Linked by Christian Schaller on Tue 19th Apr 2005 18:26 UTC
Legal We today face the risk of software patents being approved in the EU because not enough parliamentary members will be showing up to vote. Due to this it is important for those of us who oppose software patents to make sure EU parliament members see the damage software patents cause, so they realize it is important to be there to vote providing the needed absolute majority. But sending out a clear message is also important for the process of patent reform in the US and other places who have fallen into the trap of introducing them.
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Another proposal
by clausi on Wed 20th Apr 2005 06:57 UTC

A good article. Thanks. The only minor flaw was the sentence about the goal of a functioning market economy. But it has already been pointed out by somebody else that its goal is the allocation of scarce resources.

However, the more I think about patents in general, the more I get the idea that its implementation is basically wrong. Take, for example, the fixed protection time of 20 years for each patent including administration about what a innovation is.

Thinking economically, this is a strange solution. The time should be determined on the likeliness of somebody else providing a technical solution for the problem at hand a priory.

For example, if I'd like to spend 100 Million dollars on finding a cure for AIDS, this is a major undertaking, according to our current knowledge, so 20 years protection is probably justified.

If, on the other hand, I'd like to spend 100.000 dollars on finding a way to let consumers buy with a single click, this can be easily invented by nearly everybody and it serves no real needs. Thus, a protection of 1 year or so is probably justified.

The problem with the sort of solution obviously is that somebody needs to make judgements about what belongs in each category.

However, a simple way to fix this could be by restricting the amount of patent applications granted each year: for example, x patents over 20 years, 2x patents over 15 years, 4x patents over 10 years, and 8x patents over 5 years. These patent application rights are then sold on a simple auction.

So, why not let the markets sort out what a valuable innovation is?

Since all companies are interested in protecting their inventions as long as possible, the price for 20 years protection will be much higher than the one for 15 years. Obviously, a company inventing the AIDS cure will be willing to pay that higher price while a one-click-shopping inventor probably will not.

This, however, assumes working financial markets since "at-home"-inventors of a cure for AIDS will need to borrow money from a bank to be able to buy a patent. That, in turn, means the bank must be able to judge if it's indeed an AIDS cure and not just rat poison. This won't work, obviously, because somebody from within the bank may run over to the big company next door to sell the innovation.

The fix is once more the state which will have to set up a sort of bank for patent appliers. Since selling of patents will result in lots of cash, this shouldn't be a problem. Thus, the system is nearly self-funding.

Advantages:

* Easier planning and thus better administration for patent offices, resulting in lower times to get a patent granted.

* Patents will be granted according to public interests measured by the predicted saleability of the innovator.

* Patents granted unjustified will have only a short time period impact, or are easier to detect since one just needs to look at the 20 and 15 years patents.

* The prices of patents will clearly signal the need of innovation, and thus makes it easier to plan research budgets.

* Worldwide patent granting rights can be made resalable, thus nations could buy these rights from, say, the UN, and resell them to or in their local countries. A banking system can take care about low income countries.

* Alternatively to the last point, the fixed number of worldwide patents can be distributed by a key (number of citizens, for example), and be made resalable - low income countries can then sell the patent grant rights to innovative countries, or directly to companies.

Of course, the usual rules about patents being granted should still apply (no prior art, etc.).

Comments welcome.