The Pizzaright Fallacy in Patent Law

by on February 19, 2007 · 14 comments

Scott Kieff, a law professor who works just down the street from me at Wash U, makes a novel (to me anyway) argument about the purpose of patents:

When patents are enforced with clear and robust rules, and backed up by a strong right to exclude, they serve an essential coordinating role in facilitating the complex process of getting inventions commercialised. Patents help get inventions put to use broadly and rapidly.

Bringing an invention to market requires coordination among many complementary users of that technology, including capitalists, developers, managers, labourers, other technologists, manufacturers, marketers and distributors. Patents help this diverse group act in a coordinated fashion in at least two distinct ways.

First, the right to exclude associated with a published patent acts like a torch in a dark room in drawing to itself all those interested in the patented subject matter. This beacon effect gets all the diverse individuals to interact with each other and with the patentee.

Second, everyone’s expectation that the patent can be enforced against anyone is exactly what provides these individuals with the required incentive to strike deals with each other. This bargain effect falls apart if everyone knows the patent can’t be enforced.

The profit potential associated with an enforceable patent incentivises everyone in the commercialisation process. Not least of all, for example, the promise of financial payoffs is what brings the essential capital investments to start and sustain businesses.

This argument has a certain superficial plausibility, but as I’ll explain below the fold, it runs afoul of Ed Felten’s Pizzaright Principle.


A pizzaright is an imaginary kind of “intellectual property” that gives its holder the exclusive right to make pizzas. The Pizzaright Principle states that, since everyone agrees that granting pizzaright would be bad public policy, any argument for a legal monopoly that would function equally well as an argument for pizzaright must be flawed. Or, to put it another way, to be credible, any such argument must somehow distinguish the right being defended from pizzaright.

Kieff’s argument simply bombs the pizzaright test. Consider:

Opening a pizzaria requires coordination among many people, including investors, construction firms, pizza oven vendors, managers, labourers, marketers and delivery drivers. Pizzarights help this diverse group act in a coordinated fashion in at least two distinct ways.

First, the right to exclude associated with a pizzaright acts like a torch in a dark room in drawing to itself all those interested in the opening of pizzarias. This beacon effect gets all the diverse individuals to interact with each other and with the pizzaright holder.

Second, everyone’s expectation that the pizzaright can be enforced against anyone is exactly what provides these individuals with the required incentive to strike deals with each other. This bargain effect falls apart if everyone knows the pizzaright can’t be enforced.

Actually, it occurs to me that this isn’t an entirely hypothetical example. In The Death and Life of Great American Cities, Jane Jacobs argues that suburban shopping malls are often propped up by zoning laws, which by limiting the number of commercial establishments in a particular area, ensure that the ones they do permit succeed. But no libertarian would defend the use of zoning laws for the purpose of reducing competition among retail establishments, and they certainly wouldn’t defend those as required by free market principles.

Update: As Noel points out, I got the link from his blog post, which you can find here.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I like how you linked to Professor Kieff’s article, which sits on an IPcentral server. Check the URL on your link above.

    I don’t see how setting up the analogy by Ed Felten is particularly relevant. But if you’re into analogies all of a sudden, compare source code to food ingredients, then walk into a fancy bisto and demand the list of ingredients/recipes for their top dishes. And tell them how knowing the ingredients and recipes will help you improve on their product, manifest your freedom to tinker and argue how peer production will replace all 4 star bistors in the future.

    In any case, since you *often* put up TLF posts on articles *after* reading my reviews on IPcentral, here is the one for Professor Kieff’s article:

    *******
    PFF Academic Advisory Council member, F. Scott Kieff, a Research Fellow at the Hoover Institution and law professor at Washington Univ, has released a comment on the proper direction for patent reform.

    Kieff argues that patent system reform can increase competition and innovation by facilitating strong, enforceable, patents. For the patent system to enable the creation and diffusion of new technologies, patent validity-infringement-injunction rules must provide patent owners, especially small-independent inventors, the credible option of enforcing exclusivity. In making his proposal, Kieff addresses current reform discourse that would weaken patents, and consequently exacerbate rather than solve anti-competitive effects and blocking of downstream access to inventions.

