Subject: Re: Tom W. Bell paper
From: Don Marti <>
Date: Mon, 4 Sep 2006 09:40:46 -0700

begin quotation of Mon, Sep 04, 2006 at 12:47:02PM +0900:

>  > But determining whether or not a patent is bogus
>  > is more work than the SPEX.
> Really?  I don't think so.  What is more work is doing the legal
> beagling that is required to make your contention stick aginst an
> issued patent.  But that's an institutional, and theoretically
> correctable, bias in the system, not a feature of patents per se.

Transaction costs in the patent system have a powerful
special interest.  ("Inventor services" firms, the
patent bar, USPTO bureaucrats)  And there's only
one patent system.  In a SPEX system, the San Jose
and San Diego SPEXes would be competing to lower
transaction costs.

>  > Why am I selling claims here?
> *For the money.*  The claim is that prediction markets can be used to
> incentivize, ie fund, R&D.

In your original scenario, I as the researcher was
taking a position that put me at risk when another
researcher passed the test.  I don't see why a
researcher would have to do that in order to profit
from the system.

>  > An investor looks at my qualifications and proposed
>  > Web 3.0 research, and funds my lab and takes the "yes"
>  > side of the contract.  You invent Web 3.0 ahead of me,
>  > and my investor still wins.
> Yes, but *you* get *less funding*.  I haven't done the math to know
> how likely the scenario is, but in the plausible scenario that the
> investor wants to bet on Web 3.0 but only has the opportunity to
> invest in individual firms, appearance of a pure Web 3.0 play will
> result in a complete transfer of investment from your project to a
> hole in the ground (as you see it).

The investor is funding one budget number at my lab,
as grant donors do today.  From the point of view
of his grant, it is a pure play.  It's up to him to
decide if he can get better results funding a small
lab that does the one thing, or one project at a
larger lab.

Don Marti                      LinuxWorld: August 14-17, 2006, San Francisco