cat -v harmful stuff

Quotes on Patents - League for Programming Freedom (LPF)

From: (Sean Batt)
Subject: Quotes for patent office RFC 
Date: 12 Jul 91 06:54:41 GMT
Organization: Computer Services Centre, Australian National University

Here a few (mostly historical) quotes that may be of use in preparing
a submission to the U. S. Patent Office Request for Comments.

Many go well beyond the scope of software patents and look at the
economic effects of the entire patent system.  There are also a few
extracts from various official documents.  Other quotes look at
intellectual property in its broadest form.  And a few quotes exist
that are just good fun.

With a bit more typing I might be able to fill an "intellectual
property magic cookie jar".

Many of the quotes have been lifted from the painstaking research that
Edith Penrose and Fritz Machlup performed at John Hopkins University
in the 1950s.

I would have liked to have spent a bit more time proof reading them,
and checking the attributions.  But it is probably more important that
I get them out now - comments are due this Monday.

                                      Gordon Irlam

N.B. I agree with the conclusions of nearly all the quotes - but not
     always the reasoning.


     Paraphrasing Orwell.  Modern public discourse has become rigid
     like a childs' Mecano set, it consists of the bolting of standard
     phrases together that are known to produce desired emotional
     responses.  The reader is not required to think about what is
     written, indeed, the reader is required not to think about what
     is written.  Instead the reader is expected to focus upon the
     style with which the information is presented.

     Getting a good sound-bite is more important than the content.

     [Has television made for more reasoned public discussion, or has
     it made such discussion more difficult?]

     Unfortuantely Orwell is right - would you be reading this if it
     was a 20 page article on economic aspects of the patent system?

     If you can't beat them, join them.


The advantages ... [of not having patents] in the machine industry
generally, lie less in the free use of developments themselves, than
in the free scope for engineers in general.  With great complicated
machinery, individual, perhaps not very essential, parts can be
patented, thus preventing a complete and perhaps much more valuable
construction and forcing better engineers to an exacting study of all
such little patents.

    -- Bureau der Kaufmannischen Gesellschaft Zurich, 1886.


Watt refused applications for licenses to make engines under his
patent: he discouraged experiments by Murdoch with locomotive models;
he was hostile to the use of steam at high pressure; and the authority
he wielded was such as to clog engineering enterprise for more than a
generation.  If his monopoly had been allowed to expire in 1783
England might have had railways earlier.  If a similar privilege had
been extended to Arkwright - if, indeed, his wide patents had not been
annulled in 1781-5 - it is at least possible that a dead hand might
have rested on the cotton industry also, and that forces tending to
raise the standard of life of the poor would have been stifled.

    -- Ashton T.S.,
       An Economic History of England: The 18th Century.


In the electronics industry, patents are of no value whatsoever in
spurring research and development.

    -- vice-president of Intel Corporation,
       Business Week, 11 May 1981.


Few writings on the subject of intellectual property expose the
circular and issue begging use constantly made of the word 'property'.
'Property', of course, means little more than legal protection for a
claim made by a person.  It usually refers to the guarantee of an
entitlement to exclude.  The reasons for finding such an entitlement
necessitate, in intellectual property law as in all other areas of
law, an enquiry as to whether the conditions of protection are met.
But whatever the precise definition of 'property', the point here is
that it is not 'reason' to say that something deserves protection
because it is 'property'; 'property' is a shorthand description for a
'conclusion' of law.  It is meaningless, for example, to claim
protection on the ground that one has 'natural property rights' in
something.  Land and moveable goods are commonly called 'property'
because they are typical subjects over which exclusive rights are
recognized by law, but whenever the existence or extent of a right to
exclude is challenged no assistance is gained by stating that one's
interest is 'property'.  Particularly must all fog be lifted for the
next few years when some copyright law reform in Canada may reasonably
be expected.  Wringing hands or raising voices over 'expropriation of
property' or 'piracy' or quoting the eighth commandment, will not
contribute to the settlement of issues beyond providing an
inarticulate point of view, without reasons, on policy questions
concerning both the fact and form of incentive to be provided to

    -- Bruce C. McDonald,
       Canadian Bar Review, vol. XLVII, 1969, p.  145.


It is indeed an entire climate and environment that must be sought --
an environment characterized by good access to information of all
kinds, intellectual curiosity, eagerness to learn, speculative
thinking, experiment, enterprise and the entrepreneurial spirit.  To
obtain all this, there must be efficient distribution as well as
production of knowledge, information and innovation -- a spreading
about of these things.  From this process will derive the kind of
advancing society that benefits, firstly, consumers; secondly,
artists, researchers, inventors and other creative people; and
finally, and very importantly, the highly essential "innovative
entrepreneurs" in between.


