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Light Bulbs, Patents and Frozen Innovation

You have an idea that’s revolutionary. It’s game-changing. You have a strong belief that whoever implements your idea will make millions and change technology as we know it. The catch is, it takes a lot of time and resources to implement. You estimate it will take about two years if all goes well. In that amount of time, will someone else think of your idea? If you have others helping, what if they steal your idea? What if a big company thinks of it and implements it after you’ve spent countless hours and money toiling away?

Ideas and Light Bulbs

Thomas Edison is commonly considered the inventor of the light bulb, or at that time, the ‘electric lamp.’ Historical accounts indicate that Edison and his team worked for about two years between 1878 and 1880, developing over 3,000 different electric light theories. He was the poster child for failure and not giving up.

History is a funny thing, though. Another creator, Joseph Swan, was documented as working on an electric light starting in 1850 and received a successful patent for it in the U.K. before Thomas Edison and his creation. Not only did he receive a patent for it first, but he demonstrated it almost a year before the patent. Swan worked on his invention on and off for thirty years.

Understandably, lawsuits ensued, but the ultimate result was that Edison partnered with Swan. Some accounts show that the first lights manufactured by the partnered company were also Swan’s, based on the filament he used in patent, and not Edison’s.

Where was Swan’s credit in the old U.S. history books? Of course, today, both are credited for independently coming up with the idea. Yet, if they both can have a patent for almost the exact same thing, what is the point of the patent? How did it help Swan? How did it help Edison?

Swan’s Benefit? Or Edison’s?

Swan received a patent before Edison, and Edison got all the fame. Yet having the patent alone provided for investor opportunities for both inventors. Swan was able to start a company after his patent, and Edison was able to get more funding for his.

The question is, what would have happened if there was no patent process? No lawsuit would have occurred, and money would have been saved there. Instead of Edison looking to Swan for a lawsuit, they would have either started competition, or they would have partnered together more naturally. That’s not a real benefit, just a normal result.

A primary argument could be that the investors wouldn’t know how tangible their research or invention was. The patent process gives the investors a level of confidence that practically guarantees the invention’s real possibilities for exclusive profits for at least the next 20 years.

It makes sense, as an investor, that they would choose the company that gets exclusive rights before one that doesn’t. So, in both cases, Swan and Edison seem to benefit from the patent process.

Purpose of Patents

Although Edison and Swan both benefit, that is only part of the purpose of patents: to give the inventor time to capitalize on their invention. What then is the other point of patent law?

Generally speaking, patent law is derived from the constitution to “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

Imagine we are Joseph Swan, and we just received our patent. We have exclusive rights to our discovery for 20 years. So, the moment we created the light, we are the only person who can make use of that specific discovery, and everyone else must get permission. It’s all on us to make that critical invention happen.

Not to criticize the constitution, but that doesn’t sound like it is promoting the progress of science or discoveries at all. It seems to be focused, instead, on giving an advantage to the creator. This is a great idea in theory, but in practice, it doesn’t seem to work as well. Anyone who is a critic may say our economy is all the proof we need, but let’s talk capitalism for a second.

Capitalism and Intellectual Property

There are those who see intellectual property rights as an inherently capitalistic concept; as if anything giving away or ignoring those rights, like open-source software, is against capitalism. The concept of intellectual property being capitalistic seems to stem from a belief that either 1) The primary way to profit from ideas is to make them exclusive “property” to be controlled and sold. 2) Not enforcing exclusive rights, promotes a free-for-all that detracts from an individual’s ability to profit. Or 3) Speed of advancement increases because all the companies want exclusive rights.

All three of these tend to have supporting examples, but the support doesn’t tell the whole story. For instance, a pharmaceutical patent for a key drug could be worth a hundred million dollars. That sounds like capitalism at its best and supports that the idea itself is where the real profits are. Yet, capitalism isn’t only about “profits;” capitalism is more importantly about the competition that keeps the economy and society progressing. A pharma patent locks up development and eliminates competition.

We end up focusing on competition before the implementation of the invention, instead of afterward. If we give the creator exclusive rights, that will promote the desire to invent things as fast as possible. So what we end up seeing is a large number of patents originating from groups dedicated to inventing. The top 10 patent applicants are all large companies that have thousands of patents each. That means the race to patent an idea is full of competition, but the moment the idea is patented, the competition halts for 20 years. If it doesn’t halt because it’s a key technology (like smartphones), the competition is a race to get around each other’s patents, which doesn’t feel like the spirit of innovation.

Imagine if Michael Jordan patented his fade-away jumper and the up-and-under layup. What would happen to the next generation of players and the sport if they weren’t allowed to use those moves? It wouldn’t make sense at all, yet why is restricting patentable ideas in the same way any different? If we limit advancements by perpetuating exclusive rights, the market is relegated to only those who are already in the best position and stifles anyone else from coming up.