    When patents are not enforced by a strong right to exclude, the patentee’s incentives to enter into deals are disrupted. Court-awarded damages in general often are seen to under-compensate for harms compared to the price a property owner would receive for selling permission to infringe, which is typically why the infringer decides to infringe in the first place.

    A central aspect of Kieff’s argument is that the main function of the patent system is not merely to induce invention, but to facilitate the risk taking and transactions necessary for commercializing them. The commercialization theory of patents aims to diffuse inventions broadly and rapidly into society. It recommends a patent landscape where patents are “enforced with clear and robust rules, providing a strong right to exclude,” and can “serve an essential coordinating role in facilitating the complex process of getting inventions commercialized.”

    Commercializing inventions requires the participation of many parties, such as makers of complementary technologies, financers, manufacturers and distributors. Strong patents facilitate interaction among these parties, first, by allowing a centralized point around which coordination and negotiation can occur, and second, by a bargain effect, which gives incentive for actors to strike deals and enables some predictability for investment backed ventures.

    Patent system reform entailing the proliferation of weak patents, in contrast, would decrease competition, close-off access to inventions and encourage patenting for reasons such as defensive stock-piling.

    One of the justifications behind proposals to weaken patents is the belief that strong patents may create an “anti-commons,” which raises transaction costs for innovators who need to clear rights in order to commercialize their inventions. Kieff argues that weak patents would simply extend the problem they seek to resolve.

    …a US patent owner does not have…incentive to avoid open transactions. Transactions over patents… are important in monetising the value of the patent… patentees have a strong incentive to encourage use.

    Refusing to enforce patents when there is a breakdown in negotiations would suffer a fundamental circularity that would create perverse, harmful incentives. If the ability to avoid the injunction hinged upon the failure of a deal getting done, then there would be a markedly increased incentive for those wanting to obtain use through court-ordered terms to resist striking licensing deals. A legal test that rewards a failure to cooperate would lead to a decrease in cooperation, not an increase.

    Kieff predicts that reform proposals for weak patents would result in a “keiretsu” patent landscape. Keiretsu refers to large conglomerates in Japan, where the patent system is full of weak patents. Keiretsu leverage a system of weak patents to maneuver through transaction costs and litigation that smaller competitors cannot withstand, without fear of debilitating losses. What enables the keiretsu model is that “only weak patents be available, because strong patents could end up as the slingshots able to take down the Goliaths.” Lets avoid such a future where weak patents harm competition, innovation, and fail to facilitate commercialization essential to innovation.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I like how you linked to Professor Kieff’s article, which sits on an IPcentral server. Check the URL on your link above.

    I don’t see how setting up the analogy by Ed Felten is particularly relevant. But if you’re into analogies all of a sudden, compare source code to food ingredients, then walk into a fancy bisto and demand the list of ingredients/recipes for their top dishes. And tell them how knowing the ingredients and recipes will help you improve on their product, manifest your freedom to tinker and argue how peer production will replace all 4 star bistors in the future.

    In any case, since you *often* put up TLF posts on articles *after* reading my reviews on IPcentral, here is the one for Professor Kieff’s article:

    *******
    PFF Academic Advisory Council member, F. Scott Kieff, a Research Fellow at the Hoover Institution and law professor at Washington Univ, has released a comment on the proper direction for patent reform.

    Kieff argues that patent system reform can increase competition and innovation by facilitating strong, enforceable, patents. For the patent system to enable the creation and diffusion of new technologies, patent validity-infringement-injunction rules must provide patent owners, especially small-independent inventors, the credible option of enforcing exclusivity. In making his proposal, Kieff addresses current reform discourse that would weaken patents, and consequently exacerbate rather than solve anti-competitive effects and blocking of downstream access to inventions.

    When patents are not enforced by a strong right to exclude, the patentee’s incentives to enter into deals are disrupted. Court-awarded damages in general often are seen to under-compensate for harms compared to the price a property owner would receive for selling permission to infringe, which is typically why the infringer decides to infringe in the first place.

