Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.


Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus...

When people think of patents, if they do at all, they usually picture a crazed inventor who looks a lot like Christopher Lloyd in Back to the Future, working late nights in the lab to come up with something completely crazy and absolutely amazing, that no one else would ever have thought of:

What a DeLorean is Good For...

If you've read this series of posts you know that this image is mostly mythological. The vast majority of patents are owned by corporations at filing, and describe minor modifications of what has gone before, if they describe anything useful at all. But that doesn't mean there isn't the occasional individual making a real contribution to a field.

Today, if that person wants to realize a profit from her or his work, they may choose to file for one or more patents and then either try to fund a company, sell the patents to a company, or just go sue people after others come up with the idea on their own. We have argued that the last behavior should not be supported or encouraged: no social value has been added. Let's replace it with a more worthwhile alternative, consistent with the open-source world, for individuals filing patents.

Once a patent filed by an individual or group of individuals is allowed, they should have the option of laying the patent open to the public. We might forgive them the issuance fee (only a few hundred bucks anyway for a "micro-entity"). Once a patent is laid open, it becomes part of the public domain, and cannot be converted back to property. However, the inventor or inventors become eligible for inventor awards. The USPTO will be responsible to administer the awards, which should be granted to inventors whose patents have proven useful in the relevant fields. Evaluation could sensibly wait 3 to 5 years to separate out stuff that actually works from the merely promising. That's also a time scale a government agency can handle, and it's not very different from the time needed to form a company and build a business. Awards ought to be big enough to get excited about - say $100,000, providing a 5-10x return on the cost to file. This is similar to the popular small business innovation research grants (SBIR) program, whose awards range from $40,000 to $100,000 for phase 1. Note that once a patent is laid open, all continuations must also be open, since otherwise the inventor could do a bait-and-switch to sue the user of the laid-open version with slightly different claims.

These awards could be easily funded from application fees. As we noted in a previous post, only 10% of applications are assigned to individual inventors. If 10% of those are laid open, and 10% of laid open patents receive an award (which is pretty generous), only one of 1000 granted patents is awarded. Adding $100 to application fees would cover the direct cost. That's about $40M for the 400,000 patents issued each year -- not a lot of money, but certainly welcome for the winners. Including a few special awards at e.g. $1M each would make a big public impact without costing much.

Having the USPTO administer the system is no worse than having the USPTO grant these monopolies in the first place. If the USPTO were required to reach out to industry to evaluate candidates, the process would have the ancillary benefit of exposing examiners to how ideas become useful (or not) in the real world. Companies will have no particular incentive to be deceptive about a method they are free to use, or an award they pay for anyway (as do their competitors), though of course political games and under-the-table payments will naturally occur at times. The candidate inventors could take no action, or campaign vigorously for companies to adopt their methods -- the latter being a great way to see if they've actually done anything useful.

A change like this would require legislation, but it should be relatively easy to achieve. The cost is small, it is in accord with public perception of the system, and provides nifty photo ops. Should some of the changes proposed in previous posts be implemented (not likely any time soon!), an award system would provide a way to compensate individuals for whom, for example, the path to demonstrating enablement had become prohibitively expensive and time-consuming.

And if it didn't work out, you could always get in the DeLorean, accelerate to 88, and go back the way things were before. Doesn't that work?


Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace it with a system where the government has the discretion to grant monetary awards to people that the government thinks "deserve" a reward. Though I suppose this would be a more honest system. Maybe cheaper, too, if done' right, However I have seen similar proposals that if implemented across the board, would cost taxpayers literally trillions of dollars per year, so I'm very skeptical of this approach.

See e.g. http://www.againstmonopoly.org/index.php?perm=593056000000000206 and http://c4sif.org/2011/12/tabarroks-launching-the-innovation-renaissance-statism-not-renaissance/

Submit Comment

Blog Post


Email (optional):

Your Humanity:

Prove you are human by retyping the anti-spam code.
For example if the code is unodosthreefour,
type 1234 in the textbox below.

Anti-spam Code



Most Recent Comments

Questions and Challenges For Defenders of the Current Copyright Regime Subject Very controversial Gráfica em

The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace

The right to rub smooth using a hardened steel tool with ridges I'm a bit confused by this--even if "hired to invent" went away, that would just change the default

Do we need a law? @ Alexander Baker: So basically, if I copy parts of 'Titus Andronicus' to a webpage without

Do we need a law? The issue is whether the crime is punished not who punishes it. If somebody robs our house we do

Do we need a law? 1. Plagiarism most certainly is illegal, it is called "copyright infringement". One very famous

Yet another proof of the inutility of copyright. The 9/11 Commission report cost $15,000,000 to produce, not counting the salaries of the authors.

WKRP In Cincinnati - Requiem For A Masterpiece P.S. The link to Amazon's WKRP product page:

WKRP In Cincinnati - Requiem For A Masterpiece Hopefully some very good news. Shout! Factory is releasing the entire series of WKRP in Cincinnati,

What's copywritable? Go fish in court. @ Anonymous: You misunderstood my intent. I was actually trying to point out a huge but basic

Rights Violations Aren't the Only Bads I hear that nonsense from pro-IP people all the

Intellectual Property Fosters Corporate Concentration Yeah, I see the discouragement of working on a patented device all the time. Great examples

Music without copyright Hundreds of businessmen are looking for premium quality article distribution services that can be

Les patent trolls ne sont pas toujours des officines

Les patent trolls ne sont pas toujours des officines

Patent Lawyers Who Don't Toe the Line Should Be Punished! Moreover "the single most destructive force to innovation is patents". We'd like to unite with you

Bonfire of the Missalettes!

Does the decline in total factor productivity explain the drop in innovation? So, if our patent system was "broken," TFP of durable goods should have dropped. Conversely, since

Does the decline in total factor productivity explain the drop in innovation? I wondered about TFP, because I had heard that TFP was increasing. Apparently, it depends on who