How do patents encourage innovation?
Posted Mar 6, 2009 17:37 UTC (Fri) by anton
In reply to: 451 Group: Microsoft suing TomTom, not Linux, not open source
Parent article: 451 Group: Microsoft suing TomTom, not Linux, not open source
if you don't include the revenue that companies get from
selling items that include their own patents, and the fact that
without patents they may not sell as many, if any of those items (due
to competition that is prevented by the patent) then you are just
cooking the numbers to make your own point.
His argument may not be convincing, but that's far from cooking. If
the patent really was innovative, one would expect other companies to license the patent,
and there would be significant revenues from licensing.
And that still would not prove that the patent encourages
innovation; the products based on the patent would be more expensive,
so there would be less and probably fewer products, reducing the
benefit of the innovation (that's what a monopoly does for you). If
the innovation would have come about without the patent (as most
patented innovations have), then the effect of the patent is
Concerning revenue from "items that include patents they own", how
would you count that? There is no way to know if an item "includes" a
patent in general. And if that revenue was lower without the patent
due to competition, then the consumers of these items or their
competition would have paid a lower price, and probably bought more
items, increasing the value coming out of the innovation.
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