R&D is done in universities. This is being damaged in the U.S. by current administration visa and other restrictions and public attacks on “immigrants.”

        Correct and important (although I do not know why you put “immigrants” in quotes). The present administration’s anti-immigration policies are essentially handing global economic leadership to China on a silver platter.

        1. 3.2.2.1

          …handing over economic leadership — but there be no localization effects for patents…

          Greg “High Road” has a logic problem here, and remains blithely unaware of the contradictions that his own advocacy have created (because someone was “mean” to him and actually applied critical thinking to his desired positions).

  2. 2

    “If Bill Gates got very rich because of Windows and other Microsoft software, it was not because of the technology, but rather because the government gave him copyright and patent monopolies on this software. All the high-paying jobs in the STEM sector are not the result of technological change creating new opportunities, but rather the large incentives the government provides with long and strong IP protections.”

    It’s impossible to overstate how wrong this statement is.

    1. 2.1

      Indeed. It takes some almost willful confusion to see “great technology” and “patent monopoly” as mutually exclusive. Bill Gates got rich off of Windows because both it was a good technology (not the best, but good enough and at the right price point) and because of the IP protections that prevented (some) copying without buying from Microsoft. Similarly, new STEM jobs are the result of both “technological change creating new opportunities” and “large incentives the government provides with long and strong IP protections.”

      Much of the present tech industry would be impossible without both. Neither one is sufficient by itself.

      1. 2.1.1

        Moreover, what Baker has to say about Microsoft is even more wrong when it comes to drugs—the real subject of Baker’s essay. At least some of the software industry would go on just fine without patents. The commercialization of new drugs, however, would come to a near stand-still without patents.

        1. 2.1.1.1

          As predicted, the comments below are just reactionary blubbering and don’t address the issue. Also predictably, the most backwards comment is Bildo’s.

          Dean Baker was ahead of the curve on the housing crisis (just as many of us were ahead of the curve —and still are— regarding the avoidable crisis that the patent system would be forced to endure when claiming functionality, information and logic became “normalized”).

          So that’s why Dean is worth paying attention to. As for “koolaid”, it’s not me who’s been hitting the patent crack pipe every day for the past ten years.

          Nice to see Greg admit that “some” software doesn’t need patents. Which ones are those, Greg? (The correct answer, by the way, is “none”).

          The substantial point bears repeating again: there are other ways besides granting patents for promoting and encouraging research in new drug development and rewarding those who are fastest at it. That’s not deniable. That’s not an “opinion”. It’s a fact and it’s worth discussing. The existential problem it might pose for patent addicts doesn’t mean that adults can’t or shouldn’t talk about it. Quite the opposite in fact.

          1. 2.1.1.1.1

            One thing that seems to be attracting MIT and other top science grads to the biotech area these days is small companies offering dreams of eventually getting rich from stock options if technically successful and having professional business expertise on their team getting venture capital at the right times, etc.. That is not something a government R&D laboratory is ever going to offer, and apparently not something economists like this making that comparison seem to take into consideration?

            1. 2.1.1.1.1.1

              Too true. There is already a distressingly large fraction of our top math/science talent going to work on Wall Street to program computers to make trades 1/10000 of a second faster than the fastest previous trading algorithms. This is not the highest value use of these peoples’ time, but it is the most remunerative. You really do not want to encourage this trend even further by turning the entire pharma enterprise into a branch arm of the FDA.

              There is no trick to making drugs more affordable. That is easiest outcome in the world to achieve. The hard part is making new drugs affordable. Prof. Baker’s solution (whether he knows it or not) is to trim the number of new drugs down to about 1 every 15 years—but that 1 will sure be affordable!

              1. 2.1.1.1.1.1.1

                “This is not the highest value use of these peoples’ time, but it is the most remunerative. ”

                Someone must value it since they’re providing that remuneration.

                1. 6,

                  You forget that you are talking to Liberal Left Greg — his values are the only ones that are really important.

                  (quite so in fact that he recently started burying political links in his posts “sharing” his feelings, and then sought to make excuses why such was “ok” with historical references to ancient Greek practices)

                  Never mind that this is a patent law blog….

                2. Someone must value it since they’re providing that remuneration.

                  Well, you got me there. Someone values arms-race rent-seeking. It is typically the case that the rent-catcher values the rent-seeking.

                  I do not suppose that you really believe the more substantive point to which you are alluding here, so it is scarce worth the trouble of penning a rebuttal. Better trolling, please.

                3. …and there goes the Liberal Left vernacular of “rent-seeking.”

                  Those inscrutable inventors merely seeking that dastardly rent….

                  never mind that mr. high horse on another thread ‘disdains’ ad hominem, these are HIS feelings, so such ad hominem here is perfectly OK for Greg. After all, some animals simply are more equal than others (or some such Orwellian takeaway)

            2. 2.1.1.1.1.2

              “Dreams”.

              Love it when the truth leaks out. You know who was selling a lot of “dreams” at MIT? Jeff Epstein.

              Dream on, people. You’ll wake up sooner or later.

          2. 2.1.1.1.2

            “That’s not an “opinion”. It’s a fact ”

            True but whether or not those other ways actually work all that well, reliably, irl is apparently not well demonstrated irl. Do you know of wide spread systems that demonstrated the ability to compete with the Merican new drug producing system that exists irl? An Merican system which, as I understand it, if the rest of the world paid their “fair share”, or even a fraction of their fair share, for the new drugs made, instead of just leeching/paying a pittance, would be ginormously more effective.

          3. 2.1.1.1.3

            substantial point bears repeating again: there are other ways besides granting patents for promoting and encouraging research in…

            Maybe like a commune’s Five Year Plan, or maybe because the State should take from those able and give to those who need.

            Adam Smith who?

            NosireeBob, there be no cognitive dissonance around here.

      2. 2.1.2

        Who cares if Bill Gates or anybody else gets super rich?

        Serious question. If the answer is “I do!”, then step up and explain why it’s so important for you that Bill Gates becomes phenomenally wealthy.

        1. 2.1.2.1

          “Who cares if Bill Gates or anybody else gets super rich?

          Serious question. If the answer is “I do!”, then step up and explain why it’s so important for you that Bill Gates becomes phenomenally wealthy.”

          What have you done with the real M “I hate rich people” M?

          1. 2.1.2.1.1

            Oh he’s still there 6 — can’t you see him behind that “S” sign?

          2. 2.1.2.1.2

            Are you rich, 6?

            LOL

            Rhetorical question.

            1. 2.1.2.1.2.1

              “Are you rich, 6?”

              Fairly rich bruh.

              You should check out the paper that dude you’re discussing wrote tho on the rigged system. Protectionism for some in the upper class, free trade for the everyday worker. It is an interesting read. Many other topics. Not sure that I agree with his solutions tho.

              link to deanbaker.net

  3. 1

    Nice article by Dean Baker.

    Of course, rather than a sensible discussion about the issues he raises, let’s instead discuss expanding the patent system into further absurdity so the same sh-tty people can own medical correlations and other information. What could go wrong?

    Besides, as long as parent attorneys are widely employed and getting paid, nobody (here) will complain much.

    1. 1.1

      Consider the source and put down the Kool-Aid.

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