Subject: Re: "incentive void" (was Re: A different patent covenant...)
From: <stephen@xemacs.org>
Date: Mon, 2 Oct 2006 16:59:12 +0900

Craig Brozefsky writes:

 > <stephen@xemacs.org> writes:

 > > But once you've cleared those bars, the market
 > > created by the patent gets the direction right ---the innovations
 > > that most hurt when you have to pay a high license fee are precisely
 > > the ones making the biggest contribution to society.

 > However, I could not parse the last sentence.  Could you restate it
 > perhaps?

If the license fee hurts more than the value to you, you simply won't
pay it.  A high license fee that is actually paid signifies high value
to the payer.  Because of "downward sloping demand", it's quite
possible that even at a very high fee, the value to some payers is a
multiple of the fee.  That adds up to "big contribution".

Nevertheless, if you could (or already did!) invent it for yourself at
much lower cost, that fee is really really gonna hurt.

In other words, it's a very rough estimate, but if there isn't much
value to the innovation, you just can't charge enough for it to hurt.

I'm going to leave your question about "agreeing on how to measure"
without a proper answer for a while.  But the basic answer is "not
soon", because answering these questions is always a matter of
successive approximation.