Sorry, if anyone actually reads this blog for the long hiatus, but I'm back and will start updating again. This is a very interesting talk by Terence Kealey that covers multiple interesting topics.
The one that I found most interesting was his discussion about the costs of research. That to copy an innovation costs the same amount as to invent it in the first place. This is a very strong practical argument against one of the fundamental tenants of patent law.
The argument that one hears most for patent law, especially concerning the drug industry is that without patent protection all of the drugs would just be copied and that no one would invent new medicine and we would all die. Well, since it is no cheaper to copy the medicine than it is to invent it, this makes little difference. There would be a period of natural monopoly for the drug inventor while the other companies invented their version of the drug, giving an incentive to invent and then a drop in prices when their drugs came on market, using market share as the incentive to copy.
There would also be an in incentive for the original inventor to sell his drug formula to the other companies at a time discount, thereby increasing the speed of innovation, but maintaining profitability.
All that the current patent regime has done is to slow innovation, increase the price of goods by artificially extending the period of what would be a natural monopoly and transforming it into a state monopoly and generally wasting time and money.
The one that I found most interesting was his discussion about the costs of research. That to copy an innovation costs the same amount as to invent it in the first place. This is a very strong practical argument against one of the fundamental tenants of patent law.
The argument that one hears most for patent law, especially concerning the drug industry is that without patent protection all of the drugs would just be copied and that no one would invent new medicine and we would all die. Well, since it is no cheaper to copy the medicine than it is to invent it, this makes little difference. There would be a period of natural monopoly for the drug inventor while the other companies invented their version of the drug, giving an incentive to invent and then a drop in prices when their drugs came on market, using market share as the incentive to copy.
There would also be an in incentive for the original inventor to sell his drug formula to the other companies at a time discount, thereby increasing the speed of innovation, but maintaining profitability.
All that the current patent regime has done is to slow innovation, increase the price of goods by artificially extending the period of what would be a natural monopoly and transforming it into a state monopoly and generally wasting time and money.
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