Globalization

We should trade with everyone possible and encourage free markets or the closest thing to free markets. Ideally, that would produce the best competition and, ultimately, the best innovation and advances. But what happens when Huawei, a Chinese company, holds the keys to the next big 5G technology that will change the AI landscape?

How should the U.S. or other competing countries respond? Countries can either ignore the fact that Huawei patented the idea or pay them for the rights to use it. Or perhaps keep technology “proprietary” such that no one would ever know if they are using the patent or not.

Patents and intellectual property don’t work well in a globalized environment, not because they’re difficult to enforce, but because if we do successfully enforce them, we create the potential for some extremely large monopolies. Do we really want one company to be the next “legal monopoly” for 5G and AI? That sounds outrageous, doesn’t it? Because it is.

Frozen Innovation

It would be nice to see statistics on how many patents are being successfully used to make money and how many are just sitting on the shelf. Or better yet, how many companies produced patents that were great ideas and capitalized for themselves but didn’t really advance technology or the economy on a massive scale?

For example, the 3D printer was patented well over 30 years ago in 1984 by Charles Hall. His company, 3D Systems, was established soon after and, of course, has done great over the years. Around the same time, another company, Stratasys, patented a way to heat and extrude a plastic filament (the stuff that makes the 3D objects today) called Fused Deposition Modeling. Those two patents combined ultimately blocked everyone else from making the 3D printers we see today. Arguably, innovation from other companies didn’t completely stop; it was just restricted.

From a capitalistic standpoint for those two companies alone, things are great. However, with the competition knocked out for 20 years, continued advancement came to a halt. If we look at the history of 3D printing, it starts with the great developments of the 80s and magically flatlines until after the key patents expire between 2004 (the printer) and 2009 (the filament).

Around that same time, 3D printing was brought to the home in droves by companies like RepRap and MakerBot, and it started to become a widely known phenomenon. Until at least 2004, when the printer was able to be made, we had radio silence on 3D printing. The two 3D printing whales that didn’t do anything great to further technology after their initial creations started to take action the moment the small companies implemented interesting things with the now-expired patents. Both 3D Systems and Stratasys made several large acquisitions after the major 3D printing expansion after 2010. This is not capitalism at its best; it is a system that perpetuated an advantage by law and froze 3D printing innovation for possibly 30 years.

Ideas Are Not Property

Property is defined as a “thing belonging to someone,” a possession. How can you own an idea or thought when anyone can think it? We love credit. We want to stake our claim to things. We like to own and control things. But the fact is, staking claim to something that can naturally occur in the mind is not easy. If someone invents something today, who’s to say hundreds of people wouldn’t have thought of it tomorrow? Should we restrict their ability to implement ideas just because someone else was first to file? What about the poor? What about the people who aren’t versed in patent law?

Ideas aren’t property; they are non-physical creations and expressions. Ideas themselves are infinite, can be reproduced at any time at no cost (once defined), and can be shared by anyone at any time. We have to treat ideas and intellectual property much differently than physical property.

Why is it that half the world would be fined or in jail because of the incessant stealing of songs, movies, and software downloads? Why are we ok with copying memes and sending them to others, even though those memes technically have a copyright holder? Why is the vast majority of social media a mashup of other people’s content and creation, yet it’s “allowed” as long as it stays on the media platform?

Is it because we aren’t educated about what intellectual property is? Or is it because we instinctively see creations and expressions as completely different than physical property?

As we become more globalized, as technology moves faster and faster, innovation needs to keep up. A 20-year freeze on innovation to allow exclusive rights to an “idea” is not the way to do it. Capitalism thrives when we remove limitations on creation. Worst case, the big companies do what they’ve always done. Best case, small companies and individuals make a much larger impact.

P.S.

Firstly, if it isn’t obvious, not being a fan of traditional intellectual property laws doesn’t mean I think everything idea-related should be free. The market should still dictate cost, but we have to stop thinking about identifying cost in terms of protecting “infinitely reproducible content.” Selling the content is one thing and is great, but limiting the content’s use is the problem.

Secondly, I’m not against developing ideas in “secret” or anything like that. Not releasing information or content before done or ready is the same as not releasing a song until it’s done. It has nothing to do with stifling innovation.

To me, when we release information or ideas publicly, they become creations and expressions that can’t be restricted because of the way we think. We learn through experience. Anything we see and interpret cannot be “unseen.” The world being round wasn’t obvious until the idea was expressed and it became obvious. A smartphone wasn’t obvious until the idea came out and became obvious. Why make something now obvious exclusive for another 20 years? Not only that, but as we’ve seen, being first isn’t really being first in a large number of cases. Why give one person or group the advantage when we can’t even prove they were truly first?

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