[From my Webnote series]

In my post Intellectual Property’s Great Fallacy, I noted Eric Johnson has argued:

Intellectual property law has long been justified on the belief that external incentives are necessary to get people to produce artistic works and technological innovations that are easily copied. This Essay argues that this foundational premise of the economic theory of intellectual property is wrong. Using recent advances in behavioral economics, psychology, and business-management studies, it is now possible to show that there are natural and intrinsic motivations that will cause technology and the arts to flourish even in the absence of externally supplied rewards, such as copyrights and patents.

Now see a complementary argument of Mark Lemley, as noted by Mike Masnick on Techdirt (see below). The article discusses some other issues mentioned here before, such as disclosure as the basis of the patent system (see “The” Purpose of Patent Law; also Alan Devlin, “The Misunderstood Function of Disclosure in Patent Law“; pdf); and whether patent infringement defendants are often copiers or not (Patent defendants aren’t copycats. So who’s the real inventor here? and Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense).

Update: See also Machlup & Penrose, “The Patent Controversy in the Nineteenth Century” (1950), pp 25–26 et pass. [of course, because of copyright censorship, this article is paywalled and not available online]

The Very Basis Of Our Patent System… Is A Myth

from the time-to-rethink dept

DWG pointed us to what appears to be Mark Lemley’s latest (and I’ll caveat that with the point that Lemley is crazy prolific, so he may have written something else more recently) paper on the patent system, in which he explores “the myth of the sole inventor,” and worries about the fact that our entire patent system appears to be based on this very myth:

The theory of patent law is based on the idea that a lone genius can solve problems that stump the experts, and that the lone genius will do so only if properly incented. But the canonical story of the lone genius inventor is largely a myth. Surveys of hundreds of significant new technologies show that almost all of them are invented simultaneously or nearly simultaneously by two or more teams working independently of each other. Invention appears in significant part to be a social, not an individual, phenomenon. The result is a real problem for classic theories of patent law. Our dominant theory of patent law doesn’t seem to explain the way we actually implement that law.

He notes that if it’s true that most inventions are being simultaneously discovered by multiple parties, and we still believe in the basis for the patent system as put forth today, we should be rejecting nearly all patents filed today:

The result is a real problem for classic theories of patent law. If we are supposed to be encouraging only inventions that others in the field couldn‘t have made, we should be paying a lot more attention than we currently do to simultaneous invention. We should be issuing very few patents—surely not the 200,000 per year we do today. And we should be denying patents on the vast majority of the most important inventions, since most seem to involve near-simultaneous invention. Put simply, our dominant theory of patent law doesn‘t seem to explain the way we actually implement that law.

The paper has an extensive discussion on simultaneous invention, and just how prevalent it is — something we’ve discussed before. The point raised is that nearly every major innovation has involved simultaneous invention, and appears to be the sort of “natural” progress that would happen no matter what — contradicting the idea that patents are needed to act as incentive for the invention.

Multiple, independent studies show that what Merton calls — singletons are extraordinarily rare sorts of inventions. Indeed, Lamb and Easton call multiple, simultaneous invention — the pattern of scientific progress. Merton’s classic work suggests that inventions occur not merely because an individual did something particularly creative or surprising, but because the time and conditions were right. There are two components to this idea. First, invention is not a discontinuity, but an incremental step in an ongoing process. Inventors are working with the tools they are given and trying to improve those tools or use them to make something new. Schoenmakers and Duysters study 157 different inventions and conclude that they are largely based on extensions of existing knowledge.

Second, invention by one and only one person or group is exceedingly rare. Far more common are different groups struggling with the same incremental problem, and achieving the same solution at roughly the same time. Ogburn and Thomas conducted the classic study here. They document 148 instances of simultaneous invention. Only rarely, they find, does an inventor come up with an idea that is not developed in similar form by others working independently. Data on litigation tells a similar story; empirical evidence suggests that between 90 and 98% of modern patent lawsuits are against independent inventors, not copiers.

