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Source link: http://archive.mises.org/9546/monsanto-v-google-on-patent-reform/

Monsanto v. Google on Patent Reform

March 5, 2009 by

In this post, Monsanto’s General Counsel disagrees with Google’s Head of Patents and General Counsel, who had complained about the risks companies like Google face from huge damage awards in patent lawsuits.

I am so tired of patent lawyers and companies with vested interests making the tired old argument that we should not “weaken” patent protection because it’s needed to promote and protect innovation–without ever once even alluding to the fact that these purported benefits have an accompanying cost, much less demonstrating that the cost is worth the benefit received. (See my There’s No Such Thing as a Free Patent; What are the Costs of the Patent System?)

I’d much prefer simple, honest calls for protectionism: Monsanto wants patent protection to remain strong, because they think it benefits their own company–regardless of the overall effects or costs on other companies or the economy as a whole. Fine, an honest plea for redistribution of wealth.

Note how Monsant just brushes off Google’s costs and fears:

“I respectfully disagree with the recent blog post by Google’s Head of Patents and General Counsel, commenting on the perceived risks from damage awards in patent cases. Monsanto has faced billion dollar damage claims as a wrongly sued patent defendant and also knows the true benefits from avoiding the encouragement of willful infringement based on a smaller party’s calculated gain in the face of limited risk of a meaningful award of damages if infringement is established. With full knowledge of all these issues and our substantial alignment with Google and the information technology industry over the legitimate need to curtail patent trolls and a myriad of other concerns – we encourage thoughtful reform.”

Amazing that he just says he “disagrees” with Google’s perception of risks from high damage awards in patent cases–even as it admits Monsanto has faced billion dollar damage claims in wrongful patent suits. Does it occur to this gentleman that perhaps not every company is comfortable facing the risk of wrongful billion dollar patent claims?


Silas Barta March 5, 2009 at 11:50 am

@Stephan_Kinsella: When was the last time you mentioned the benefits of property rights *and* also added a caveate about the accompanying costs?

And can anyone imagine Stephan_Kinsella ridiculing someone for arguing that, “Yes, there are dangers from frivolous lawsuits — I’ve been a target of them myself — but even knowing this, I support property rights.”

Didn’t think so.

scineram March 5, 2009 at 1:24 pm

Can you imagine a cyberstalker repeating the same old irrelevant point over and over again?

J Cortez March 5, 2009 at 2:12 pm

I saw the Kinsella post and thought, I wonder if his serial stalker, Silas Barta, will make an appearance within 3 or 5 posts?

Andras March 5, 2009 at 2:37 pm

@Scineram & J Cortez,
That’s the way guys, just ignore Silas’ points.
Never mind that Kinsella keeps pulling a Goebbels on IP.

Taras Smereka March 5, 2009 at 3:08 pm

Physical property does not have the kind of protection costs that IP does. I do not have to go to an external institution to prove that my head phones are mine, and then go around looking at other people’s headphones to make sure they are not mine or similar to mine and press legal action against them if they are. On the other hand, Apple does search for and go after anything similar to an I-pod or one of its services or components and incurs huge costs doing so just so someone else cannot get a patent and do the same thing to them.

Egosumabbas March 5, 2009 at 3:40 pm

Since we’re talking Monsato here, wouldn’t Silas be a cereal killer?

Also, who’s Stephen Underscore Kinsella? Any relation to Dr. Kinsella?

Andras March 5, 2009 at 4:42 pm

@Taras Smereka: “Physical property does not have the kind of protection costs that IP does.”

Just look at the middle east where every parcel of land is a cause for war. The cost of IP is negligible to that. Besides, you don’t expect any innovation there. Here, in a well established system and under more peaceful conditions still have title offices and lawsuites associated with land, cost of which is quite considerable when compared to the cost of an average patent.

SailDog March 5, 2009 at 7:58 pm

Monsanto is a corporate vandal. It, its technology and above all its patents on genes have done a massive disservice to humanity and caused untold grief.

Small Software Company in Favour of Software Patents March 6, 2009 at 4:48 pm

the mess with software patents is that small companies don’t stand much of a chance anymore against behemoths such as the ones behind this latest reform push – Microsoft&Google. Small companies are overwhelmingly the ones doing the innovation but yet when approach large companies have the door slammed in their faces.

