Analysis on balance: Standardisation and Patents

Alex Hudson home at
Tue Dec 2 22:21:35 UTC 2008

simo wrote:
> The patent system should reward risk takers that actually made the
> investment, because if you don't, in the long term you will get no
> investments.

I agree with that, but you can't directly link investment, risk and 
result. Sometimes the investment required will be low, sometime high, 
ditto the results. The risk is somewhat quantifiable, but again, it's an 
art not a science (hence actuaries).

If the investment and/or risk is too high even the result, not enough 
people will put the effort in. If it's too low, then the system is 
faulty in the other direction. It's a balance. What you try to do is get 
a systemic result in which the balance (overall investment versus 
overall "progress" - and I quote that because I think 
"progress==patents" is fallacious) is about right.

If you put a basic requirement on the level of investment, you don't 
actually improve the situation. You're just turning the risk knob up, 
and so people will look to offset that risk - in the same way as when 
companies file their accounts, suddenly there are a lot of deductions 
they have against tax. It makes the system more expensive, but any 
decent-sized company would easily be able to allocation sufficient costs 
to the development to beef up their apparent investment.



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