Bill Gates: Flip-Flopping IP Hypocrite

A couple decades ago, Bill Gates seemed to have some appreciation of the damage wrought by patent law:

If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today. I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique. If we assume this company has no need of any of our patents then [they] have a 17-year right to take as much of our profits as they want. The solution to this is patent exchanges with large companies and patenting as much as we can. Amazingly we havn’t done any patent exchanges tha I am aware of. Amazingly we havn’t found a way to use our licensing position to avoid having our own customers cause patent problems for us. I know these aren’t simply problems but they deserve more effort by both Legal and other groups. For example we need to do a patent exchange with HP as part of our new relationship. In many application categories straightforward thinking ahead allows you to come up with patentable ideas. A recent paper from the League for Programming Freedom (available from the Legal department) explains some problems with the way patents are applied to software. [See Bill Gates’ 1991 Comments on Patents; emphasis added.]

Yet over the years Microsoft relied on the other major form of intellectual property—copyright—to dominate aspects of the software industry, and then to use the monopoly profits to accumulate thousands of patents. These two forms of IP are then used together to squelch competition. (See Controls breed controls, Monopolies breed monopolies; Microsoft Copyrights —> Patent Dominance; Price Controls, Antitrust, and Patents; The Schizo Feds: Patent Monopolies and the FTC.)

Now that Gates has used state-granted IP monopolies to acquire billions of dollars that he can then use to be a bigshot philanthropist, he is all for patents (as my friend Rob Wicks says, Gates is “America’s wealthiest welfare queen”). For example, in a recent Microsoft Summit, he had this to say about patents:

On the greatness of patent law

“Thank god for commercial software,” Gates told an audience member who asked about the disconnect between Microsoft’s historically proprietary nature and all the charitable work Gates now does.

Intellecual property in developed countries pays salaries and lets software companies, pharmaceutical companies and others actually be able to invest in the innovation that helps improve our world, he explained. Then, when organizations like the Gates Foundation are doing work in undeveloped countries, pharmaceutical, IT and agri-business companies can afford to give away their work for free. (A skeptic might say that’s like robbing from the not-so-rich to give to the poor.)

“Anybody who thinks getting rid of [patent law] would be better … I can tell you, that’s crazy,” Gates said. “My view is it’s working very well.”

How the heck does Gates know it’s “working” well? Does he know the costs and the benefits of this system? No. (See The Overwhelming Empirical Case Against Patent and Copyright.) This sounds like welfare-socialists who say that medicare or social security “work well”. Yes, if you ignore the victims forced to pay for it, maybe.

And now he is involved with a company spun off from uber patent troll Intellectual Ventures (see Patent Trolling in Action: Big Patent Firm Sues Nine Tech Firms), as noted in Bill Gates’ nuclear company explores molten salt reactors, thorium:

“We’re thinking about it and trying to work on it and we have a few proprietary ideas that we’re cooking up,” Gilleland said in relation to MSRs. He did provide details of the “proprietary” ideas, noting that, “We like to work on an idea for a while before we run out and tell about it – so we have some ideas which we’re trying to ferret out how good they are.”

Director of innovation Latkowski declined to say whether or not TerraPower has filed any MSR patents. In addition to running innovation and related partnerships, Latkowski also “oversees the development, maintenance and protection of TerraPower’s intellectual property portfolio” according to his company bio. TerraPower is a spin out of Intellectual Ventures, an innovation and venture capital firm that makes a business out of patents and is known as a keen collector and protector of intellectual property. It is headed by Nathan Myhrvold, a former Microsoft chief strategist and technology officer who serves as TerraPower’s vice chairman.

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Patently speaking. TerraPower vice chairman Nathan Myhrvold is CEO of Intellectual Ventures, a company whose business is intellectual property. TerraPower is an Intellectual Ventures spin out.

Imagine some other company comes up with a good way to make affordable, cheap, clean, safe thorium or other nuclear energy systems. They could well be sued into the ground by TerraPower by virtue of its patents, setting human progress and welfare back decades.

It’s no surprise Gates is in favor of the statist institution of IP; here he is gushing over the great things state violence gives us:

You write about the violence in traditional societies. It made me think of Steven Pinker’s The Better Angels of Our Nature, which shows how and why the world has become a less violent place over the centuries. One factor is the growth of centralized governments that have a monopoly on punishing people. You’ve seen examples where police come in to an area for the first time. As soon as they make it clear that the first guy to take revenge will go to prison, the levels of violence drop very quickly. [From Gates’s blog: A Discussion with Jared Diamond.]

This is all a shame, given that Gates elsewhere seems to have some glimmer of understanding of the importance of capitalist property rights:

The incredible economic transition in China over the last three-plus decades occurred because the leadership embraced capitalistic economics, including private property, markets, and investing in infrastructure and education.

This points to the most obvious theory about growth, which is that it is strongly correlated with embracing capitalistic economics—independent of the political system. When a country focuses on getting infrastructure built and education improved, and it uses market pricing to determine how resources should be allocated, then it moves towards growth. This test has a lot more clarity than the one proposed by the authors, and seems to me fits the facts of what has happened over time far better.