    A central aspect of Kieff’s argument is that the main function of the patent system is not merely to induce invention, but to facilitate the risk taking and transactions necessary for commercializing them. The commercialization theory of patents aims to diffuse inventions broadly and rapidly into society. It recommends a patent landscape where patents are “enforced with clear and robust rules, providing a strong right to exclude,” and can “serve an essential coordinating role in facilitating the complex process of getting inventions commercialized.”

    Commercializing inventions requires the participation of many parties, such as makers of complementary technologies, financers, manufacturers and distributors. Strong patents facilitate interaction among these parties, first, by allowing a centralized point around which coordination and negotiation can occur, and second, by a bargain effect, which gives incentive for actors to strike deals and enables some predictability for investment backed ventures.

    Patent system reform entailing the proliferation of weak patents, in contrast, would decrease competition, close-off access to inventions and encourage patenting for reasons such as defensive stock-piling.

    One of the justifications behind proposals to weaken patents is the belief that strong patents may create an “anti-commons,” which raises transaction costs for innovators who need to clear rights in order to commercialize their inventions. Kieff argues that weak patents would simply extend the problem they seek to resolve.

    …a US patent owner does not have…incentive to avoid open transactions. Transactions over patents… are important in monetising the value of the patent… patentees have a strong incentive to encourage use.

    Refusing to enforce patents when there is a breakdown in negotiations would suffer a fundamental circularity that would create perverse, harmful incentives. If the ability to avoid the injunction hinged upon the failure of a deal getting done, then there would be a markedly increased incentive for those wanting to obtain use through court-ordered terms to resist striking licensing deals. A legal test that rewards a failure to cooperate would lead to a decrease in cooperation, not an increase.

    Kieff predicts that reform proposals for weak patents would result in a “keiretsu” patent landscape. Keiretsu refers to large conglomerates in Japan, where the patent system is full of weak patents. Keiretsu leverage a system of weak patents to maneuver through transaction costs and litigation that smaller competitors cannot withstand, without fear of debilitating losses. What enables the keiretsu model is that “only weak patents be available, because strong patents could end up as the slingshots able to take down the Goliaths.” Lets avoid such a future where weak patents harm competition, innovation, and fail to facilitate commercialization essential to innovation.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I like how you linked to Professor Kieff’s article, which sits on an IPcentral server. Check the URL on your link above.

    I don’t see how setting up the analogy by Ed Felten is particularly relevant. But if you’re into analogies all of a sudden, compare source code to food ingredients, then walk into a fancy bisto and demand the list of ingredients/recipes for their top dishes. And tell them how knowing the ingredients and recipes will help you improve on their product, manifest your freedom to tinker and argue how peer production will replace all 4 star bistors in the future.

    In any case, since you *often* put up TLF posts on articles *after* reading my reviews on IPcentral, here is the one for Professor Kieff’s article:

    *******
    PFF Academic Advisory Council member, F. Scott Kieff, a Research Fellow at the Hoover Institution and law professor at Washington Univ, has released a comment on the proper direction for patent reform.

    Kieff argues that patent system reform can increase competition and innovation by facilitating strong, enforceable, patents. For the patent system to enable the creation and diffusion of new technologies, patent validity-infringement-injunction rules must provide patent owners, especially small-independent inventors, the credible option of enforcing exclusivity. In making his proposal, Kieff addresses current reform discourse that would weaken patents, and consequently exacerbate rather than solve anti-competitive effects and blocking of downstream access to inventions.

    When patents are not enforced by a strong right to exclude, the patentee’s incentives to enter into deals are disrupted. Court-awarded damages in general often are seen to under-compensate for harms compared to the price a property owner would receive for selling permission to infringe, which is typically why the infringer decides to infringe in the first place.

    A central aspect of Kieff’s argument is that the main function of the patent system is not merely to induce invention, but to facilitate the risk taking and transactions necessary for commercializing them. The commercialization theory of patents aims to diffuse inventions broadly and rapidly into society. It recommends a patent landscape where patents are “enforced with clear and robust rules, providing a strong right to exclude,” and can “serve an essential coordinating role in facilitating the complex process of getting inventions commercialized.”

