Wednesday, September 8, 2010

For Innovation’s Sake, Close the Patent Office

I’m starting to worry about the pace of invention. In our capitalist system, people get patents so that they can exploit their inventions for a number of years to amortize the cost of inventing them. But suppose that no matter what you invented, something better would be invented a year or two later. Would you become an inventor?

Do you remember “planned obsolescence”? In Democracy in America (1840), Alexis de Tocqueville wrote: "I accost an American sailor, and I inquire why the ships of his country are built so as to last but for a short time; he answers without hesitation that the art of navigation is every day making such rapid progress, that the finest vessel would become almost useless if it lasted beyond a certain number of years."

In De Tocqueville’s example, at least someone was profiting from the advances in navigation that made durable ships uneconomic. But what about the advances in navigation themselves? Apparently, they were not happening so quickly that they, themselves, were not profitable. But wasn’t that clearly a matter of historical contingency, something that may or may not have been true?

There’s a bit of Yogi’s Paradox here: “Nobody goes there any more – it’s always too crowded.” The reason not to invent is that someone will come along and invent something better too soon. But why would superseding inventions arise if they, too, will quickly obsolesce? We end up in a sort of temporal tragedy of the commons, where, at first, too many people invent because inventing is profitable, and then nobody invents because too many people are inventing.

Ordinarily, we think in terms of things taking too long to be practical. But some people rely on things not happening too quickly, and that group consists largely of innovators. There is no reason to believe that more and more things will happen too quickly for those who depend on their not doing so.

Well, actually, there is a reason: the law of diminishing returns. It should be getting harder and harder to think up new things, and I suppose if one measured the pace of invention in computer cycles, the law might hold. But Moore’s Law has so far outpaced the law of diminishing returns. With computers thinking in teraflops, and many of the innovations improving the platforms used for innovation itself (think human genome project), we may be closer to the day when invention is uneconomic because obsolescence looms than because the work is too difficult.

Barriers to entry are an important part of any new business’s plan. What, the venture capitalist wants to know, is your unique value proposition? A patent used to be a pretty good barrier to a competitor’s entry. But now, considering how quickly people can invent ways to do things, one has to think twice about that.

The problem compounds itself at the consumer level. Why buy this year’s technology when you can have next year’s by waiting only a year? Once, believe it or not, there was no “next year’s technology.” For how many years was TV black and white? Or analog, with a 4:3 aspect ratio? Then, boom. My two-year old flat plasma won’t connect to the internet or run apps, and it only has three colors, not four, and it’s only 2-D. I don’t want to buy a new set now, both because I want to amortize the cost of the one I own and because a new one won’t have smell-o-vision, or whatever the hell else is next. If there is a next. So now the inventor thinks “Why bother to invent if no one will buy my invention for fear it will become obsolete?”

Obviously, we can’t close the patent office and declare a moratorium on invention. At least not yet. But I’m not sure that it would be a bad idea to limit patent filings to one-year windows every five years or such so that an inventor could count on making a few bucks on a good mousetrap before a better one comes along.

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