Subject: Re: "incentive void" (was Re: A different patent covenant...)
From: <stephen@xemacs.org>
Date: Mon, 23 Oct 2006 23:33:52 +0900

simo writes:

 > On Mon, 2006-10-23 at 14:54 +0900, stephen@xemacs.org wrote:
 > > This market offers real benefits to those who would rather code than
 > > manage.  Without the patent, they have to take an equity position in
 > > a firm ... but they have no redress if a rival outperforms their
 > > managing partner.  With the patent, they can say, "cash, please; no
 > > shares, no options."  And the frog must jump.
 > 
 > I don't get this point, with copyrights it is the same, you can keep
 > them or ask for a price,

Absolutely.

 > where's the difference? 

The area of the monopoly provided.  In general, if you need to protect
a valuable technology whose working is visible to the public, a patent
works, copyright does not.  Cf. the GNU Project, whose primary goal in
the early days was circumventing copyright protection.  They were
pretty darn successful at it, too!

 > I never heard this thing that signing away in advance is good for the
 > engineer, can you tell me why it should be good in theory?

I didn't say that signing away was good in theory.  I said that the
possibility of producing patentable ideas probably raises the market
value of the engineer.  That doesn't mean that "salary of engineer
transferring IP to company" is worth more than "salary of engineer
keeping own IP" plus "value of IP on open market".

In fact, I strongly recommend that you complain loudly about such a
clause in any contract you are offered, even if you would certainly
accept that contract, with the transfer of IP to your employer, at
that salary, if they just firmly say "no".  Why?  Because the fact
that you take the apparent risk of missing out on the contract signals
to your potential employer that you believe your potential for
generating IP is larger than the salary they're offering.  This will
give you more leverage in current and future negotiations, until they
get enough information about your productivity to discount such
signaling activity.  Of course there's an art to such negotiation;
the risk may be more real than apparent!

 > Oh, but in the field of software there is no such possibility except in
 > very rare cases. Copyrights block free riders as well,

Nonsense, unless you insist that "free" means "exactly zero cost".  Go
reread the GNU Manifesto.  RMS is quite explicit about the fact that
he intended to free ride[1] on the design and any network
externalities available to Unix-compatible systems.  Some at least of
these could surely have been subject to software and/or business
method patents, which would have been much harder to circumvent.  I
mean, howcum I can't download GNU DeCSS? ;-)

 > So, in the field of software, what's the point of patents at this point?

The same as in any other field: providing a monopoly as compensation
for the social value of innovation that otherwise would not occur.

How much value there is (including the value of inducing software
engineers to learn better reuse practices and inducing improved
indexing of knowledge, both of which have clearly higher value under a
system that grants patents), and whether it is larger than the costs
of the monopoly (including the chilling effect on future innovation
and the pure frictional costs of patent sharking), is an empirical
question.

Since that necessarily indirect measurement has not been done to
everyone's satisfaction yet, it's rather important to get the theory
right, otherwise we will not be able to interpret the direct
observation correctly.


Footnotes: 
[1]  In the sense I used the word; Richard would of course express the
same semantic idea in terms of reclaiming social capital from the
free-riding proprietary parasites.