    Commercializing inventions requires the participation of many parties, such as makers of complementary technologies, financers, manufacturers and distributors. Strong patents facilitate interaction among these parties, first, by allowing a centralized point around which coordination and negotiation can occur, and second, by a bargain effect, which gives incentive for actors to strike deals and enables some predictability for investment backed ventures.

    Patent system reform entailing the proliferation of weak patents, in contrast, would decrease competition, close-off access to inventions and encourage patenting for reasons such as defensive stock-piling.

    One of the justifications behind proposals to weaken patents is the belief that strong patents may create an “anti-commons,” which raises transaction costs for innovators who need to clear rights in order to commercialize their inventions. Kieff argues that weak patents would simply extend the problem they seek to resolve.

    …a US patent owner does not have…incentive to avoid open transactions. Transactions over patents… are important in monetising the value of the patent… patentees have a strong incentive to encourage use.

    Refusing to enforce patents when there is a breakdown in negotiations would suffer a fundamental circularity that would create perverse, harmful incentives. If the ability to avoid the injunction hinged upon the failure of a deal getting done, then there would be a markedly increased incentive for those wanting to obtain use through court-ordered terms to resist striking licensing deals. A legal test that rewards a failure to cooperate would lead to a decrease in cooperation, not an increase.

    Kieff predicts that reform proposals for weak patents would result in a “keiretsu” patent landscape. Keiretsu refers to large conglomerates in Japan, where the patent system is full of weak patents. Keiretsu leverage a system of weak patents to maneuver through transaction costs and litigation that smaller competitors cannot withstand, without fear of debilitating losses. What enables the keiretsu model is that “only weak patents be available, because strong patents could end up as the slingshots able to take down the Goliaths.” Lets avoid such a future where weak patents harm competition, innovation, and fail to facilitate commercialization essential to innovation.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I like how you linked to Professor Kieff’s article, which sits on an IPcentral server. Check the URL on your link above.

    I don’t see how setting up the analogy by Ed Felten is particularly relevant. But if you’re into analogies all of a sudden, compare source code to food ingredients, then walk into a fancy bisto and demand the list of ingredients/recipes for their top dishes. And tell them how knowing the ingredients and recipes will help you improve on their product, manifest your freedom to tinker and argue how peer production will replace all 4 star bistors in the future.

    In any case, since you *often* put up TLF posts on articles *after* reading my reviews on IPcentral, here is the one for Professor Kieff’s article:

    *******
    PFF Academic Advisory Council member, F. Scott Kieff, a Research Fellow at the Hoover Institution and law professor at Washington Univ, has released a comment on the proper direction for patent reform.

    Kieff argues that patent system reform can increase competition and innovation by facilitating strong, enforceable, patents. For the patent system to enable the creation and diffusion of new technologies, patent validity-infringement-injunction rules must provide patent owners, especially small-independent inventors, the credible option of enforcing exclusivity. In making his proposal, Kieff addresses current reform discourse that would weaken patents, and consequently exacerbate rather than solve anti-competitive effects and blocking of downstream access to inventions.

    When patents are not enforced by a strong right to exclude, the patentee’s incentives to enter into deals are disrupted. Court-awarded damages in general often are seen to under-compensate for harms compared to the price a property owner would receive for selling permission to infringe, which is typically why the infringer decides to infringe in the first place.

    A central aspect of Kieff’s argument is that the main function of the patent system is not merely to induce invention, but to facilitate the risk taking and transactions necessary for commercializing them. The commercialization theory of patents aims to diffuse inventions broadly and rapidly into society. It recommends a patent landscape where patents are “enforced with clear and robust rules, providing a strong right to exclude,” and can “serve an essential coordinating role in facilitating the complex process of getting inventions commercialized.”

    Commercializing inventions requires the participation of many parties, such as makers of complementary technologies, financers, manufacturers and distributors. Strong patents facilitate interaction among these parties, first, by allowing a centralized point around which coordination and negotiation can occur, and second, by a bargain effect, which gives incentive for actors to strike deals and enables some predictability for investment backed ventures.

