I always assumed that intellectual property was invented in order to protect against a specific use case:
If researching a new product is extremely cost intensive. But once a product is invented, it is easy to reverse engineer how the product works. Then the first firm will need intellectual property to put in the initial cost, otherwise they will not do so, as they know they will not have enough time to recoup their costs in the market before a competitor moves in with a copy-cat product without having to paid the initial costs.
1) [the stronger one] while the scenario/narrative is a compelling one (or maybe it just feels compelling as I’ve heard it so many times), if it doesn’t have experimental/data backing I have to abandon it.
2) [the weaker one, as it replaces a narrative with another narrative within a complex system] I’ll only give the highlights as the arguments are a lot more eloquently laid out in the book; part of it is comparing the force of “many inventor nodes building on top of many invention nodes” vs “inventor nodes (with more investment individually?) building on top of fewer invention nodes”, part of it is the game theory effect of companies collectively investing less (proportionally) in R&D as the ROI from lawyers under this regime has more power, part of it was that actually, the reverse-engineering-simplicity story was too overblown and that actually the friction + domain knowledge has a stronger effect than people think (they published a paper on this). There were others, but it’s been a while now!
But doing away completely with patents would certainly stifle companies’ willingness to invest in R&D. They’d rather wait for someone else to invent something they can copy.
In theory or in real life?
I’m not in favor of the current patent landscape, but doing away completely with them would likely be throwing out the baby with the bathwater.
I'm not making a judgement on what the ideal situation is, more so explaining why the referenced study could have come to its conclusion.
Then there is the fact that when something is patented, that has a chilling effect on competition, making the market less efficient.
There are also a lot of really silly patents that end up benefitting no-one, not even their inventor, but only result in needless litigation. The recent lawsuit between Nintendo and PocketPair comes to mind.
While there are cases in which patent law can help individual people profit from their invention, once all consequences are tallied, the overall effect of patent law on society appears to be negative.
The complicating factor is that as time passes our ability to reverse engineer has grown, however I'm not sure that invalidates the need for patents, the question is whether the new patents are being assessed well from a novelty / inventiveness perspective
I need a bit more depth and detail to believe that this doesn't destroy the pharma industry.
What would the empirical evidence even look like? It's not like the modern pharma industry existed before patents.
I would flag that we’re getting into “prove a negative” territory here: the goalpost is that we need to prove empirically that patents achieve the desired outcome. If the scenario you describe accounts for all game-theory/incentive/complex-adaptive-system universes, we should see this reflected in the data.
When it comes to pharmaceuticals, they looked into Italy and Switzerland who switched to a patent system in 1978 (and I believe Portugal in the 1990s). They looked at the growth curves of things like # of inventions, total factor productivity, percentage R&D spending, and the conclusion was that there was no statistically significant change in trajectory that would suggest the introduction of the patents had any positive effects. (Edit: they accounted for domestic/international + US filings before/after as well).
I could read a book on it but Italy/Switzerland (combined ~5-10% of drug discovery) making changes 60 years ago doesn't get me too excited about updating my priors.
I think it's important to note that the cost of bringing a drug to market has increased a lot (about threefold) since 1990, so if the case studies are that old they might not generalize.
You’ll have to forgive me if my answer isn’t super satisfying - it’s possible, but I’d want to see patents under these conditions empirically validated.
Some things you might find interesting - the author(s) make various arguments such as:
1) Ranking (by various metrics/criteria) the most impactful medicines and making the case that the ones developed independently from patents are both over represented and more impactful. (There was some stuff around what kind of medicines are incentivised with each regime)
2) I don’t exactly remember what they say about R&D costs increasing with time (aside from (1)-style skepticism), but they did talk how as time went on, logistics/distribution/marketing technology has grown immeasurably, so the window one has before the copycats come in can be exploited with a lot more gusto.
3) Reverse engineering of medicines + especially their industrialisation takes longer (and requires more capital) than people think, and there’s a bit of a conundrum where, because you don’t know which medicines will be commercially successful, you have to wait to see how they perform on the market… but the longer you wait, the more (2) happens (and the more you have to fight first mover advantage, established marketing etc)
The points are more rigorously covered in the book - (2)+(3) had papers that quantified the stated effects in question.
I will stress again though that while the “counter-narratives” are interesting and may help build some intuition, I would set the gold standard to some econometric/shock-analysis of patents in action.
The you being taxpayers, right?
To make a shit ton of money. These things are insanely profitable. Generics exist and they're still profitable. You can get 99% of drugs from over seas and they're still profitable. These companies make trillions of dollars over the years. Yes, they might make slightly less money, but they still would be making a shit ton of money.
Not sure how that address the point. Again, the investment to get a drug to market is gigantic and you're saying that someone should pay for that and someone else should get the reward. It really doesn't work that way. Everyone would want to be the one who didn't pay.
If the current iteration of pharma companies refuse to share society progress with all humans, we can create different pharma companies that build drugs for the public good rather than the private benefit.
But here's a mechanism to mobilize private capital for those diseases that are. Again, the investment needed boogles the mind, around 10B currently, for a single drug.
You're asking someone to pay that money and allowing others to reap the rewards. Why wouldn't everyone want to be the one who didn't pay the money?
These are made up numbers though. 99% of that is overheads of a massive corporation. A tiny fraction of 10B would pay for all the brightest minds in teh world for a decade. Another tiny fraction to pay for a lab and lab techs.
Even with the current system everything older than X years is public. That means we should have better care options available then anything X years ago. And that keeps increasing.
