Subject: Re: IC's mystery patent claims
From: <>
Date: Thu, 28 Sep 2006 11:18:43 +0900

Thomas Lord writes:

 > This is much closer to a democratic market selling monopoly rights
 > than the current system.  If the challengers all give up say
 > "grant" at, say, 6 years -- then perhaps 6 years is about fair
 > (optionally with additional conditions such as a fixed price for a
 > public license in a shorter time frame).

What are you talking about?  We already have a market in monopoly
rights.  If you've got some money, you can license a patent.  If
you've got a lot of money, you can buy it outright.  I gather you're
not talking about that, but I don't see what you *could* be talking

The problem here is that the monopoly is an artificial legal creation,
and it involves a *zero-sum* redistribution of something (which
economists typically call property rights).  This can be done
democratically (we vote on patent standards and terms), but the only
reasonable way to create a market for it involves an initial *non-
market* creation of a monopoly or oligopoly.

In the state of nature, effectively the property right is in each one
of us, to copy expression and practice technology as the state of the
art permits.  If someone "creates" something new, then it is
*impossible* for her to contract with all of the relevant parties,
because many of them have not yet reached their majorities (and most
haven't been born).  The best she can do is to force every customer to
sign an EULA or NDA or whatever.  But if it leaks, there's very little
that can be done, because there's *no property*.

How many millions of dollars have you received from busking for your
contributions, Tom?  About 0.001 over 20 years or so, right?  That's
the kind of efficiency in revenue collection to expect after the leak.

If you endow a monopoly franchise, on the other hand, then enforcement
becomes much more efficient because an unlicensed copy is the
monopolist's property (in some sense).  This leads to much greater
efficiency in revenue collection.

*But* this can't be done in a market.  Who is going to pay whom for
giving up all rights to unspecified inventions that may never be
invented or if invented may never be widely disseminated, especially
when most of the potential purchasers of these rights haven't been
born yet?

The only way to do it is to have the political system do it, and some
people aren't going to like it, especially ex post.  The obvious
example is ... us free software developers.

Note, none of the above is an argument that IP is good; just that if
we want to improve the efficiency of these markets, it's hard to see
another way.