On the whole, it is hard not to emerge from this analysis with the
assessment that, as a means of encouraging industrial innovation in
Canada, whether based on domestic inventions or on foreign inventions,
plus rapid "technology transfer" into Canada, the existing patent
system has not been an outstanding success. ... Looking at patents as
an international system, there is a presumption that we are carrying
too large a proportion of the costs of the system in relation to the
proportion of the benefits that we receive.


It is often pointed out that in the United States, the rights of
authors and inventors are enshrined in the Constitution.  That
document does indeed deal with such rights, but the context and
language of the relevant passage are worth noting.  The passage occurs
not in the Bill of Rights, but in the enumeration of the powers of the
Congress, which are stated to include, among other things, the power
"... to promote the Progress of Science and useful Arts, by securing
for limited times to Authors and Inventors the exclusive Right to
their respective Writings and Discoveries...."  In other words, a
limited right is granted in order to promote a stated social end.

    -- Report on Intellectual and Industrial Property,
       Economic Council of Canada, 1971.


On the basis of the review and analysis contained in this first part
of the working paper it is evident that Canada should give serious
consideration to the possibility of abandoning the continued
maintenance of a patent system in any form.

    -- Working Paper on Patent Law Revision,
       Canadian Department of Consumer and Corporate Affairs, 1976.


The Patent System as it stands today has to a considerable extent
"just growed", without much reference to fundamental principles,
escaping the social planning of men into unexpected byways ...


[Discussing patents in the 17th century.]  The public outcry against
these restrictive and privileged monopolies, covering as they did,
such daily necessities of life as salt, oils, vinegar, starch and
saltpeter was loud and persistent.  Under these early grants patentees
had extensive powers of control.  They could search the premises of
alleged infringers and seize their goods.  These powers were
frequently exercised with considerable violence, high-handedness and
irresponsibility, and they intensified the popular resentment against
the entire system.


Up to the present, the regime for the international protection of
patent rights has been developed primarily in the interests of
patentees.  The gains to be derived from an extension of the patent
system have been stressed, but the concomitant increase in social
costs has been seriously neglected.

    -- E. Penrose,
       The Economics of the International Patent System, 1951.


In my specification I mention no particular salt, but reserve myself
the choice of whatever salt I find by experience to answer my purposes
best ... I cannot determine precisely which is best for these
purposes, but apprehended I am at liberty to use any, or either, or
several of the same, in preparing my powder.

    -- R. James, 1750.


That ideas should freely spread from one to another over the globe,
for the moral and mutual instruction of man, and the improvement of
his conditions, seems to have been peculiarly and benevolently
designed by nature, when she made them, like fire, expansible over all
space, without lessening their density in any point, and like the air
in which we breathe, move, and have our physical being, incapable of
confinement of exclusive appropriation.  Inventions then cannot, in
nature, be a subject of property.

    -- T. Jefferson,
       Letter to Isaac McPherson, 1813.


Article 19

Everyone has the right to freedom of opinion and expression; this
right includes freedom to hold opinions without interference and to
seek, receive and impart information and ideas through any media and
regardless of frontiers.


Article 27

1. Everyone has the right freely to participate in the cultural life
of the community, to enjoy the arts and to share in scientific
advancement and its benefits.

2. Everyone has the right to the protection of the moral and material
interests resulting from any scientific, literary or artistic
production of which he is the author.

    -- Universal Declaration of Human Rights.
       United Nations, 1948.


2.  Everyone shall have the right to freedom of expression; this
    right shall include freedom to seek, receive and impart
    information and ideas of all kinds, regardless of frontiers,
    either orally, in writing or in print, in the form of art, or
    through any other media of his choice.

    -- Article 19,
       International Covenant on Civil and Political Rights.


1.  The States Parties to the present covenant recognize the right of

  (a) To take part in cultural life;

  (b) To enjoy the benefits of scientific progress and its applications'

  (c) To benefit from the protection of the moral and material interests
      resulting from any scientific, literary or artistic production of
      which he is the author.

    -- Article 15,
       International Covenant on Economic, Social and Cultural Rights.


3. All States shall take measures to ensure that scientific and
technological achievements satisfy the material and spiritual needs of
all sectors of the population.


5. All States shall co-operate in the establishment, strengthening and
development of the scientific and technological capacity of developing
countries with a review to accelerating the realization of the social
and economic rights of the peoples of those countries.

