Is The Patent System Relevant?


HuffPost; new legislation passed by house of representatives

 

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I was recently interviewed by Dr. Amy Vanderbilt for the TrendPOV show.  The question was “Is The Patent System Relevant”.  The directness of the question is interesting; where the null hypothesis is that the Patent System is irrelevant.  Second; it is interesting that she would interview me! After all, I own no successful patents, not for lack of trying and perhaps as a result, I commit my work entirely to the public domain.   Also surprising is that I neither encounter other people’s patents nor do I require patents of my own for what I do.    

Here is a link to that Interview with Dr. V 

The following are some supporting research and preparation material that I put together for the Interview

As a matter of perspective;  The software industry claims to have a net negative monetary relationship with the patent system.  While my work is not directly associated with software, it is directly associated with the “soft” assets such as knowledge, innovation and wisdom of people and teams of people which are served by “software”.  Maybe this chart explains a few things.

Here’s a growth plan; Let’s Argue!!

There are many arguments for and against the patent system, the most compelling argument in favor include the notion that in a Capitalist system, the guaranteed monopoly is somehow an incentive for entrepreneurs to innovate. 

Arguments against the patent system include the idea that unfair advantage is given to wealthy corporations and has little to do with innovation; except innovation in the means and methods of stifling both competition and collaboration.  In many industries such as automotive and aviation, everyone is suing each other uniformly.  One would suspect that collaboration must be more efficient.

It’s especially worrisome when you hear both arguments stated by the same person.  Most corporate CEOs will fight valiantly on the field of patent litigation in protection of profits.  However, the source of those patents – the creative people who actually invent things are given the choice of either abandoning their IP rights or their jobs, in perpetuity.  It is important to consider the incentives.

Incentive to Dictate, not Innovate

The idea of a monopoly position is clearly more consistent with the art and science of dictatorship and oppression than any recognizable form of Capitalistic incentive to innovate.  I say this somewhat in jest, because corporations are a very important for of community organization for producing things that people need (or not).  However, corporations may no longer be the only form of social organization that can produce things that people need.  

Patents are important for transforming intangible assets into tangible assets.  Tangible assets are a class of financial instrument that can be capitalized, securitized, diversified, and used as collateral on debt.  Patents are also dependent on a functional legal system and associated enforcement tools – which are ALL public institutions funded by intangible asset production.  Funding of patents is dependent on money; which is also a “public traded” institution.

The irony is that patents support tangibility of intangibles, but those intangible are what actually support the patent system.  Herein lies the vulnerability of the patent system as we now know it – whoever figures out how to bypass this loop will release value directly into an economy eliminating friction and delivering immense efficiencies of scale.  As soon as someone figures out how to transfer intangibles directly into a value creation framework, then the idea of a corporation, and the assets that they securitize will be altered forever.   

So what if people could organize themselves?

Like the first Goddard Rocket, Occupy Wall Street was a trial run at the moon landing.  All the tools and technologies are emerging in social media like scaffolding.  Open source innovation is hanging all the parts on this scaffolding that emulate the functions of corporations.

The Ingenesist project has developed a novel business method called the value game which flips Capitalism over on it’s back.  It’s still Capitalism because everyone is playing to win an outcome in his or her own best interest – but flipped none-the-less.  The primary difference is that the competing elements of capitalism are simply converted to cooperating forces of Social Capitalism.  The resources wasted in producing losers, is converted directly to efficiency gained in net productive output.

Converting social capital to financial capital; and vice-versa

This is significant.  We are currently deploying a value game to a high-rise condominium renovation project where the home owners, the contractors, the engineers, and even the neighborhood are interacting in a value game where it’s in everyone’s best interest that the others are successful.  The project is valued at 2.5 million dollars so real money is in play and real people are playing what would formally be called a Multi-Agent, Algorithmic Game. 

The Value Game sets up a new body of incentives that drive data, information, knowledge, innovation, and wisdom towards preservation of a shared tangible asset.  When everyone depends on everyone else and they share data instead of trying to form some sort of monopoly, they create “the secret sauce” that “produces” things.  This is the exact same outcome as a corporation except without the corporation….or all those pesky patents. 

This is real, this is happening today, we have been able to convert social capital directly into financial capital and convert financial capital directly into social capital – now listen closely; we do this ALL without an overreaching corporation in place. 

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