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To: Scott C. Lemon who wrote (6453)	2/19/2000 9:23:00 AM
From: axial	Read Replies (1) \| Respond to of 12823

Hi,Scott - Thanks for your response - the issue of IPRs is complex. First, from a philosophical viewpoint, I understand the view that we should dispense with patent protection altogether. It reminds me of the ideology that believes there should be no such thing as "property". As an abstraction, it's not bad; in reality, it doesn't work. Second, flowing from the preamble above, is the conclusion that issuing patents actually encourages innovation. The reasons for this statement are: (a) Innovation can be pursued as an end in itself; IPR protection does as much as anything else to encourage "pure research". IPR protection undoes the linkage between discovery and commercial implementation. This can be good for many reasons: the owner of the patent may have neither the means nor the expertise to take his patent to market; the patent may be ahead of its time, and not yet commercially viable; etc., etc. (b) Where commercialization is pursued it gives the enterprise a "head start" on others; in this time a small company can grow its product, and market share, without fear that its initial outlays will be usurped by competitors. These are a few considerations out of many. However, there is a third aspect to the IPR question that I find a little disturbing. Here we may find some common ground. A practice has arisen lately, where rich multinationals use IPRs to discourage competition. I quoted (paraphrased) the general language used in IEEE/ITU statements: "shared on a fair, non-discriminatory and equitable basis". I understand an intent in this phrase: that where you do have a patent, yes, you are entitled to compensation, but no, you shouldn't discourage its use by excluding certain competitors, or by jacking up the price so high as to make it unusable. The end result is that innovation becomes quickly adopted by all, progress within an industry is maximized, and each innovator obtains some compensation (and recognition) for their intellectual input. There is some question in my mind about the practice of buying small companies, and their patents, and using those patents (by virtue of a costly and lengthy litigation process) to forestall competition. Certain companies have become well-known for this practice. They may, or may not, implement the patents they buy. But you better not even come close to one of those patents, or you'll end up in court for years, with your company's officers wasting time giving evidence, rather than attending to business.Of course, the process will cost you millions. And if you and other posters are saying that this practice discourages innovation, then I agree. As an addendum to all this, I posted a while ago the story of a wireless company, who agreed to pay royalties to another company, even though they disputed the patent. Why? Because the royalty payment was only $250,000 for the life of the patent. If the price is low enough, and fair enough, progress is not impeded. Everyone wins, and innovation continues.

To: Scott C. Lemon who wrote (6453)	2/21/2000 3:29:00 PM
From: axial	Respond to of 12823

Scott - I neglected the most important aspect of this (mis)usage of patents - it discourages competition. Buy the patents, lock 'em up, and sue the hell out of everyone who tries to compete in your playground. But if you don't have a patent, and the competition does, well, just ignore 'em. If they want to go to court, maybe they can win after years and millions spent in litigation. Discouraging innovation is one thing, but the practice goes a lot more damage than that: free enterprise be damned.