It’s not difficult to figure out why this is true. While patent system supporters continue to insist that patents are “necessary” as the incentive to innovate (we hear all the time in our comments how without patents, no one would bother inventing), the truth is that there are much more effective and useful drivers of invention and innovation: need and consumer demand. Other studies have shown that the major driver for invention is one’s own need. That same study found that a second big driver of innovation was to get past a certain hurdle that would make an overall market bigger. In such scenarios patents don’t make sense, because lots of players in the market are willing to collaborate to get past the initial hurdle. Giving a patent to a single player would hinder much of the innovation (as we’ve seen).

Lemley goes on to point out that this issue of simultaneous invention isn’t just the aggregate of “regular patents” obscuring the big genius breakthroughs. In fact, he finds that the big breakthroughs weren’t really big breakthroughs at all:

In fact, however, the evidence does not simply show that most inventions result from simultaneous independent invention. It also shows that the vast majority of the most important inventions of the past two centuries—the pioneering inventions that seem with the passage of history such radical departures from the prior art—were themselves the result of gradual social processes in which multiple inventors developed the idea at about the same time.

From there he goes through the history of a variety of such “breakthrough” inventions, and dispels the “myth of the lone genius” in each case. One by one, he goes through the steam engine, steamboats, the cotton gin, the telegraph, the sewing machine, the telephone, the light bulb, the movie projector, the automobile, the airplane, radio, television, the computer, the laser and polymer chemistry — and in every case shows how lots of people basically came up with the same basic inventions at about the same time, often independently. In fact, sometimes the names most associated with the “invention” were stragglers, who were well aware of the work of others in the field. Lemley does admit to a few true independent inventions… but, in almost every one of those cases, the invention was more of an accident, such as with penicillin, vulcanized rubber, the pacemaker and film — all of which resulted from accidents or mistakes, rather than any sort of “individual genius” that needed to be rewarded.

From there, Lemley shows how this basically destroys the very basis on which patent theory rests. It’s supposed to be about creating the incentive for what wouldn’t be created otherwise. And he notes that patents are “costly” to society, but that we as society agree to bear those costs under the (false) belief that we get these unique inventions because of it. As Lemley notes: “If we are patenting things we would have obtained without the cost of a patent, on this theory, we‘re wasting our money and probably harming rather than helping innovation downstream.”

He also debunks the “ex post” theory for the patent system, which argues that even if patents aren’t needed to create the incentives for the initial invention, they are then needed afterwards to incentivize the development of the invention into a product for the market. This theory falls apart quickly for anyone who understands basic free market economics: you don’t need a monopoly to bring something to market. In fact, monopolies tend to hinder needed innovations. As Lemley points out, existing incentives such as brand reputation and first-mover advantage seem to suffice. And limiting a market to just a single provider, such as the one who invented it, often seems to lead to the invention being mistargeted, away from the most useful application:

Marconi thought the use of wireless radio technology would be to permit ships at sea to communicate with each other; while that is in fact a use, it is hardly the most important one. Armstrong, the inventor of FM radio, thought he had invented a way of extending the reach of AM radio and broadening its bandwidth; he missed the things (like the absence of static) that actually made FM a success. Bell described his telephone as an improvement in telegraphy, and Western Union turned down an opportunity to buy the patent for $100,000, rejecting the telephone as inherently of no value to us. IBM didn‘t foresee the market for personal computers. The transistor was originally conceived primarily as useful in hearing aids. The steam engine was developed to pump water out of flooded mines. Railroads were originally envisioned as a way of getting goods to canals, which would be the dominant form of overland transportation. The VCR was initially marketed to TV stations as a means of airing reruns. And so on.

Next up, Lemley debunks the “disclosure theory” as a basis for patents. We’ve gone through a variety of reasons why disclosure theory is a myth. Lemley’s critique is more direct: patents don’t disclose anything useful, for the most part. This was highlighted in the recent This American Life episode on patents, in which a software developer with a patent admitted that he didn’t even understand what his own patent said. Lemley puts it simply:

The problem is in part one of law; the Federal Circuit has permitted a number of vague general disclosures that don‘t in fact communicate very much to anyone, and patent lawyers often have incentives to write those vague disclosures. So even those who read patents hoping to learn the state of the art would often be disappointed today.

He also discusses a few other reasons why disclosure doesn’t work, such as the fact that patent applications are kept secret for 18 months, meaning any disclosure is already quite out of date, and the sheer impossibility of finding relevant patents thanks to the terrible classification system and vague wording. Instead of disclosure, reading patents is almost only done for lawsuit avoidance. As Lemley says: “If they read patents at all, it is to know what is owned, not what is known.”

