Subject: Re: EY invests in online patent exchange
From: "Stephen J. Turnbull" <>
Date: Thu, 16 Sep 1999 12:45:04 +0900 (JST)

>>>>> "Tim" == Tim O'Reilly <> writes:

    Tim> Real value?  Nil, I think.

That's because with the brief history of software patents, they nearly
all cover already invented ideas, or ideas that would soon have been
invented anyway.

Any value in a patent system must be due to encouraging _future_
innovation.  It's pretty clear that patents encourage a lot of
innovation in pharmaceuticals.  The numbers show that the typical
drug, with a share of total R&D allocated to it as an overhead cost,
takes about 10 years to repay investment at monopoly prices.
Curiously enough, the effective length of patent (FDA approval to
termination) is about 10 years.  Development of a generic (a) reduces
price of the branded drug by 40-60% in typical cases, and (b) takes
about two years.  QED: current levels of R&D in drugs would be
dramatically unprofitable without patents.

What's _different_ about software?

    Tim> Steven Work wrote:
    >> Over 100,000 sw patents to date, pace increasing.  What's the
    >> real value of these things?  SCW

University of Tsukuba                Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
Institute of Policy and Planning Sciences       Tel/fax: +81 (298) 53-5091
What are those two straight lines for?  "Free software rules."