    -- Declaration on the Use of Scientific and Technological Progress
           in the Interests of Peace and for the Benefit of Mankind,
       United Nations, 1975.


The subjects, or citizens of each of the contracting states shall
enjoy, in all the other States of the Union, so far as patents ... are
concerned, the advantages that ... [the law grants] to their own
nationals.  Consequently they shall have the same protection as the
later, and the same legal remedy against any infringement of their
rights ...

    -- Article 2,
       [Paris] Convention for the Protection of Industrial Property, 1883.


Patents as an instrument to stimulate innovative activities appear to
be of little relevance for small firms.  It was found that no
significant changes in R and D behavior would take place if the patent
protection time were reduced or extended.  Also, for large firms, the
R and D behavior seems to be rather independent of the availability of
patent protection.  The survey showed that increased patent protection
time is likely to provide, at most, a modest stimulus for R and D
activities.  Chemical, and particularly pharmaceutical, firms appear
to be more sensitive to such changes.

    -- O. Granstrand,
       The use of patents for the protection of technological
           innovation: A case study of selected Swedish firms
       [A commissioned report for the]
       UN Conference on Trade and Development Secretariat, 1990.


The general picture emerging from our sample regarding restrictive
provisions is therefore that the majority of licensors limit the
markets available to their licensees as a fairly common feature of
their agreements, and in particular attempt to limit competition in
their home markets through selective licensing and export restrictions
on foreign licensees.  Limitations on the quality of output under
license and on uses for which licensed products are sold and for which
licensed processes are used are also very common, but these are said
to refer almost always to misuse or lowering of standards, and are
essentially intended to protect the reputation of the patentee.

    -- The Economic Impact of the Patent System,
       Cambridge University Press, 1973.


              Main Sources of Technological Information
            for Engineers Involved with the Patent System

                       Source               Percent

                Technical and trade journals  38.0
                Informal contact with
                    other organizations       13.8
                Conferences and seminars      12.8
                Informal contact within
                    your organization         10.0
                Visits outside Australia       7.8
                Newspapers and magazines       6.2
                Government departments         3.5
                Courses in edu. institutions   2.7
                Computer data bases            2.0
                Internal training courses      1.7
                Patents specifications         1.0
                TV and radio                   0.5

          First ranked source given a weighting of 3, second
          ranked source a weighting of 2, third ranked source
          a weighting of 1.

Main Reasons for Companies Consulting Patent Information

    52% Check on potential patent infringements
    25% Consider new products or processes which could be manufactured
            or used with or without a licensing agreement
    10% Assess the state of the art before embarking on a R&D project
     7% Assess the novelty of an invention with a view to patenting
     5% Check on what competitors are doing
     1% Solve technical problems

    -- T. Mandeville, et al.,
       Economic Effects of the Australian Patent System - Supporting Papers,
       [A commissioned report for the]
       Australian Industrial Property Advisory Committee, 1982.


In England by the late 16th century, patents had regularly been
granted by the Crown for the encouragement of invention and
innovation.  But Royal prerogative in this as in other matters soon
degenerated to near total misuse with patent monopolies being granted
to reward favourites and to help consolidate the power of the Crown.
As restrictive patent monopolies began to cover such daily necessities
as salt, oils, vinegar, starch and saltpeter, public outcry became
great.  Eventually pressures exerted via the House of Commons and the
Courts led to the next major development in the world history of the
patent system: the English Statute of Monopolies of 1623.  This
Statute which declared monopolies to be void under common law, made an
exception for invention patents.  Patent law was thus contradictory
from the beginning.

By the end of the 18th century, the U.S. and France had established
patent law based on the English Statute of Monopolies.  In the early
decades of the 19th century many European countries adopted formal
patent laws.  However, controversy and debate on the patent system
heightened as the 19th century progressed.  Indeed for a few years it
appeared as if the patent abolitionist movement, which was linked to
the free trade movement would prevail.

Parliamentary committees and royal commissions investigated the
operation of the British patent system in 1851-52, in 1862-65, and
again in 1869-72.  The findings of these reviews lent considerable
weight to the arguments of the patent abolitionists: "Some of the
testimony before these commissions was so damaging to the repute of
the patent system that leading statesmen in the two Houses of
Parliament proposed the complete abolition of patent protection."
However, compromise prevailed and the eventual Patent Reform Bill that
arose out of the 1872 Commission's Report advocated changes to patent
law that would significantly weaken the harmful effects of patent
monopolies: "... a reduction of patent protection [from fourteen
years] to seven years, strictest examination of patent applications,
forfeit of patents not worked after two years, and compulsory
licensing of all patents."  This Bill was passed by the House of

[Note, the current request for comments suggests increasing the term
to 20 years.]


