Tuesday, 25 May 2010

Patent thickets?

Those opposed to inventors keeping property in their own inventions will often be heard muttering about the destructive economic effects of so-called “patent thickets.”

_quote The patent thickets problem, a form of ‘tragedy of the anticommons,’ is
a phenomenon by which people underuse scarce resources because of
overlapping ownership. In the patent thickets, a technology is prone to
underuse because of the high costs of licensing resulting from multiple
ownership stakes in the same technology.”

“This concept is not unique to patent law,” notes associate professor at George Mason University Adam Mossoff,

_quoteit is based on Professor Michael Heller’s theory of the anticommons in real
property, which arises when there is excessive fragmentation of ownership
interests in a single parcel of land. According to economic theory, the problem of
such excessive fragmentation of ownership interests is straightforward: It
increases transaction costs, accentuates hold-out problems, and precipitates
costly litigation, which prevents commercial development of the affected property.

The implicit assumption is that some sort of redistribution of property is the answer to this alleged problem.  But as Adam Mossoff points out, even “Professor Heller acknowledges that ‘the empirical studies that prove — or disprove — our theory remain inconclusive.’”

sewing It’s in this context that Mossoff’s series of posts on the Sewing Machine Wars “and the denouement of this patent thicket in the Sewing Machine Combination of 1856 is important.” 

Why would you be interested in “sewing machine blogging”?  Simple:

  1. because the invention of the sewing machine in the late-nineteenth century was an achievement then “on par with the latest high-tech or pharmaceutical discovery today”;
  2. because its invention, patenting and commercialisation tell us an awful lot about how patent law works, and once worked well;
  3. because it tells us how patent conflicts are resolved voluntarily; and,
  4. because author Adam Mossoff knows all about patent law.

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Anonymous Fred Stevens said...

Sounds a bit like multiple-owned Maori land

25 May 2010, 11:02:00  
Anonymous matt said...

I just looked up sewing machine on wiki. Here's an interesting bit on the invention:

"In 1830 a French tailor, Barthélemy Thimonnier, patented a sewing machine that sewed straight seams using chain stitch. By 1841, Thimonnier had a factory of 80 machines sewing uniforms for the French Army. The factory was destroyed by rioting French tailors afraid of losing their livelihood."

The more things change...

25 May 2010, 11:27:00  
Blogger Eric Crampton said...

Nice. Volokh is excellent source on many things. The guest blogger there, Mossoff, notes though that solution to thicket via pool may be currently hampered by antitrust legislation. And, with reasonable reason: patent pools can be a way for dominant firms to stifle new entrants.

25 May 2010, 15:06:00  
Blogger PC said...

@Eric: And since antitrust legislation itself is an attack on property rights, it would be wrong to use its existence to justify launching another.

Not saying that you're saying that, but I know many others who would.

On this, I'd recommend this short piece by my new Guest Blogger: "Patent & Antitrust Law," my own aging posts on the iniquity of antitrust, and of course George Reisman's article "Platonic Competition."

25 May 2010, 15:39:00  
Blogger Eric Crampton said...

I've also written skeptically about antitrust law...

25 May 2010, 16:39:00  
Blogger Owen McShane said...

Actually the invention of the sewing machine is doubly significant because Singer recognised that his target market could not afford to buy it even though they stood to benefit most.

So, he invented Hire Purchase and the rest is history.
Software plus hardware working together.

26 May 2010, 10:06:00  

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