Thursday, May 25, 2006

Do patents tend to harm inventors?--part 3

In the abstract of the Bessen working paper, we have the text: The natural experiment that occurred when patent protection was extended to software in the 1980's provides a test of this model. Standard arguments would predict R&D intensity should have increased... Consistent with our model, however, these increases did not occur.

As pointed out earlier, patent protection was NOT extended to software in the 1980's so there is NO TEST OF THE BESSEN MODEL. Further, given that there was no new development opening up the "patenting of software" in the 1980's, then standard [static] arguments might predict a stagnant period of R&D spending, exactly the outcome Bessen found. Of course, the assertion that the [perceived] presence (or absence) of patent protection CAUSES an effect in R&D spending might be questioned.

Bessen's "dynamic" model [in a dynamic industry patents may reduce overall innovation] is just a model, and is not suggested by, or consistent with, the experimental "data" of the paper. The separate claim, that imitation promotes innovation, was merely a conclusory assertion to begin with.

Bessen stated a firm may be better off if other firms imitate it and compete with it. This is not at all how the Wright Brothers viewed the imitative activities of Glenn Curtiss. This is not how pharmaceutical companies view the world.

Noting that Bessen relied on the software patents/stagnant R&D correlation to "prove" his dynamic model, I observe that Mike at Techdirt wrote:

In the paper I read, the software patents issue is a minor side point. What the paper discusses is a model that shows why, in situations where innovation is
an ongoing process, the inventor can be harmed by patents. The discussion
of software patents is in no way the *basis* of the argument in the paper,
but rather a way to illustrate what is being discussed.

Mike also wrote:

The issue of the patents harming or helping the inventor is part of the
issue of the incentives behind patents.

Now, here is the "Where's Waldo" inquiry. Where in the Bessen working paper did Bessen state that patents harmed the inventor?

Recall, back in the first IPBiz post on the topic, we noted the text on techdirt:

David Levine points us to a new peer reviewed paper on "sequential innovation", which looks into this very issue and finds that, since innovation is such an ongoing process, patents tend to harm inventors more than help them.

Did Bessen, in the 1999 non-peer reviewed working paper, actually write "patents tend to harm inventors more than help them"?


Mike observed that the Bessen paper states:

"Indeed, society and even inventors themselves may be better off
without such protection. Furthermore, an inventor's prospective profit
may actually be enhanced by competition and imitation."

Mike continued: That certainly seems to support the point we made. The rest of the
paper then sets up different models of innovation, showing under which ones
inventors are hurt more by patents, and which ones inventors are helped


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