While ultimately a matter of judgement, this study leaves little room
for doubt that the benefit/cost ratio of the patent system in
Australia is negative, or at the very best, in balance.  However, this
conclusion does not necessarily imply an economic justification for
abolishing the patent system.  The costs and benefits of an
institution need to be distinguished from the costs and benefits of
abolishing that institution.  In the perspective of the national
economy, the economic effects - both costs and benefits - of the
patent system in Australia are quite modest.  However, the costs of
the unilateral abolition of the patent system to Australia's
international commercial relations could possibly be much larger; the
Swiss experience outlined in the historical section of Chapter 2 is

Since the benefits of the patent system are so tenuous and subtle and
the overall benefit/cost ratio is considered to be negative, there is
no economic justification for extending patent monopolies by
lengthening the term, or by widening the grounds for either
infringement, or patentability (for example, Plant VAriety Rights or
computer programs).  However, in the light of our findings, there is
considerable economic justification for policy action to reduce the
negative effects of the patent system by stricter examination, by
reducing the length of term and the scope of patent monopolies, and by
action to deal with undesirable restrictive practices in patent

An historical awareness of the political economy of patent reform
suggests that this task is not easy at the domestic policy level.
This is basically because those who perceive they would lose by such
reform are concentrated, powerful and active defenders of their
interests.  In contrast, those who would gain by patent reform are
diffuse and hardly aware of their interest in the matter.  Again a
pertinent parallel could be drawn with the tariff issue.  Furthermore,
since the patent system's costs and benefits cannot be measured
precisely, "the optimum limits of the patent system, whether with
respect to time, space, patentability or restrictions on the use of
the grant must always remain a subject of controversy.  There is no
doubt, however, that the costs have been underestimated".  For these
reasons, as well as the patent system's intrinsic international
nature, patent reform is best pursued in international forums - such
as the conferences for the revision of the Paris Convention.  This
need not preclude unilateral action by Australia whenever such action
is deemed practically appropriate or feasible.  There is now ample
economic justification for measures which might be taken to reduce the
costs of the patent system in Australia.

    -- T. Mandeville, et al.,
       Economic Effects of the Australian Patent System,
       [A commissioned report for the]
       Australian Industrial Property Advisory Committee, 1982.


While Australia has made poor use of the patent system in the past and
its overall effects may not have been positive, we must take into
account aspirations to become a significant exporter of
skill-intensive goods and services.  Given this situation, the most
critical element may become Australia's potential capacity to become
technologically competitive.


The accepted international patent data base comprises 16 million
documents, averaging 16 pages per document, and has an annual growth
rate of approximately 500,000 documents.

    -- Patents, Innovation and Competition in Australia,
       Industrial Property Advisory Group,
       [Australian] Attorney General's Department, 1984.


[Dissenting statement by the sole economist working on the above "do
nothing" report.]

This report does not live up to its claim to have adopted economic
perspectives and to have applied economic criteria.  It has not
consistently applied economic criteria; it has not made use of the
available empirical evidence; and the concept of social cost, so
frequently mentioned, has never really been fully grasped.  ...  The
sensible objective is rightly declared to be "to modify the Australian
patent laws, adjusting the length, strength and breath of patent
rights" to maximize the net benefit.  It is unfortunate that the
Report soon strays from this path.

No amount of talk about individual patent successes nor about a future
in which the Australian economy has magically become progressive,
innovation-oriented, and competitive on the world scene, can hide the
fact that Australia exports little in the way of manufactured goods
and has few innovations for sale.  Most patents are granted to
overseas firms.  To make the most of this situation, Australia needs
to reduce the social costs to the extent possible without inhibiting
innovation and without provoking international retaliation.  As a
small nation, there is scope for such action.  The constraints of the
[Paris] Convention are largely a myth.


To acknowledge the circumstances of the Australian economy and to seek
such a balancing of social costs and dynamic benefits is to reject much
of this Report.  In particular, it points to:

  (a) reduction of standard patent term [from 16] to 10 years;

  (b) some freeing of import competition from the restrictions patents
      permit ...

  (c) ...

  (d) making sure that provisions such as compulsory licensing and
      re-examination can function effectively;

  (e) ...

  (f) avoiding the restrictive consequences and additional social costs
      that can arise if the scope of the patent system is extended
      unnecessarily in the development of the information economy;

      [Unfortunately the Australian Patent Office has now spontaneously
      decided to allow patents on "software related innovation".]

