“The secret to success is to own nothing, but control everything.” — Nelson Rockefeller
The Patent Problem
Patent law in the United States has always been framed with the intent to promote innovation. Because there has generally been a large amount of capital required to produce such innovations as the railroad, the airplane and modern medicines, the government wisely decided to allow an incentive for these investments by means of protecting the rights of companies to have exclusive claim on profits made for research they have done for a limited time. By allowing room for an innovation to breathe, we had created an economy where everyone could benefit by the rapid rate of technological progress.
Today, however, these profits are protected not for innovators but for a minimal investment by patent trolls. The incentives were never intended to create a viable career for lawyers and companies that harass smaller companies for unintended violations of patents which should have been obvious industry practice.
We are left with an economic result that does not encourage innovation, but instead creates a chilling effect in the technological field. It doesn’t encourage the necessary competition that must exist for a capitalist economy to grow. It instead encourages companies to acquire a war chest of patents that they can use as ammunition against other companies in the battleground of patent law litigation. If anyone has been watching the wars between Motorola, Apple, Microsoft, Google and Oracle in recent years, then it is obvious that we are wasting a significant amount of our national resources in the attempted of Rockefellian control of everything technological. I think we could and should spend those resources more efficiently.
The Copyright Conundrum
Copyrights were also created to promote the progress of the sciences and the arts. The United States patent law was written to be a civil matter which had as a purpose to prevent authors from losing profits to printers and other copycat authors at the treat of a civil suit which must be pressed by the copyright holder. It was never intended to be used as a criminal statute against the purchaser of such works. Such an idea would have been laughable because it would be both unenforceable and completely against one of the key freedoms necessary for capitalism to work: ownership.
But capitalism now has a problem. The Digital Millennium Copyright Act (DMCA) passed by President Clinton makes it a crime to tamper with your own possessions. As I have stated before, ownership must mean you can make all decisions of your possession for capitalism to work. How did we ever get to the point where tampering your own possessions was against the law? The old guard of companies that exist today cannot see how to make money off of their own industry, except by means of the heavy hand of government.
Besides the obvious violation of personal liberties that the DMCA imposes, it poses a serious threat to our Republic because it is unenforceable. In order to enforce such a law, we would have to pass another law that makes it a criminal act to purchase, build or own a digital device that does not have DRM (Digital Rights Management) built into it, to prevent users from being able to move information in the way they see fit. And doing that would be such an egregious violation of our personal freedoms that it would be looked back upon by future generations as Prohibition is looked back upon by ours.
The Simple Solution
Capitalism must always mean that there are winners and losers as technologies and people change. The problem we have is caused by a legal system which is devoted to keeping afloat business models which do not really work in the modern technological realm. So we have been imposing drastic attacks on our own freedoms in order to keep the old business models working.
The solution really is simple: stop! We will go through a period where large companies lose their ability to make money the way they always have. Of course, they will complain to no end about this. But we shouldn’t listen. There will be new players that can innovate and change the way our economy works.
Ending the criminalization of data transfers may mean that selling pieces of plastic called CDs and DVDs will no longer be a viable means of profit. But new businesses for artists to pre-sell their creations could be formed. An artist could offer their album up for pre-sale and not release it until they have achieved a desired amount of sales, for example. This would still leave room for the current copyright laws to apply to commercial use restrictions.
I would not suggest ending all patents, as mechanical and medicinal patents are still very necessary for innovation. Ending patents should only apply to software. The small amount of capital required to create software and the obvious nature of almost every software patent shows that patents do not incentivize innovation it the field of software. Besides that, Free Open Source Software (FOSS) has shown that truly great creations can be made on very little capital and are very likely with collaboration instead of competition (i.e. Firefox, Blender, VLC Media Player, LibreOffice and Linux Mint).
We really live in a new paradigm of technological and economic possibilities today that we have never really properly addressed. I believe if we stop and rethink the structure of our legal system and apply to it our value of personal liberty, then we can create law that better suits the possible future that the Internet Age promises.
Brian Cox's Thoughts on Technology 
Markus
July 25, 2011
I totally agree 100% with what you said. Look at Microsoft bullying small companies who sells Android on their devices to pay royalties.
Microsoft makes more money from Google’s Android than their own Windows Phone 7 product.
It’s a jokes
rawler
July 26, 2011
I’m not sure about medicinal patents either, although from a more fairness standpoint than economic. The problem with the monetary incentive to research medicine is that only medicine targeting the wealthy population gets funding. Compare for example funding for research in cosmetic surgery compared to research in HIV.
It’s even to the point where, some years ago, different pharmaceutical companies held different partial patents on what when combined makes a very effective HIV drug. That means, world-help organizations couldn’t access those (mostly unused) substances to combat the HIV-epidemic of Africa. Eventually, an Indian company decided to ignore the patents and started producing the drug anyways, to great effect.
I general, the laws of free economy states that in a healthy competitive ecosystem, the price for a commodity should always move towards the marginal cost of production and shipping. In that light, the clear difference between production-cost and end-user price on many drugs indicates perhaps things aren’t right there either.
