0spinboson's Reviews > Against Intellectual Monopoly

Against Intellectual Monopoly by Michele Boldrin
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Jun 14, 10

Read in February, 2010

With this book the authors powerfully rebut an idée fixe that seems to pervade most of Western society: namely, that creativity and innovation can only occur in a legal culture that places many restrictions on the kinds of innovation that are allowed (by granting patent applications that claim entire product classes), resulting in enormous amounts of money being spent on developing sufficiently dissimilar rival products -- that is, reinventing the wheel.
If this sounds as though there might be something odd about this idea, that's because there is. Apparently granting monopolies does fosters neither innovation, nor creativity -- rather, it stifles it. One could easily make the argument, after all, that an author or inventor will be encouraged to do nothing the rest of his life after (s)he has written a single best-selling work as you could argue the opposite.
One of the strongest conceptual arguments they offer is the (historical) fact that IPRs are really always only granted years to decades after an industry is established, by which time it has amply proven that the market offers adequate incentive for companies to invest in it. (What's more risky, after all, than setting up a company in an entirely new industry?) Once a company has gained size, they can use the they (and their employees) 'needed' patent protections, even though they had obviously managed to grow to their current size without protection, surviving the competition and mutual borrowing practices without major problems.
And after they've gained their protection, they can effectively rest on their laurels (innovation speed generally decreases, or at best stays the same as before), and force competitors who can't contribute to patent pools out of business, as well as keeping new entrants from establishing a foot-hold through patent litigation, which basically makes them legalized cartels. So once a few companies hold a large amount of patents, they will be in the position to threaten/sue out of business, every smaller competitor, after which no new companies will have a chance to enter the field unless they are already larger than those companies.
Furthermore, because of patents, rather than spending R&D money innovating a current generation of a product, either your own or a competitors, you will be forced to research until you find a marketable product that is not encumbered by a patent held by one of your competitors. This enormously increases R&D costs with very little benefits, except for the companies holding the patents.

The authors do a great job, using lots of empirical/historical data, convincing their readers of the fact that, in almost all cases, intellectual property rights are superfluous at best, and usually detrimental.
I found this book a lot of fun to read: it steadily chips away the foundations beneath a lot of arguments you are likely to have heard from the industry and lawyers/judges, who believe that a world without IPR is an innovation-less world. Read it!
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