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Comment by zipdog | Hacker News Reader

One of the foundations of America's success in the earlier years (up to the beginning of the 20th C) was its general disregard for IP laws. British manufactures were constantly complaining about American's using their designs, manuscripts, etc without payment, as well as state to state infringement (Hollywood started in CA to get away for legal oversight).

The article is spot on: legal protection is protection from innovation.

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Bingo. Cory Doctorow's take on it is informative, even if you don't agree with his conclusions, as he covers a lot of this; it heavily features our old friends, the music publishers (who became a viable business themselves, back in the day, only by taking the music that already existed and selling it on without permission).

Well worth reading, and comes under a creative commons licence.

http://craphound.com/content/download/

There was not necessarily disregard of intellectual property at least when Americans were the owners. Many things like the creation of the commercial sewing machine in the mid 1800s were strongly encouraged by patent and intellectual property protection, despite the fact that patent thickets arose -- i.e. many competing individuals held patents covering individual components necessary to a good sewing machine. How these issues were resolved actually has great relevance for so-called modern issues of "patent trolls," since they existed back then too.

Source: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1354849

Think earlier, around the turn of the 1800s. The power loom and the steam engine were both British technologies protected by patent in Britain, but their patents weren't recognized or enforceable in America. And so we got the American mills at Lowell, Mississippi river and Great Lakes steamers, and the transcontinental railroad.

The steamboat is probably a good example of this effect at work. In Britain, Boulton and Watt's patent allowed them to block development of high-pressure steam engines, because Watt thought they were dangerous. In the US, his patent didn't apply, and so Fitch and Fulton were allowed to experiment freely with increasing the boiler pressure, and eventually managed to produce a design capable of powering boats. That opened up a whole new area of commerce.

>both British technologies protected by patent in Britain, but their patents weren't recognized or enforceable in America.

That's not a disregard for IP law though. That in a way is IP law working. The British company got their limited monopoly to ensure they could pay their workers and continue to innovate and the public domain got the explicit and detailed knowledge on how to exploit that invention.

>In Britain, Boulton and Watt's patent allowed them to block development of high-pressure steam engines, because Watt thought they were dangerous.

This is certainly not a feature of current patent legislation, I suspect it wasn't then either. Patents protect commercial exploitation. They do not prevent rivals from using the invention for research and development, indeed that's half the point. Patents are an exchange of knowledge for a limited monopoly on it's commercial use.

Also, you're free to use a patent specification and work the invention for yourself as a private individual.

Whether or not you're free to do private R&D on a patent-protected technology, most people don't. After all, the reason IP laws exist is that people ostensibly won't do research if there is no financial incentive to do so.

This leads to the somewhat paradoxical result that no innovation would happen if IP laws didn't exist, and yet a large percentage of today's industries were founded or developed by people who pretty much operated with a casual disregard for other people's IP. Perhaps this is why PG looks for "naughtiness" in founders. The modus operandi of most startups seems to be to do what you were going to do anyway, ignore any patents or prior art out there (but don't willfully go out and copy people either, or if you do, restrain it to borrowing general ideas and not whole chunks of code), and then use the inevitable lawsuit as a PR boost.

> One of the foundations of America's success in the earlier years (up to the beginning of the 20th C) was its general disregard for IP laws.

Uh, you should really read up on America's early economic development. Its success has very little to do with IP laws.

And to counter your claim: look at China, which has no IP laws. How much software innovation do you see coming from there?

Yup, zero.

China is actually a very good example, you're just looking at the wrong industry.

Both America and China industrialized by misappropriating trade secrets from the reigning technical powers of the time (Britain and America, respectively) and then bringing that knowledge home where it could be employed by workers who were willing to work for less. The birthplace of the American industrial revolution are the textile mills at Waltham and later Lowell, MA. Francis Cabot Lowell spent 2 years memorizing how British power mills worked, and then came back to America with all that knowledge in his head. He then copied the design of that mill on the banks of the Charles River, and American industry was born.

China's manufacturing similarly depends upon transfer of knowledge from developed to developing nations, though in this case the transfer is largely voluntary, with American firms setting up factories in China. However, people then leave those factories and set up their own firms, using the trade secrets they gained while working at foreign multinationals. Software is the wrong industry to look at - think in terms of textiles or cars.

Their economy is growing much faster than America's though, and there are a few other factors, like, oh I don't know, an authoritarian state and walled off internet that might just be slowing down software innovation independent of the IP situation.

That's a fair statement. I still think that the absence of IP laws in China provides no incentive for new companies to innovate.

Back to my original point: if the US software patent system is so broken, how come America is #1 in software innovation?

It's an interesting question. I suppose the first step is to see if there is another country that has better or nonexistent IP laws without mitigating social and political factors like China's.

It may be difficult because the sheer amount of capital in the US, both physical and cultural, is probably enough to offset the effect of bad IP laws in comparison to most countries. You also need to find a way to measure software innovation per capita to control for population.

It may be that the US is simply the best of a bad lot.

Please correct me if I'm misreading you here, but it appears that your "counter" is incorrect. The GP claims that (IP laws implies lack of innovation). You present a single example of (No IP laws & no innovation). However, the GP did not claim that a lack of IP laws is sufficient for innovation, only that it is necessary.

> How much software innovation do you see coming from there? > > Yup, zero.

http://en.wikipedia.org/wiki/Software_industry_in_China

"China's software industry grew at a compound annual growth rate of more than 39% over the period from 2001 to 2007 to reach RMB 506 billion and is further anticipated to grow at a CAGR of nearly 22% through 2012."

"software industry" and "software innovation" are two different concepts.

> It is predicted that in China, Linux market (both server and client) will grow with an annual rate of 34 %. The client-side share growth will be comparatively faster.[citation needed]

I recently walked around a large computer bazaar in China looking for a laptop with Linux pre-installed. I finally found one with a sign saying "Computers for sale with Windows or Linux installed". I walked in asking for one with Linux, pointing to the sign. The seller went "Uhh?!? These are all there are, and they all have Windows. You should know better than to read signs."

I was talking about innovation, you are talking about growth.

Where are the Google, Facebook, Twitter, Apple, Foursquare, LinkedIn? Look at all the startups and new ideas described in Techcrunch every day, how many of them came from China?

Why would a startup in China focus on the American market? A Chinese startup has a vastly larger local market to address, one that doesn't require localisation support or careful negotiation of cultural differences. Until they've saturated the local market, marketing in America would be a waste of time and effort.

look at China, which has no IP laws. How much software innovation do you see coming from there?

Yup, zero.

The IP laws here mean they wouldn't be able to sell me anything that resulted from their lack of IP laws, and the language barrier means I wouldn't likely see anything they weren't trying to sell me. So why would my not seeing anything have any meaning?

Hollywood itself exists because of piracy. Movie makers went out there to escape the enforcement of Thomas Edison's patents.

Another example is Philips, the Dutch electronics company. Which basically was built on the fact that the Netherlands did not have a patent-system at that time.

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