The final section of the paper is where Lemley suggests an alternate theory. That is, he isn’t convinced that all of this means we should dump the patent system, but that we might need to rethink what patents are for and how to set them up… though even he concludes that his theory isn’t entirely convincing and probably needs additional thought. His idea is that “patent races,” whereby the opportunity to gain such a monopoly makes inventors rush their work to get the patent, may be a better way of viewing the patent system, with people often “racing” to beat others to the patent. He admits that this setup likely has negative consequences (many of which we see in the market today — such as blocking out those who independently invent, but come in second or later). However, as an explanation for how the patent system works, it probably presents a much better theory than the standard theories, which he showed didn’t work, earlier in the paper.

As always with Lemley, the paper is a great read. While it runs 104 pages, it’s quite easy to get through. It’s thorough, well-argued and well-documented. I’d be curious, though. to hear any critiques from patent system supporters. Too often when we write about these kinds of papers, we just get angry insults in the comments from patent holders, who insist that it’s all just an “excuse to steal.” This paper goes to great lengths to back up its arguments, and it would be nice if those who disagree with the position at least were able to do the same.

Regarding Masnick’s summary above of “a variety of reasons why disclosure theory is a myth” and Devlin’s critique: “He also discusses a few other reasons why disclosure doesn’t work, such as the fact that patent applications are kept secret for 18 months, meaning any disclosure is already quite out of date, and the sheer impossibility of finding relevant patents thanks to the terrible classification system and vague wording. Instead of disclosure, reading patents is almost only done for lawsuit avoidance. As Lemley says: “If they read patents at all, it is to know what is owned, not what is known.”

See also Frank H. Easterbrook, “Intellectual Property Is Still Property,” Harv. J.L. & Pub. Pol’y 13, no. 1 (Winter 1990): 108–118, pp. 109–110:

The idea that a patent represents an exchange of protection for disclosure makes no sense, except perhaps with respect to process patents. The product itself, not the patent papers, usually discloses things. Inventors want and need patents only when disclosure is inevitable in the absence of protection. When the product can be sold without disclosure, the manufacturer can use trade secret law to protect its contribution, getting even better protection—not only perpetual, but also guarding by secrecy against infringement. Infringement is difficult to detect and penalize; why disclose anything in exchange for what is at best a limit on the duration of your returns? Lawyers use the utmost skill to draft patent applications so that they do not disclose enough to practice the invention, and the omitted details frequently are vital. Patents thus are valuable when the product itself, not the papers filed in the Patent Office, discloses the invention.

And see also another paper by Devlin, “The Misunderstood Function of Disclosure in Patent Law“; pdf), Part II.B especially (notes omitted), but at pp. 405 & 410–411:

While the patent document alone may fail to teach the workings of an invention with sufficient clarity, the invention itself is often self-revealing.18 Put differently, the kind of innovation for which inventors seek patent protection is often vulnerable to reverse engineering.19 Once these inventions come into being and are brought to market, disclosure is inevitable.

… Counterintuitively, the information-revealing function of the patent system is largely illusory.47 Although the enablement condition of patentability would appear to educate third parties on the nature of a patented invention,48 in practice it lacks bite.49 Many patents fail to disclose properly the inner workings of the protected technology. Numerous studies and anecdotal reports reveal that the patent system’s performance in disseminating information is disappointing at best.50 A 2009 study by Professors Christopher Cotropia and Mark Lemley makes clear that “defendants in patent infringement lawsuits . . . were not knowingly using already-patented technology.”51 The IT industry, in particular, is infamous for producing patents that convey little, if any, information about the underlying nature of the discovery.52 Indeed, even IT patents’ claims are notoriously vague, creating an indeterminate zone of potential, though not certain, infringement for third parties to traverse.

