A Stroll through Patent History [12:57 pm]
And a look at how the other side of IP, disclosure to the public, doesn’t always seem to make economic sense — the unexplored question, of course, is whether the actions of these subjects led to a deceleration or acceleration in overall innovation and technological development (a very tough research question in this context, although an examination of trade secret protected domains might be a worthwhile parallel): A Stroll Through Patent History [pdf]
The conventional wisdom among economists has been that a robust patent system helped transform the United States into an economic powerhouse. And this may be true. But, Professor Moser concludes, what was good for America and Britain in the 19th century is not necessarily good for emerging, largely rural economies in countries like Denmark, the Netherlands and Switzerland.
“In economics, we are taught that patent laws are what create incentives for innovation,” she said. “But many of the best innovators in what was the high technology of the day came from some of the smallest countries in Europe, and these nations did not have patent laws.”
Professor Moser found, for example, that Swiss inventors tended to concentrate their efforts in watch making and specialized steel making for scientific and optical instruments. Their innovations were exceedingly difficult to reverse-engineer and thus were successfully guarded as trade secrets.
“There were competitions in England to reproduce some Swiss innovations in steel,” Professor Moser said. “But the English just couldn’t figure out how to do it. The Swiss would have been silly to patent these innovations.”
That is because the purpose of patents is twofold: to protect the inventor and to speed technological progress. Thus, patent laws require that an inventor, in a quid pro quo exchange for the limited monopoly that a patent provides, disclose his methods to others. “Countries without patent laws have much larger shares of their innovations where patenting would have been a bad idea,” Professor Moser said.