  (g) weakening the professional patent attorney monopoly of costly

  (h) significantly improving the educational requirements for those
      working within the patent system; and

  (i) clarifying the extent to which Patent Office operations are to
      be subsidized.


This report is not an imaginative one.  It is constrained by the very
"haze of assumptions about rights and rewards for inventors, special
pleading by those directly involved, and a plethora of legal
procedures and criteria in the Patents act" that it deplores.  Many of
its recommendations are for no change; and when change is implemented
it is all too often merely procedural or has little prospect of being
effective.  A good opportunity to adjust an ancient institution to the
current needs of the Australian economy has been missed.

    -- Dissenting Statement by Professor D. Lamberton,
       Patents, Innovation and Competition in Australia,
       Industrial Property Advisory Group,
       [Australian] Attorney General's Department, 1984.


Governments have taken different views of whether publicly sponsored
research should also be patentable.  The U.S. government permits and
even encourages patenting of results from government sponsored
research; for example, the Boyer-Cohen patent.  In contrast, the
British government forbade the Cambridge Molecular Biology Lab from
patenting monoclonal antibodies in the mid-1970s.  Permitting patents
on government sponsored research rewards successful innovators twice,
once through government funding and again through patents.


It appears that patent policy is a very blunt instrument trying to
solve a very delicate problem.  Its bluntness derives largely from the
narrowness of what patent breadth can depend on, namely the realized
values of the technologies.  As a consequence, the prospects for
fine-tuning the patent system seem limited, which may be an argument
for more public sponsorship of basic research.

    -- S. Scotchmer,
       Standing on the Shoulders of Giants: Cumulative Research
           and the Patent Law,
       Journal of Economic Perspectives, 1991.


It is surprising ... that in numerous cases gadgetry wins judicial
approval while inventions of some consequence fail to make the grade.
The bench of the United States Supreme Court found that Marconi's
contributions did not rise sufficiently above the level of the art as
to make him the inventor of the wireless; yet the same bench found a
new combination of circuits in a pinball machine to be genuine
invention.  ... An exhibit was once presented of a collection of can
openers, each of which had its distinct identity and none of which
infringed the patent of any other. ...

    -- The Politics of Industry,
        Walton Hamilton, 1957.


There is an ever widening gulf between the decisions of the Patent
Office in granting patents and decisions of the courts who pass upon
their validity.

    -- Report of the [U. S.] National Patent Planning Commission, 1943.


If and when the Patent Office administers the standard of
patentability indicated by the Supreme Court, the number of patents
should be reduced at least one-half.  The granting of fewer patents
would in turn lead to fewer applications and the need for fewer
examiners; moreover, it would reduce correspondingly the need for
taking out so-called defensive patents.

    -- F. Vaughan,
       The United States Patent System, 1956.


Property in ideas is an insoluble contradiction.  [He who complains of
"theft" of his idea] complains that something has been stolen which he
still possesses, and he wants back something which, if given to him a
thousand times, would add nothing to his possession.

    -- H. Rentzsch,
       Geistiges Eigenthum, 1866.


Inventions do not belong in the category of intellectual property,
because inventions are emanations of the current state of civilization
and, thus, are common property. ...  What the artist or poet create is
always something quite individual and cannot simultaneously be created
by anyone else in exact likeness.  In the case of inventions, however,
this is easily possible, and experience has taught us that one and the
same invention can be made at the same time by two different persons;
inventions are merely blossoms on the tree of civilization.

    -- M. Wirth,
       Vierteljahrschrift fur Volkswirtschaft und Kulturgeschichte, 1863.


Before ... [the inventors] can ... establish a right of property in
their inventions, they ought to give up all the knowledge and
assistance they have derived from the knowledge and inventions of
others.  That is impossible, and the impossibility shows that their
minds and their inventions are, in fact, parts of the great mental
whole of society, and that they have no right of property in their
inventions, except that they can keep them to themselves if they
please and own all the material objects in which they may realize
their mental concepts.

    -- The Economist, 1850.


.... no convincing argument has yet been put forward to show that ... a
"licence of right" system whereby, after a very short period, anyone
might use a patent on paying a license fee to the inventor, would ...
diminish the flow of invention.


Patent monopolies have employed nearly every means of competition
unfairly.  They have tended to destroy competitors and discourage
would-be rivals regardless of their efficiency.

    -- Lionel Robbins,
       The Economic Basis of Class Conflict, 1939.

[I suspect citing this source might not go down so well with the
review committee, perhaps the next tittle would be more to their


Technology moves now with a speed once undreamed of - its swift march
dictates a shortening of the life of a patent.

