August 17, 2003

Petra Moser on Nineteenth-Century Innovation

Ah. This is good. The core of Petra Moser's Berkeley economic history Ph.D. dissertation reaches working paper stage. It is a wonderful, wonderful piece of work:

How Do Patent Laws Influence Innovation? Evidence from Nineteenth-Century World Fairs: This paper introduces a new internationally comparable data set that permits an empirical investigation of the effects of patent law on innovation. The data have been constructed from the catalogues of two 19th century world fairs: the Crystal Palace Exhibition in London, 1851, and the Centennial Exhibition in Philadelphia, 1876. They include innovations that were not patented, as well as those that were, and innovations from countries both with and without patent laws. I find no evidence that patent laws increased levels of innovative activity but strong evidence that patent systems influenced the distribution of innovative activity across industries. Inventors in countries without patent laws concentrated in industries where secrecy was effective relative to patents, e.g., food processing and scientific instruments. These results suggest that introducing strong and effective patent laws in countries without patents may have stronger effects on changing the direction of innovative activity than on raising the number of innovations.

Posted by DeLong at August 17, 2003 06:31 PM | TrackBack

Comments

"These results suggest that introducing strong and effective patent laws in countries without patents may have stronger effects on changing the direction of innovative activity than on raising the number of innovations."

Does a bear crap in the woods? Does 2+2=4? I am happy that Petra Moser is doing some research on this matter---but is it possibly controversial to believe that inventors are greatly encouraged if their results are protected by the law? I would think that this is just plain common sense.

Posted by: David Thomson on August 18, 2003 03:37 PM

David,

Kindly re-read the paragraph you have quoted.

The *amount* of innovative activity seemed to stay the same, regardless of patent laws.

As a thought example, consider a society with hyper-strong patent laws - lets call em the Vilani. Now, an inventor will either need to either spend a great deal ensuring they are in compliance with all previous patents (software processes, look and feel and so on) requiring spending a great deal licencing those patents, or risk being sued out of existence for patent infringement.

See also the SCO case, and particularily IBM's response to it, which involved counter-suing with reference to SCO's alleged infringement of IBM software patents.

Now, IBM is Playing Nice, and using it's prodigious patent portfolio as a purely defensive weapon, but not all companies are nice. For example, if Microsoft had IBM's software patent inventory, then God help the IT industry.

Ian Whitchurch

Posted by: Ian Whitchurch on August 18, 2003 04:15 PM

"Now, IBM is Playing Nice, and using it's prodigious patent portfolio as a purely defensive weapon, but not all companies are nice. For example, if Microsoft had IBM's software patent inventory, then God help the IT industry."

I perhaps should purchase a copy of the whole paper. My initial understanding is that Petra Moser claims that one way or another--an inventor is further encouraged to greater efforts if the results of their intellectual creativity is protected. On a practical level, an individual might feel equally protected in a milieu where “Inventors in countries without patent laws concentrated in industries where secrecy was effective relative to patents, e.g., food processing and scientific instruments.”

Does this thesis even deal with the damage caused by exaggerated attempts to protect copyrights and patents? I don’t think the Phd candidate even attempts to address this troubling issue.

Posted by: David Thomson on August 18, 2003 06:15 PM

Well, lots of things that may seem to be "common sense" nevertheless turn out to be false; and different people's ideas of "common sense" differ drastically, so the sort of basic analysis that Moser seems to be doing is sorely needed.

Q: Why don't economists publish their papers for free on the web, like computer scientists? Is it a copyright issue? The major CS professional organizations, like the ACM, allow authors to republish freely for noncommercial use on their personal websites; but it seems that scholars in other academic disciplines either don't possess this freedom or don't take advantage of it. 90% of a typical CS literature search can be conducted using a combination of Google and CiteSeer. It's kind of amazing to me that scholars in other fields can get any work done without such conveniences.

Posted by: Armature on August 19, 2003 02:15 AM

I have 'free' access to a wide variety of journals due to my university site license. As long as I'm on the university network, I can access stuff.

Posted by: Barry on August 19, 2003 05:03 AM

Proving that an entire body of law desidned to promote innovation does no such thing is plenty to be getting on with I would have thought.

Posted by: Jack on August 19, 2003 06:25 AM
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