It wasn't just some government flex.
You also haven't addressed any of the other negatives that unregulated market dynamics have manifested.
The "American colonies" were, of course, not limited to the modern USofA; Sir John Hawkins of Plymouth aka "the Pioneer of the English Slave Trade". formed a slave-trading syndicate in 1554.
He sailed with three ships for the Caribbean via Sierra Leone, hijacked a Portuguese slave ship and sold the 300 slaves from it in Santo Domingo. During a second voyage in 1564, his crew captured 400 Africans and sold them at Rio de la Hacha in present-day Colombia, making a 60% profit for his financiers.
Caribbean colonies were of course quite different.
Capital continued to exist and there continued to be people who decided what got built and who received them. To me, that's private ownership. I mean, it's not like apple trees suddenly began bearing Ladas. If I wanted to acquire a field to occupy / farm, it was presumably controlled by someone, either an individual person or group of people. I don't see the difference in saying that in one situation my neighbor owns the field as personal real estate, versus whatever terminology the soviets used for why I can't just take it.
The main distinction with capitalism is that the people who decide what gets built are private individuals in competition with each other, and incentivised by profit to meet the demands of consumers.
In communism the people who decide what gets built are part of a single central authority with no competitors and no profit motive. That system doesn't work, which is why it collapsed.
Also, the bulk of the cost of manufacturing a drug lives in the scientific & engineering exploration space, which we should incentivize.
Most companies only publish medical research findings on blockbuster drugs once both are true:
1. Production has started
2. A patent has been filed
The reason for this is that they want to maximize the amount of production time under patent b/c that maximizes revenue.
If you are the researcher, that means you have to wait until all of the production setup is ready to go.
Merck took a different stance.
There, the patent was filed as soon as the researcher was ready to publish. This meant that there was less time under patent for production but was much better for the researcher as they got their findings out earlier.
The thinking was that being able to publish earlier would attract better researchers and in turn would lead to better drugs, more revenue, more profits.
This was in the late 1990s so not sure how this plan worked out as I haven't been in pharma since that era.
Would be interesting to hear from other folks more knowledgeable.
But then it takes a decade or so to develop towards approval. You work together with outside researchers who lend their credibility and get attractive publication possibilities in return. Those publications also help to raise awareness with doctors and investors. Since some company researchers are also authors, this does indeed work as an incentive and is helpful for recruitment and ultimately more successful products.
To the core of the article: why would anyone want to file a patent with AI as a (co-)inventor? It's a tool, and it cannot have any ownership rights. And even if it did, it would diminish your share of royalties.
Historically not so much in the US, but yes now that the US has joined the rest of the world with a first-to-file system
Assuming "MANY years ago" is >15, then the US was still in a first-to-invent system
Actor network theory sheds a tear. And more promptly: ownership rights are enacted via tools. Whether agentful or non-agentic, listing them would in the very least be similar to disclosing funding bodies or agencies.
Patents have been mostly a pride checkbox for me, but at the same time being able to get credit for something you could never build is interesting. I’m less supportive of the loose monopoly part though, that seems to be the real issue dampening innovation
Everyone hates patent trolls (non practicing entities who dont implement the idea themselves), but practically its an extremely high burden. I did some patents on financial market plumbing, implementing that requires licensing and infrastructure far beyond any coding or building problem
Thinking of it 10 years before investment banks get around to it I think should still be incentivized someway
But the current system is cooked
at the time patents were debated, a key part of the proposal was to encourage the transfer "trade secret knowledge" to the public good while still protecting the inventor. this is not an "encourage innovation" argument, it's to stop knowledge from dying with a secretive inventor, knowledge such as glass or metallurgical techniques, formulas, etc.
the inventor also benefited from this patent protection because they could expand their business unlimited by maintaining a small inner circle who knew the secret.
The book cherry-picks its sources, and even then contains several mischaracterizations and exaggerations of those works. There are many other economists who have shown significant beneficial aspects of patents with empirical data but they conveniently don’t get mentioned at all.
As an example, see this: https://www.researchgate.net/publication/46556404_Watt_Again...
Yep, the very first chapter of the book starts with patents and steam power, and they got called out on it by actual experts on the topic. Note the “still” in the title – this is after the book was already “revised” once. The book was not revised after this last note, so the exaggerations still stand.
The rest of the book had many similar issues. Once I started digging into their sources, I could not get past the first few chapters, but anecdotally others on HN have also pointed out glaring inaccuracies. I remember thinking wryly that it should be called “Against Intellectual Honesty.”
Having said that, the bits I found juicy - i.e on the various shock analyses coming from patent introductions or increasing of scope, the studies on how effective first mover advantages was etc. all seemed pretty solid when I checked the sources - admittedly they were deeper into the book, so you may have already abandoned it by then.
> There are many other economists who have shown significant beneficial aspects of patents with empirical data but they conveniently don’t get mentioned at all.
Any chance you have some to share? When I LLM’d the topic a while ago the best I got was some weak investment effect in Singapore (unaccompanied by TFP/etc).
Patents make us richer, in the short term with new ideas/products that people can only afford to invest in/bring to market because of patent protections, and in the long term with public access to those things as the patents expire. We have hundreds of years of seeing this model be successful, the same with copyright.
I've seen too many companies use the patent system to prevent progress because the innovation would cut into their profits.
With that lens, I welcome gradually phasing this stuff out, especially as we navigate into the unknown game-theory landscape AI-as-inventors brings.