    -- W. Hamilton,
       Patents and Free Enterprise,
       Temporary [U. S.] National Economic Committee, 1941.


["Do you have any opinion as to whether, if it were not possible for a
company to acquire a patent on an invention, the same work would
nevertheless be carried on?"]

I feel quite definitely it would be carried on.

    -- President of the Ford Motor Corp,
       Hearings before the
           Temporary [U. S.] National Economic Committee, 1939.


I believe the law is essentially deficient because it aims at a
purpose which cannot be rationally achieved.  It tries to parcel up a
stream of creative thought into a serious of distinct claims, each of
which constitutes the basis of a separately owned monopoly.  But the
growth of human knowledge cannot be divided up into such sharply
circumscribed phases.  Ideas usually develop shades of emphasis, and
even when, from time to time, sparks of discovery flare up and
suddenly reveal a new understanding, it usually appears on closer
scrutiny that the new idea had at least been partly foreshadowed in
previous speculations.  Moreover, discovery and invention do not
progress only along one sequence of thought, which perhaps could
somehow be divided up into consecutive segments.  Mental progress
interacts at every stage with the whole network of human knowledge and
draws at every moment on the most varied and diverse stimuli.
Invention, and particularly modern invention which relies more and
more on a systematic process of trial and error, is a drama enacted on
a crowded stage.  It may be possible to analyze its various scenes and
acts, and to ascribe different degrees of merit to the participants;
but it is not possible, in general, to attribute to any of them one
decisive self-contained mental operation which can be formulated in a
definitive claim.

    -- M. Polanyi,
       Patent Reform, Review of Economic Studies, 1944.


Each novel element arises inevitably from the past and itself sets up
a complex interplay of causes and effects which in turn induce still
further change.  These novel elements are what we call inventions.
They are, of course, created by individuals; but these individuals
merely make explicit what was already implicit in the technological
organism which conditions their thought and effort and within which
they must work.  Strictly speaking, no individual makes a invention,
in the usual connotation of the term.  For the object which, for
linguistic convenience, we call an automobile, a telephone, as if it
where an entity, is, as a matter of fact, the aggregate of an almost
infinite number of individual units of invention, each of them the
contribution of a separate person.  It is little short of absurdity to
call any one of the interrelated units 'the' invention, and its
"creator" 'the' inventor.

    -- A. Kahn,
       Deficiencies of American Patent Law,
       American Economic Review, 1940.


.... the fairness of the patent laws is contested on the ground that
they reward only those who put the finishing touch leading to
practical utilization of achievements on many predecessors.  These
precursors go empty-handed although their contribution to the final
result was often much more weighty than that of the patentee.

    -- L. Mises,
       Human Action: A Treatise of Economics, 1949.


Those great men, those favoured mortals, those sublime spirits, who
share that ray of divinity which we call genius, are entrusted by
Providence with the delegated power of impairing to their fellow
creatures that instruction which heaven meant for universal benefit.

    -- Lord Camden, 1774.


In the field of industrial patents in particular we shall have
seriously to examine whether the award of a monopoly privilege is
really the most appropriate and effective form of reward for the kind
of risk bearing which investment in scientific research involves.

    -- F. Hayek,
       Individualism and Economic Order, 1948.


A patent is a device to prevent the diffusion of new methods before
the original investor has recovered profit adequate to induce the
requisite investment.  The justification of the patent system is that
by slowing down the diffusion of technical progress it ensures that
there will be more progress to diffuse.  The patent system introduces
some of the greatest complexities in the capitalist rules of the game
and leads to many anomalies.  Since it is rooted in a contradiction,
there can be no such thing as an ideally beneficial patent system, and
it is bound to produce negative results in particular instances,
impeding progress unnecessarily, even if its general effect is
favourable on balance.

    -- J. Robinson,
       The Accumulation of Capital, 1956.


A patent system applicable to inventions in general clearly cannot be
justified, however, by exceptional circumstances of this kind.
Economics, in short, has not yet evolved any apparatus of analysis
which would enable us to pronounce upon the relative productivity of
this particular infant industry - the production of inventions; nor
does it provide any criteria for the approval of this method of
special encouragement.


Expedients such as licenses of right, nevertheless, cannot repair the
lack of theoretical principle behind the whole patent system.  They
can only serve to confine the evils of monopoly within the limits
contemplated by the legislators; and, as I have endeavoured to show,
the science of economics, as it stands today, furnishes no basis of
justification for this enormous experiment in the encouragement of a
particular activity by enabling monopolistic price control.