    Patent system reform entailing the proliferation of weak patents, in contrast, would decrease competition, close-off access to inventions and encourage patenting for reasons such as defensive stock-piling.

    One of the justifications behind proposals to weaken patents is the belief that strong patents may create an “anti-commons,” which raises transaction costs for innovators who need to clear rights in order to commercialize their inventions. Kieff argues that weak patents would simply extend the problem they seek to resolve.

    …a US patent owner does not have…incentive to avoid open transactions. Transactions over patents… are important in monetising the value of the patent… patentees have a strong incentive to encourage use.

    Refusing to enforce patents when there is a breakdown in negotiations would suffer a fundamental circularity that would create perverse, harmful incentives. If the ability to avoid the injunction hinged upon the failure of a deal getting done, then there would be a markedly increased incentive for those wanting to obtain use through court-ordered terms to resist striking licensing deals. A legal test that rewards a failure to cooperate would lead to a decrease in cooperation, not an increase.

    Kieff predicts that reform proposals for weak patents would result in a “keiretsu” patent landscape. Keiretsu refers to large conglomerates in Japan, where the patent system is full of weak patents. Keiretsu leverage a system of weak patents to maneuver through transaction costs and litigation that smaller competitors cannot withstand, without fear of debilitating losses. What enables the keiretsu model is that “only weak patents be available, because strong patents could end up as the slingshots able to take down the Goliaths.” Lets avoid such a future where weak patents harm competition, innovation, and fail to facilitate commercialization essential to innovation.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, this is one of the most biizzaarree posts you ever done. I might send it to Professor Kieff.

    Did you catch my note about the source code-food ingredient analogy?

  • http://weblog.ipcentral.info/ Noel Le

    Tim, this is one of the most biizzaarree posts you ever done. I might send it to Professor Kieff.

    Did you catch my note about the source code-food ingredient analogy?

  • http://weblog.ipcentral.info/ Noel Le

    Tim may take a while to approve my first comment, given his busy schedule, so I’ll repost. I feel its proper since Tim linked to the copy of Professor Kieff’s article sitting on IPcentral’s server, which I set up to write my review, and he did not even mention my review, which is a bit more considered than his write-up.

    In any case, if we’re going to make oddball analogies such as this one taken from some writings by Professor Felten, consider source code as food ingredients and recipes. Imagine that the typical FOSS supporter walked into a restaurant and demanded to know the ingredients and recipes for items on the menu. When asked why, he replies that it is essential to freedom an anti-monopolistic sentiment that he be privy to the secret recipes of the restaurant. When asked what he would do with the list of ingredients and the recipes, he replies that he’ll improve upon what the restaurant has created, and that one day, four star restaurants would be moot because peer-production will top all dining establishments. When told that the restaurant needs to make money, and thus cannot give away its ingredients and recipes, our FOSS hero replies that the restaurant can always make money leasing out seats and tables, and that waitors can perform acts or play musical instruments to receive tips.

    There is a certain limit to analogies, that’s patently obvious. Its hardly something to critique a law review on patent theory by.

    PFF Academic Advisory Council member, F. Scott Kieff, a Research Fellow at the Hoover Institution and law professor at Washington Univ, has released a comment on the proper direction for patent reform.

    Kieff argues that patent system reform can increase competition and innovation by facilitating strong, enforceable, patents. For the patent system to enable the creation and diffusion of new technologies, patent validity-infringement-injunction rules must provide patent owners, especially small-independent inventors, the credible option of enforcing exclusivity. In making his proposal, Kieff addresses current reform discourse that would weaken patents, and consequently exacerbate rather than solve anti-competitive effects and blocking of downstream access to inventions.

    When patents are not enforced by a strong right to exclude, the patentee’s incentives to enter into deals are disrupted. Court-awarded damages in general often are seen to under-compensate for harms compared to the price a property owner would receive for selling permission to infringe, which is typically why the infringer decides to infringe in the first place.

