For private industry...a lack of first mover advantage
is
problematic...creating a new product and having it copied
within a few years
is a strongly revenue-negative
proposition. So, companies will be better off
sitting on
their hands and spending their development dollars copying
each
other. (Even with patents, most developing economies
spent a few decades just
duplicating products from the US.
And, even with patents, there are large
companies that
specialize in being second movers and duplicating
innovative
products.)
This is not true of industries that
operate in a modern way. Over the last 40 years time-to-market and NRE
(non-recurring engineering cost) have been greatly reduced in every market
except pharmaceuticals and chemicals. Even in rocketry, SpaceX has greatly
reduced time-to-market and NRE. It is normal now to carry out continuous product
improvement so you present a moving target to your competitors. As a result the
natural economic advantage of being first mover, that is getting to market
first, is sufficient. You don't need to augment it with an additional
artificial monopoly.
It isn't so much that basic research can be
or is supported
by industry. (Bell Labs was an exception.) However,
without
patents, it would be difficult to justify applied
research - which industry does
do. (For example, no one
would ever invest 5-10B in clinical trials to get 1 new
drug
without getting a monopoly on its use.*)
Pharmaceuticals
and chemicals are the big exception. But to what extent have they failed to
reduced time-to-market and NRE just because, without competition, they didn't
have to? Consider pharmaceuticals, which are not only protected by patents but
also protected from imports by national "safety" regulations. This is not a
natural or in any way free market.
One thing that's actually
sort of nice about patents is that they scale well with development cost/need.
(With a monopoly, anything where the value is > development cost will be
developed. Bounty systems, current industry
revenues, et cetera scale less
well.)
Patents do not scale down at all. You have to have
multi-millions just to enforce a patent. Consequently they are useless as an
asset to small businesses and lone inventors, which should have the most use for
them because they are typically the most innovative. Meanwhile they are very
dangerous as a minefield. You are looking at patents with a large-business
mentality, but as constructed the patent system only throws obstacles in the way
of innovation by small business. [ Reply to This | Parent | # ]
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