    -- A. Plant,
       The Economic Theory Concerning Patents for Inventions,
       Economica, 1934.


[the patent systems] principles are paradoxical.  It is meant to
encourage over the long period the widest possible use of knowledge,
but it starts out by conferring upon the inventor the power to
restrict to himself the use of that knowledge.  It grants statutory
monoplies, but it arose out of an act to curb monopoly. ... it is more
robustly defended and embodies the most extensive monoploy rights in
those countries which ternaciously adhere to the competitive system of
private enterprise.  It is a crude and inconsistent system.  ... It
provides rewards for certain kinds of discoveries, but usually confers
no such reward for other kinds of discovery. ...

The patent system lacks logic.  It postulates something called
"invention" but in fact no satisfactory definition of "invention" has
ever appeared, and the courts, in their search for guiding rules, have
produced an almost incredible tangle of conflicting doctrines.  This
confusion has lead to extensive and costly litigation.  ...

The system, too, is wasteful.  ... It is dangerous in that the monoply
it confers can often be widened by its owner into fields and forms
which it was never intended he should possess.

It is almost impossible to conceive of any existing social institution
so faulty in so many ways.  It survives only because there seems to be
nothing better.

    -- J. Jewkes,
       The Sources of Invention, 1958.


Of course, nothing is easier than to excite people on the argument
that everything should be made in this country and not imported:
though what would happen if anybody really tried to carry that out is
the same as would happen if everybody expelled his breath from his
body and never drew any breath in.

    -- Viscount Simon,
       Parliamentary Debates,
       House of Lords, 1949.


Except, perhaps, cases of warranty of horses, there was no subject
which offered so many opportunities for sharp practice as the law of

    -- Earl of Granville,
       Parliamentary Debates,
       House of Lords, 1851.


[Arguing against the using economics to determine the scope of the
patent system.]

How far legal protection should reach different fields of industry is
primarily a field for the Jurists.

    -- W. Stuber,
       Die Patentierbarkeit chemischer Erfindungen, 1907.


[And the opinions of another lawyer.]

After jurisprudence has taken hold of any area treated by the law, it
is up to science to develop it and all the other disciplines must
resign; from now on it is the method of judicial thinking which must

    -- J. Kohler,
       Handbuch des Deutschen Patentsrechts, 1900.


[Questioning the qualification of Walter Hamilton to write on the
subject of patents.]

What are those qualifications?  Is he a lawyer?  Has he ever practiced
law?  Has he any law degree? ... Professor Hamilton ... prior to his
Professorship in the Yale Law School was a Professor of Economics ...
It does not appear that an affirmative answer could be given ... to
any of the foregoing pertinent questions as to his qualifications to
speak as an expert on the subject of patents or the patent system.

    -- G. Folk,
       Patents and Industrial Progress,
       Law and Contemporary Problems, 1942.


The conclusion is unavoidable that in an economic society such as the
United States the general rule should be to discourage cartels.
Either we believe in competition and economic democracy or we do not.
If we do we cannot, as a general policy, endorse cartels, which are
neither competitive nor democratic.

    -- C. Whittlesey,
       National Interest and Internation Cartels, 1946.


According to a published commentary to the Patent Act of 1952 which
deleted the clause [requiring patents to be confined to "useful and
important" inventions], the requirement of importance "had seldom been
resorted to either in the Patent Office or in the courts."  The
official explanation for its deletion is as follows: "The phrase 'and
the invention is sufficiently useful and important' is omitted as
unnecessary, the requirements for patentability being stated in secs.
101, 102, and 103."  (The requirements stated in these sections
include "usefulness", but not "importance.")


Economists usually argued for shortening the period of protection: the
bulk of inventions are not so costly as to require the stimulus
provided by protection for such a long time, and not important enough
to deserve the reward that it affords; a much shorter period would
provide sufficient incentive for almost the same amount of inventive
activity; the period should not be so long as to allow patentees to
get entrenched in their market positions; ...

In actual fact, the patent terms where lengthened to 15, 16, 17 and 18
years in most countries, and to 20 years in some.  But the explanation
is probably more political than economic; one clear fact is that many
patent attorneys and few economists were heard by the legislative


Examples of important patents whose application had been pending for
extremely long periods - with or without fault on the part of the
applicants - are the Gubelmann (cash register) patent with a pendency
of over 26 years, the Fritts (photographic sound recording) patent
with a pendancy of 36 years, and the Stelmer (automatic glass
machinery) patent with a pendency of 27 years.  A more recent example
is the Jorgensen (automatic choke) patent, issued to General Motors
Corp. in 1955 after a pendancy of over 23 years, chiefly due to 12
interference procedures and litigation.  ... The official life of a
patent begins of course, only after its issuance.  Hence the total
lives from application to expiration, of the first 3 mentioned patents
varied from 43 to 53 years.

