From: Michael S. Lorrey (retroman@together.net)
Date: Mon Feb 22 1999 - 07:41:37 MST
CurtAdams@aol.com wrote:
> Twice in the 19th century (Netherlands 1830s to 1850s and Switzerland 1870s
> to 1890s) patent laws were repealed mostly for ideological reasons (ideas
> should be free, etc.) In neither case did technological innovation decrease.
> In Switzerland this coincided with a spectacular increase in chemical industry
> innovation which resulted in the Swiss chemical and pharmeceutical industries.
> Once they got large, of course, the new companies lobbied patent laws back
> in, ostensibly to protect research (in spite of their own impressive
> achievements without patents) but more plausibly to protect themselves from
> competition.
You haven't included any information about the capital markets in these countries
during this period. The main argument for patents is as security to obtain
capital, and to establish a capacity to pay back capital without competetive
pressures diluting the firm's ability to do so. At first glance I would venture to
say that the reason those countries ended their experiments with no patent laws
was because too many of their businesses were either patenting in other countries
anyways and were not manufacturing in the patentless countries, or the companies
were losing the rights to their own products in countries which kept patent laws,
as competitors were patenting their products. The third reason would have been
because investors found that the payback on patentless products was not as great
as patented ones...
I would also imagine that those countries started seeing a lack of imports of new
technology, as companies were afraid of firms in those countries steal their
knowledge. If India were a shining light of modernity and industrialization, I
might put some credence to the anti-patent argument. But they have not gone
anywhere near their potential. Their GDP has stagnated and unemployment is now 1/3
of the population. They are an economic basketcase. China is enough better that
they have a useful system, even though to get patent protection it costs a lot of
money in bribes... The so called 'pirate software' industry is mostly just a
scheme by which large software producers can avoid taxes....
Mike Lorrey
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