On patents and innovation

I'm often tempted to write a post about patent law and its ambiguous-at-best impact on innovation, but for some reason I never actually do it. In part, I think that's because I assume I've already covered it on the blog, but in searching through my history it seems like I haven't (maybe here, and here, kinda sorta, but those are sort of different points).

At any rate, in the wake of the overly broad and frankly pretty ridiculous court ruling that went in Apple's favor against Samsung in the companies' ongoing patent war, I thought this was a useful time to broach that topic once and for all. To set the table for this argument, I'll first share with you a nice little chart from Alex Tabarrok over at the Marginal Revolution blog.

In layman's terms, Tabarrok's chart argues that while some level of patent protection is necessary in order to protect intellectual property and encourage experimentation and innovation in the business realm, there comes a tipping point at which overly strong (or overly specific) patent protections become counter-productive.

At that point (which we have now passed), large companies begin to use their vast legal resources to patent everything under the sun (read this piece for an example of how it goes down), even those things which are not yet commercially viable and which they have no intention of bringing to market. They do this simply to protect their dominant market position, preventing smaller competitors from threatening their near-monopolies.

Apple, for one, has become particularly aggressive in its manipulation of patent law, literally attempting to patent every aspect of every product that it manufactures, in an obvious attempt to prevent competitors from entering into any market in which Apple operates. That's ironic, given Apple and Steve Jobs' well-known, unapologetic history of being an imitator and/or thief of other companies' intellectual property—but Apple doesn't care much about irony or intellectual consistency, just piles of money.

Regardless of the details of the cases discussed in that last link, Apple and Microsoft are indisputably stronger companies today because of the competition between the two of them (oh, and Xerox, don't forget about Xerox). Now, Apple is trying to stifle just that kind of competition in the present day, and so far courts are falling for it.

That may not last for long, though, if U.S. Circuit Judge Richard Posner (whom I've written about here and here) has anything to say about it. In this ruling and others, Posner has consistently referred to a "dysfunctional patent system" in this country, one that has run amok and now operates contrary to the public interest (that last remark is a direct rebuke of the primary justification of patent law in the first place). Will Posner be able to do anything about it? In the short run, it's doubtful, but I certainly hold out hope.

In the long run, our economy's only hope for rescuing itself from its current malaise is not via money printing or trade sanctions against China (so please, guys, seriously, stop trying that dumb shit), but through innovation—real, honest, serious innovation, the kind that makes us all legitimately more productive and prosperous. Our country has been great for the last century not because it has protected its largest corporations' market positions, but because it has allowed and enabled start-ups to thrive without smacking down their creations on dubious patent grounds.

So let's hope our country's future is determined a little bit more by Richard Posner and a little bit less by Apple—no matter how much you like your new iPhones, believe me, you shouldn't be rooting for Apple, at least not anymore. I know I'm not.

[Marginal Revolution]

Becker & Posner on Catholicism & Contraception

I often read the Becker-Posner blog, a blog co-written by a pair of University of Chicago professors who aim to bridge the gap between law, economics, politics, and public policy. They often have very interesting takes on complicated issues--think Freakonomics on a grand scale--and I find their posts (they typically post once a week, both writing on the same topic) to be consistently thought-provoking.

Having spent time in the Vatican and Florence last week--and having been overwhelmed by the breadth and grandeur of Catholic imagery throughout Italy--I found their posts this week (Becker; Posner) on Catholicism and contraception to be both timely and intriguing. For the purposes of this post, I will focus on Posner's post. He writes:

It is always difficult to decide whether a religious tenet of a hierarchical religion, such as Roman Catholicism, reflects religious belief or institutional strategy. The Roman Catholic Church is a huge “corporation,” one that reached its present size, wealth, and influence in a competitive environment, where it had first to confront paganism and Judaism, and later Protestantism and secularism.

The Church has long been hostile to contraception, but the nature of its hostility has changed, and may be changing yet again with the Pope’s recent acknowledgment that the use of condoms may sometimes be justified as a way of preventing the spread of AIDS. I want to consider the institutional as distinct from doctrinal considerations that might explain the history of orthodox Catholic views of contraception.

In the early years of Christianity, the Church had to steer a middle course between Christian extremists who thought sex a form of purely animal behavior that Christians should eschew, and pagans, who had a notably relaxed attitude toward sex, including masturbation, homosexual and other nonmarital sex, and contraception in the form of coitus interruptus and abortion. Rejecting sex altogether was not a viable policy for an ambitious Church (think where rejection of sex got the Shakers), but accepting the pagan view would have resulted in a failure to differentiate Christianity from paganism, and perhaps reduce Christianity’s appeal to women.

The compromise position that the Church adopted was that sex was proper as long as it was oriented toward its proper function, which, the Church held, was procreation within marriage. But it had to qualify this view to avoid condemning sex by married people who turned out to be sterile, for example because the wife had reached menopause. So the Church allowed that a secondary lawful purpose of sex was to reinforce the marital bond. 

This compromise worked well for a while (think of the number of massive Irish Catholic families in cities like Boston, families very similar to my own), but ran into problems when heavily Catholic nations achieved greater prosperity.

For various reasons, birth rates fall as prosperity rises, which led to a growth problem for the Church. The Vatican tried to hold its ground by embracing the "rhythm method" of contraception, but has found itself in a place today (according to Posner) where Catholics around the world use contraception at the same rate as non-Catholics. Posner concludes,

The Church finds itself today in a quandary: its proscription of contraception is so widely ignored, and so anachronistic given today’s sexual mores, as to invite derision—to make the Church seem “out of it.” This might not matter a great deal if Roman Catholicism were a fringe faith, as Christianity was at its inception. It is, as I said, a vast “corporation.” It has hundreds of millions of “customers.” It has been losing customers in the Western world, but gaining them in Africa—but Africans, ravaged by the AIDS epidemic, are pressing for a relaxation of the Church’s ban against contraception because condoms are a cheap and effective method of preventing infection with the AIDS virus. 

It is therefore not surprising, from an institutional perspective, that the Pope should take a first, albeit hesitant. step back from the proscription of contraception by acknowledging publicly that condoms might be justifiable as a method of reducing the incidence of AIDS.

The risk, of course, is that the Church could undermine its religious authority in favor of self-preservation. Any religion derives its primary power from the faith of its constituents, but there is often a conflict between the believers of the past and the believers of the present (and future).

My own checkered history with Catholicism derives from precisely these types of conflicts--and the Church's bizarre inability to reconcile them satisfactorily. The Catholic sex abuse scandal hit close to home for me at a formative time (right around the time of my Catholic confirmation), and certainly soured my opinion of the Church to the point where I no longer actively practice any religion.

The question for the Vatican is whether or not it is possible for the Church to reinvent itself without stripping away its own authority. We no longer live in a time where religious authority implies political authority (as it most certainly did in the Holy Roman Empire, not to mention throughout the Middle Ages), and the Church is uncertain how to respond.

To admit that "corporate" concerns play a huge role in religious doctrine may seem unsavory, but it is likely the only way for the Church to remain relevant in the modern world. Posner is right on in his analysis. The Church can no longer hope to achieve growth (or even maintain relevance) through higher birth rates; it must instead make sure that its message has maximum relevance in today's world. It's a lesson that the Church has been slow to learn.


[Becker-Posner Blog]