Brunel on Patents

In emulation of Arnold Kling, a quotation with discussion question —

The quotation is from the 1851 memoirs of the Victorian engineer Isambard Kingdom Brunel, arguing against the patent system:

I believe that the most useful and novel inventions and improvements of the present day are mere progressive steps in a highly wrought and highly advanced system, suggested by, and dependent on, other previous steps, their whole value and the means of their application probably dependent on the success of some or many other inventions, some old, some new. I think also that really good improvements are not the result of inspiration; they are not, strictly speaking, inventions, but more or less the results of an observing mind, brought to bear upon circumstances as they arise, with an intimate knowledge of what already has been done, or what might now be done, by means of the present improved state of things, and that in most cases they result from a demand which circumstances happen to create.

Question: is Brunel's contention more or less true today than it was in his own time, and why? More generally, are the consequentialist arguments for patents stronger or weaker now than they were then?

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Steve, you make a good point

Steve, you make a good point that as technology advances a patent holder (and the public at large) is best served by many and inexpensive licenses. However, there is a very high fixed transaction cost for licensing technology. IP lawyers charge quite a bit for their time and being on the losing end of an infringement suit is potentially catastrophic. It is entirely possible that the cost of licensing exceeds the benefit of the technology itself, in which case technology is underutilized and innovation is stifled. It is my impression that this is the case in the computer industry where most IP is used either defensively or as a mercenary weapon rather than as a product that is created to produce value.

I think Mr Warbiany brings

I think Mr Warbiany brings up a good point but I think he also misses one. The speed of technological advancement has increased dramatically, but that increased speed also means that the length of the patent protection doesn't matter nearly as much. A patent is granted for exclusive licensure not production itself. The rate of gain in technology seems to imply that the value of the patent is rapidly decreasing, it is unlikely to be nearly as valuable at the 17 year mark as it is when issued. In order to maximize the return on their research, a patent holder would be best served by issuing many and inexpensive licenses. Overly broad patents, however, could easily prevent substitutes.

My gut instinct would state

My gut instinct would state that the patent protections don't need to be weakened, but the term does. 17 years on a patent, in our world, is a lifetime. Because of technology and communication, the speed of technological increase is occurring too quickly to grant exclusive patent licensing for 17 years.

I think, ironically, that

I think, ironically, that the arguments presented by Mr. Brunel were, in some ways, arguments for why a patent system might exist in the first place. After all, while patents are intended to allow a system whereby an inventor may be rewarded for their work, it also makes their invention publicly available for other inventors to build upon. Before such a system was in place it seems that the only way to protect the knowledge of one's invention was to make the entire process as secretive as possible, only passing along the secrets of creation through trusted apprentices or "society" of other industrial professionals who would all maintain the secrecy of production.

The patent system, on the other hand, seems to have been put into place to encourage openness in the inventive process by providing limited, exclusive, reward for the inventor for making their work openly available. I think the question becomes is the patent process (and even copyright to some extent) as it exists in modern society fostering creative invention or is it hindering it? Does it provide incentive to publicly innovate through protected rewards, or does it no longer serve that purpose?

I'm curious whether the

I'm curious whether the current system provides much incentive for would-be inventors to actually read others' patents in order to get ideas for patentable improvements, at least in fields like software.

If there are only a few players in an industry, with a high barrier to entry, and a small set of well-known patents, then the consequentialist argument in favor of patents seems fairly strong. There's little risk of "accidental" subsequent independent re-invention landing you with liability for infringement. Everybody knows what's off-limits, so it's probably fruitful to examine patent disclosures for new ideas.

If there are a lot of players in an industry, with a fairly low barrier to entry, and a whole lot of obscure patents on comparatively straightforward inventions, it seems prudent to err on the side of caution. Odds are decent that no matter what you do, you'll be infringing on somebody's patent. Better that you do so innocently and not be liable for the damages associated with willful infringement. It would seem prudent to avoid reading any patents at all, lest you be "tainted." Maybe pick up a big enough portfolio of counter-patents so you can beat back anyone who tries to extort you with something they bought at an IP fire sale.

To the extent that the description in the previous paragraph accurately reflects some fields of endeavor (which is certainly debatable), it seems as though there is not much incentive for an inventor to make use of the information that patents make public. I believe this substantially weakens the consequentialist argument in favor of patents in these sorts of fields.