Patent reform should level the playing field away from the large software companies and back towards the little guy. IN COMPARISON to how often the little guy gets screwed – cases like NTP vs RIM are extremely rare.

As we continue this trend to weaken software patents will just discourage investors and inventors from investing their time&money in innovating, and instead more and more towards copying competitors innovations.

augusto September 29, 2010 at 5:59 pm

Would there be such huge companies were it not for patent laws?

pat March 6, 2009 at 4:55 pm

seems like typical corporate strategy is behind this reform – increase profits. Software companies would love nothing more than be able to remove their R&D, then monitor competitor products or startups, and copy-paste best stuff by outsourcing it to China/India.

I believe in the end both Obama & Congress will see through this propaganda. “Patent Fairness” my ass.

Indepedent Inventor March 6, 2009 at 5:02 pm

Some interesting facts:

# “[T]here is no explosion in patent litigation. In 1993, lawsuits were 1.45% of patents granted. In 2007, lawsuits were 1.48% of patents granted. The number fluctuates from year to year, but it has never indicated a system out of control. (Source: USPTO Annual Reports, Federal Judicial Statistics)”

# “[T]here is no explosion in patent damage awards. Adjusting for inflation, the median annual patent damages award has actually dropped slightly over the last 13 years. In constant dollars, the median was $3.9 million from 1995 through 2000, and $3.8 million from 2001 through 2007. (Source: 2008 Patent Litigation Study, PriceWaterhouseCoopers.)”

Karl June 1, 2011 at 10:04 am

Obviously, the Framers of the Constitution thought that, on balance, the benefit of IP rights outweighs the costs, and that a national rather than state-by-state legal system was appropriate. That is the “default setting” that has been hallowed by the morality of consent. If you want to change that setting, the burden, it seems to me, is on you to present the facts, arguments, etc., to show that the Framers either were wrong then, or that the facts have changed since, thus making their choice now wrong.

Or, if you accept their premise but want to argue about altering the particular laws implementing the system, it also seems to me that you bear the burden of making your case that your proposed changes will produce a net benefit. Merely pointing out that someone else does not marshal facts or arguments hardly wins the day, if you are arguing for change.

Ah, yes, the great IP swindle to redistribute wealth. Here’s an example of wealth redistribution: Suppose I invest about $50 million to make a film (assume it’s a cheesy, schlocky romantic comedy with big name stars). A large number of people in the People’s Republic of China, that bastion of the free-market, quickly copy my movie and either sell DVD copies of it to silly tourists on the street or post it on the Internet for all to watch for free. (I’ve seen many examples of both these.) Have they not redistributed some of my wealth either to their own pockets or the pockets of the free-riders who watch my movie without giving me any return on my investment? Is there an overriding societal benefit from this wealth redistribution that justifies it?

Or suppose I invest about $50 million in researching a drug that helps people with high blood pressure. If someone else then simply starts manufacturing drugs using this formula and pocketing the proceeds, has he not redistributed my wealth into his pocket?

I’m assuming that we are better off because we have some products that require a huge amount of resources being invested up front, such as prescription drugs or cheesy comedies, but of which individual copies (a pill or DVD, for example, can be very cheaply produced). It seems difficult to argue, and I’m not sure you are, that there are no benefits from an IP system that would permit me to make reasonable predictions about a return on an investment of resources.

I’m shocked — shocked! — to see people like Monsanto’s mouthpiece resorting to unsupported, rhetorical arguments in a political debate. When we invent a better human being, we’ll have better political debates. (I think Lenin had some ideas on how to improve the human being . . . )

The abuses of some scoundrels like Monsanto are good arguments for changes to the system. But the existence of scoundrels who will abuse the system for their own benefit is not in itself a justification to scrap the system entirely. You’re not going to scrap free trade or a free market because some scoundrel in China figures out that selling toys with lead paint is profitable; instead you either (1) prohibit importing poisonous toys or (2) punish the scoundrel if it was already prohibited. I don’t have any trouble concluding that some of the things Monsanto can now legally do should be prohibited. But that’s an argument about details, not an argument about first principles.

Stephan Kinsella June 1, 2011 at 11:19 am

Yes, the Framers had this hunch but had no evidence and none has been produced in the meantime. It was unjustified then and it’s unjustified now. Everyone else you say is confused and irrelevant.

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