There were few pleasant surprises for me in Nobel Prizes front, this year. First, Al Gore won the Nobel Prize for Peace. I know many people feel it is not at all deserved. As a lover of trees and a person concerned about global warming, I was gratified. I was hoping, it will give an additional impetus to all those fighting to save the planet.
I did not know much about the other winners, until my colleague sent me this link which talked about Prof. Eric Maskin, one of the Nobel Prize winner for Economics and the research he was doing on the impact of patents on innovation. He says when discoveries are sequential in nature (ie each successive invention is built on its predecessor), society and even inventors themselves may be better off without such patent protection. He gives the example of Software Industry, which is by nature is highly innovative and although there have been good number of imitations; it has not had a severely negative effect on the industry.
First, I found this a paradigm shift from the accepted notion that patents support innovation by encouraging companies to invest in research. Secondly, being from the software industry, I often experience the power of open source software and how it can transform technology and society. So I looked for the original research paper and found it on the net (Sequential innovations, Patents and Imitations). The paper is authored by James Bessen and Eric Maskin. Do read the paper; it not only has very good examples, but even complex sets of equations which prove that imitations may promote innovations and patents inhibit it, in industries where innovation is sequential and complimentary. Certain facts that caught my attention
1) As patent protection become more stringent in software industry, the firms that acquired most of these patents reduced their R&D spend relative to sale
2) Adobe put Postscript and PDF format in public domain inviting other firms to be direct competitors for some of its products
3) CISCO regularly contribute patented technology to industry standards bodies
4) IBM and several other firms have donated number of patents for free use by open source developers. The stated reason for these donations was to build the overall ecosystem.
The equations, of course went way over my head. But the overall premise of the paper was, in such industries copyright achieves better results than patent protection. This does not hold good for, what they call ‘Static Environment’. The term is not clearly defined in the paper. I assume it refers to industries such as pharmaceuticals and cars.
I was reminded of my, FLOSS crazy friend Prem, who used gave a new twist to the term ‘free’ used in the context of open source tools. He said it stands for freedom. Recently someone told me about a book called The Long Tail which was written entirely on the net and feedback from the readers was incorporated before it was published. It went on to become a best seller. It is nice to know that openness could provide competitive advantage.
The Vice Chairman of my company, who is also the Chairman of NASSCOM told us this story during a meeting. There was once corn farmer, who always produced the best corn. Someone asked him, what was the secret of his success. He said, he always shared his best seeds with other farmers. Now this sounds very counterintuitive, how can you be the best when you share your best with others. He said, “Cross pollination happens continuously from the surrounding farms. If their produce is of inferior quality my crop will definitely be inferior. When I share my best seeds with my neighbors, I compete with the best. So I always stay competitive”.
Nice thought, isn’t it? It is my hope that one day we will see the benefits of openness and sharing in all walks of life.