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Comment by eru | Hacker News Reader

> Patents, by design, reward innovators and contribute to the public good by exchanging information for protection.

Patents are politics. Politics is always a murky morass of compromises, and it's hard to say what is by design. (And, no, you can't trust the name of an act or even its formulation to tease out the real and differing intentions of the lawmakers who proposed or voted for it.)

> IP rights allow the company to defend their interests and pay larger salaries.

I can believe the first part. But I don't see how IP rights translate into higher salaries?

(Yes, in the trivial sense of _allowing_ them, perhaps. But not in the implied sense of making it more likely.)

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> I don't see how IP rights translate into higher salaries?

When a company can defend its IP, it earns more profit and can invest in itself more. One way to invest in itself is to pay higher salaries to attract talent.

Other than small bumps to bonus multipliers, big companies don’t share higher profits with employees.

Of course they do. Google pays some of the highest salaries in tech because they managed to become so profitable. I'm saying long term, profitable companies who want to reinvest in themselves will pass profits on to employees because they need talent to make their products. There are certainly companies who decide not to reinvest, and simply extract profit. They become the dinosaurs.

Do you say that at Google salaries increase with profits and are not capped by "fair amount for your location"?

Google literally colluded with other tech companies to avoid passing on those profits to employees.

That happened once they became a top-paying employer. You get there by paying high salaries.

They do, when competition forces them to.

I guess one _can_ make some kind of argument about how adding government enforced monopolies, ie patents, increases that kind of competition. But it would have to be a somewhat sophisticated one.

That's right, it's a temporarily granted monopoly in return for publishing the tech. The argument isn't so sophisticated.

Problem is that it doesn't really work.

Most patents are written in such a way to be maximally defendable/enforceable in court, and minimally useful for reproduction. Often you need to pair them with lots of trade secrets to get anything to work.

The other common argument in favour of patents is that they reward innovation. And that might or might not be an argument that actually works. Patents certainly also hinder innovation, so it's an empirical question which effect dominates, and whether any net beneficial effect is big enough to overcome our basic economic presumption against encouraging monopolies.

Patents do not hinder innovation. Without them, the richest companies would steal every new idea that showed promise.

Why only the richest companies?

Wouldn't everyone be copying all the best ideas from everyone else? Wouldn't that be a good thing? Both in general and for innovation?

(And even if only the richest companies did this, they would still have to compete against each other's copy-cat implementations of those ideas.)

We don't necessarily have to re-hash this discussion, other people already had it, eg at https://sciencebusiness.net/news/79887/The-Great-IP-Debate%3...

In any case, whether patents help or hinder innovation is an empirical question that deserves study! Instead of just assuming that they _must_ encourage innovation, because they say so.

You can also get a start on the literature by following the sources of this Wikipedia article: https://en.wikipedia.org/wiki/Economics_and_patents#Innovati...

> Wouldn't everyone be copying all the best ideas from everyone else? Wouldn't that be a good thing? Both in general and for innovation?

No because this incentivizes copying over innovation. There is little reason to invest in R&D when anyone can copy your idea. Consider the COVID vaccines. Each cost billions in R&D. If they could be copied then a company that specializes in production could invest all its money into that and spend nothing on R&D. Eventually no one will be willing to invest in innovation until someone comes up with the idea of protecting IP again.

Btw, that defense means that other people will make less money (or that there is less consumer surplus).

Not really. If you have a system that defends ingenuity, then new ideas will flourish, providing more jobs, and more chances for entrepeneurs to create. It comes down to this- people will not accept the state of banging their head against the wall over the same problems forever. We live to solve problems, and by defending new ideas, we give credit to creators and encourage creativity.

You can argue that solving one problem creates a set of new ones and I won't disagree. Those are for the next generation to address.

The empiric question is whether that system actually promotes ingenuity.

It also hinders ingenuity, especially prominently displayed with software patents.

> [...] we give credit to creators and encourage creativity.

You can do that just fine without patents, too.

Eg socially by recognising their genius. But also more materially via trade secrets.

And as you say, people don't like banging their head against the wall over and over again, and that's true whether there's a patent system or not.

> Eg socially by recognising their genius.

That's ripe for corruption. Social recognition would largely be in the hands of the wealthiest, i.e. the government in that scenario. You want individuals to be able to generate their own wealth so they can defend themselves. Patents, capitalism, etc are a means of delegating power to the people. Keeping all that control in the hands of the government is costly and less efficient.

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