2briancox
July 26, 2011
They may need more incentives than they currently have for manufacturing some expensive medications. But I don’t think we can take away the incentive to innovate in medicine considering the immense amount of capital required to develop many of the expensive cancer drugs and other necessities to improving the human condition.
rawler
July 26, 2011
I wonder how much of the Cancer-research come from business-type funding, and how much come from public funding/non-profit funds. You don’t happen to know where such data can be found?
In general, I’m not sure the “greed” motive is the right motive for “improving the human condition”.
2briancox
July 26, 2011
I do know that in recent years Merck has had some severe financial difficulties because of overextending of their own resources for the purpose of medical research.
andrew
July 26, 2011
I agree with you on the state of software patents. However, it’s unlikely that a drastic change in direction will occur from a legal stand point. It’s much more likely that, as FOSS expands into every area of technology, proprietary software will decline. I read an excellent article a few months ago describing how GPL software will ultimately decimate the proprietary software and software patents along with it. The idea is that the presence of FOSS lowers the allowable sale price of software. Once the FOSS package becomes “good enough” for the average user, the proprietary software is left unused… Granted the current state of software patents seems quite messy at the moment, but FOSS will eventually become the baseline in the long term with or without patent law modifications…
Medical patents on the other hand seem to be here for the long term because of the extremely high funding required…
Personally I subscribe to the Ben Franklin philosophy… he never filed for any patents… and we all benefited greatly from his innovations…
2briancox
July 26, 2011
I would have to agree that, although FOSS moves slowly, it will always catch up and it will also more accurately reflect the desires of the end user eventually. And because its cost cannot be competed with, it will win.
The question is how much will it be slowed down, unfairly assaulted and denied the right to give users what they want when companies like Microsoft continue to harass Open Source projects like Android with ridiculous threats of patent suits. The current state of our law is unfair and unkind to technological progress. So that alone is reason to change it.
nonya
July 26, 2011
“So we have been imposing drastic attacks on our own freedoms in order to keep the old business models working.” This statement is NOT true! For this statement to be true, substitute “large corporations” for the word “we”! Software and business method psattents need to be entirely eliminated. Patents and copyrights need to be 5-7 years max, no extensions allowed for any reason. Patent holders must prove that they are using the pattent to produce a product within 3 years or the pattent is transfered to public domain perrmantly. Copyrighted materials not published within 3 years become public domain. Buying a patent or copyrighted material should not in any way extend the original 5-7 year term. These changes need to be retroactive on all patents and all copyrighted material, NO EXCEPTIONS!
One of the biggest barriers to inovation is todays practice of patent troling, and companies buying patents to supress new technologies that threaten their profits. We can no longer allow large corporations to take away our rights and freedoms in the name of higher profits and propping up business models that are outdated and not workable due to technoligicle inovation!
2briancox
July 26, 2011
I agree with your sentiments that the IP system we currently have needs to be drastically revamped.
But you can’t blame large corporations and say “they did this to us!”
We have self-government. That means WE did this to us! If you don’t like it, then get involved and organize, get politically active, work with people that lobby big government. You are free to do these things in the United States. And if we don’t all do what we believe is important, then we did this to ourselves.
JustAnotherOpinion
July 26, 2011
Brian,
Nice article. You may wish to add 1 line – “I am not a lawyer.” (IANAL) This prevents morons from interpreting your blog as “legal advice” and pursuing you for practicing law without a license.
By the way IANAL.
2briancox
July 26, 2011
Hmmm. Interesting point. But wouldn’t the fact that I have my entire resume on this site equate to saying the same thing? =)
AAC
July 26, 2011
Current US patent law is a complete farce – it’s as bad as the European system. The patent now goes to the ‘first to steal,’ rather than the inventor – and the very existence of software patents is absurd in and of itself.
Current US copyright law is, in all probability, unconstitutional – unless you really believe perpetual copyright for corporations – forever plus 80 years – is a reasonable length of term.
Dave
July 26, 2011
Current intellectual property law is severly flawed and attempts to control the natural evolution of thought and innovation that never takes place in a vacuum, and always occurs as we build on prior knowledge. We need significant change in these laws which do not allow the appropriate competition that should exist in a free market. The fact that companies like Apple and Microsoft can sue or extort money from others for utilizing concepts or obvious technologies is akin to organized crime.
Specifically, we need better control on what is actually novel enough to earn a patent. No patent should last more than several years in our current rapidly progressing economy. Patents should only be held by a company or individual who is using the technology. Patents should not be transferred to entities that are not using the technology. All current patents that are older than a certain number of years need to be invalidated.
These are big changes, but unless we change these laws, large corporations will continue to control our markets, by extorting money from all of us as we pay licensing and attorney fees and fail to see entrepreneurs be able to deliver their products to market.
The question is, how do little guys like us do anything about this? I would love to join an effort to amend these laws, but I am just a small concerned citizen without the influence or money of the multi-billion dollar companies who are benefiting from this crooked system. Any ideas?