    A central aspect of Kieff’s argument is that the main function of the patent system is not merely to induce invention, but to facilitate the risk taking and transactions necessary for commercializing them. The commercialization theory of patents aims to diffuse inventions broadly and rapidly into society. It recommends a patent landscape where patents are “enforced with clear and robust rules, providing a strong right to exclude,” and can “serve an essential coordinating role in facilitating the complex process of getting inventions commercialized.”

    Commercializing inventions requires the participation of many parties, such as makers of complementary technologies, financers, manufacturers and distributors. Strong patents facilitate interaction among these parties, first, by allowing a centralized point around which coordination and negotiation can occur, and second, by a bargain effect, which gives incentive for actors to strike deals and enables some predictability for investment backed ventures.

    Patent system reform entailing the proliferation of weak patents, in contrast, would decrease competition, close-off access to inventions and encourage patenting for reasons such as defensive stock-piling.

    One of the justifications behind proposals to weaken patents is the belief that strong patents may create an “anti-commons,” which raises transaction costs for innovators who need to clear rights in order to commercialize their inventions. Kieff argues that weak patents would simply extend the problem they seek to resolve.

    …a US patent owner does not have…incentive to avoid open transactions. Transactions over patents… are important in monetising the value of the patent… patentees have a strong incentive to encourage use.

    Refusing to enforce patents when there is a breakdown in negotiations would suffer a fundamental circularity that would create perverse, harmful incentives. If the ability to avoid the injunction hinged upon the failure of a deal getting done, then there would be a markedly increased incentive for those wanting to obtain use through court-ordered terms to resist striking licensing deals. A legal test that rewards a failure to cooperate would lead to a decrease in cooperation, not an increase.

    Kieff predicts that reform proposals for weak patents would result in a “keiretsu” patent landscape. Keiretsu refers to large conglomerates in Japan, where the patent system is full of weak patents. Keiretsu leverage a system of weak patents to maneuver through transaction costs and litigation that smaller competitors cannot withstand, without fear of debilitating losses. What enables the keiretsu model is that “only weak patents be available, because strong patents could end up as the slingshots able to take down the Goliaths.” Lets avoid such a future where weak patents harm competition, innovation, and fail to facilitate commercialization essential to innovation.

  • http://weblog.ipcentral.info/ Noel Le

    Tim may take a while to approve my first comment, given his busy schedule, so I’ll repost. I feel its proper since Tim linked to the copy of Professor Kieff’s article sitting on IPcentral’s server, which I set up to write my review, and he did not even mention my review, which is a bit more considered than his write-up.

    In any case, if we’re going to make oddball analogies such as this one taken from some writings by Professor Felten, consider source code as food ingredients and recipes. Imagine that the typical FOSS supporter walked into a restaurant and demanded to know the ingredients and recipes for items on the menu. When asked why, he replies that it is essential to freedom an anti-monopolistic sentiment that he be privy to the secret recipes of the restaurant. When asked what he would do with the list of ingredients and the recipes, he replies that he’ll improve upon what the restaurant has created, and that one day, four star restaurants would be moot because peer-production will top all dining establishments. When told that the restaurant needs to make money, and thus cannot give away its ingredients and recipes, our FOSS hero replies that the restaurant can always make money leasing out seats and tables, and that waitors can perform acts or play musical instruments to receive tips.

    There is a certain limit to analogies, that’s patently obvious. Its hardly something to critique a law review on patent theory by.

    PFF Academic Advisory Council member, F. Scott Kieff, a Research Fellow at the Hoover Institution and law professor at Washington Univ, has released a comment on the proper direction for patent reform.

    Kieff argues that patent system reform can increase competition and innovation by facilitating strong, enforceable, patents. For the patent system to enable the creation and diffusion of new technologies, patent validity-infringement-injunction rules must provide patent owners, especially small-independent inventors, the credible option of enforcing exclusivity. In making his proposal, Kieff addresses current reform discourse that would weaken patents, and consequently exacerbate rather than solve anti-competitive effects and blocking of downstream access to inventions.