[More recent examples are I believe that of the laser and
microprocessor (Hyatt).]


Within certain limits prior use and incomplete disclosure, if proved,
make a patent invalid, but proof is not easy to come by.  The Alien
Property Custodian who had taken the United States patents from enemy
owners during the First World War testified: "Since we took up the
patents, more than a million dollars have been spent on finding out
how to work them, because always something was left out and always
something was covered up."*

* -  Pooling of Patents Hearings.


Substantial control of an industry can be obtained by a "basic patent"
(on a bona fide basic invention), by an "umbrella patent", where
illegitimately broad or ambiguous claims, covering the entire
industry, have been allowed and are not tested by the courts*, by a
"bottleneck patent", which is not basic but good enough to hold up or
close the entire industry, by an aggregation or accumulation of
patents which secure domination of all existing firms and effectively
close the industry to newcomers, or by use of restrictive licensing
agreements establishing domination or cartelization of the industry
and exclusion of newcomers.  Control, sometimes is extended to markets
of products not covered by the patent, through the use of tying
clauses in licensing agreements.

* -The patent on the idea of the automobile, the Selden patent,
applied for in 1879 and granted after long delay in 1895, is the most
famous example.  Henry Ford had to litigate until 1911 to destroy this
"umbrella".  The patent on hardboard is another.


[economists] stress the idea that inventions really are arbitrarily
differentiated slices of a more or less continuous social growth in
which the individual contribution cannot reasonably be identified.


That experts in the chemical, electronics and other industries testify
that their firms could not maintain their research laboratories
without patent protection may persuade some, but probably should be
discounted as sell self serving testimony.


No economist on the basis of present knowledge, could possibly state
with certainty that the patent system, as it now operates, confers a
net benefit or a net loss upon society.  The best he can do is state
assumptions and make guesses about the extent to which reality
corresponds to these assumptions.

If one does not know whether a system "as a whole" (in contrast to
certain features of it) is good or bad, the safest "policy conclusion"
is to "muddle through" - either with it, if one has long lived with
it, or without it, if one has lived without it.  If we did not have a
patent system, it would be irresponsible, on the basis of our present
knowledge of its economic consequences, to recommend instituting one.
But since we have had a patent system for a long time, it would be
irresponsible, on the basis of our present knowledge, to recommend
abolishing it.  This last statement refers to a country such as the
United States of America - not to a small country and not to a
predominantly nonindustrial country, where a different weight of
argument might well suggest another conclusion.

    -- F. Machlup,
       An Economic Review of the Patent System,
       [A commissioned report for the]
       Study of the Subcommittee on Patents Trademarks and Copyrights,
       Committee on the Judiciary,
       United States Senate, 1958.


A proposition placed before the Constitutional convention would have
empowered Congress "to establish public institutions, rewards and
immunities for the promotion of agriculture, commerce and
manufactures."  This was rejected by the convention in favour of one
which authorized Congress "to promote the progress of science and the
useful arts, by securing for limited times to authors and inventors
the exclusive right to their respective writings and discoveries."


The first United States Patent Law, of 1790, was administered by
Thomas Jefferson and his colleagues under very strict standards, and
relatively few patents were issued.  Three years later a more relaxed
system was adopted whereby "anybody who swore to the originality of
his invention and paid the stipulated fees could secure a patent", its
validity being decided by the courts.  In 1836 this second law was
repealed ...

    -- D. Noble,
       America by Design: Science, Technology, and the Rise of
           Corporate Capitalism, 1979.


Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent ...

    -- Section 101,
       United States Code, 1988.


Scientific truth, or the mathematical expression of it, is not a
patentable invention.

    -- MR&T v. RCA,
       U. S. Supreme Court, 1939.


An algorithm, or mathematical formula, is like a law of nature, which
cannot be the subject of a patent.

    -- Gottschalk v. Benson,
       U. S. Supreme Court, 1972.


Excluded from such patent protection are laws of nature, physical
phenomena, and abstract ideas.

    -- Diamond v. Diehr,
       U. S. Supreme Court, 1981.

------------- Sean Sebastian Batt - --------  .______. 
-------- Coombs Computing Section - Telephone: +61 6 249 3296 -----  | Damn |\
-- Australian National University - GPO Box 4 Canberra City 2601 --  | Fine |/
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