alt Hacker NewsAre patents (and trade secrets) the right model for protection?
I've been wondering this. It seems that, they were the right model, back in The Day. Back then, what you had (in my model) was a few inventors, cash-strapped or with wealthy benefactors, and they wanted to protect their inventions. Poor inventors, in other words.
I imagine that, back in the day, with smaller government and regulations, and everything 'cheaper' even 'litigating' the case would have been achievable for such poor inventors. In such a scenario, the patent could be a tool of the tiny against the behemoth exploiter (ye olde robbere barron). Ie, true protection.
These days however? Not so much. To litigate takes years and millions, effectively denying the protection to those who could most benefit from it. The "high bar" to protect your protection creates an incentive where you see conglomerates emerge that use that cost to coerce settlements, and make a business out of it by purchasing many such supposedly 'protective amulets'.
It's also a good model for the 'protective amulet forging guilt' (ie, lawyers). Who will often tell you, "Have you considered a patent? We can help if you choose to go that route."
But is the patent, once so lauded, useful and genuine - really the right model for protection today? Could it be reformed? Or should it be relegated to the past? Like mint coin collections of yesteryear - now without real value, except for collectors and traders (ye olde patent trollus).
I don't know. Thoughts, anyone? Especially valuable I think would be personal experience and the thoughts gained from that, as well as any big picture reflections.
Replies
There are solid economic arguments that they were never the right model, even "back in The Day": http://www.dklevine.com/general/intellectual/againstfinal.ht...
Patents are government granted monopolies on ideas. The case for them is that you need the carrot of a monopoly to incentivize innovators (empirically untrue). The case against them is that government mandated monopolies immediately dampen all subsequent innovation until expiry (empirically true across industries throughout history).
> Are patents (and trade secrets) the right model for protection?
This probably deserves a more expansive discussion in its own right. I think what has become clear is that the tools we have (patents, trade secrets, copyright) are extraordinarily crude. Nonetheless, they worked pretty well in a time when intrinsic friction and overhead in markets was high.
Now that we’ve eliminated almost all friction in markets, everything has become extremely sensitive to the intrinsic cost and supply chain structure of the IP being protected and the speed at which those supply chains can adapt to competitive opportunities. To make matters worse, these intrinsic cost and supply chain structures tend to vary considerably depending on the particulars of the domain. Consequently, the IP protection tool in any particular case is the one that in practice has highest cost burden (both money and speed) on anyone trying to circumvent it with the lowest cost to both implement and defend. Patents rarely win that argument anymore for many things.
The most robust protection these days is information asymmetry, and trade secrets are good at maximizing that. Unlike patents, it is also extremely cheap to implement, so it is economically favorable. Defending that information asymmetry has become more difficult in some ways (more sophisticated reverse engineering) but easier in others (hello cloud). Unfortunately, we lived in an age of trade secrets in past centuries and it had many downsides; patents were essentially invented to mitigate those downsides.
The entire dynamic has many downsides but trade secrets are essentially winning out. Information asymmetry still has a lot of market power if you are good at exploiting it, much of the benefit isn’t even the secrecy per se in many cases.
Patents are both overprotective and underprotective. Out of a desire to screen out patent litigation that lacks merit, we have made the system unbelievably expensive for all but the most well funded litigants. That, in turn, has helped the biggest companies. Their freedom to infringe with impunity becomes part of the moat that helps preserve their market position.
Iverson "open sourced" APL because a professor in ~1950 told him about Edwin Howard Armstrong, the inventor of the FM radio, who lost the 2nd half of his life to litigation, eventually leading to his divorce and possible suicide. His professor told him not to patent things, because enforcement would cost the rest of your life.
Some fields have moved away from patents and almost purely to trade secrets. There are so many practical issues with patents now that in many cases they have negative value.
The downside of this is that companies who are using trade secrets instead of patents are no longer publishing either. Many areas of R&D that are primarily done outside of academia are becoming increasingly opaque because there is no up-to-date literature around the state-of-the-art.
Ironically, the situation that patents were meant to prevent is becoming common again now that patents are often effectively useless.
I feel like patents are well beyond their utility.
They are really only useful today to protect companies during their enshittification phase. Is enshittification useful to society? Maybe.
Probably tech patents should have been reformed when IBM went around trying to protect its BIOS. Or when Microsoft started pushing its weight around with FAT.
A large company protecting itself against competition is almost definitionally anti productivity.
Some kind of category protection might be useful. Protect only the latest (or maybe latest x) genuinely novel innovation in a category while open sourcing everything prior. Keeps the incentive to innovate, removes patent trolling and reduces enshittification. Will need a strong hand to ensure that people dont just try and create a bunch of new categories.
The US practice of patents helps incentivize inventors to study and innovate so that they see an ROI when they sell to a large company able to handle exploiting a defending a patent. If you wanna try to make a company on your own around your patent, you’re free to try but we don’t build the system around moonshot strategies that are likely to fail (i.e. making the company around your patent).
I’m not defending the system, I’m simply explaining. Likewise, forever copyrights exist to increase the value of artistry so that artists get something back when they sell them. Again, not defending.
No they are not. I've asked that question to quite a few well-published economists studying innovation and the off-the-record answer is always:
> Patents are an extremely noisy and biased measure of innovation; conflate innovation with a million other variables, etc. but we have all of the patents and patent applications available for free since the beginning of the time, so that's what we'll use. If you find another good measure as comprehensive let us know and we'll use that instead; meanwhile <shrug emoji>