    When patents are not enforced by a strong right to exclude, the patentee’s incentives to enter into deals are disrupted. Court-awarded damages in general often are seen to under-compensate for harms compared to the price a property owner would receive for selling permission to infringe, which is typically why the infringer decides to infringe in the first place.

    A central aspect of Kieff’s argument is that the main function of the patent system is not merely to induce invention, but to facilitate the risk taking and transactions necessary for commercializing them. The commercialization theory of patents aims to diffuse inventions broadly and rapidly into society. It recommends a patent landscape where patents are “enforced with clear and robust rules, providing a strong right to exclude,” and can “serve an essential coordinating role in facilitating the complex process of getting inventions commercialized.”

    Commercializing inventions requires the participation of many parties, such as makers of complementary technologies, financers, manufacturers and distributors. Strong patents facilitate interaction among these parties, first, by allowing a centralized point around which coordination and negotiation can occur, and second, by a bargain effect, which gives incentive for actors to strike deals and enables some predictability for investment backed ventures.

    Patent system reform entailing the proliferation of weak patents, in contrast, would decrease competition, close-off access to inventions and encourage patenting for reasons such as defensive stock-piling.

    One of the justifications behind proposals to weaken patents is the belief that strong patents may create an “anti-commons,” which raises transaction costs for innovators who need to clear rights in order to commercialize their inventions. Kieff argues that weak patents would simply extend the problem they seek to resolve.

    …a US patent owner does not have…incentive to avoid open transactions. Transactions over patents… are important in monetising the value of the patent… patentees have a strong incentive to encourage use.

    Refusing to enforce patents when there is a breakdown in negotiations would suffer a fundamental circularity that would create perverse, harmful incentives. If the ability to avoid the injunction hinged upon the failure of a deal getting done, then there would be a markedly increased incentive for those wanting to obtain use through court-ordered terms to resist striking licensing deals. A legal test that rewards a failure to cooperate would lead to a decrease in cooperation, not an increase.

    Kieff predicts that reform proposals for weak patents would result in a “keiretsu” patent landscape. Keiretsu refers to large conglomerates in Japan, where the patent system is full of weak patents. Keiretsu leverage a system of weak patents to maneuver through transaction costs and litigation that smaller competitors cannot withstand, without fear of debilitating losses. What enables the keiretsu model is that “only weak patents be available, because strong patents could end up as the slingshots able to take down the Goliaths.” Lets avoid such a future where weak patents harm competition, innovation, and fail to facilitate commercialization essential to innovation.

  • http://www.digitalproductions.co.uk Crosbie Fitch

    The GPL does not violate your right to privacy or commercial secrets.

    A pizza restaurant can take some GPL code for industrial oven control, modify it to make the perfect pizza, keep it secret, and even Richard Stallman himself, if he sat at a table, would not be able to demand or claim the right to obtain the source code from the pizza restaurant.

    The GPL nullifies copyright and patents, not your right to privacy.

  • http://www.digitalproductions.co.uk Crosbie Fitch

    The GPL does not violate your right to privacy or commercial secrets.

    A pizza restaurant can take some GPL code for industrial oven control, modify it to make the perfect pizza, keep it secret, and even Richard Stallman himself, if he sat at a table, would not be able to demand or claim the right to obtain the source code from the pizza restaurant.

    The GPL nullifies copyright and patents, not your right to privacy.

  • http://www.techliberation.com/ Tim Lee

    Noel, some of your colleagues have been known to complain when I criticize posts on IPCentral, so I thought perhaps y’all would rather I not link to you. But I’ve gone ahead and added a link. My apologies for the oversight.

  • http://www.techliberation.com/ Tim Lee

    Noel, some of your colleagues have been known to complain when I criticize posts on IPCentral, so I thought perhaps y’all would rather I not link to you. But I’ve gone ahead and added a link. My apologies for the oversight.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I was just having fun with you using our server space!

    Its in the spirit of *debate* to engage you when you criticize posts on IPcentral. Otherwise, (at least I) would just ignore it.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I was just having fun with you using our server space!

    Its in the spirit of *debate* to engage you when you criticize posts on IPcentral. Otherwise, (at least I) would just ignore it.

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