… When specifications fail to teach how protected technologies operate, they subvert the disclosure function of patent law.5  … “without sufficient enablement the social bargain fails, and the inventor gets a windfall in monopoly profits,” [quoting Elisa Rives, Comment, Mother Nature and the Courts: Are Sexually Reproducing Plants and Their Progeny Patentable Under the Utility Patent Act of 1952?, 32 CUMB. L. REV. 187, 226 (2002);]

… patented inventions are typically self-revealing, [hence their] vulnerability to reverse engineering…

See also Masnick, Why Do Patents Tend To Cause More Harm Than Good?:

Another popular claim is that patent benefit us via “disclosure.” Because patents require the inventor to “disclose” the invention, the idea is that these patents will spur additional innovation as others learn from the patents and build on them. The idea is that there’s obvious benefit in keeping the idea secret, so in exchange for disclosing the idea, the government gives the inventor a monopoly. However, this is easily shown to be false. First, very few patents these days are written to the point where they actually disclose enough to be useful. They tend to be broadly written in a way that can cover as much as possible. However, there’s an even better simple logical rationale for why disclosure is a myth when it comes to patents. If the inventor truly believes there’s tremendous value in keeping the idea secret, he or she will still keep it secret. There’s no real benefit to disclosing it to get the patent. You get just as much benefit from keeping it secret. The only benefit is if you think that others will be able to figure out the same concept in less time than it takes for the patent to expire. In other words, if you realize that others will be able to come up with the same thing in that amount of time. So getting a patent prevents others from doing that. But if you truly believe that it would take longer than the length of the patent to figure out its secrets, then you’ll keep it quiet anyway.

And Masnick again: Can We Get Rid Of The Disclosure Myth For Patents?:

If there’s economic benefit to keeping an idea secret, and the creator of that idea knows that he or she can keep it secret for greater than the length of the patent, then there’s still no incentive to disclose. They’ll simply keep the idea as a secret, because the economic benefit of it being a trade secret is much greater than the value of the patent. Alternatively, however, the people who will decide to patent their ideas, are those who recognize that the secret behind their invention is likely to become public no matter what, before the patent period has expired. For those people, there is economic benefit in patenting the idea and “disclosing” it — because doing so, actually gives them control over the idea for a longer period of time. However, that completely wipes out the argument that the patent system helps disclose ideas. After all, many won’t disclose because the idea is worth more while secret, and the only ones who will disclose are those who have ideas that are going to become public knowledge anyway.

And again: Microsoft Employee Admits That Patent Disclosure Is A Myth:

Defenders of the patent system quite frequently point out that one of the main benefits (some claim the only benefit) of the patent system is “disclosure.” That is, because the patent system requires you to disclose your patent, the patent system is quite helpful in spreading ideas. This is a myth that’s easily debunked on a few points. First, it only really makes sense to get patent protection if you know the idea will get disclosed or figured out anyway. In those cases, the disclosure via the patent system is meaningless, since the info would have gotten out anyway. Second, these days, thanks to “willful infringement” tripling the damages you pay, many corporations tell employees not to look at relevant patents, as it only opens up more liability. Third, many patent lawyers are taught to write claims that are as broad and vague as possible while still getting approved. This way, the patent can be construed to cover much more than the actual invention.

Now, Slashdot points us to a Microsoft employee admitting that looking at patents is a total waste because they never actually disclose anything useful:

When using existing libraries, services, tools, and methods from outside Microsoft, we must be respectful of licenses, copyrights, and patents. Generally, you want to carefully research licenses and copyrights (your contact in Legal and Corporate Affairs can help), and never search, view, or speculate about patents. I was confused by this guidance till I wrote and reviewed one of my own patents. The legal claims section — the only section that counts — was indecipherable by anyone but a patent attorney. Ignorance is bliss and strongly recommended when it comes to patents.

Of course, technically, a patent is supposed to be written so that someone skilled in the art can replicate the invention from the patent alone. But, when even patent holders can’t understand their own patents, it’s quite clear that reality doesn’t match up with the theory here. So, the next time you hear a patent system defender claiming the importance of disclosure, it might be worth pointing out that one of the biggest patent holding companies in the world instructs its own employees to ignore patents, because you can’t actually learn anything from them in the first place.

See also:

• “Legal Scholars: Thumbs Down on Patent and Copyright“
• “The Overwhelming Empirical Case Against Patent and Copyright“
• Jessica Silbey, The Eureka Myth, in Slate: “How misunderstandings about creativity sustain a flawed copyright system.”

Update:

Falkvinge: Ten Myths About Patents.

and: